As Dr. Glen Peters, a GCP member at the Centre for International Climate Research (Cicero) in Norway, stated in the Guardian, “Many countries, cities, companies, and individuals have made pledges to reduce emissions. It is a stark reminder that despite all this rhetoric, global fossil CO2 emissions are more than 5% higher than in 2015, the year of the Paris agreement.”
While global emissions are objectively heading in the wrong direction, global awareness and new climate technologies (and funding for them) are also at an all-time high.
One of the biggest questions about these two data points is—how much can climate change technology (ClimateTech) alleviate global warming versus how much we need more aggressive legislation? The answer, unsurprisingly, is both, but the essential component is how much they rely on one another.
We can define ClimateTech as all technologies that can take our global infrastructure from producing 59 gigatons of emissions a year to zero. This is a gigantic undertaking that obviously can’t be done in a matter of years. However, there is significant reason to hope that ClimateTech can bring our global infrastructure to zero greenhouse gas admission by 2050.
How and Why ClimateTech Innovation Requires a Different Investment Approach
A promising sign is that, despite the decline of Tech VC funding over the past few years, ClimateTech funding is increasing. Since 2018, ClimateTech funding has generated about $260 billion in funding and $50 billion in 2022 alone. Also, in 2022, startups that targeted sectors that produce 85% of global greenhouse emissions garnered 52% of ClimateTech funding, up from 39% the year before.
This promising transfer of investment to ClimateTech is even bolder than it may appear. Over the past 20 years, the inclination of VC funding was towards “disruptive” startups that could deploy their tech quickly at scale (relying on software) that ostensibly would lead to fast ROI. For ClimateTech, more steady, longer-term investment strategies are needed.
In a 2022 interview titled “Steel in the Ground: How Climate Solutions Need to think Big, Huge Scale and VCs to Go Along,” Derek Warnick, Co-Founder and CFO of Electric Hydrogen discussed the shift in investment philosophy:
“Individual investors and large investment groups looking at climate tech are more comfortable with the time scales being fundamentally different than classic venture capital. Classic venture capital is constrained by what is termed the fund life cycle, and the timing where they need to harvest or monetize their investments, typically a total of seven years. That works fine if you’re building a software company, where you take in money year one and four years later, you get sold or you IPO. I think in climate tech investing, you’re seeing a lot of different funds that now have 10- or 20- or 30-year or even evergreen fund lives where the individuals and institutions that invested in these venture capital firms are willing to wait longer.
They know the problems are complex and they understand that it may take five or ten years for this to get to where it needs to go – and that’s okay. Rushing innovation may lead to failure and for these solutions to scale, we must take the time that’s necessary to get there.”
Although in a different realm, large corporate institutions are also increasingly making sustainable financial decisions or holding themselves accountable when failing to meet green standards. In 2020, Visa introduced its green bond worth $500 million to foster environmental sustainability and a sustainable payments ecosystem. Tesla recently cited ecological concerns as the reason they backed out of accepting Bitcoin payments.
The investment and slower pace of funding in ClimateTech solutions are essential because of the general hardware that needs to be produced and adopted in scale. The speed of development for technologies like wind turbines, solar panels, and batteries are ramping up, and getting significantly more federal funding; however they are fundamentally different from the software-based tech that has dominated over the past thirty years.
5 Essential Innovation Sectors for ClimateTech to Reduce Greenhouse Gases
As laid out in John Doerr’s brilliant and highly accessible book “Speed and Scale: An Action Plan for Solving Our Climate Crisis Now,” the imperative over the next 25 years is to go from the aforementioned 59 gigatons of greenhouse emissions a year to zero. Doerr lays this daunting challenge out in a simple “napkin” outline:
Image source: speedandscale.com
While there are, without question, more than five sectors ClimateTech is prominent in, to better understand the areas this napkin outlines, we can look at the below as a window into achieving a zero-emissions future.
One of the primary ClimateTech solutions is carbon capture — technology that traps carbon dioxide and either stores it or repurposes it. This technology is still in development, but some organizations are already putting it to use.
