Environment / February 15, 2024

I Saw the Future of Climate Technology—and Its Big-Oil Investors

At the Cleantech North America conference, the fates of climate-tech start-ups are tangled into the balance sheets of companies who caused the crisis in the first place.

Molly Taft

An Avnos Inc. engineer works on a hybrid direct air carbon capture technology pilot site in Bakersfield, Calif., on October 25, 2023.

(Alisha Jucevic / Bloomberg via Getty Images)

“The world does not end at 2 degrees C,” Bill Gates told the British podcast The Rest Is Politics in an episode that aired in January. Gates, one of the strongest and earliest supporters of tech as a tool to address the climate crisis, has spoken before about his belief that we’ll blow past 1.5 degrees—but his more recent assertions that 2 degrees C is unavoidable took many by surprise. 

“There’s no stopping us passing 2C,” he said. “In temperate zone countries, in terms of your overall economy or livelihoods, it’s actually not a gigantic thing. Yes, you have to pay to make various changes, you have to have air conditioning.… The really bad stuff is, say, you let it go above 3 degrees.”

I listened to the Gates interview sitting in a hotel ballroom in San Diego on January 23, surrounded by hundreds of attendees of the cleantech conference I’d come to observe. The conference was partially sponsored by an arm of Breakthrough Energy, the venture fund Gates founded in 2015 to invest in climate innovation. 

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I felt the familiar pit of despair in my gut that I get when I think about just how little time we have left to act on the climate: of how quickly our world seems to already be spinning out of control, even at less than 1.5 degrees of warming, let alone the 2 degrees Gates seems to be hand-waving away. Outside the ballroom, San Diego was in shambles after nearly three inches of rain had fallen the day before, making for the city’s fourth-wettest day in history.

The ballroom—filled with people outfitted in tech-wear vests, slacks, and neat blazers—didn’t reflect my grim vibe. Across the table from me, picking at breakfast burritos, two investors chatted quietly about the difficulties of getting big businesses—including Caterpillar, one of the world’s largest manufacturers of oil and gas equipment—interested in small cleantech start-ups. “Don’t be surprised if you have a great dialogue and all of a sudden they stop answering you,” one said. Later on in the morning, the head of BP’s capital growth arm—clad in a blue puffy vest, looking every bit the part of the West Coast finance bro as the countless other white men in attendance—took the main stage for a talk titled “What’s in Store for ’24—and Beyond? Perspectives From the Investor World.”

This is the landscape of the Cleantech North America conference, an annual event bringing together investors, entrepreneurs, tech gurus, and talking heads—and, of course, representatives from major oil and gas companies, mining giants, petro-states, and other polluters. I’d come to observe panels and learn about new technologies, try to understand terms like “purple hydrogen” and “45Q,” and figure out just how much weight to give Gates-ian claims that clean technology will save us.

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For climate advocates, the tech world can seem like a pleasant but murky unknown: a well-dressed distant cousin who brings gifts at Christmas but sometimes doesn’t show up to family reunions. Climate optimists will point to the explosion of investment in the sector since the Paris Agreement was signed; oil and gas companies will eagerly show off the work they do in pouring money into new technologies; and green capitalists will laud the progress the market is making to address climate—without much detail as to how much that’s actually helping to cut emissions in the here and now. Critics of techno-optimism, meanwhile, say that focusing on technological feats at the expense of government action can delude us into thinking that we’re making more progress on climate than we are. 

The techno-optimists are half right: Climate tech could help save the world. During the three days I spent in San Diego, I witnessed some real ideas that could help tackle some of our thorniest problems. But depending on these innovations to make profits while helping to solve the climate crisis—to bind the development of promising future technologies to the whims and timelines of Big Oil investors, tangling the fate of the climate in the balance sheets of companies who caused the very crisis they’re purporting to solve—is not only a losing game but a waste of time that we simply do not have.

