Australia’s climate tech sector now employs more than 7,000 people across more than 730 startups and scale-ups, which attracted $680 million in venture funding in 2025.
The analysis of the local sector and its momentum and growth features in the 2025 Australian Climate Tech Industry Report, released today by Climate Salad founder Mick Liubinskas.
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“This report is full of optimism. After years of hard work, these climate solutions are ready to scale,” he said.
“With even the briefest look at this industry, it’s clear that the energy, sustainability and nature positive industry has pushed way past green premiums and straight into economic benefit.
“We’ve been racing disastrous tipping points and with the strength in this report, it’s starting to look like we might just save ourselves.”
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This year’s report spoke with 80 companies and 37 sustainability champions to get their view on the state of play in climate tech.
It paints a picture of increased capital investment and rapidly scaling companies, alongside global attention and talent in the Australian ecosystem at a time when government policy has begun to turn favourably towards climate tech.
Wednesday’s ASX listing of seven-year-old Tasmanian scale-up Sea Forest, which uses seaweed to reduce livestock methane emissions, saw its share price pop more than 20% on its opening day of trade, suggesting the public appetite for investing in climate tech is also strong.
Unbelievable opportunity
Liubinskas believes there’s also “unbelievable opportunity” in a range of solutions, from green steel and critical minerals to home electrification and AI-powered agriculture, with Australian climate tech companies increasingly delivering innovations the world wants.
“There’s excitement. It’s not hype, it’s earned optimism,” he says in the introduction to the report, describing climate tech at scale as a team sport.
“Yes, it’s tough. Yes, there’s risk. But this industry is full of people who choose action, who build even when the path is unclear, and who know that climate tech isn’t just a sector. Yes, it’s a rollercoaster, and, at times, it kinda feels like a rom-com. But it’s also a mission.”
The call to action in increasingly competitive global markets is rolling out public funding faster to lead and secure economic growth. Growth in green jobs also needs to be matched by a major investment in sustainability skills development.
Climate tech by sector. Source: 2025 Australian Climate Tech Industry Report
The 61-page analysis lists 39 climate tech players with the potential for unicorn status – a $1 billion valuation – with the names already generating more than $10 million in revenue and/or global customers.
They include Brighte, MGA Thermal, SunDrive, Xefco, Amber Electric, Samsara Eco, and JET Charge.
Source: 2025 Australian Climate Tech Industry Report
Malcolm Thornton, head of growth capital at the federal government-backed Clean Energy Finance Corporation (CEFC), labelled the momentum “highly encouraging” amid a broad focus on achieving Australia’s net zero targets.
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“The transition to a net-zero economy is creating exciting opportunities for new technologies and business models, demanding rapid innovation and the acceleration of commercialisation. There’s a real need for specialist risk capital to scale up these enterprises as they drive emissions reduction,” he said.
“Climate tech investments from the CEFC span direct equity and fund investments, with commitments typically ranging from $5 million to $30 million. Investments are made across all sectors of the economy, including the built environment, energy, transport, industry and natural capital.”
$10.3 billion in new funding
The report identified $10 billion in new public funding coming online in the last 18 months from the likes of the Future Made in Australia, ARENA, and the National Reconstruction Fund, amid $164 billion in potential investment. The private VC funds increased their capital pool by $310 million – almost 50% – amid $957 million for climate tech. Leading that pack was Wollemi Capital, with $230 million committed by REST Super for a new fund.
But benchmarking local investment against global capital, the Climate Tech Industry Report concluded that Australia is under-investing based on GDP and our assets. Energy — mostly renewables — and food/land — mostly proteins — lead investment as expected, and data centre sustainability is expected to grow quickly over the next five years, but storage lacks investment despite the nation’s competitive advantage.
Other sectors where underinvestment was identified include food waste, aviation, marine, HVAC (heating and air con), and regenerative agriculture.
Emissions reduction or removal represents 51% of the impact by climate tech companies. Surprisingly, asking founders about their impact, 18% reported no impact metrics at all, which Climate Salad describes as a missed opportunity for credibility, funding, and alignment with emerging climate reporting standards.
Startup impact. Source: 2025 Australian Climate Tech Industry Report
Dr Jehan Kanga, founder of Rux Energy, said the clean tech industry is facing investment headwinds caused by delays in delivering climate policies across key global jurisdictions — a reference most likely to the US and a dramatic about-face in policies by US President Donald Trump’s administration.
“However, the fundamentals are very strong with many technologies delivering significant cost savings. Cost competitiveness with fossil fuel is here. India and China know it, and they are doubling down and giga-scaling,” he said.
“Australia’s strategic opportunity is to double down on ourselves, form international partnerships to catapult market entry, and continue to provide (both governmental and private) funding to Australian clean and deep techs to enable global market capture at this critical moment of change. The outcome will be exceptional returns on investment, and the emergence of the Australian climate tech giants, as our clean solutions displace fossil fuels all around the world.”
AI’s impact
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Artificial intelligence is also seen as playing a key role as the industry looks to transition to reduce and account for carbon footprint and energy consumption.
Futurist Mark Pesce from One Billion Seconds said while AI is improving in efficiency, the energy demands of data centres currently outstrips any gains.
“Despite these immediate environmental costs, AI looks to become an essential tool for accelerating the path to a climate-positive future, necessary to handle the complexity of the climate crisis, citing its ability to optimise energy usage in real-time, accelerate material science breakthroughs for batteries and carbon capture, and assist businesses in navigating complex sustainability reporting,” he said.
“Ultimately, while AI currently adds to the global carbon burden, it functions as a necessary investment that will speed up the technological convergence required to solve climate change in the long run.”
Green jobs
When it comes to jobs, global demand for green skills is growing at twice the pace of green talent in the market, and more than half of all green hires occur in non-green job titles, signalling that sustainability knowledge is increasingly essential across mainstream roles in operations, manufacturing, supply chain, and finance.
Workers with green skills are also significantly more competitive, with a hiring rate nearly 47% above the global average.
In Australia, green hiring has grown steadily (5.8% CAGR from 2021–2025), although that trails other key markets, which implies a widening capability gap as the country accelerates investment in renewables, electrification, and clean-industry growth.
The role of tech for green skills. Source: 2025 Australian Climate Tech Industry Report
You can read the full Climate Salad report here.
This article was first published by Startup Daily.
