by Tope Alake* Light industry, climate adaptation and next-generation energy storage aren’t necessarily the first things to come to mind for a net-zero transition. But they represent key challenges to getting there — and insulating people from the impacts of climate change
That’s why BloombergNEF has made them the categories for this year’s Pioneers awards, which are given to early-stage climate tech firms. Applications opened this week. (The competition also includes a wildcard category for startups working on problems outside these areas.)
Last year, the world invested $1.8 trillion in climate tech. Much of that went toward renewable energy and electrifying transport, climate tech sectors that are relatively mature. Pioneers — a program that’s run for more than a decade — focuses on areas where innovation is most needed, ranging from reducing buildings’ carbon footprints and developing clean fuels.
Making light industry more sustainable
Industrial activities drive a huge portion of emissions globally. Much of the decarbonization focus has been on some of the most heavy-emitting sectors like steel, cement and petrochemicals.
Very little has been done about reducing emissions in sectors that rely on low to medium heat, like pulp and paper production; food and beverage manufacturing; and textiles. These overlooked areas account for one-third of industrial emissions, according to BNEF. For example, the food-processing industry alone emits 90 million metric tons of CO2 annually in the US, according to a report by Renewable Thermal Collaborative.
“There’s also a really big chunk of emissions in so-called lighter industries that aren’t necessarily considered super hard to abate, but there’s actually just not a lot of solutions out there that we know work,” said Mark Daly, BNEF’s head of technology and innovation.
Heat pumps are one of the few tried and true solutions; the Renewable Thermal Collective report found that they will help electrify 85% of the food sector by 2050. But they have temperature limitations and are expensive, while natural gas boilers are very cheap, Daly said. Innovative approaches to improving heat pump temperature output or improving water use and reducing toxic chemicals in the textile industry are among some of the other solutions that could help decarbonize light industry, he said.
Improving energy storage
The increased use of renewables in power grids worldwide makes the deployment of energy storage crucial. Lithium-ion is currently the leading form of battery storage, but startups are testing other solutions, including bricks, abandoned oil wells and rust. Batteries and other forms of energy storage such as green hydrogen are also crucial to decarbonizing transit, especially long-haul trucking and aviation.
Renewables growth has been a major driver for energy storage. Projects in the storage sector attracted a record $36.3 billion in investments in the past year, according to BloombergNEF.
Boosting climate adaptation
As the race to a net zero world advances, the need to reduce the harms of climate change is also vital. Last year, the US alone saw a record 28 climate disasters that cost $1 billion or more while this year, searing heat waves and massive wildfires have offered a peek at the future unless the world adapts to changes already in the pipeline.
Startups in this area have been starved of funds even as billions are poured into emission reduction efforts. Investments in climate adaptation are slowing when they should be accelerating, according to the 2023 edition of the United Nations Environment Program’s Adaptation Gap report. The organization also found there’s a funding shortage of up to $366 billion for projects that could help society adapt to climate change. Meanwhile, early-stage companies focused on limiting climate change impact only received 7.5% of global climate tech funding from 2019 to 2020, according to a 2023 report from the Oxford Climate Tech Initiative in partnership with the Skoll Centre at Oxford.
“The world is changing and it will continue to change as we continue to emit more, so investing in the ability to improve human quality of life and to maintain human quality of life as the world warms is also an important strategy for developing climate tech,” Daly said.
Pioneers applications will close on November 1, 2024.
*Tope Alake is Power and Renewables Reporter at Bloomberg News
(Bloomberg, August 02, 2024)
