Top Climate Tech Trends 2026

After a bruising reset in 2024-25, climate tech is re-entering the spotlight with a harder edge. Global electricity demand is surging under the weight of AI, data centers, and industrial reshoring. Water stress is moving from environmental concern to operational risk. Corporates, having paused, reorganized, and recalibrated, are quietly preparing to re-enter the market, this time with profitability, resilience, and scale firmly in focus. Recent headlines tell the story: record power demand forecasts, renewed government backing for nuclear and fusion, a rebound in strategic M&A, and capital flowing back to climate solutions that actually lower costs and secure supply.

Against this backdrop, 2026 emerges as the moment when long-horizon technologies collide with near-term market pressure. So without further ado, here are some thoughts from Emerald’s investment team on the climate tech trends that will define 2026 – not as distant possibilities, but as signals leaders need to act on now.

Fusion Futures: 2026 and the Dawn of the Abundant Energy Race

In 2026, fusion will shift from sci-fi promise to strategic reality, triggering a global scramble to understand, invest in, and position around its potential. As nearly every climate solution hinges on vast amounts of clean electricity, recent fusion breakthroughs – alongside billions flowing into magnetic and inertial confinement technologies – will push corporates and governments to professionalize their fusion roadmaps and explore early markets where premium clean power (or related spin-off components) can gain traction. Yet progress won’t be fast enough to outpace the near-term rise of advanced fission and SMRs, which will increasingly serve surging demand from data centers and heavy 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. In a time where twenty years is basically tomorrow, 2026 will be the year leaders start acting accordingly.

- - - - Christoph Frei, Partner and Head of Energy

Big GPUs, Thin Margins: Why 2026 Is the Year AI Turns Profit-First

2025 was the year of big numbers for GenAI, with massive spending commitments for giga-scale GPU farms. Less-touted but equally large? The gap between middling profit rates and the race to pay off all that expensive hardware on a 5 year refresh cycle. If we want to keep cracks from growing in the AI-enabled future, 2026 will need to be the year of profit-focused innovation in AI – expect novel monetization strategies to go mainstream, and a redoubled focus on squeezing additional tokens out of every $ and W spent through better communication and thermal management tech.

- - - - Graham Carey, Senior Investment Manager, Advanced Materials

Blue is the New Green: Water Tech’s Breakout Moment

Long a niche behind energy and EVs, water technology is poised for a breakout in 2026. Once an overlooked subset of climate tech, it’s now a major focus as droughts and water scarcity make headlines. In fact, venture investment in water tech hit record highs recently ($864 million in 2023, with 2024 close behind), nearly double the average of the late 2010s. This surge reflects an urgent new reality: nearly half of the world’s population is beginning to live in water-stressed areas, turning water from a boring utility into a boardroom-level risk. In 2026, expect corporations and investors to double down on water innovation – from smart leak detection to low-energy desalination – as they realize that securing water supplies is no longer just an ESG talking point but a core business continuity issue.

- - - - Helge Daebel, Partner, Head of Water, Emerald

2026: The Year Strategics Go Shopping Again

The “green premium” fantasy is dead, and 2026 only rewards sustainability tech that slashes costs while working at scale (read: makes CFOs breathe easier). But the real action will be in M&A, as Fortune 500s emerge from their 2025 “re-organizations” with fresh mandates and itchy trigger fingers. CVC teams that ghosted startups in 2025 will suddenly rediscover the joys of “open innovation” because it’s still the fastest, cheapest way to hit those ESG targets they publicly softened but privately still get paid on. So if corporates ghosted you last year, they just might slide back into your DMs, this time looking to buy.

- - - - Neil Cameron, Partner, Co-Head of Materials & Packaging, Emerald

Plant Cell Cultivation Will Take Root in 2026

While animal cell cultivation continues to hold substantial long-term potential, its trajectory is constrained by high production costs, complex regulatory pathways, and uncertain consumer adoption. Plant cell cultivation, however, presents a more commercially viable near-term alternative, leveraging decades of biotechnological expertise and a clearer route to market. As food systems transition toward greater resource efficiency, this technology may well become a cornerstone of the bio-based economy, helping bridge the gap between the promise of cultivated foods and the realities of global demand.

- - - - Annina Winkler, Senior Investment Manager, AgriFood & Packaging