It’s an interesting time to be working on technology that purports to save the planet. After the pandemic, capital investments in cleantech skyrocketed in 2021 and 2022, only to fall significantly in 2023. In the United States, the Biden administration’s policies have unleashed a wealth of funding, making some climate tech investments much more attractive for investors who can count on government funds to help support their cash bets. A possible new Trump administration, however, could undo a significant amount of that progress and sow even more uncertainty. Once-hyped sectors, like fake meat, have experienced growing pains and a slowdown in investment recently, while other, untested technologies like hydrogen have exploded onto the scene as new darlings for investors. 

Despite all of this, climate-related tech still has a public face as a sure bet in an otherwise unsteady tech sector. In late January, while I was in San Diego, The New York Times ran a piece whose headline proclaimed climate tech as “Recession Resilient.”

There’s no official definition or regulations for companies labeling themselves as “climate tech.” Wider still is the umbrella for “cleantech,” the term used by the Cleantech Group, the organization that put on the conference in San Diego I attended. As I sat in the conference’s opening ceremony, listening to the parade of companies being honored on this year’s list of 100 top cleantech companies, I was struck by just how many different kinds of ventures can claim this label, from fake meat to technologies for “smart mining.”

Many of these companies seem, on the surface, to have a product that’s pretty good—or, at least, could be useful in the near future. I found myself most drawn in by the descriptions of things that sounded like they could be applied now: an EV-charging app, a platform to oversee data from solar installations. I listened raptly to the pitch from a company that makes sealing technology for buildings to keep heat from escaping—dorky, but extremely practical. It was only mentions of start-ups intending to revolutionize direct air capture or perfect hydrogen energy sources—technology that even optimists will tell you is years away from being deployed at scale—that reminded me I wasn’t just at a local trade conference for any other industry.

Despite the genial corporate blandness of the conference, cleantech is not a normal industry, but a sector that has been conjured up out of an urgent global call to action. This is a sector that has benefited from the Bill Gates and Al Gores of the world promoting its progress and potentials; a sector that has been highlighted and uplifted as a reason for climate hope as government action has lagged. And while other industries might have timelines dictated by investor interest or market trends, climate tech has a distinct set of scientific timelines operating in parallel to the venture capital investments and IPOs. Chief among these timelines is the mandate to move away from fossil fuel use as quickly as possible. 

Yet, walking around the conference, you could hardly tell that we’re running out of time. In the hours and hours I spent onsite attending panels and chatting with participants, I only heard the term “Paris Agreement” mentioned once. Mentions of 1.5 degrees and 2 degrees were few and far between, as were discussions of any UN proceedings or the need to phase out fossil fuels. It was much more common to walk into a panel and hear a detailed breakdown of US tax credits for carbon dioxide versus any focus on how last year was the hottest in recorded history. No one even thought to link the intense rains we’d all experienced in San Diego—which shut down much of the city—with increased warming. 

Some of this could be chalked up to a more widespread acceptance of climate change as a problem, or tech as a solution. Climate start-up owner Julia Collins told The New York Times that she used to include a slide laying out a blow-by-blow of the climate emergency in her pitch to investors; she has since taken out that slide. “We’re well beyond the point of having to prove climate change, or that it’s a big market,” Collins told the Times

But it was hard not to square the lack of urgency with some of the conference’s most prominent attendees: fossil fuel companies. There is perhaps no other industry where the foxes are invited as openly into the henhouse as in cleantech. And while they may make their own net-zero pledges or talk up their investments in different energy sources, these companies benefit when people forget just how urgently we need to phase out their product or how much damage they’ve already done to the planet. 

I listened to a spokesperson from TC Energy—the owner of the Keystone XL pipeline, which will create more than 1 billion tons of greenhouse gasses over the course of its lifetime—speak on a panel about cleaning up urban energy distribution systems. I attended discussions hosted by the investment arm of Tokyo Gas, one of the biggest suppliers of natural gas in Japan, and Idemitsu, a Japanese petroleum company. At one panel sponsored by SLB—formerly Schlumberger, the world’s largest offshore drilling platform, which rebranded itself in 2022 to focus on cleantech—a start-up owner proudly announced that Chevron, Equinor, and AGL had all invested in his company. (AGL, Australia’s biggest electric generator, was called “one of the most toxic companies on the planet” by one of its own investors for its overreliance on coal.) Reps from Shell, Chevron, SoCal Gas, Southern Company, and BP were all on the conference guest list. I kept accidentally making eye contact with one man wearing a Saudi Aramco–branded vest, weaving through crowds like a contented shark. 

