Climate Tech Innovations: Carbon Capture and Renewable Energy Startups in 2025

Introduction

In 2025, climate tech is no longer a niche sector but a global powerhouse, with investments surpassing $100 billion annually and clean energy technologies poised to outpace upstream oil and gas spending for the first time. As the world grapples with escalating climate impacts—rising CO2 levels, extreme weather, and biodiversity loss—innovations in carbon capture and renewable energy are accelerating toward commercialization. Carbon capture technologies, particularly direct air capture (DAC), are scaling to gigatonne capacities, while renewable energy startups are revolutionizing storage, hydrogen production, and grid integration to enable 24/7 clean power.

This article spotlights the most promising startups in these domains, examines key innovations, and outlines their potential to drive a net-zero transition. Drawing from recent funding rounds, pilot projects, and industry reports, we highlight how these ventures are transforming waste into value and fossil fuels into fossils of the past.

The Carbon Capture Revolution: From Concept to Scale

Carbon capture, utilization, and storage (CCUS) technologies are pivotal for removing existing atmospheric CO₂ and mitigating emissions from hard-to-abate sectors like cement and steel. In 2025, the sector has seen explosive growth, with over 30 startups emerging to tackle capture efficiency, cost reduction, and novel utilization pathways. Direct air capture (DAC), which extracts CO directly from the ambient air, is leading the way, with leading pilots reporting costs below $200 per tonne. Innovations include modular designs for urban integration, bioengineered sorbents, and integration with renewable energy for carbon-negative processes.

Key Innovations in Carbon Capture

• Modular DAC Systems: Startups are deploying compact, scalable units that leverage existing infrastructure like buildings and geothermal vents, reducing deployment costs by 40%.
• Bio-Based and Ocean Capture: Engineered substrates remove ocean CO₂ while enhancing marine biodiversity, addressing acidification alongside emissions.
• Post-Combustion and Point-Source Capture: Advanced sorbents and digital twins optimize flue gas separation, capturing up to 99% of emissions at industrial sites.
• Carbon Utilization: Captured CO₂ is repurposed into fuels, building materials, and even AI compute power via biomass pyrolysis.

Policy tailwinds, such as tax credits and carbon markets projected to reach $819 billion by 2030, fuel these advancements.

Top Carbon Capture Startups to Watch in 2025

1. Climeworks (Switzerland): Pioneering DAC at scale, Climeworks' Mammoth facility in Iceland captures 36,000 tons of CO₂ annually using geothermal energy, with plans for 1 million tons by 2030. Their modular Orca plants are now deployable worldwide.
2. Octavia Carbon (Kenya): Building Africa's first large-scale DAC plant in Gilgil, powered by geothermal energy to remove 1,000 tons yearly, with underground storage in the Rift Valley and carbon credit sales. I successfully raised $5 million in seed funding for expansion.
3. Noya (USA): Partners with almond farmers for enhanced rock weathering, capturing CO₂ via agricultural processes at $100/tonne, scaling to 1 million tons annually.
4. Spiritus (USA): Develops low-cost DAC using electrochemical processes, targeting $50/tonne by 2027 through efficient sorbent regeneration.
5. Remedium (UK): Innovates a calcium-based sorbent in a "Carbon Capture Heat Battery" that captures CO₂ while generating heat for industrial use, making it commercially viable.
6. Capture6 (USA): Transforms wastewater treatment into carbon capture hubs, producing fresh water as a byproduct while removing 500,000 tons yearly.
7. Avnos (USA): Focuses on "carbon-negative, water-positive" DAC, humidifying air to enhance capture efficiency and generate water in arid regions.
8. Ventrix Labs (UK): Integrates DAC into building infrastructures, scaling capture through urban HVAC systems for distributed removal.
9. Origen (UK): Produces zero-carbon lime using a process that sequesters billions of tons of CO₂, deployable in construction and agriculture.
10. Mission Zero Technologies (UAE): Deploys AI-optimized DAC in the Middle East, capturing 10,000 tons in pilots with plans for megaton scale.

These startups, featured in accelerators like the UK's CDR program, are securing $500 million+ in funding this year alone.

