The economic toll from climate-related disasters is expected to reach US$220 billion by the end of the year, according to reinsurer Swiss Re – so it is just as well that 2025 saw unprecedented investment flows into climate technologies.
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Global energy investment is on track to reach a record US$3.3 trillion in 2025, with roughly US$2.2 trillion going into clean technologies such as renewables, grids, storage and electrification – more than double the spend on fossil fuels.
Yet the venture capital landscape tells a more nuanced story. Private funding for climate tech startups dipped in the first half of 2025, only to recover later on in the year, with market observers pointing to a trend towards tested technologies, scalable business models and measurable climate outcomes.
Climate investment is still focused in the West, despite a retreat from climate policy led by the United States. In the first half of 2025, North America drew the largest share of private climate tech funding, with roughly US$21.4 billion in disclosed deals, followed by Europe at US$13.1 billion and Asia at about US$6.6 billion.
2025 was the year that investors started to face scrutiny for pouring billions into artificial intelligence (AI) without assessing the potential harms of adopting the technology. In this year-end review, Eco-Business highlights new technologies that use AI to solve environmental and social problems, as well as those that seek to limit their environmental impact. We also feature interesting non-AI innovations that promised to limit humanity’s planetary footprint.
Better chips
The energy and emissions cost of ever-bigger data centres to meet soaring demand for AI has imperilled net zero targets all over the world this year. Enter Californian startup Snowcap Compute, which wants to disrupt the foundations of digital infrastructure with a superconducting computing platform designed to dramatically cut energy use. By replacing conventional silicon transistors with superconducting Josephson junctions – tiny quantum devices that allow an electric current to flow between two superconductors separated by a very thin insulating barrier – the system allows electricity to flow with virtually no energy loss. The technology is claimed to use up to 100,000 times less energy than today’s chips and could help data centres support fast-growing AI, quantum and high-performance computing without exploding emissions. Backed by fresh funding secured in June, Snowcap’s approach points to a more efficient future for computing.
Shedding value
Cat’s hair could be used to clean waterways. Image: Robin Hicks/Eco-Business
Millions of tonnes of human and pet hair become waste, are burned or end up in landfills every year. Spanish startup Clic Recycle turns chopped hair into valuable, low-carbon products. Through a subscription-based collection service, salons send their waste hair to Clic instead of landfill or incineration. The recovered hair is transformed into mulch mats for agriculture, soft yarns and even biodegradable oil-absorbing nets used to clean polluted waterways.
Logic-based AI
British startup Literal Labs is challenging today’s energy-hungry neural networks – a kind of machine learning inspired by the human brain – with a simpler approach: logic-based AI. Built on years of academic research, its models eliminate unnecessary computations. The result is AI that’s 52 times more energy efficient and 54 times faster. This approach would suit companies looking for a replacement to carbon-intensive algorithms and those that need faster and more efficient models to battery-based products. With new funding to commercialise its tech secured in June, Literal Labs is showing that smarter AI doesn’t have to mean bigger, climate-wrecking computing.
Cool clothing
HydraVolt’s gel can reduce skin temperatures by 10°C for up to eight hours. Image: Eztia Materials
Eztia Materials, a San Francisco-based startup, developed HydraVolt, a heat-absorbing gel that helps the human body cope with extreme temperatures. Integrated into clothing or protective gear, the gel can reduce skin temperature by around 10°C for up to eight hours during strenuous activity, lowering the risk of heat stress and injury. Unlike powered cooling systems, it needs no batteries, electricity or refrigeration. It recharges using only water. The technology was shortlisted for Eco-Business’ innovation competition, The Liveability Challenge, this year.
Food waste-fighting train stations
In Yokohama, “SDGs lockers” were installed in busy train stations to cut food waste. The unmanned vending-style units sell unsold bread and pastries from local bakeries at a discount, offering fresh food that would otherwise be thrown away once shops close. Fully cashless and digitally monitored, the lockers let retailers sell surplus stock without extra staffing, while stations earn rental income. At just one site, the pilot is expected to save around 1.5 tonnes of food a year.
Self-healing roads
Self-healing roads, made from biomass waste, could offer a solution to potholes. Image: Jeff Bowen/Flickr
Researchers in the United Kingdom and Chile developed self-healing asphalt that could reduce potholes, repair costs and carbon emissions. Using machine learning, scientists identified how cracks form in bitumen and embedded tiny spores filled with recycled oils into the asphalt. When cracks appear, the oils are released, softening the material and healing microcracks in under an hour during lab tests. If scaled, self-repairing roads could reduce the need for energy-intensive resurfacing.
Tracking city trees
Researchers developed the first open-source tool to monitor street-level greenery in near real time. Led by the International Institute for Applied Systems Analysis, the AI model estimates the Green View Index using satellite and street-level imagery. Applied across 190 cities, it reveals a worrying decline in urban greenery – up to 2.6 per cent per year in Asia; European and North American cities saw modest increases – while also exposing inequalities in public access to green space.