I wondered if fossil fuel money was necessary to keep this industry running—if it was possible to have a cleantech economy without dirty money. Oil and gas companies are not totally necessary, one cleantech investor told me; there are plenty of funding sources that aren’t Big Oil. But existing energy companies do make good partners for a lot of start-ups, and are ponying up some cash for certain ventures. 

The investor encouraged me to notice which initiatives fossil fuel funders were taking interest in at the conference: not in near-term technologies that could replace or knock out their product, like solar or EVs, but in longer-term ideas that will take a lot of research and capital, and give them room to keep producing as much oil as possible in the next decade. A start-up that works in hydrogen or carbon capture makes sense for an oil company to invest in. Besides, fossil-fuel companies have a lot of money to throw around, the investor told me, and it makes sense to diversify. 

Isn’t there an innate conundrum, I asked, in a start-up ostensibly committed to helping to solve climate change partnering with an oil company that has no plans to stop producing?

If there’s a bottom line to bring on funding to get the company off the ground, not really, the investor told me. “Money is green,” they said.

One of the many companies at the conference that had already taken fossil-fuel funding is Amogy, a Brooklyn-based ammonia company that describes itself as “bringing the transportation industry one step closer to net-zero emissions.” Ammonia is one of those solutions that seems like it has real promise. As Maciek Lukawski, Amogy’s vice president of strategy and business development, explained to me, ammonia is used around the world in fertilizers, meaning that the infrastructure already exists to create and ship it—unlike something like hydrogen, which would require huge amounts of money to build new infrastructure. Amogy’s product—a tech that cracks ammonia to produce hydrogen for a carbon-free fuel, contained in a portable box—could be a game-changer for hard-to-abate industries like shipping.

Since launching in 2020, Amogy has already scored big with investors like Amazon, Mitsubishi Heavy Industries—and Saudi Aramco Energy Ventures, an arm of the state-owned oil company. Aramco, one of the most profitable companies in world history, has been frank about its objectives to keep producing oil and gas even as it invests in clean-energy research and development. The Saudi Arabian government, funded almost entirely by its oil reserves, has been one of the biggest blocks to action since the UN climate process began in the 1990s.

As Lukawski told me, Aramco has already made its own significant technological strides in developing ammonia as a fuel source, creating the world’s first supply chain of ammonia with Japan in 2020. “They’re very well-positioned” to work on this specific issue, he said. “I think we’ll need someone who can bring the scale to low-carbon ammonia production.”

I pressed Lukawski—one of several Amogy employees with a background in working for Big Oil, having spent four years at Exxon—on if he feels any sort of cognitive dissonance in his business partnering with Aramco. 

“I have a 6-month-old daughter,” he told me, eyes shining. “It makes you think in a certain way. Your focus shifts to thinking about the next generation. The energy transition needs to happen, and it’s not going to be easy, and it’s not going to be cheap—we need all hands on deck.”

As the conference wore on, I became better at understanding how profit margins, not science, dictated how corporate types talk about climate. A spokeswoman from Chubb Insurance was one of the only people I heard publicly mention searing heat across the world last year. According to the company’s financials, Chubb, a sponsor of the conference, experienced $400 million in pretax catastrophe losses in the second quarter of 2023, compared to $291 million in the same quarter the year before. In the US alone last year, there were 28 weather- and climate-related disasters that cost more than $1 billion each. Unlike Saudi Aramco or BP, whose profits rely on climate inaction, investors like Chubb have a real financial stake in seeing the tech pitched at this conference succeed. 

Yet the capitalist rhetoric didn’t always add up. Most conference attendees seemed, like Gates, to be in agreement that keeping warming under 1.5 degrees was impossible. David Victor, a professor at the School of Global Policy and Strategy at UC San Diego, told a crowd on Wednesday morning that he was “optimistic” on the state of the energy transition—especially compared to 15 years ago, when the world was on track for nearly 5 degrees of warming. The 1.5 degree goal “will not be met, and that will look like failure, but in terms of trajectory, that’s actually a tremendous success,” Victor said. 

