The New Zealand Cleantech Impact Report 2026 was released last week. It’s the sector’s primary stocktake, sponsored by the MacDiarmid Institute, with contributors from across the ecosystem including CVCF partner Jez Weston, the MacDiarmid Institute, Ara Ake, Earth Sciences New Zealand and Vector.
Two numbers in that report stand out.
The first is 19.2 million tonnes of CO₂-equivalent per year by 2030. That’s the projected reduction in emissions from just nine New Zealand cleantech companies if they deploy their technologies globally. This amount is comparable to the carbon absorbed by New Zealand’s forestry sector each year. Nine companies, in a single sector, with genuinely global reach.
The second is one-eighth. That’s the share of capital New Zealand cleantech companies raise compared to their peers in other small, advanced economies like Denmark or Ireland. Economies of similar size to New Zealand, working on similar categories of technology, raising roughly eight times the capital.
The gap between those two numbers is what this piece is about. The argument we want to make, having sat with the report for the past week, is that the gap isn’t primarily a supply problem. It’s a matching problem. There’s capital in New Zealand that could and should be funding the next decade of climate innovation but isn’t.
The impact case is now empirical
For most of the last decade, the story about New Zealand cleantech has been told in aspirational terms: we could build this, there’s an opportunity here, the talent is world-class. We think that’s true, but yet to be proven.
The 2026 report is the first time the impact case has been modelled at ecosystem scale using a standardised methodology, the Carbon Reduction Assessment for New Enterprises (CRANE) tool from Prime Coalition. This is the globally leading tool for making forward-looking emissions claims. The forecast of 19.2 Mt CO₂e per year by 2030 is the best estimate we have of the impact of those nine companies.
Those nine sit within a surveyed cohort of 52, drawn from 158 the researchers initially identified across the sector. Of the 52 surveyed, 50 report a positive net effect on greenhouse gas emissions. These impact cases remain aspirational and unquantified but are now more credible and internationally comparable.
The economic story sits alongside the climate one, albeit with more measurement to show progress. The surveyed companies collectively employ 943 full-time staff, 93% of them based in New Zealand. Revenue grew 29% year-on-year, from $60.3M in FY25 to $77.9M in FY26, despite 67% of the cohort still being pre-revenue. $173.8M was raised in private capital across the two years, up 53% on the prior period. $86.5M went into R&D and $32.2M into capital equipment. Three companies generated their first revenue in FY26. $29.8M came in as grant funding, with 28% of that from international sources.
The companies represent serious potential. Liquium, a CVCF portfolio company, is building novel catalysts to improve the Haber-Bosch ammonia process, with partnerships already in place with industrial players whose combined market capitalisation exceeds US$20 billion. Enpot enables aluminium smelters to run on variable renewable energy, with the potential to abate around 150 Mt CO₂ per year if rolled out to 30% of global smelter capacity. Cetogenix converts organic waste into low-carbon biomethane and green ammonia with 40% higher yields than incumbent technologies. Avertana is cutting emissions across two heavy industries simultaneously. Captivate is targeting direct CO₂ capture. These are companies with working technology, early commercial traction, clear markets they’re selling into, and the potential for huge emissions savings.
Which brings us to the obvious question. If the pipeline is truly this deep and the impact this measurable, why are these companies only raising an eighth of the capital compared to companies in comparable ecosystems?
The gap is partly supply, partly something else
It would be easy to read the one-eighth figure and conclude the problem is simply not enough capital. That’s partly right. Supply is a binding near-term constraint, with New Zealand’s venture ecosystem yet to grow to the scales found overseas.
However, volume alone undersells the picture. Consider two things side by side.
A class of New Zealand institutional investors, including community trusts, regional development funds, Iwi investment entities, long-horizon superannuation pools and intergenerational-focused family offices, manages billions of dollars. Their mandates prioritise intergenerational wealth creation, regional and community economic impact, environmental stewardship, long investment cycles, and sustainability.
