10 Climate Tech Trends to Keep an Eye on in 2023 | Deeptech Briefing
What is Climate Tech? Why are climate change tech investments heating up? Let's uncover 10 Deeptech startup trends and the rewards that await climate innovators in line with our sustainable goals.
Hey folks 👋
Welcome to our #5 edition of Deeptech Briefing!
Happy to see 9 new subscribers from all over the world this week, we hope you enjoy your stay with us.
Like always, we invite you to share your feedback and new ideas to bring more value to our community.
So, if you have any specific interests you want us to explore, you can drop us a line here: info@thescenarionist.org
And now, let’s approach the Climate Tech world!
Last Saturday was Earth Day 2023 whose motto was “Invest In Our Planet”.
So, we decided to focus our #5 edition to map the Climate Tech landscape because it is the macro-trend including all the Deeptech startups providing solutions against Climate Change.
However, approaching “the Climate Change problem” can be a little too wide to digest. It is composed of a mix of industries, technologies, and companies approaching different problems in different ways.
So, we decided to define what climate tech means, map the investment landscape, and explore 10 promising trends included in this giant one.
For new subscribers: this email is the weekly quick recap of our work.
If you want to read the extended 30 min read version, including references, you can find it here:
What is Climate Tech?
In brief, climate technologies fall into 3 main categories that together reflect the policies and priorities of governments and communities around the world:
Technological solutions that reduce or capture CO2 emissions or help reduce future emissions.
Climate change technology that supports adaptation and resilience in the face of climate change impacts.
Solutions that collect, analyze, and track climate change data
So, "Climate Tech" is both an industry and embedded in other industries.
For example, there are companies that reduce greenhouse gas emissions through carbon capture or provide sustainable solutions for transportation, energy, geoengineering, and manufacturing all qualify as working in climate technology.
But there are also companies working in the supply chain, sustainable construction, or sustainable land and water management.
Why does Climate Tech matter today?
Climate change has become a major concern for global leaders in recent years, as it severely impacts people, animals, and the environment worldwide, forcing countries to take various measures.
To meet the UN Sustainable Development Goals for 2030 and keep the global temperature rising below 1.5°C, we will need some technical solutions from collective mitigation efforts.
In a nutshell: the world will need dozens of breakthrough climate technologies in the next decade to achieve our long-term goal of near-zero emissions by 2050.
However, experts estimate that up to 50% of the emissions reductions we need will come from technologies that are not yet ready for the market.
As a result, investments in climate tech have surged as governments urge companies to adopt favorable climate policies and transition to green.
On the other hand, the growing awareness of the potential of climate technology is not just about the altruism and nobility of saving the planet but also rooted in the fact that urgency fuels unprecedented opportunity.
Here are a few numbers and facts:
The number of climate tech companies has grown significantly in the past decade, with approximately 35,000 established between 2010 and 2022.
The U.S. leads with 14,300 startups, followed by the U.K. with 5,200.
Funding for climate tech is expected to reach $20 billion a year in the U.K. alone by the end of the decade.
Major companies like Amazon and Microsoft are investing heavily in climate tech, reflecting the industry's momentum and resilience during economic and energy crises.
Finally, here is a quick snapshot of the "opportunities" of 2021 and 2022.
Now let’s zoom in on the VC investment landscaping, before diving into market niches.
Why are climate tech investments heating up?
Let’s start with a quote to put everything into the right perspective:
“Larry Fink, CEO of BlackRock, the world’s largest asset manager with $10 trillion under management, has called decarbonizing the economy the “greatest investment opportunity of our lifetime” and predicted that the next thousand “unicorns” will be “startups that help the world decarbonize and make the energy transition affordable for all consumers."
- MIT Technology Review
So, basically, aside from saving the planet, there are serious rewards that await climate innovators.
Moreover, according to Climate Tech VC, investments made last year amounted to roughly $40 billion and were distributed among an impressive 1,000 transactions.
The latter metric witnessed an increase of over 40% in 2022 as compared to the preceding year, indicating the widespread proliferation of innovations in the climate technology space.
Here's a global picture of that:
Not so bad, right?
10 Climate Tech Trends to Keep an Eye on in 2023
And now let’s try to dive into the 10 most promising Climate Tech trends in 2023 according to the literature.