Victor, who argued that “deployment of capital” after the Paris Agreement has helped to improve not only the technological outlook but also the political condition, stated that he considered green-finance initiatives to direct capital to accelerating net-zero targets to be “nonsense.” “What’s going to make [the energy transition] happen is when finance is just finance,” he said. 

If the 1.5 degree goal is already a done deal—if, as Victor claims, the market left alone would be the best instrument for addressing climate change—it would make sense that start-ups that provide adaptation would be hot areas for entrepreneurs looking to make money in climate tech. Experts estimate that developing countries will need $2 trillion by 2030 to adapt to the changes they’re already experiencing. 

But adaptation technologies consistently fail to get as much attention as other areas of investment. The Cleantech Group found that the adaptation sector made up just 7 percent of total cleantech investments last year, figures that track with research released last year from Oxford and the UN. “Engagement with technologies supporting climate adaptation and resilience has mostly remained flat as a percentage of investments, forcing the question, “How prepared are we truly for the next phase of climate change?” Cleantech Group CEO Richard Youngman wrote in the company’s annual report.

I asked a climate tech entrepreneur why, if everyone is in agreement that we’ll zoom past 1.5, investment in this specific sector is so under-pronounced. “That is the billion-dollar question,” they told me. They said that a phenomenon they called the ostrich paradox—a term coined by a University of Pennsylvania marketing professor and economist to describe psychological behaviors that create under-preparedness for disaster—was probably overwhelmingly to blame. 

This concept, I think, is a little too forgiving of the capitalist framework that drives tech attitudes. 

When we encourage the idea of letting the market serve as the solution for climate—of, as Victor said, encouraging capital deployment to spur both technological development and political change—it seems only natural that more money would go toward solutions like ammonia, or hydrogen, or nuclear, versus setting up seawalls or monitoring wildfires. Treating climate tech as a hero inherently sets up climate as a long-term problem to be solved on the schedules of venture funds and oil companies’ stretched out “transition” plans—not on the schedule the planet dictates. A capitalist system that brushes away the 1.5 degree mark as inconsequential, when millions of people in countries around the world will inevitably suffer from that shift, is not one that is set up to help those same people adjust to an entirely new way of life. 

At the end of the day on Tuesday, Breakthrough Energy sponsored a happy hour for conference attendees for “a chance to unwind, and [have] a little fun.” The Southern California sun was shining once again over a bay flush with rainwater from the storms the day before. Those same smartly attired people milled around tables set up on a grassy knoll outside the hotel, snacking on vegetarian hors d’oeuvres and playing cornhole, while an iPad hidden behind a palm blasted a Spotify playlist titled “Corporate Event Pump Up Playlist.”

I thought about Gates’s casual dismissal of the 2-degree target, and his seemingly single-minded faith in the power of innovation to bail us out of the mess we’re in. “Big thanks to Bill for selling us fake tech and market solutions so governments wouldn’t actually take the actions that would’ve been required to avoid 2C of warming,” Paris Marx, a journalist and host of The Nation’s Tech Won’t Save Us podcast, tweeted about the Gates interview. “He’s not the only guilty party, but he played an important role.”

I tried to think about if my fellow conference attendees ever considered their companies, or the tech industry as a whole, this way. I looked around at all the people my age drinking wine in the early evening light—probably many with kids at home, like Lukawski, who could also feel that nagging pull of panic every time they think about their child’s future. I knew that climate tech has a new image as recession-proof, but I’d also wager that many of the people around me probably took a pay cut in leaving high-profile jobs—perhaps leaving jobs at oil companies—to try and make the world a better place. 

I think they’re trying to do the right thing, selling innovation. In an age of near-futility on climate, this is the only way they know how to do it.

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Molly Taft

Molly Taft is a Brooklyn-based climate journalist. They are currently a reporter at Drilled and were formerly a contributing senior editor at The New Republic and a staff writer at Gizmodo.

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