11 Startups Leading the $1.8 Trillion Climate Tech Revolution
These companies have won BloombergNEF’s annual Pioneers competition for the most promising climate tech.
By Brian Kahn and Michelle Ma
The 2020s are a pivotal decade that will show how serious the world is about stemming global warming.
It might seem like the fight is losing steam, given furious backlash from multiple quarters, including investors, farmers and drivers. Yet, a record $1.8 trillion flowed into green technologies last year, helping to grow a generation of startups seeking to cool the planet. That innovation is what underpins BloombergNEF’s annual Pioneers competition, which identifies some of the most promising companies rising to meet the climate challenge.
In the world these startups are trying to build, clean energy rushes through state-of-the-art wires. Jets run on emissions-free fuel created from plants. Apartments tap the Earth to stay both cool and warm.
But, of course, it’s not that simple. It’s far from clear whether these solutions will get the support they need to reach escape velocity and transform our economies.
In 2024, half the planet’s population will go to the polls. No election may have a bigger impact on the climate than the US, where former President Donald Trump has promised to gut most of the nation’s biggest climate law if he wins.
Voters in India, the world’s largest democracy and a growing power player at global climate talks, will also have their say. So will citizens in five Latin American countries, including Mexico, where climate scientist Claudia Sheinbaum could win the presidency. In Europe, right-wing politicians are poised to take a bigger chunk of the seats in the European Parliament.
Permits and regulations are two other major potential bottlenecks to deploying more clean energy. Officials are facing a huge backlog of applications, particularly around adding new transmission lines and upgrading existing ones. Without a faster process, projects could languish, prolonging the life of fossil-fuel infrastructure.
Perhaps the biggest hurdle is demand. While clean energy now costs the same as, or less than, fossil fuels, other pieces of the decarbonization puzzle still come with a “green premium.” The question remains: Who will buy more costly technology and materials, and how much are they willing to pay?
“I think it’s easy to say, ‘let’s throw subsidies and tax credits at things,’” said Claire Curry, the strategic lead of BNEF’s technology and innovation research. But it’s not always that easy to just “drop in” a greener replacement, she said, if there isn’t enough demand to drive the change.
BNEF identified three key challenges for this year’s Pioneers: getting clean power on the grid faster, lowering buildings’ carbon footprints, and developing low-carbon fuels. It also awarded three startups in its “wildcard” category. The 11 winners were selected from 240 applications and voted on by a group that included Bloomberg Green editors.
Challenge 1 Relieving clean-power bottlenecks
At last year’s global climate talks in Dubai, governments set a goal to triple renewable energy by the end of this decade. Building solar and wind is cheaper than ever, but other bottlenecks could put that target in danger.
For example, it can take up to seven years in the UK for a wind or solar farm to come online after its been permitted, according to Mark Daly, head of technology and innovation at BNEF. Changing regulations is one way to cut down that time. Technology, though, can help developers speed up grid feasibility studies and find the best sites for projects.
The grid will also need an overhaul. BNEF forecasts investments will need to rise to $777 billion in 2030 to better transmit clean energy and distribute it more efficiently. Crucially, developers and utilities need new software to deal with peaks and troughs in renewable generation and manage battery storage.
Company: Envelio
Location: Germany
Founded: 2017
Investment: Acquired by E.on in 2021
Connecting renewables to the grid requires studies and those studies take time. Envelio has developed software that speeds up the clock. The software uses a digital twin of distribution power grids and allows for much quicker analysis of projects ranging from renewables to EV chargers. While cutting down the time it takes to do studies won’t clear years-long backlogs it can help alleviate the bottleneck somewhat.
Company: PVCase
Location: Lithuania
Founded: 2018
Investment: $124m
Wringing the most power out of the sun requires building solar farms in the right places at the right sizes. PVcase is a software company with an array of tools that help developers do just that. By integrating with modeling software AutoCAD, solar engineers can conduct site-specific research and automate repetitive processes. Other tools allow developers to simulate solar yield. That can reduce the number of permits filed for less-than-optimal projects so that ones that can max out their capacity come online quicker.