Net Zero Teesside (NZT) — named for the Teesside industrial region in Northern England — is a collaborative United Kingdom-based initiative involving major players in the industrial, hydrogen, and energy production sectors. NZT’s mission is to capture carbon dioxide produced by power plants and certain industrial processes and transport it via pipeline to deep-sea storage.
Another carbon storage technology is based on the same technology NASA used to capture carbon dioxide on Mars. This tech captures carbon dioxide produced in the beer-brewing process that can then be reused in the beer-carbonation process.
A growing carbon capture technology is direct air capture (DAC), in which machines “vacuum” carbon dioxide from the air and store it in underground containers. As of November 2021, 19 small DAC plants were operating around the world, with a larger DAC plant anticipated to come online in the United States by 2024.
DAC technology is drawing attention from investors, along with companies like Microsoft and Shopify that have paid for DAC services to offset their greenhouse gas emissions. However, the cost of establishing a DAC plant remains a barrier to the widespread adoption of this technology.
Moving away from combustion-based energy and towards renewable very much depends on battery technology. Lithium-ion batteries, the dominant form, are continuing to get better and cheaper, but there is concern over the availability of resources for this type of battery to hit a big enough scale.
Recent legislation in the U.S. and abroad are focusing billions of funding dollar on battery development. An example of this type of startup development can be seen in Form Energy, which is developing an iron-based batter that MIT Technology Review has explained “uses a water-based electrolyte and basically stores energy using reversible rusting.” Form Energy announced in December 2022 that they are opening a $760 million manufacturing facility in West Virginia.
In addition to new forms of chemistry to create long-lasting batteries at scale, battery recycling will be essential. This is true not only for the supply of batteries but also to reduce the environmental impact of battery waste. One such recycling plant is Redwood Materials, based out of Carson City, Nevada. Redwood’s mission “is to build a circular supply chain to power a sustainable world and accelerate the reduction of fossil fuels.
The combustion of fossil fuels contributes to a large amount of carbon dioxide in the atmosphere. Technology to combat climate change includes alternative methods of powering vehicles that travel by air, land, or sea.
Ships account for 2.5% of carbon dioxide emissions globally, but efforts are underway in Sweden to create a ship that produces zero harmful emissions. The project — Gotland Horizon — could launch the first large hydrogen-powered ship as soon as 2030.
The Gotland concept is to use green hydrogen (derived from using wind energy to split water molecules) as fuel, producing only water in its emissions. Similar technology has already powered a ferry in Belgium and other small boats. The Gotland Horizon would be the largest hydrogen-powered ship, with the capacity for 1,900 passengers, 600 cars, and 100 trucks.
Airplanes burn large volumes of fuel and account for about 2% of global carbon emissions. Jumbo jets consume too much energy to be powered by batteries alone — the number of batteries required for flight and their combined weight (an estimated 1.2 million pounds) means e-powered trans-Atlantic flights may not be a reality until a lightweight battery solution exists. However, battery power is feasible for small commuter planes on short trips.
Boeing has been developing battery-powered aircraft, including a plane that could operate autonomously and travel up to 50 miles. NASA has spent 10 years developing an electric two-seater plane with a range of about 100 miles. In 2021, a small Cessna with room for nine passengers flew on battery power for about 30 minutes, and a hybrid plane flew for 2.5 hours.
Private companies, including Tesla, also work on electric and hybrid plane technologies.
Tractor-trailers, heavy trucks, and buses account for about 10% of vehicles worldwide but around 50% of total carbon dioxide emissions. Long-haul trucks aren’t well suited to battery operation based on the amount of battery power they’d need and the frequency with which batteries would need to be recharged. Smaller trucks traveling local routes could be battery-powered, although charging stations would need to be more conveniently located — and in greater density — for fleets of battery-powered trucks to operate.
We anticipate seeing the growth of infrastructure that supports battery-powered trucks.
Agriculture is a necessity, but maintaining livestock contributes to greenhouse gas emissions. Innovators are looking toward meat alternatives and livestock care technology that could help reduce hazardous emissions.