The companies in this report employ people in New Zealand (93% of 943 FTE roles based here), develop intellectual property inside New Zealand research institutions, operate on ten to fifteen year commercialisation arcs, measure environmental impact in verifiable units (tonnes of CO₂ avoided, waste diverted, water treated, etc), generate global export revenue from a New Zealand base, and produce outcomes that are durable rather than speculative because the industrial problems they solve aren’t going away.
Between the two sits a labelling layer. “Deep tech early-stage venture impact” is a string of industry-specific descriptors that, read together by a regional trustee or an Iwi investment committee, can reasonably sound like “unproven”, “volatile”, “long duration”, and “niche”. Not an unreasonable reading of the labels and not exactly a framing that makes it to the investment committee table, let alone up for serious consideration.
The structural shape of the gap
Some structural features of cleantech are worth noting when thinking about what would close the gap in practice.
Firstly, climatetech is a theme, not a sector. Climate is such a wide-reaching driver that it bears upon all businesses, no matter what growth pathway they are aiming for. It’s not a niche, it’s the whole economy. Some companies are going to follow the long arc of most deep-tech prospects: long hardware cycles, regulatory approvals, industrial partnership timelines and high capital requirements for scale-up. Others can rapidly retire their technical and commercial risks with much lower capital needs and get to market at speed. In each case, climate influences every part of their business. Climate-dedicated funds need to be designed around this cross-cutting factor. Generalist funds doing the occasional climate deal often aren’t.
Secondly, New Zealand’s climate capital stack is thin at every layer, rather than structurally absent. The ecosystem has closed-end climate venture funds, with CVCF in the Australasian seat and a handful of peers, plus international climate specialists engaging with local deal flow. It has angel networks, sovereign co-investment through NZGCP, and catalytic grant support. What it lacks, at the volume peer economies have, is any one of these layers at the scale required to cumulatively close the one-eighth gap.
Common objections to climate investing, answered honestly
Some objections get raised often enough to engage with honestly rather than talk around.
“Impact investing sacrifices financial returns.”
This is the most common objection to any climate-dedicated capital, and for sophisticated investors it’s the one that matters most. The honest response is that climate technology is not a charity sector. Companies like Enpot, Liquium and Cetogenix are selling, or preparing to sell, into industrial markets with tens of billions of dollars of addressable demand, solving problems that heavy industry has to solve regardless of sentiment or politics.
The returns of climate venture are driven by the same fundamentals as any other venture category: market size, technology defensibility, capital efficiency, commercial traction, and management quality. If anything, climate ventures benefit from tailwinds the generalist categories don’t have, because the underlying industrial transitions are unavoidable rather than optional. The “impact means lower returns” framing is a hangover from an older understanding of ESG that treated impact as a constraint layered on top of financial performance.
In climate technology, impact is structurally where the returns come from, because the problems being solved are where the industrial capital is already being spent. We’d rather be invested in companies solving problems that heavy industry must solve than in companies solving problems customers might or might not want solved.
“Capital isn’t the binding constraint. Talent, regulation and market access are.”
All real constraints, and the report acknowledges them clearly. We don’t claim capital is the only lever. But the data in this report tells us capital is a binding constraint right now: 21% of planned capital actually raised, eleven companies deferring rounds, $173.8M against a peer benchmark roughly eight times larger. Solving the other constraints without the needed capital leaves companies stuck. Providing capital without addressing the other factors won’t allow them to progress rapidly. All of them need to move together, and the piece you’re reading is about the one that is currently slowest to move.
“Forward-looking emissions figures are speculative.”
This is a fair point. The CRANE-modelled 19.2 Mt figure depends on assumptions about technology adoption, market penetration and counterfactual baselines. The report is explicit about this. It’s a structured projection, not an audited outcome. What it tells us is that if the nine companies reach the commercial scale their technology supports, the global impact is of an order comparable to the entire drawdown New Zealand’s forestry sector is projected to provide. That’s a large conditional, but it is the right kind of number for a thesis-setting document: a standardised methodology, applied consistently, against incumbent baselines.