Renewable Energy: Powering the Net-Zero Grid

Renewable energy startups are addressing intermittency through advanced storage, green hydrogen, and AI-optimized grids, enabling baseload clean power. In 2025, solar PV investments dominate cleantech, accounting for half of all funding, while battery energy storage systems (BESS) and hydrogen electrolyzers surge to meet rising electricity demand from EVs and AI data centers. Innovations focus on long-duration storage, decentralized microgrids, and hybrid systems combining solar, wind, and geothermal.

Key Innovations in Renewable Energy

• Advanced Battery Chemistries: Solid-state and flow batteries extend life cycles to 10,000+ while cutting costs 30%.
• Green Hydrogen Production: Electrolyzers powered by renewables produce H₂ at $1.50/kg, enabling sector coupling for industry and transport.
• AI-Driven Grid Management: Virtual power plants aggregate distributed renewables for 24/7 reliability, reducing curtailment by 25%.
• Geothermal and Biomass Hybrids: Enhanced geothermal systems (EGS) and pyrolysis tech provide dispatchable power with carbon-negative benefits.

Global renewable capacity is growing at 21% annually, with India alone targeting 500 GW by 2030.

Top Renewable Energy Startups to Watch in 2025

1. Form Energy (USA): Develops iron-air batteries for 100-hour storage, enabling multi-day renewables dispatch at grid scale. I have secured $405 million for commercial pilots.
2. Oklo (USA): Builds small modular nuclear reactors (SMRs) with liquid metal cooling, recycling waste to power data centers carbon-free. Y Combinator has backed this project.
3. Electric Hydrogen (USA): Produces gigawatt-scale electrolyzers for green H₂ at under $2/kg, targeting heavy industry decarbonization.
4. EcoFlow (China/Global): Offers portable solar-battery systems for off-grid and emergency use, with home backups scaling to 10 kWh.
5. Antora Energy (USA): Thermal batteries store renewable heat for industrial processes, achieving 90% round-trip efficiency.
6. Enpal (Germany): Provides subscription-based solar-plus-storage for homes, with 100,000+ installations across Europe.
7. Infinitum (USA): Electric motors for HVAC reduce energy use 30% in buildings, integrating with renewables for efficiency.
8. Halcyon (UK): AI platform analyzes energy transition risks for investors, optimizing renewable portfolios.
9. TerraThermo (Global): Enhances geothermal production with AI drilling, unlocking baseload renewables in new regions.
10. Budderfly (USA): Managed energy-as-a-service for commercial buildings, retrofitting with renewables to cut bills 40%.

These startups, many YC-funded, are attracting $30 billion in venture capital, with BESS alone targeting 160 GWh in India by 2032.

Trends and Challenges in Climate Tech 2025

Climate technology in 2025 will be marked by baseload clean energy solutions and decentralized models with AI integration across capture and renewables. However, challenges persist: high CAPEX for scaling DAC, supply chain bottlenecks for rare earths in batteries, and policy uncertainties in carbon markets. Solutions include public-private partnerships and tokenized carbon credits via blockchain, as explored by ventures like Punkvism. Funding trends show a shift to deep tech, with 25 startups in land use, energy, and nature sectors raising early-stage rounds. In regions like India, clusters in Jamnagar and Pune are emerging for CCUS, managing 70% of emissions within 500 km. Globally, events like the Carbon Capture Expo underscore the sector's momentum.

Future Prospects: Toward Gigatonne Impact

By 2030, carbon capture could remove 10 gigatons annually if startups scale successfully, while renewables hit 60% of global capacity. Innovations like carbon-neutral fuels from DAC and H₂ will decarbonize aviation and shipping. With COP30's supportive policies, these startups have the potential to generate millions of green jobs and prevent $2 trillion in climate damages.

Conclusion

2025's climate tech innovations in carbon capture and renewables are beacons of hope, with startups like Climeworks, Octavia Carbon, Form Energy, and Oklo leading the charge. By merging cutting-edge science with scalable business models, they are not just mitigating climate risks but building a resilient, equitable energy future. As investments flow and technologies mature, the path to net-zero grows clearer—proving that innovation, when aligned with urgency, can indeed save the planet.