Market Opportunity¶
The EUR 140 Billion Question¶
The European Union has committed the most ambitious climate funding program in history. Between EU-level programs and national initiatives, over EUR 140 billion in carbon and sustainability grants is accessible to small and medium-sized enterprises through 2030.
Yet the vast majority of this money goes unclaimed.
The EU Carbon Funding Landscape¶
Major Funding Programs (2024-2030)¶
| Program | Total Allocation | SME-Accessible Portion | Focus Areas |
|---|---|---|---|
| EU Innovation Fund | EUR 40B | ~EUR 10B | Clean technology, industrial decarbonization |
| Horizon Europe | EUR 95.5B | ~EUR 20B | Research and green innovation |
| ERDF / Cohesion Funds | EUR 200B | ~EUR 50B | Regional green transition projects |
| Just Transition Fund | EUR 17.5B | ~EUR 5B | Support for carbon-intensive regions |
| InvestEU Green | EUR 26B | ~EUR 8B | Sustainable investment instruments |
| National Programs | EUR 150B+ | ~EUR 45B | Country-specific climate initiatives |
| Total | EUR 529B+ | ~EUR 138B |
Funding by Carbon Category¶
The funding landscape spans all areas of the green transition, with the fastest-growing categories in clean technology and sustainable transport:
| Category | Available Funding | Annual Growth |
|---|---|---|
| Renewable Energy | EUR 40B | 18% year-over-year |
| Energy Efficiency | EUR 35B | 15% year-over-year |
| Industrial Decarbonization | EUR 30B | 17% year-over-year |
| Clean Technology | EUR 25B | 22% year-over-year |
| Sustainable Transport | EUR 20B | 25% year-over-year |
| Circular Economy | EUR 15B | 20% year-over-year |
| Hydrogen | EUR 15B | 35% year-over-year |
| Green Buildings | EUR 12B | 12% year-over-year |
Regulatory Tailwinds¶
Four major regulatory developments are creating unprecedented demand for carbon funding tools:
1. Corporate Sustainability Reporting Directive (CSRD)¶
The CSRD is expanding mandatory sustainability reporting to over 50,000 European companies between 2024 and 2026. These companies must now:
- Report on carbon emissions (Scopes 1, 2, and 3)
- Disclose climate-related risks and targets
- Align reporting with EU Taxonomy criteria
This creates immediate demand for tools that help companies measure emissions and find funding for reduction projects.
2. EU Taxonomy for Sustainable Finance¶
Banks and investors are now required to report what percentage of their financing is "taxonomy-aligned." This means they are actively looking for SME borrowers with sustainability credentials -- making Carbon Connect's carbon profiling even more valuable beyond grant matching.
3. Fit for 55 Package¶
The EU's commitment to a 55% emission reduction by 2030 is driving massive new grant allocations at both EU and national levels. Every member state is creating new programs to help businesses achieve these targets, and Carbon Connect aggregates them all.
4. Carbon Border Adjustment Mechanism (CBAM)¶
Export-oriented SMEs now need to demonstrate their carbon footprint to continue trading. This creates urgent demand for both carbon calculation tools and funding to invest in decarbonization.
Market Sizing¶
Total Addressable Market (TAM)¶
All EU SMEs that could potentially benefit from carbon funding:
| Metric | Value |
|---|---|
| Total EU SMEs | 24.3 million |
| SMEs with sustainability needs | 6.9 million (28%) |
| Average platform spend potential | EUR 150/month |
| TAM | EUR 12.4 billion annually |
Serviceable Addressable Market (SAM)¶
SMEs actively seeking carbon funding in our target segments:
| Metric | Value |
|---|---|
| Active grant seekers in target sectors | 1.2 million |
| Carbon-focused subset | 420,000 |
| Average platform spend | EUR 175/month |
| SAM | EUR 882 million annually |
Serviceable Obtainable Market (SOM) -- Three-Year Projection¶
Realistic capture based on our go-to-market strategy:
| Year | Target Customers | Avg. Monthly Revenue | Annual Recurring Revenue |
|---|---|---|---|
| 2026 | 1,500 | EUR 133 | EUR 2.4M |
| 2027 | 4,200 | EUR 168 | EUR 8.5M |
| 2028 | 9,500 | EUR 193 | EUR 22.0M |
Target Industry Segments¶
Our primary market segments represent the sectors with the highest carbon intensity and the greatest access to sustainability funding:
| Segment | EU SME Count | Key Funding Areas |
|---|---|---|
| Manufacturing | 2.1 million | Industrial process efficiency, clean technology |
| Construction & Real Estate | 1.8 million | Green buildings, renovation, near-zero energy |
| Transport & Logistics | 1.2 million | Fleet electrification, sustainable logistics |
| Agriculture & Food | 1.5 million | Sustainable farming, circular food systems |
| Energy & Utilities | 0.3 million | Renewable generation, grid optimization |
Competitive Gaps¶
The market has a clear gap that Carbon Connect fills:
What Exists Today
- Generic grant databases (GrantFinder, Fundsquire) offer search but no carbon intelligence, no AI matching, and no application assistance
- Carbon accounting platforms (Persefoni, Watershed, Normative) measure emissions but do not connect companies to funding
- Traditional consultants provide excellent service but at EUR 5,000-25,000 per application, they are inaccessible to most SMEs
- Government portals have the data but offer poor user experience, no cross-border search, and no matching
What Carbon Connect Delivers
The first platform to combine carbon intelligence + grant matching + AI application writing in a single workflow, purpose-built for the EU carbon funding landscape, at a price point accessible to any SME.
Geographic Opportunity¶
Initial Markets (2026)¶
| Country | Market Size | Grant Landscape |
|---|---|---|
| Germany | Largest EU manufacturing base | BAFA, KfW, national energy programs |
| France | Strong green transition policy | Bpifrance, ADEME, France 2030 |
| Netherlands | High sustainability adoption | RVO, SDE++, WBSO |
| United Kingdom | Active innovation funding | Innovate UK, UKRI, British Business Bank |
| Italy | Large SME population | PNRR funds, regional programs |
Expansion Markets (2027-2028)¶
Spain, Poland, Sweden, Belgium, Austria, and the remaining EU member states, plus Switzerland and Norway.
Why Now¶
Three factors make this the right moment:
- Regulatory urgency -- CSRD, EU Taxonomy, and Fit for 55 are creating immediate demand
- AI maturity -- Claude and similar models make application generation feasible at under EUR 0.01 per application
- Open data momentum -- EU and national governments are making grant data increasingly available through APIs
The window is open. The first platform to establish itself as the "go-to" for carbon funding discovery will benefit from strong network effects as user interaction data improves matching accuracy over time.