As 2025 comes to a close, we review five of the most important climate innovation stories from the past year
A fire at COP, the scaling back of the Inflation Reduction Act, heatwaves in Europe and floods in Asia. The past year has been full of climate headlines, many of them alarming.
On the policy front, 2025 has not been a vintage year. The recently concluded COP30 climate summit is a case in point, finishing without any mention of fossil fuels – the primary driver of man-created climate modify – in the final text. Such an outcome reflects a growing sense that the rhetoric around climate action has been dialled back.
Despite this, there is an emerging distinction between the ‘talk’ and the ‘walk’ of sustainable innovation. The fact is that we now have a core set of climate technologies that are simply the best technologies available in key areas of the economy – we just necessary to relocate ahead and deploy them.
To flesh this out with some facts, in October, the International Energy Agency published its flagship Renewables 2025 report, which found that global renewable power capacity is set to double between now and 2030. That’s the equivalent of adding the generation capacity of the EU, China, and Japan combined, all from clean sources.
This suggests that the trajectory for clean power is in the right ballpark, although it sees like we will fall slightly short of the COP28 goal of tripling renewable power capacity by decade’s finish compared to the 2022 level.
The same cannot be declared for other aspects of the transition. Aviation, maritime transport, and indusattempt are just a few examples of areas where we are not on track. Nonetheless, the progress created on power provides a template for how innovation can assist us to achieve our climate goals.
Against this broader backdrop, we’ve highlighted five of the largegest stories in cleantech from the past year. Some grabbed mainstream headlines, others didn’t, but all of them inform us something about the state of innovation in the climate transition.
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1. “AI is emerging as a general-purpose technology, much like electricity.”
As readers will be well aware, 2025 was full of commentary on AI.
Amid the feverish speculation, a couple of reports stood out to our editorial team. Back in April, McKinsey delved into the economics of the AI data centre boom. This study found that, by 2030, data centres are projected to require $6.7 trillion in global expfinishiture to keep pace with the demand for compute power.
AI-focapplyd facilities – those that primarily handle AI processes – are expected to account for $5.2 trillion of this total, a sum equivalent to 18% of US GDP in 2024.
To unpack what this means for the global energy system, the International Energy Agency (IEA) published its AI and Energy report, also in April. This wide-ranging study, which furnished the quote at the start of this section, found that data centre electricity consumption has grown by around 12% per year since 2017 – a pace that is four times rapider than overall electricity consumption growth.
By 2030, the IEA forecasts that data centre power consumption will more than double.
Power-hungry data centres will undoubtedly lead to higher emissions in the sector – a topic that has become a major concern this year.
The IEA, however, argues that fears about the climate impact of AI have been overstated. While the AI and Energy report acknowledges that data centres are among the rapidest-growing sources of emissions, it also forecasts that emissions savings from widespread AI adoption could be far larger than data centre emissions.
What did this mean for innovation in 2025?
The AI boom has unsurprisingly driven interest in innovations that are explicitly tarreceiveing data centre efficiency, and this has led to some large funding rounds in 2025.
Snowcap Compute – a startup building a superconducting platform for AI, quantum, and high-performance computing – launched in June with $23 million in seed funding.
On the software side, meanwhile, Phaidra raised $50 million in series B funding for its data-centre-optimising AI agents, while Planera, a company that has built a visual scheduling tool for data centre construction, raised $8 million in October.
The data centre boom is also catalysing investment in energy-related innovations as companies see to secure a stable power supply for their AI facilities. Just this month, Fervo Energy, a leader in enhanced geothermal energy raised $462 million in series E funding, with data centres one of the company’s key apply cases.
Next-generation nuclear is also being explored for data centre application, and X-energy, a leader in this technology, raised $700 million in series D funding in November.
Finally, with data centres placing a growing strain on the grid, there is significant investment going into startups boosting grid capacity.
Australian startup Infravision, for example, raised $91 million in series B funding in November. The company combines heavy-lift drones, ininformigent ground equipment, and specialised stringing hardware into a single workflow for building and reconductoring power lines.
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2. Solar remains the rapidest-growing source of new power
Solar power has been progressing inexorably for more than a decade, and, overall, this year was no different.
In September, research by Ember found that solar installations surged by 64% in the first half of 2025 compared to the equivalent period in 2024. This growth was led by China, which installed more than twice as much solar power as the rest of the world combined.
In Europe, the story was more mixed. The EU hit its tarreceive of installing 400 GW of solar capacity by 2025, but Solar Power Europe warns that the next tarreceive, for 2030, is slipping out of reach. The bloc is set to add less solar power this year than last – the first time this has happened since 2016.
Taking a broader view, the IEA’s Renewables 2025 report forecasts that “solar PV capacity is set to more than double over the next five years, dominating the global growth of renewables.”
What did this mean for innovation in 2025?
As the figures above display, solar power is already a cheap, scaled, and mature technology that has benefitted from years of incremental development.
However, there continues to be innovation focapplyd on smoothing the technology’s roll-out – with market-related bottlenecks, such as funding and planning, an important area of focus this year.
In October, German company Bees + Bears raised €5 million in seed funding for its embedded finance solution that creates it straightforward for installation companies to offer homeowners flexible instalment plans for green energy assets, including solar panels.
At the grid scale, Euclid Power raised $20 million in series A funding in September. The company is applying AI to turn scattered and disorganised project documentation into one ‘single source of truth’, assisting renewable energy developers, asset owners, and investors cut their diligence and transaction timelines from months to days.