Company: TS Conductor
Location: US
Founded: 2018
Investment: $25m
The grid will need better power lines to deal with terawatts of new power coming online in the coming decades. Most cables today use steel-reinforced aluminum conductors (ACSR). TS Conductor makes one with a carbon-composite core wrapped in a highly conductive form of aluminum that’s 10 times stronger than ACSR. The result? Less sag, more power. The conductor has three times the current-carrying capacity.
Challenge 2 Decarbonizing buildings
Buildings are where we spend most of our time, and the sector is responsible for an eye-popping 37% of the world’s greenhouse gas emissions, according to the United Nations.
That includes the construction of new buildings, which relies on carbon-intensive materials like steel and cement, and extra energy needed for heating, cooling and lighting. Then there are the properties that have been around for decades, which are essentially leaking carbon dioxide daily due to issues like inefficient HVAC systems and subpar insulation.
Startups are working to find more climate-friendly ways to build. Retrofitting homes and offices — and ensuring the carbon embodied in the construction materials stay locked up — is another important way to reduce emissions. And these solutions also come with an added bonus: They often result in living and working spaces that are more comfortable.
Company: Aeroseal
Location: US
Founded: 1997
Investment: $89m
Energy efficient homes are a climate and comfort solution. Aeroseal improves efficiency using a unique process by first pressurizing a house using plastic sheeting and a fan, then spraying an aerosolized sealant that flows towards gaps and expands to form an airtight seal. It’s basically speed typing compared to the hunt and peck method contractors traditionally use when seeking out and sealing gaps one at a time. The process qualifies for Inflation Reduction Act tax credits and works with both newly constructed homes, as well as older buildings in the process of doing HVAC work.
Company: Celsius Energy
Location: France
Founded: 2020
Investment: Subsidiary of SLB
Heat pumps are an increasingly common tool in the climate solutions toolbox. The name of the game now is deploying them more efficiently. Celsius Energy offers a few avenues for doing that with ground-source heat pumps. Using the ground for heating and cooling large buildings means drilling vertical holes every few meters, requiring a large amount of land to make an efficient system. By drilling diagonally, Celsius’ system uses the equivalent of two parking spaces to install a standard system with around 20 wells. For densely populated areas, that makes ground-source heat pumps accessible. The company also offers software to optimize the heat pump system in real time.
Company: Kelvin Systems
Location: US
Founded: 2012
Investment: $14m
Radiator heating has been around since the 19th century, and its efficiency at heating a space (or lack thereof) reflects its age. Yet millions of apartments still rely on the outdated technology, in part because it’s so expensive to convert old buildings’ HVAC systems. In an effort to bring those homes into the 21st century, Kelvin Systems offers what it calls the Cozy. The insulated metal enclosure is built to fit snugly around various types of radiators. Digital controls and a fan help distribute warmth more evenly and reduce the amount of oil, gas and other types of fuel used to heat up boilers. The startup is also working on a hybrid electrification offering by providing a heat pump and thermal storage system that can be used for cooling and heating when temperatures are above freezing.
Challenge 3 Creating new net-zero fuels
While the electric vehicle transition is well underway (albeit not fast enough) for passenger cars, other forms of transportation are still struggling to find solutions.
Aviation, shipping and long-distance trucking are all hard to electrify because batteries are heavy and can’t hold all the energy these industries need. Planes, which account for more than 2% of global emissions, are the hardest to clean up. The industry’s share of emissions is set to rise in the coming decades as more people are able to afford air travel and other sectors with readily available alternatives cut carbon.
That puts the focus on alternative fuels that are dense in energy but don’t pollute the climate. “We’ll need fuels: better fuels and not fossil fuels,” said BNEF’s Daly.
