Emerald Technology Ventures Identifies Five Forces Making 2026 Climate Tech’s Defining Year

Profitable AI, fusion energy, water security, climate tech consolidation, and plant cell cultivation highlight climate tech predictions for coming year

ZURICH, Jan. 15, 2026 (GLOBE NEWSWIRE) -- Climate tech is entering its make-or-break moment, and 2026 will decide the winners. According to Emerald Technology Ventures, the coming year will mark a fundamental shift in how climate innovation is funded, scaled, and judged, as investors move past hype toward technologies that deliver real profitability, resilience, and impact. Emerald’s investment team sees 2026 as the year climate solutions stop being experimental and start becoming essential infrastructure for green technologies, especially in clean energy, data processing, water tech, ESG, and food biotechnology.

Several factors are driving new capital to fund climate solutions that lower costs and secure supplies of resources. Artificial intelligence (AI), data centers, and global reshoring are creating a surge in global electricity demand. Water stress is no longer just an environmental concern but has become an operational risk. Many corporations are quietly recalibrating and preparing to re-enter the market with a renewed focus on profitability, resilience, and scalability, while government agencies are providing new backing for nuclear and fusion technologies.

Here are five trends that Emerald executives have identified that will shape climate tech investment in 2026:

Fusion sparks a new energy race – Demand for vast amounts of clean energy is fueling the scramble to deliver fusion technology. Along with billions invested in magnetic and inertial confinement technologies, corporations and government agencies are investing in fusion while continuing to rely on advanced fission and small modular reactors (SMRs) to meet the near-term demands of data centers and industry.

“The real story won’t be 'fusion vs. fission,' but how the world finances the coming clean-energy megacycle as traditional market models strain,” said Cristoph Frei, Partner and Head of Energy at Emerald

New focus on AI profitability – 2025 saw massive spending to deliver giga-scale GPU processing farms, resulting in a gap between modest profit margins and the need to pay off hardware under a five-year refresh cycle. In 2026, the focus will be on delivering innovative solutions to make AI more profitable.

“Expect novel monetization strategies to go mainstream, with a renewed focus on extracting more value from every dollar and watt spent through better communication and thermal management technology,” said Graham Carey, Senior Investment Manager, Advanced Materials at Emerald.

New breakthroughs in water tech – Once an overlooked subset of climate tech, water technology will become important to investors in 2026, with ongoing water shortages and droughts. Investment in water tech hit a record high of $864 million in 2023, double the average of the late 2010s, which illustrates the urgent need for better water management. With half the world’s population living in water-stressed areas, water has become a board-level risk.

“In 2026, expect corporations and investors to double down on water innovation, from smart leak detection to low-energy desalination,” said Helge Daebel, Partner, Head of Water at Emerald. “Securing water supplies is no longer just an ESG talking point but a core business continuity issue.”

M&A drives climate tech scale-up – Low-cost solar, wind, batteries, and affordable electric vehicles (EVs) from Asia have killed green premiums. The future of sustainable technology will rely on cutting costs and operating at scale. Emerald expects large enterprises to turn to the acquisition of promising climate tech companies to meet new sustainability mandates.

“Corporate venture teams that ghosted startups in 2025 will rediscover the joys of ‘open innovation’ because it’s still the fastest, cheapest way to hit those ESG targets they publicly softened but still matter internally,” said Neil Cameron, Partner, Co-Head of Materials & Packaging at Emerald.

Plant cell cultivation to drive bio-based economy – Animal cell cultivation continues to hold promise as a basis for new hybrid foods. Still, high production costs, complex regulations, and consumer caution continue to impede progress. Plant cell cultivation is proving more commercially viable in the near term, enabling companies to leverage biotechnological research to develop new foods and materials with shorter time-to-market and greater scalability.

“As food systems transition toward greater resource efficiency, plant cell cultivation may well become a cornerstone of the bio-based economy,“ said Annina Winkler, Senior Investment Manager, AgriFood & Packaging, at Emerald.

About Emerald Technology Ventures
Emerald is a globally recognized venture capital firm, founded in 2000, that manages and advises assets of over €1 billion from its offices in Zurich, Toronto, and Singapore. The firm invests in start-ups that tackle big challenges in climate change and sustainability, with four current funds, hundreds of venture transactions, and five third-party investment mandates, including loan guarantees to over 100 start-ups. Bold Ideas. Bright Future. www.emerald.vc

Media Contact:
info@emerald.vc

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Emerald's Full Team

Emerald is a globally recognized venture capital firm, founded in 2000, that manages and advises assets of over €1 billion from its offices in Zurich, Toronto, and Singapore.

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