6 Climate Tech Companies and Startups Fighting Climate Change
Climate technologies are central to formulating effective, sustainable strategies and meeting climate goals. Per Capgemini's research, 37% of organizational executives need climate tech to meet their decarbonization goals. However, the cost of climate tech solutions is widening the green premium and becoming a barrier to scale adoption. Innovations that offer commercial viability of climate tech solutions will be a key focus as the industry evolves.
What is Climate Tech?
Climate tech refers to technologies designed to address climate change by reducing greenhouse gas emissions, enhancing energy efficiency, and promoting sustainable practices. These technologies span various sectors, including renewable energy (solar, wind, hydro), carbon capture and storage, electric vehicles, sustainable agriculture, energy-efficient building materials, and smart grid systems. Climate tech aims to mitigate the impacts of climate change, adapt to its effects, and ultimately support the transition to a low-carbon, sustainable economy.
Why Climate Tech Matters
Climate tech is crucial for tackling the escalating climate crisis and achieving net-zero emissions targets. It drives innovation, offering solutions like renewable energy and carbon capture to combat climate change. Achieving net zero by 2050 depends on developing high-impact, high-risk climate technologies. According to the International Energy Agency (IEA), 35% of the emission reductions required by 2050 will be contingent on technologies still in development and not yet commercially available. Climate tech solutions—clean hydrogen, sustainable aviation, maritime fuels, waste-to-value technologies, long-duration energy storage, and carbon removal—are technically feasible but require significant investment to scale availability and adoption. Creating specialized funding, training founders to gain financial acumen to attract funding, and building partnerships with emerging economies to develop climate tech ventures will accelerate the market. The climate tech sector also creates economic opportunities, including job creation and technological progress.
Climate Tech Investments
2023 saw a year-over-year decline of over 40% in climate tech funding, a drop in tandem with an overall slowdown in private market activity, as per PwC's 2023 State of Climate Tech report. However, in the first quarter of 2024, climate tech startups demonstrated resilience and growth by raising $8.1 billion in funding, nearing record levels and marking a solid recovery from a quieter end to 2023 based on a TechCrunch publication. The publication also highlighted that despite a 20% decrease in deal volume compared to Q4 2023, the total investment value surged by nearly 400%, driven by substantial investments in materials such as green steel and battery innovations.
This flurry of activity reflects sustained investor confidence in climate tech's potential to address global challenges while presenting lucrative economic opportunities. The U.S. federal investment in industrial decarbonization was also a catalyst for deal value growth, as per PitchBook's Q1 2024 Carbon & Emissions Tech Report. Early-stage venture capital firms like Climate Capital, Lowercarbon Capital, and SOSV largely drove the number of deals in the climate tech space.
Despite rising investor interest, capital-intensive hard-tech solutions for the climate are still far from becoming scalable, as product-market fit still needs to be achieved. The World Economic Forum estimates that current investment levels are insufficient and states that a $2 trillion financing gap for climate tech currently persists. This mismatch makes diversifying funding sources, including government and private sector support, essential to bridge the funding gap.
Top Climate Tech Companies and Startups
Beyond Meat
Animal agriculture accounts for 14.5% of global greenhouse emissions, with primary contributors to this being beef and dairy cattle (65%), as per the United Nations' Food and Agriculture Organization. Beyond Meat is tackling this problem by developing a range of plant-based products, including burgers, sausages, and ground beef, designed to mimic traditional meat's taste, texture, and cooking experience. The company uses a proprietary process to extract proteins, fats, and other components from plants like peas, mung beans, and brown rice to recreate the sensory experience of meat. By offering plant-based alternatives, Beyond Meat aims to reduce greenhouse gas emissions, land and water use, and other environmental impacts associated with industrial animal agriculture. Replacing just one quarter-pound beef burger with a Beyond Burger can save 2.5 pounds of CO2 emissions.
Beyond Meat's 2022 life-cycle assessment reveals significant environmental advantages over traditional beef. Compared to an 80/20 quarter-pound beef patty produced in the U.S., the Beyond Burger emits 90% fewer greenhouse gasses, requires 37% less non-renewable energy, uses 97% less land, and consumes 97% less water. Even accounting for land use change, the plant-based patty achieves an 89% reduction in global warming impact. Beyond Meat's focus on sustainability extends to nutritional benefits, offering more iron, less fat, fewer calories, and zero cholesterol than beef, reinforcing its commitment to sustainable, healthier food alternatives.
