2025 will be a year of conflicting trends in the global clean technology sector. Global demand for clean energy and low-carbon technologies will reach a record high, but actual venture capital investment in clean technologies will fall to its lowest level in nearly five years. This trend is a result of a confluence of factors, including geopolitical changes, technological fragmentation, and policy uncertainty.
According to data from the International Energy Agency (IEA), global spending on clean energy, including renewable energy sources such as solar and wind power, grid modernization, and energy efficiency, reached approximately $2.2 trillion (about 3168 trillion won) this year. This is double the amount invested in fossil fuels during the same period. However, venture capital flows have stagnated in the opposite direction. According to Crunchbase, in 2025, global startup investment in clean technology, electric vehicles, and sustainability will amount to approximately $24 billion (about 34.56 trillion won), a decrease of nearly half compared to the previous year.
Experts point out that political factors underlie this investment contraction. Especially after the Trump administration's return to power became clearer earlier this year, the market had to comprehensively adjust its investment strategies to cope with the potential setbacks in climate-related subsidies and tax incentives promoted by President Biden. The mainstream interpretation is that the sharp decline in clean technology investment in the first quarter of this year, followed by a gradual recovery, reflects this uncertainty.
However, different sectors are showing varying levels of investment enthusiasm. The nuclear fusion and fission sector, in particular, has garnered significant attention due to its support from both conservative and progressive camps. Notable examples include: Commonwealth Fusion, based in Devons, Massachusetts, raised $863 million (approximately 1.243 trillion won) in its Series B2 funding round in August alone; X-energy, a developer of small modular reactors, raised $700 million (approximately 1.02 trillion won) led by Jane Street Capital; and TerraPower, founded by Bill Gates, raised $650 million (approximately 936 billion won) with the participation of Nvidia's venture capital arm, NVentures.
The traditional battery sector is facing difficulties. In particular, the bankruptcy filing of Swedish electric vehicle battery company Northvolt has exacerbated market distrust. Nevertheless, some companies, such as Base Power, Return, Group14 Technologies, and Redwood Materials, have still secured substantial investments, demonstrating their robust resilience.
As the year draws to a close, the industry atmosphere is gradually turning positive. Increasing pressure from climate change and rising energy demands driven by the rapid development of artificial intelligence are also increasing the necessity for investment in clean infrastructure. This recovery in the second half of the year suggests that the clean technology market may experience another boom in 2026, and venture capitalists are therefore refocusing their attention on this sector.
