Climate tech reframes and pivots

A bracing chill has come over climate change mitigation in the year and half since Donald J. Trump returned to the US presidency. The administration halted most federal investments into technology meant to cut emissions of carbon dioxide and other greenhouse gases, upended subsidy structures designed to transition the economy toward renewable resources, and put oil and gas advocates in charge of federal energy and environmental policies.

It’s a challenging investment climate for entrepreneurs and investors looking to commercialize climate technology. But they haven’t given up. Instead, they’re reframing the economic premise of their innovations and, in some cases, pivoting to different applications for the same underlying science. Climate change mitigation has become secondary to value propositions now centered on resilience and supply chain security.

The shift in angle was evident at Climate Week NYC, an annual gathering that draws an estimated 100,000 people from all parts of the climate change world to New York City in September. The keynotes and panel discussions in previous years focused on locking in policy gains and moving on from first-of-a-kind deployments to scaled-up clean industries.

This year, the talk was about how to sell clean technologies to a pessimistic public and skeptical investors. “In the United States . . . we’ve got to be talking about why it makes energy more affordable, more available, and safer,” Mindy Lubber, CEO of the sustainability finance nonprofit Ceres, said in a panel hosted by the Climate Group.

At the same session, Icelandic prime minister Kristrún Frostadóttir framed the expansion of clean energy for power and manufacturing in terms of resilience. The island nation rapidly switched its space-heating load away from imported fossil fuels and tapped into its geothermal resources in response to the oil crises of the 1970s. In the meantime, she said, Iceland has expanded geothermal as a baseload power source for industry. As a result, Iceland has suffered far less than other European nations during disruptions such as the current war in Iran.

Frostadóttir said her country is far from the only place with potential geothermal resources and invited innovators to think of Iceland as a test bed for climate technologies. “The transition each of you is managing . . . won’t be won by the company or the country that reacts fastest to the next disruption. It’ll be won by the one that has already built the capacity to absorb it,” she said.

Most start-up leaders talk about the shift in conversation as a question of emphasizing benefits other than CO₂ reduction that their technology had all along. At a sustainable products showcase called Planet Haus, the sustainable textiles start-up Matereal said that by combining cyclic carbonates and amines, it can avoid the dangerous isocyanate raw materials needed to make polyurethane leather alternatives. The small carbon footprint was still mentioned in the firm’s display, but it wasn’t the headline.

Similarly, the synthetic biology start-up Aura Life Sciences cited a resilient and domestic supply chain for insulin, not the net consumption of atmospheric CO₂, as a need it can fulfill by engineering cyanobacteria to ferment CO₂ into targeted proteins using photosynthesis as an energy source.

Just fighting greenhouse gas emissions isn’t good enough in the current climate, according to Sophia Sulimirski, a program manager at the ClimateTech Expertise Network, a mentorship program funded by New York State to support climate tech start-ups. Some application areas are doing fine, she said, such as critical materials and efficient cooling for data centers. But she and her coworkers have spent a lot of time recently working with start-ups to retool their pitches around resilience and adaptation.

It’s undoubtedly hard. The people working in the climate tech ecosystem have, to different degrees, built their lives and careers around using their time and talents to secure humanity’s future against the existential threat of climate change. Every start-up founder still standing can explain why their technology still makes sense despite the public pullback from climate solutions. But they’ll often break character for a moment when asked how that reframe, that pivot away from fighting net greenhouse gas emissions, feels.

There’s a subtle tenacity, though, in the reworked plans of the entrepreneurs. And it’s echoed in the expectations of investors—at least those working the bustle of Climate Week. Even if sustainability can’t be the focus right now like it was when these founders started out, it’s becoming something different and, maybe, more powerful: the price of admission for commercializing new chemical technology.

The start-up Revora Materials offers a telling example. It used to be called Carbon to Stone and was based around the idea of using electrochemistry and advanced crystallization methods to mineralize CO₂. During a pitch slam at an event during Climate Week called the Carbontech Summit, CEO Sravanth Gadikota talked instead about using the firm’s technology to extract magnesium from mine tailings. He didn’t even mention CO₂.

Gadikota later told C&EN that the underlying chemistry is the same and the processes they’re building will still sequester CO₂ while detoxifying mine waste. But whereas the market was interested in CO₂ reductions before, it cares more now about domestic supply chains for critical materials.

Some investors see the loss of support from the US government, and the private-money retreat that has followed, as healthy for the emergence of climate technologies that can scale up organically. Andrew Gollach, a partner at the incubator and early-stage investment group SOSV Hax, said in a panel at the Carbontech Summit that the influx of unsophisticated, speculative capital was inflating the climate tech market in an unsustainable way.

“It created a market inefficiency where venture dollars and equity dollars were going to projects that just had no chance at long-term profitability,” Gollach said. “Ultimately it hurts the people who really understand the sector and have been playing in the sector for a long time.” Fad investors have moved on to artificial intelligence, he said, and that means better deals and cleaner market signals for true believers in the long-term value of climate technology.

Though the narrative has changed, the climate stakes have not. Decarbonization efforts over the past 15 years or so have slowed the growth of CO₂ emissions, but we’re still emitting more every year, adding to a total atmospheric concentration higher than we have any reason to think is safe, argued former US vice president Al Gore during a fireside chat with weatherman Al Roker on Wednesday, Sept. 23.

The largest chunk of the growth in CO₂ emissions is projected to come from low-income countries, Gore said. But those regions are also adopting climate-smart technologies such as solar electricity faster than anywhere else. That dynamic creates an opportunity for climate tech investors to make good returns and an outsized impact on climate change by working outside of the US and Europe, he said. And though investing in those regions has historically carried more risk, he said, the instability of US policy is closing that gap.

Gore described himself as “temperamentally optimistic” about society’s ability to change course. “We have made some progress in cutting away the absolute worst possibilities for the emissions going through the roof, but they’re still going so high . . . we’re using the sky as an open sewer,” he said.

And the consequences are arriving. In just the past few years, New York has seen more than eight storms so intense that they’d normally be expected only once in a thousand years, Gore said. “The statistics all have to be rewritten because we’re changing our world that much.”