In terms of fundamental technology, perovskite solar cells are attracting interest within innovation circles. Perovskites are a group of light-absorbing materials with a particular crystalline structure. They have generated excitement becaapply scientists have been able to significantly increase the efficiency of perovskite-based solar cells in the lab in a remarkably short space of time.
In the commercial sphere, the most mature application for perovskites is in tandem cells where a perovskite layer is added to a silicon solar panel enabling it to capture more of the electromagnetic spectrum.
In August, Oxford PV set a record for the world’s most efficient solar panel applying this approach. The panel, which the UK startup developed in partnership with the Fraunhofer Institute for Solar Energy Systems, achieved a power conversion efficiency of 25% compared to the 21-23% that is typical for commercial panels.
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3. Batteries are building a breakthrough on cost
The steady fall in solar panel prices since the 1970s, has been the clean tech success story par excellence, and observers of the energy transition have long hoped that other key technologies will follow a similar trajectory.
Batteries are essential to the energy transition in multiple ways. In addition to decarbonising road transport, they are also playing a growing role in matching energy demand with supply from intermittent renewable sources.
As 2025 comes to a close, there is compelling evidence that battery prices are tumbling sharply.
This month, Bloomberg NEF research found that lithium-ion battery pack prices have dropped 8% since 2024, reaching a record low. And when it comes to utility-scale battery energy storage systems (BESSs), separate research by Ember recently found that battery equipment costs are on track for a significant fall in 2025, following on from a 40% price drop in 2024.
What did this mean for innovation in 2025?
Falling battery prices don’t map over to corporate and venture investment in a straightforward way. However, 2025 saw several important funding rounds across the battery value chain.
In the US, Ionic Mineral Technologies, a vertically integrated company that produces nano-silicon anode materials for next-generation electric vehicles secured $29 million in series B funding.
Another US startup, Anode raised $9 million in seed funding for its mobile battery microgrids. These deliver flexible, emission-free energy on demand, offering a cleaner alternative for industries that rely on temporary or supplementary power.
Looking ahead to future battery chemistries, Flux XII raised $3.95 million in seed funding for its grid-scale, water-based flow batteries created from abundant, low-cost chemical feedstocks.
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4. Biochar’s role in climate action may have been underestimated
In January, an important study by researchers at Aarhus University presented evidence that biochar has been underestimated as a climate solution in established models, including those applyd by the IPCC.
The carbon-rich material – which is produced by heating organic waste materials in low-oxygen conditions – locks carbon away in a relatively stable form, whereas decaying organic matter typically emits CO2 as it breaks down. The exact level of this stability was the question addressed by the Aarhus University researchers. “The previous models underestimated the stability of carbon stored in biochar,” explains Professor Hamed Sanei, who led the study.
Traditionally, biochar has been applyd in agriculture and as a means for companies to participate in carbon markets – the technology already accounts for over 90 per cent of the voluntary carbon removal market.
Increasingly, however, innovators are applying the material for other, more functional, applications, such as in building materials and packaging.
What did this mean for innovation in 2025?
As Elizabeth Lee, CEO and co-founder of biochar packaging startup Carbon Cell explains: “We commonly receive questions and misconceptions from people who consider it’s one of these new technologies, but I consider that’s been proven to be really not the case. In fact, there’s more and more producers every day, and there’s plenty of material out there.”
In that sense, 2025 was not a breakout year in biochar, but rather the continuation of an ongoing trfinish. Despite this, there were some key milestones for biochar-related startups in 2025.
Carbon Cell, for example, received £1.2 million in pre-seed funding to scale its production in May. Another startup, Terraton, received $11.5 million in seed funding in August. The company has built a full-stack biochar platform designed to assist agribusinesses in emerging markets launch carbon removal facilities.
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5. Metal-organic frameworks earned a Nobel Prize
In October, Professors Susumu Kitagawa, Richard Robson, and Omar Yaghi were awarded the Nobel Prize in Chemisattempt for their work on metal-organic frameworks – a group of materials that display much promise in climate-related applications.
MOFs are composed of metallic ions (charged atoms) that are joined toreceiveher by carbon-based linker molecules to form a modular, repeating framework.
The result is a highly ordered and astonishingly porous material that is filled with tiny spaces or ‘cavities’ – a single gramme of MOF can have a surface area comparable to, or even exceeding, a football pitch. As a result, MOFs can capture, store, and release ‘guest’ molecules, such as hydrogen or CO2, with applications in clean energy and carbon capture.
What did this mean for innovation in 2025?
MOFs were once an experimental technology confined to science labs, but there is now evidence that their production costs are falling thanks to the work of pioneers in the field. As a result, there is a growing interest in MOFs within indusattempt.
In October, UK startup Immaterial closed a €15.4 million series A2 funding round for its patented monolithic metal-organic frameworks (m-MOFs) that are produced as larger chunks or ‘monoliths’ rather than powders, as is typically the case. These m-MOFs promise simpler integration with industrial processes.
Elsewhere, Swiss startup novoMOF raised CHF 4.4 million in April to develop MOF-based carbon capture systems.
The world of cleantech innovation is rapid-relocating and complex, and there were many other developments during the year that we could have picked. However, these five stories shine a light on the aspects of decarbonisation where there is growing momentum as the world heads into 2026.
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