Solar rail
After years of delays, Swiss cleantech startup Sun-Ways installed 100 metres of solar panels on active railway tracks in the town of Buttes, Neuchâtel, this April. The brainchild of entrepreneur he solar panels can be installed manually or mechanically using a machine, which can place and remove about 1,000 square metres of solar panels in a few hours. If half of Switzerland’s 5,320 kilometres of railway tracks are filled with solar panels, they could generate 1 billion kilowatt-hours – or 2 per cent of the country’s electricity needs. Countries including South Korea, Japan, Spain and Indonesia have reportedly shown interest in the technology.
If half of Switzerland’s railway tracks were filled with solar panels, they could generate 2 per cent of the country’s electricity needs. Image: Sun-Ways
Mycelial plastics
A battery could one day contain parts made from fungus. Image: Razor512/Flickr
Swiss researchers turned fungal mycelium into a high-performance, fully biodegradable material that could rival petroleum-based plastics – without the heavy chemical processing. Developed at the Swiss Federal Laboratories for Materials Science and Technology (EMPA), the material comes from the split-gill mushroom and is naturally strong and tear-resistant. By adjusting how the fungus grows, scientists can tune its properties for uses ranging from cosmetics and food emulsifiers to compostable bioplastic bags, moisture sensors, and even biodegradable battery components.
Lambs, honey and sunshine
Much has been made of the conflict between renewables and agriculture for space. A farm in Halifax County, Virginia, in the United States strikes a compromise by combining a solar field with sheep grazing and bee-keeping. Crystal Hill Solar’s 65-megawatt solar field can power 10,800 homes while sheep graze between solar panels, halving mowing needs. Ten beehives house 500,000 pollinators, which are slated to produce 181 kilogrammes of honey a year.
Crystal Hill Solar’s 65-megawatt facility powers 10,800 homes while sheep graze between the solar panels and bees produce 181 kilograms of honey annually. Image: Crystal Hill on YouTube
Spotting conservation hotspots
Iberian Lynxes have been saved from extinction due to extensive conservation efforts. Image: Chas Moonie/Flickr.
Researchers at the University of Córdoba in Spain created a satellite-powered AI tool that can pinpoint which habitats most urgently need protection to prevent species extinction. By combining satellite data with a Habitat Availability Index – which estimates the likelihood of a species occupying a given area – the system identifies places that are still suitable for key species, but where populations are declining. Tested on species including the Iberian lynx, the approach revealed that 80 per cent of protected areas in parts of southern Spain have seen habitat quality fall over two decades. By tracking change year by year, the tool offers policymakers a way to prioritise conservation where it will have the greatest chances of species survival.
Water from air
MIT’s water-preservation device is a vertical panel made from a water-absorbent hydrogel material, resembling bubble wrap. Image: MIT
Engineers at Massachusetts Institute of Technology (MIT) created a passive device that harvests clean drinking water from the atmosphere, even in desert conditions. The window-sized panel uses a hydrogel that absorbs water vapour at night and releases it during the day, with sunlight driving condensation – no electricity required. Tested in Death Valley, the United States’ hottest, driest and lowest-lying national park, the system produced water across a wide range of humidity levels while avoiding salt contamination. As water scarcity grows worldwide, the technology offers a low-energy way to deliver safe drinking water far from traditional sources.
Batteries from industrial waste
Scientists at Northwestern University in the US turned a common chemical industry waste product into a key ingredient for metal-free energy storage. The team repurposed triphenylphosphine oxide (TPPO) – a by-product of pharmaceutical and agrochemical production – as an efficient charge-storing material for redox flow batteries. The waste-derived molecule showed strong performance over hundreds of charge–discharge cycles, pointing to a lower-carbon alternative to batteries reliant on lithium or cobalt. If scaled, the approach could cut emissions from energy storage while giving industrial waste a second life.
Rubber from bark
Nokian Tyres and Reselo are working to develop rubber made from birch bark as a raw material for tyres. Image: Nokian Tyres
Swedish startup Reselo is disrupting one of the car industry’s most problematic materials: rubber. Its innovation, Reselo Rubber, is a bio-based polymer made from birch bark waste – a byproduct of the pulp and timber industries – offering a forest-friendly alternative to natural rubber, and a renewable alternative to fossil-based synthetic rubber. Unlike other bio-fillers, Reselo Rubber can be fully polymerised and cured, allowing it to directly replace synthetic rubber in demanding applications like tyres. Early tests suggest it could cut CO₂ emissions by up to 92 per cent. The company is now working with Finnish tyre maker Nokian Tyres to bring the material closer to the road.
This story is part of Eco-Business’ Year in Review series, which looks back at the stories that shaped sustainability in 2025.
