Climate
change is real – that’s not the question anymore. Global momentum is building
to achieve net zero in greenhouse gas emissions. Along with Government
initiatives, startups are emerging across the value chain to tackle this
imminent challenge.
In
today’s newsletter, we explore the emerging Climate Tech space, and how
startups are using technology and business innovations to solve this.
Addressing
what exactly is Climate Tech – and how is it different from Clean/Green Tech?
Climate
Tech is directly focused on technologies that reduce greenhouse-gas emissions.
In comparison, Clean Tech includes a wider variety of technologies designed for
environmental purposes. The Climate Tech landscape is building on 4 key
segments today: mobility, food, energy, and monitoring these changes. By 2025,
investors are expected to infuse US$1.5-2T annually into a wide range of
startups.
- Low
carbon mobility or the EV sector is one of the most important areas of focus
and is expected to grow at a CAGR of 65.1%
- Food
production contributes around 37% of global greenhouse gas (GHG) emissions,
where animal-based foods produce roughly twice the emissions of plant-based
ones
- Energy
efficiency is an integral component in mitigating GHGs, energy production of
all types accounts for 72% of all emissions.
- Industrial
decarbonization entails reducing GHGs from all aspects of the industry and
value chain (manufacturing, packaging, etc.) without compromising the sector’s
economic competitiveness
- The
Indian market landscape of the EV ecosystem has several market participants
across the value chain
- There
are start-ups across the globe directing their activities to the production of
lab-based meat and optimizing agricultural processes
- This
market consists of a large variety of products ranging from renewable energy
sources, apps to minimize carbon footprints, IoT based
energy-efficiency-as-a-service platforms, etc.
- Some
of their products include – bamboo-based packaging, 100% biodegradable plastics
and alternative fibres
Investment
in Climate Tech has been dominated by the energy and transport segments,
accounting for over two-thirds of funding last year. 2021 marked the highest
number of Climate Tech deals yet, with 28 unicorns emerging in the space (up
from 6 in 2019). Although nascent, agriculture sector has been gaining traction
lately.
Globally,
Climeworks AG, a Swiss player specializing in carbon dioxide air capture
technology secured USD $650M from Partners Group and GIC, making it the largest
Climate Tech deal so far.