Australia’s climate tech sector attracted $680 million in 2025, yet most startups can’t scale past pilot stage.
What’s Happening: Australia’s climate tech sector raised $680 million across 69 deals in 2025, yet over $164 billion in public funds remains available with only $10 billion deployed recently.
Why This Matters: Australia excels at climate innovation but lacks systematic support to scale startups into globally competitive enterprises.
Australia’s climate tech sector has validated itself through capital attraction and founder activity. The challenge now shifts from proving viability to achieving scale.
Despite $680 million raised across 69 deals in 2025, systemic barriers prevent most startups from crossing what industry insiders call the valley of death between pilot programmes and profitable operations.
Mick Liubinskas, Climate Salad Co-founder & CEO, frames the moment bluntly. “There’s excitement. It’s not hype, it’s earned optimism. These aren’t theoretical plays, they’re boots-on-the-ground builders solving real problems with urgency and optimism,” he states.
The 2025 Australian Climate Tech Industry Report reveals the sector now employs over 7,000 people and ranks among Australia’s top three funded industries. Yet funding patterns expose a persistent gap. Pre-seed rounds continue dominating as new ventures enter the ecosystem, reflecting strong ideation but limited progression to later stages.
Capital exists, deployment lags
Over $164 billion in estimated public funds sits available for climate-aligned initiatives, yet only $10 billion has been deployed recently. The Clean Energy Finance Corporation holds $33 billion total with $2 billion new, whilst the National Reconstruction Fund and Net Zero Fund combined offer $15 billion with $5 billion recently committed.
Future Made in Australia deployed $1.7 billion in new funding, whilst ARENA grants added $1.9 billion from a $12 billion total allocation. The Future Fund, with 40% of its $252 billion focused on renewables, represents $100 billion in potential climate capital. Additional public commitments include the Queensland Investment Council’s $15 billion, NSW Net Zero Industry & Innovation Program’s $115 million, and Breakthrough Victoria’s $2 billion.
Private funding activity shows growing momentum. Wollemi Capital secured $230 million in new commitments from REST Super toward a $450 million fund. Virescent Fund 2 added $25 million to reach $155 million total, whilst Climate Tech Partners raised $30 million of a $50 million target. Ecotone Planet Fund closed at $25 million. Established funds including Investible Climate Fund at $32 million, Giant Leap Impact Fund at $50 million, and Main Sequence at $250 million provide additional capital sources for climate-focused ventures. Combined, an estimated $310 million in new private climate tech funding joined $957 million already available.
The scaling gap widens
Shift toward Series A funding signals growing investor confidence and more prototypes graduating into deployable, market-ready solutions. However, bridge and debt financing remain marginal, consistent with climate tech’s capital-intensive profile and investor preference for equity at early technology readiness levels. Grants maintain modest but steady contribution, underscoring the role of public funding in derisking early hardware and deep-tech pathways.
Greg Miller, Co-founder and Partner, identifies the core problem. “Australia has proven itself a world leader in climate tech innovation. We punch far above our weight in creating new ideas, new technologies, and new ventures, the ‘zero to one’ phase. But innovation alone won’t decarbonise the economy,” he explains.
Miller argues Australia must master the one to one hundred phase, scaling climate tech companies into enduring, globally competitive enterprises. “The gap isn’t in ideas, it’s in infrastructure. Startups need more than funding; they need the experienced operators, commercial pathways, and systematic support that help them cross the valley of death between pilot and profit,” he states.
Canada’s MaRS Discovery District provides a working model. Dedicated scale-up programmes turned clean tech innovators into global leaders, creating thousands of jobs and hundreds of millions in annual investment. Australia currently lacks equivalent infrastructure connecting founders with operators, investors and customers whilst embedding experienced mentors and talent.
Policy creates urgency
Australia’s new 2035 emissions target, a 62–70% cut from 2005 levels, signals the steepest decarbonisation decade yet. The Government’s Net Zero Plan and sectoral pathways position climate technology at the centre of economic transition.
Between 2025 and 2030, most near-term abatement comes from replacing coal generation with renewable electricity backed by hydro, gas and batteries. Growing demand will favour technologies connecting large-scale renewable projects faster and driving uptake of home solar and storage, including companies like Amber Electric and National Renewables Network.
In the resources sector, emissions fall through electrification, process optimisation and on-site renewable power, whilst export volumes of thermal coal gradually decline.
By the mid-2030s, most coal exits the grid as industrial electrification expands to alumina, steel and minerals processing. In transport, light-vehicle electrification leads with steady progress on heavy vehicle adoption. Companies like Kwetta and JET Charge will play important roles building Australia’s charging infrastructure.
Agriculture and high-temperature industries remain harder to abate, yet sustained innovation from feed additives to green hydrogen and ammonia will define the next wave of Australian climate tech.
Infrastructure remains missing
Miller’s assessment cuts to the fundamental challenge. “If we invest now in scaling capability, not just startup creation, we can triple the number of Australian climate tech companies that reach global scale. The opportunity is here: to turn our ingenuity into industry, our startups into sovereign capability, and our climate tech promise into the next great export story,” he argues.
Australia can build national scale-up infrastructure connecting founders with operators, investors and customers. The framework requires embedding experienced mentors and talent whilst aligning public and private capital behind the nation’s most promising climate ventures.
Without systematic scaling support, Australian innovations risk commercialising offshore. International markets recognise Australian climate tech quality, with 48% of founders already operating in the European Union, 45% planning Asian expansion, and 53% targeting the United States. The question becomes whether Australia captures the economic value from technologies developed domestically.
The climate transition will occur throughout Australia’s economy over coming decades, providing sustained opportunity for local innovation. Policy settings now create demand certainty across multiple sectors simultaneously. Capital availability exceeds historical levels across both public and private sources.
What remains missing is the connective infrastructure transforming early-stage ventures into scaled enterprises capable of meeting policy targets, capturing export markets and generating the jobs and economic returns that justify public investment. The sector has proven it can innovate. The next phase determines whether Australia can scale.
This article is based on findings from The 2025 Australian Climate Tech Industry Report by Mick Liubinskas.
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