market research agencies in mumbai
16 Sep 2022

Climate Tech: An emerging sector


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.