Climeworks
Climeworks, a Swiss company, specializes in direct air capture (DAC) technology to remove carbon dioxide (CO2) directly from the ambient air. Their advanced DAC machines filter CO2 through adsorption-desorption, and the captured CO2 is then permanently stored underground. Partnering with Carbfix in Iceland, Climeworks ensures the CO2 mineralizes into stone, guaranteeing long-term storage. Their DAC plants are powered by renewable or energy-from-waste, maintaining a low carbon footprint. By permanently removing CO2 from the atmosphere, Climeworks' technology directly addresses climate change, with the IPCC (Intergovernmental Panel on Climate Change) recognizing such technologies as vital for limiting global warming to 1.5°C. Climeworks is rapidly expanding and planning megatonne-scale DAC facilities in multiple countries to meet international climate goals. Their high-quality carbon removal services enable businesses and individuals to offset hard-to-abate emissions, supporting the transition to net zero.
Climeworks has developed its "Generation 3" DAC technology, which doubles the CO2 capture capacity per module, halves energy consumption, increases material lifetime, and cuts costs by up to 50% compared to previous generations. This new technology will be deployed in the U.S. and replicated globally.
Ørsted
Ørsted is a global leader in offshore wind energy, specializing in developing and operating large-scale offshore wind farms. As the world's largest offshore wind farm developer, Ørsted boasts over 8 G.W. of installed capacity worldwide, with projects in the UK, Denmark, Germany, the Netherlands, Poland, Taiwan, and the U.S. By aggressively investing in offshore wind and phasing out coal, Ørsted became the world's largest producer of offshore wind energy by 2019 as published in a McKinsey article. The publication also stated that the company achieved its target of raising its renewable generation share to 86%, reaching this milestone 21 years ahead of schedule. The company aims to expand to 20-22 G.W. offshore wind capacity by 2030. Ørsted's innovations include record-breaking projects like Hornsea 2, the world's highest-capacity offshore wind farm at 1.3 GW, and the upcoming Hornsea 3, which will have a capacity of 2.9 GW. Their technical advancements have significantly improved turbine power and efficiency, with Hornsea 2 turbines being nearly 18 times more potent than those used in the first offshore wind farm, Vindeby. Ørsted is also investing in floating offshore wind technology for deeper waters. Ørsted's offshore wind farms provide clean, renewable energy, reducing reliance on fossil fuels and lowering carbon emissions. Additionally, their projects generate jobs and stimulate local economies, contributing to sustainable economic growth.
Motif FoodWorks
Motif FoodWorks is pioneering innovations in plant-based food technology with key advancements like extrudable fat technology, which integrates plant-based fats and proteins through extrusion for more authentic marbling and texture in plant-based meats. Their prolamin technology uses natural corn protein to provide melt, stretch, and bubbling qualities in plant-based cheeses, addressing a critical gap compared to dairy cheese. Additionally, Motif focuses on enhancing plant-based foods' flavor, texture, moisture retention, and mouthfeel. These innovations contribute to more sustainable food production and reduce the environmental footprint of animal agriculture. Motif aims to increase consumer adoption of these sustainable options by improving the sensory and nutritional profiles of plant-based foods. In summary, Motif FoodWorks is at the forefront of plant-based food technology, developing solutions that replicate desirable qualities of animal products using sustainable, plant-derived ingredients, supporting the transition to environmentally friendly and healthier food systems.
Sublime Systems
Sublime Systems is reinventing how cement is produced with a mission to decarbonize the $410 billion cement industry globally. MIT Technological Review states that cement is a significant climate risk, with approximately 8% of global greenhouse gas emissions attributed to the industry. Sublime Systems is a pioneering climate tech company revolutionizing cement production with an innovative electrochemical process. This breakthrough technology, powered by electricity instead of fossil fuels, has the potential to reduce cement-related emissions by up to 90% compared to traditional methods. According to a CNBC publication, the company is on track to set up a new plant in Boston, which it estimates will produce 30,000 tons of clean cement every year.
XFuel
This Irish company is changing how sustainable and low-carbon fuels are produced for road, marine, and aviation transport sectors. The fuel is created by building a modular plant that will help it scale production to develop fuel from marine sludge to waste biomass. The company claims to deliver fuel with an 85% reduction in emissions and eventually carbon-neutral fuels in the future. Using waste biomass and other waste oils helps the production process reduce 145% of greenhouse gas emissions.
The Future of Climate Tech
Bloomberg states that the world must invest $8 trillion in climate tech annually by 2050 to combat global warming. Investment appetite in climate tech solutions is projected to have a positive trajectory through 2024. As more countries unite to follow through on the Paris Climate Agreement commitments, delivering climate solutions will become more urgent and concrete. Climate-caused technologies like artificial intelligence (AI) for analytics, electric vehicles, and petroleum-based product alternatives are coming to the forefront. The industry's growth will be driven by a better regulatory environment, evolving market dynamics, and growing consumer concerns about climate risks.
The convergence of tech and climate change solutions is more than a trend—it's a crucial movement towards sustainability and climate resilience. From policymakers to investors and from students to entrepreneurs, everyone has a role to play in fostering the growth of climate tech. By staying informed and supporting these innovations, we can collectively address the challenges of climate change and build a better world for future generations.
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