For the other forty companies in the report, many are at an early stage where their potential to reduce emissions is obvious but hard to estimate. The only way to find out that potential is to realise it.
“At one-eighth the peer benchmark, couldn’t more capital inflate valuations or fund weak companies?”
This is possible at the margin, but the near-term risk is the opposite. At the current capital level, strong companies are under-funded, timelines are slipping, and IP and people are migrating to better-capitalised ecosystems. The eleven deferred rounds this report identifies represent eleven delayed commercial arcs, with consequences that compound through every subsequent industrial partnership and scale decision.
What this means for the New Zealand climate capital stack
CVCF is a series of climate-dedicated venture funds focused on Australasia. The fund design, with patient, venture-style funding tuned to climatetech commercialisation approaches, is deliberate. Institutional climate-impact allocators generally need the defined-horizon, committed-pool characteristics that closed-ended structures provide, combined with a climate-dedicated mandate and duration long enough to underwrite the multi-year arcs cleantech can demand. We’ve been investing through exactly the capital constraint this report describes, and the findings reinforce the thesis that took the firm into the sector.
The argument we’re making, though, isn’t an argument for CVCF specifically. It’s an argument for a stack. CVCF fills one structural role as a closed-ended Australasian climate fund series, building on 2040 Ventures’ twelve years of NZ tech investing experience. Other closed-ended climate specialists fill others. Sovereign co-investment through NZGCP fills another. Industrial corporate venture arms fill another. The Active Investor Plus (AIP) visa is bringing capital as well as international links. And the values-aligned institutional pools we described earlier represent a substantial under-tapped layer of the stack if the sector can speak to them in the language of their actual mandates.
No single fund or investor or policy will close the gap on its own. This is a structural problem, and it has to be solved by the people who choose to solve it.
The Callaghan question, restated
Sir Paul Callaghan argued that New Zealand’s prosperity would come from globally relevant technology developed here, and that this was part of the foundation for New Zealand being the kind of place talented people want to live. He wasn’t writing specifically about climate technology.
Place the Callaghan thesis next to the numbers in this report: 19.2 Mt CO₂e per year of global emissions impact, generated from New Zealand; 943 FTE, 93% of them based here; $77.9M in revenue; $43.5M in FY26 salary spend on R&D talent. And then the one-eighth figure, sitting alongside them.
New Zealand can be a net exporter of climate technology, creating meaningful economic value at home while contributing to global emissions reduction, or it can be a net importer, buying solutions developed and scaled elsewhere. The cleantech pipeline now exists to make the first outcome possible. Whether that happens depends on whether capital, policy, talent pathways, and ecosystem infrastructure all move together in coming years.
The most actionable part of that list is probably the capital layer. The AIP channel is live. Climate-dedicated Australasian venture capital is growing fast. What’s needed now is scale, coordination, and the serious engagement of the New Zealand institutional capital whose mandates should already have taken it here.
“19.2 million tonnes” and “One-eighth”. The rate at which those two numbers close is worth watching.
CVCF (Climate Venture Capital Fund) is a series of closed-ended climate venture funds backing Australasian climate technology innovators, managed by 2040 Ventures. Learn more at climatevcfund.com. The New Zealand Cleantech Impact Report 2026 is available from the MacDiarmid Institute. CVCF partner Jez Weston is a co-author.
Dr Jez Weston is a Partner at Climate Venture Capital Fund.
Jez has over 15 years’ experience in policy and climate advice across roles at the Royal Society, Ministry for Primary Industries, and Ministry for Business, Innovation & Employment. Jez managed the Commercialisation Partner Network and PreSeed Accelerator Fund, managing over $500m of government contracts, and is a Return on Science – Physical Science Investment team member. Jez has a PhD – Engineering (Cambridge University)