The world has a plethora of options. Biomass and food waste are already used to make clean jet fuel. But that accounts for a tiny portion of aviation fuel used today. Methanol holds promise for shipping and green hydrogen could power trucks. Meanwhile, e-fuels made from carbon dioxide could be the best option in terms of emissions. From barely nothing today, the e-fuel market could reach nearly $50 billion by the end of this decade, according to some industry estimates.
Yet all are expensive, energy-intensive and far from commercialization. The winners of this challenge have unique solutions that could help overcome those barriers.
Company: CoverCress Inc.
Location: US
Founded: 2013
Investment: $48m
CoverCress is asking biofuel makers to consider the humble pennycress. The company has used plant breeding and gene editing to improve yield, quality and composition of fiber and oil from the crop. The plant can be grown in the winter, which means it doesn’t use up land that could otherwise be used to grow food. That sidesteps one of the biggest issues with biofuels such as corn-based ethanol. Pennycress has the potential to produce up to 1 billion liters of seed oil annually by 2030 that can be used as feedstock for sustainable aviation fuel and renewable diesel.
Company: XFuel
Location: Ireland
Founded: 2010
Investment: $9.1m
Most factories making alternative fuels are hulking facilities of vats, pipes and reactors. XFuel has a different vision: a modular plant that could allow it to quickly scale up production of fuels made from everything from oily shipping waste known as marine sludge to waste biomass. The former would be using fossil fuels to make fuel. While that’s not devoid of emissions, it still reduces them by about 85%. When using waste biomass and waste lubricate oils, XFuel says it’s process can lead to a 145% decrease in greenhouse gas emissions.
Wildcards
Perhaps the most interesting thing about the wildcard winners is how little they have in common. That shows how carbon cuts will have to come from every corner of the economy.
Still, the winners intersect with the other three challenges, whether it’s producing clean steel for buildings or improving lithium-ion batteries so they can better serve the grid. Looking for signs of biodiversity could help with, among other things, siting renewable installations. They’re startups that are, according to BNEF analyst Stephanie Diaz, “trying to prevent a bottleneck before it occurs.”
Company: NatureMetrics
Location: UK
Founded: 2014
Investment: $37m
Biodiversity is essential to planetary health, but species are disappearing at a rate of up to 10,000 times faster due to human activity. You can’t protect what you don’t know is there, though. That’s where NatureMetrics comes in. The startup offers relatively low-cost kits that allow users to analyze samples of water, soil and sediment for what’s known as environmental DNA (eDNA). The results are essentially a biological camera trap: eDNA provides a snapshot of animal species that have passed through the area sampled. Using the snapshot, companies from software firms to cement makers can set biodiversity goals.
Company: Li-Metal
Location: Canada
Founded: 2018
Investment: $30m
Lithium-ion batteries are key to the energy transition, but they’re not perfect. Li-Metal is developing the next wave of technology to ensure batteries are safer, longer lasting and more energy dense. Typically, lithium metal is created by treating lithium chloride, which is not only costly but also produces five tons of chlorine gas for every ton of lithium. Li-Metal has developed a process for producing lithium metal and lithium-metal anodes — important batter components — without the poisonous byproduct. It’s also more energy efficient. The startup plans on selling lithium metal to battery makers or using it in its own lithium-anode technology.
Company: Element Zero
Location: Australia
Founded: 2023
Investment: $10.5m
Steel generates more than $870 billion in revenue and 7% of global greenhouse gas emissions annually. Element Zero creates the pure iron ore essential for steel using a large tank of molten alkaline electrolyte to dissolve iron ore and separate out impurities. Making steel typically requires coal, which Element Zero cuts out. But more importantly, the startup’s technology doesn’t need to be continually powered. The solvent the company uses holds heat well, only losing a few degrees per hour. That means its can go without power for 4 to 12 hours, allowing the company to better take advantage of renewable energy when prices are low. An added bonus: Element Zero’s technology also produces cement as a small but notable byproduct.
Updates to include estimate of e-fuel market in creating cleaner fuels section. A previous version was corrected to remove first reference of iron ore in Element Zero description.