One-third of all methane emissions come from grazing animals that emit the gas through their mouths and nostrils as they digest food. Cattle and dairy farms are, therefore, some of the largest methane producers on the planet, but new technology could be poised to reduce livestock-based methane emissions dramatically.
Cargill, one of the top producers of agricultural products globally, and the Zero Emission Livestock Project (ZELP) have collaborated on the development of wearable technology that neutralizes methane as cows exhale it. In tests, this technology has shown the potential to reduce cattle-related methane emissions by 53%. The device, which is expected to launch in late 2022, also gathers data about livestock health.
Reducing dependency on livestock may be another way to slowly curb greenhouse gas emissions, and plant-based meats could help facilitate that change.
The process of “growing meat” in a laboratory involves a protein called heme that both plants and animals share. This protein can be extracted from plants and re-engineered to produce foods that have the texture, taste, and color of meat.
McDonald’s, Burger King, and KFC are three fast food chains rolling out plant-based meat alternatives in select markets. McDonald’s partnered with Beyond Meat to create a meatless “McPlant” burger and tested the sandwich in some markets in Europe and the United States. In January 2022, McDonald’s announced it would add the sandwich to 600 locations in San Francisco and the Dallas-Fort Worth area in February.
Because fossil fuels generate an enormous amount of greenhouse gases, finding alternative energy sources will be crucial to reversing climate change. Several large-scale projects aim to harness more solar and wind energy, and projections indicate that by 2026, renewable energy sources will amount to 4,800 gigawatts — that’s equivalent to the power generated by all nuclear plants and fossil-fuel plants in the world.
Solar power is not a new technology, but today’s innovators are looking at ways to use solar energy in locations that are too densely populated or too rugged to support large solar panel installments. Floating solar energy stations may be the climate change technology that solves this problem.
In November 2021, South Korea launched its 41-megawatt floating solar power plant on a water reservoir. While not the first such plant in the country, it’s the largest in the world. The plant can produce enough power for 60,000 people.
Sustainable Marine is on track to launch the first floating tidal energy platform — Plat-I — in 2022. Harnessing the power of tides has historically been a challenge, because of safety concerns in turbulent waters and the difficulty of building structures in such areas. The Plat-I is a modular system that can be easily towed through just two meters of water, with a mooring system that allows it to flex along with tidal changes. It also features remote operation capabilities.
The platform underwent testing in Nova Scotia’s Bay of Fundy, known for having the highest tides on Earth. Once online, the platform will connect to an onshore power station.
How MassChallenge Drives ClimateTech Innovation
The 4-week program will employ the Dreams and Details framework, created by Jim Hagemann Snabe (Chair, Siemens) and Mikael Trolle (former CEO, Volleyball Denmark). Since its publication in 2017, Dreams and Details has provided many of the world’s largest legacy corporations with the tools and strategic mindset needed to thrive in a rapidly digitizing world.
This framework was used by Snabe himself during his time as Chairman of Maersk, where he oversaw a massive decarbonization transition, with a plan to launch 8 container vessels running on carbon-neutral methanol by 2024 and become carbon-neutral by 2040.
“We believe that the technologies that will define the next century have already arrived, and that what’s required now is global cooperation and leadership to scale faster and convert decarbonization to a business opportunity,” said Snabe, who is also the Chair of Kaplak Partners. “At Kaplak Partners, we are excited to launch the Decarbonization Accelerator in partnership with MassChallenge so that we can both deploy bleeding-edge decarbonization technologies at an industrial scale, and also provide mentorship to a new generation of purpose-driven business leaders.”
“In 2017, when we were working on different projects in the cooling sector – we realized, that there is an immense potential in saving CO2 with focusing on building heat pumps with natural refrigerants for the retrofit market. 51% of world wide overall energy consumption is going into heating and cooling and only 11% comes from renewable energy sources. That is why we need to achieve the heating transition to achieve the energy transition. With our products we built a solution for the millions of buildings that were built before 1990 and are in desperate need for an upgrade of their heating systems to drastically reduce their emissions.”