The extended 30 min-read deep dive, including references, is available here:
If you're short on time, here's what you need to know in 2 min read:
10. 🕸 Carbon Capture and Storage (CCS)
Carbon Capture and Storage (CCS) is a key innovation for achieving net-zero carbon emissions, capturing about 90% of CO2 emissions from industrial processes.
The captured CO2 can be used for valuable products or stored underground.
Increasing adoption in major sectors and demand for low-carbon solutions are driving the global CCS market, expected to reach $9 billion by 2032.
9. 🌽 Sustainable Food Production
Sustainable food production is crucial to meet future food demand.
Startups are developing smart farming solutions, plant-based meat alternatives, and urban farming systems.
Governments provide incentives. Market size is projected to reach $28.53 billion by 2030 with a 9.9% CAGR.
8. 🏡 Sustainable Buildings
Sustainable buildings focus on reducing energy consumption and emissions.
Innovations include smart HVAC, energy-efficient lighting, and clean energy generation.
Net-zero energy buildings are gaining popularity, with a market estimated to reach $403 billion by 2031, growing at 18.7% CAGR.
7. 💦 Water Management & Treatment
Water management and treatment technologies are crucial in addressing global water scarcity.
Deeptech startups are developing innovative solutions like advanced filtration, smart irrigation, and water-saving devices.
For example, Saudi Arabia has over 60 water treatment projects to triple their desalination capacity by 2027.
We have already explored available solutions for managing water scarcity in agriculture. You can find it here:
6. 🚗 Sustainable Mobility
Sustainable mobility solutions, such as electric vehicles, hydrogen fuel cells, and shared mobility models, are crucial in reducing carbon emissions in transportation.
Startups are developing innovative technologies to improve fuel efficiency and offer attractive investment opportunities.
However, sustainable hardware solutions like energy production, distribution, materials, and batteries are also needed to achieve net-zero emissions.
Flow Batteries can be a promising solution. We explored this field last week, you can find it here:
5. ⚡️ Renewable Energy Production
Renewable energy, including solar, wind, geothermal, and biofuels, is gaining momentum in the shift towards clean energy.
Startups are designing off-grid solutions, while established corporations are increasing renewable energy portfolios.
Nuclear and hydrogen power are also advancing.
The global renewable energy market is projected to reach $1,977.6 billion by 2030 but requires initial investments for infrastructure and resource exploration.
4. 📦 Sustainable Plastics & Packaging
Sustainable plastics and packaging are crucial for achieving a circular economy.
Moreover, national bans and regulations are pressuring companies to invest in meeting their plastics commitments.
Startups are developing biodegradable materials, including bio-based plastics and compostable packaging, to reduce waste and pollution.
The sustainable plastics market is projected to reach $828.8 billion by 2030.
3. 🏭 Low-Carbon Manufacturing
Low-carbon manufacturing methods, such as sustainable materials and energy-efficient processes, are helping reduce greenhouse gas emissions in the industrial sector.
Startups are developing innovative heat recovery systems and manufacturing companies are implementing decarbonization measures in supply chains and waste management.
Partnerships with electric vehicle fleet providers for logistics operations are also contributing to reducing the carbon footprint of manufacturing.
Recently we explored a key industrial sector accounting for about 8% of global CO2 emissions today: steel production. You can check the Green Steel trend out here:
2. ♻️ Waste Management & Circular Economy
The circular economy aims to reduce waste and pollution by reusing low-value and end-of-life products.
Climate tech startups are innovating waste management technologies to maximize material recovery, recycling, and upcycling, generating additional revenue.
The global waste recycling services market is projected to reach almost $90 billion by 2028.
1. 📊 Carbon Data Analytics
Climate tech startups use IoT sensors and satellites for accurate climate data collection and analysis, leading to improved climate models and better planning.
Carbon accounting platforms help businesses assess carbon projects' effectiveness, enhancing brand value and sales.
The global carbon accounting software market is projected to reach $64.39 billion by 2030.
If you want to dive deeper into Climate Tech Trends (and see the references), press the button below:
Before you go, we invite you to share your feedback to bring more value to our community.
If you have any specific interests you want to explore with us, you can drop us a line here: info@thescenarionist.org
Thank you for your participation and let's make the next editions even more engaging and informative for everyone in our community! 💪
See you next week!
Best,
The Scenarionist Team
Disclaimer
Be aware: this is not investment advice! This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. DYOR - Do Your Own Research.
The technologies and companies mentioned are not part of our investments, nor do they pay us for promotional purposes.
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