With the World Meteorological Organization reporting that June 2026 was the hottest June recorded for western Europe and the second warmest globally, the pressure is mounting to accelerate the transition to cleaner, more resilient energy systems. This alarming trend underscores the urgency for innovative solutions in the face of climate change, prompting discussions among policymakers and industry leaders alike.
The debate has reached a critical juncture, particularly with reports indicating that the European Commission’s upcoming Electrification Action Plan, set to launch on 15 July 2026, will not introduce new measures to improve access to cooling technologies despite rising temperatures across the continent. This raises questions about the adequacy of current policies in addressing the pressing needs of citizens and industries alike.
The broader challenge Europe faces is the dual mandate of reducing emissions while ensuring that its energy infrastructure can meet growing demand. As temperatures rise, the need for effective cooling solutions becomes increasingly critical. In this context, Europe’s ClimateTech sector is stepping up, attracting significant investment as startups develop innovative solutions aimed at decarbonizing various industries, including energy, manufacturing, transport, and the built environment.
From battery recycling and carbon accounting to heat pumps, thermal storage, and renewable energy platforms, these companies are tackling some of the biggest barriers to achieving net-zero targets while simultaneously building commercially viable businesses. The innovation landscape is vibrant, with numerous startups emerging to address these challenges.
Founded in 2022, Aira is a Stockholm-based clean energy company that provides heat pumps and home energy-saving solutions directly to consumers. By offering an integrated platform for home electrification and energy efficiency, Aira is helping households transition away from fossil fuel heating. The company has raised more than €621 million across five funding rounds, including a close of €150 million in August 2025.
Another notable player is Aachen-based cylib, also founded in 2022. This startup is developing sustainable battery recycling technology for end-of-life lithium-ion batteries. Its proprietary process recovers critical raw materials, including lithium, graphite, nickel, and cobalt, thereby supporting a circular battery supply chain for Europe’s growing electric vehicle market. Cylib has raised €156.1 million across five funding rounds, including a €55 million Series A in May 2024.
Based in London, Isometric is another promising startup founded in 2022. It operates a science-backed registry for carbon removal credits, providing independent verification and monitoring of carbon removal projects. This helps businesses purchase high-quality, transparent carbon credits, thereby improving trust and accountability in the voluntary carbon market. Isometric has raised €56 million across three funding rounds, including a close of €34 million in June 2026.
Berlin-based trawa, founded in 2022, offers an end-to-end Energy-as-a-Service platform for small and medium-sized businesses. Its software combines renewable electricity procurement with intelligent energy management, helping companies reduce costs and lower carbon emissions. Trawa has raised €36.4 million across four funding rounds, including a close of €10 million in May 2024.
Founded in 2022, Samara is a Madrid-based clean energy company focused on helping homeowners adopt rooftop solar and home electrification solutions. By simplifying the installation process, Samara makes it easier for households to lower both energy bills and carbon emissions. The company has raised €18 million across three funding rounds, including a €4.5 million round raised just six months after launch in December 2022.
Another innovative startup from Berlin is Climatiq, founded in 2021. This climate software company provides APIs and emissions data for businesses building carbon accounting and sustainability products. By making emissions data more accessible, Climatiq helps organizations measure and reduce their environmental impact. The company has raised €17 million across three funding rounds, bolstered by their €10 million Series A in June of last year.
Another noteworthy player is Ostrom, a digital green energy provider founded in 2021 in Berlin. Ostrom offers renewable electricity alongside smart tools that help customers use power when it is cheapest and cleanest. The company’s digital-first approach aims to make green electricity more affordable and accessible for consumers. Ostrom has raised €40 million across five funding rounds, including a €20 million Series B close in June 2025.
Founded in 2021, PaperShell is a Swedish materials startup developing load-bearing components made from natural fibers. Its paper-based composite material is designed to replace carbon-intensive materials such as plastic and aluminum in applications including furniture, consumer products, and automotive components. PaperShell has raised €60 million across five funding rounds, securing €40.3 million in financing to expand industrial production through a new flagship factory in Tibro, Sweden.
Founded in 2023, Stellaria is a ClimateTech startup based in north-eastern France, developing next-generation molten salt nuclear reactors. Its 200 MWe reactor design aims to provide safe, low-carbon electricity with up to 20 years of operation without refueling. Stellaria is advancing nuclear technology as a long-term solution for reliable, carbon-free energy generation and has raised €23 million to date.
Lastly, Exergy3, founded in 2023 in Edinburgh, is developing thermal energy storage systems for industrial applications. Its technology stores heat for later use, helping manufacturers reduce fossil fuel consumption and lower emissions from industrial processes. By addressing one of the hardest sectors to decarbonize, Exergy3 aims to support cleaner industrial energy systems. The company has raised €22 million across five funding rounds, including a raise of €11.4 million (£10 million) in Seed funding in April of this year.