“My cofounder, Siwen, and I started Sundial Foods as UC Berkeley students while studying plant biology & molecular biology respectively. Like many university students, we both had aspirations of doing something to positively impact the world. We tackled our global food system — namely meat production — because climate-forward innovation in food can not only decrease the environmental and resource burden of food production but can also impact public health, accessibility, and nutrition. We’ve spent nearly four years developing a cost-effective processing method for giving plants a meaty texture and delivering the protein a person needs without any harmful additives — and of course without animals. We really find joy in the challenge of it all, and also in the freedom of entrepreneurship — it’s been extremely fulfilling to not only work on a climate-focused mission but to see the happiness that good food” brings people.”
“Growing up in a rural part of Maine, I could see all the stars in the night sky clearly from my backyard. Then as an adult I developed a true appreciation and love for our planet. I’ve used my entrepreneurial endeavors to seek out the nexus of where technology can benefit both humanity and our planet, first with a solar company, and now with a carbon-neutral, nontoxic rocket launch company.”
MassChallenge’s goal for this program alongside partners 401 Tech Bridge, BAE Systems, MITRE BlueTech Lab, Raytheon Technologies, and Navsea Warfare Centers is to convene maritime leaders with startups that have the tools and ideas to leverage ocean technology to provide solutions to the maritime industry.
The six-week sprint program is broken into three distinct modules designed to offer a wide range of industry perspectives, customer acquisition and an understanding of the funding landscape. Experts in Blue Tech discuss the sector and why high-impact startups are crucially needed to push innovation forward. Module 2 focuses on Blue Tech Opportunity as we hear from successful founders and leaders in government who are navigating the blue frontiers. In the last module (“Funding Blue”), founders immerse themselves in discussions with blue investors and DOD and SBIR experts to understand better both equity financing and non-dilutive funding options for their solutions.
In its inaugural year, the program welcomed an expanded group of 12 startups to participate alongside 4 fellows to accelerate their innovations in the ocean, defense, and wind industries. Initially, the cohort was not to exceed 10 startups, but because of the promising nature of the group, a larger cohort emerged. The cohort represents 10 blue tech focus areas that include undersea/unmanned vehicles, sensors (concepts, signal processing techniques), IT communications, data transfer, cybersecurity, digital twins, modeling & simulation, composite materials, electronic systems, oceanographic research, materials certification, and artificial intelligence/machine learning (autonomy & data science). Learn about the Blue Tech Cohort here.
Sustainable Food Solutions
The food value chain accounts for c. 25- 30% of total Green House Gas emissions. According to the IPCC, observed climate change is already affecting food security through increasing temperatures, changing rain patterns, and a greater frequency of extreme events. Combining supply-side actions such as efficient production, transport, and processing with demand-side interventions such as modification of food choices and reduction of food loss and waste, can reduce Green House Gas emissions and help feed the planet’s projected 9 billion population in 2050.
“To accommodate the exploding population and meet the growing demands of protein, a radical change in the way we think about protein production is ever more important. Status quo is not a cure, doing less harm is no longer enough. Unlocking macro-nutrients at the micro-level is the ONLY way forward to a sustainable future that creates minimal footprint.” – Eugene Wang, Co-founder & CEO at Sophie’s Bionutrients, a MassChallenge cohort member in 2021.
Sophie Bionutrients leverages technology to increase sustainable protein production for the world! We are revolutionizing alternative protein production with our technology to address food security and supply chain disruptions.
“Enabling sustainable protein supply is critical to bring nutrition to a growing world population without further compromising the environment. Scaling solutions which allow us to decouple protein supply from arable land while reducing the environmental footprint will be an essential part of the solution,” – Erika Georget, Head of Food Bioprocessing at Bühler Group, a MassChallenge Switzerland corporate partner.
ClimateTech is a global industry that is essential to develop. As more legislative funding and incentives are pushed to these dynamic technologies, disruption to much of our energy infrastructure is imminent.
MassChallenge has helped connect the problem-solvers of tomorrow with corporations and investors who share their vision for change. We are always searching for brilliant ideas and partners that can make those ideas a reality.