Global Climate Tech Trends: Current Status and Future Outlook for Japan

Japanese

Since the adoption of the Paris Agreement^*1 into the United Nations Framework Convention on Climate Change at the 21st Conference of the Parties (COP21) in 2015, ‘climate tech’—technologies that mitigate, reduce, or assess the impacts of climate change—has been gaining significant global attention. In this report, climate tech is categorized into eight sectors^*2—Energy; Mobility and Transport; Climate Change Management and Reporting; Financial Services; Greenhouse Gas Capture, Removal and Storage; Food, Agriculture and Land Use; Industry, Manufacturing and Resource Management; and Built Environment (Figure 1). Using PwC Consulting LLC’s proprietary analysis tool, Intelligent Business Analytics (IBA), we examined global technology trends, country- and region-specific patterns, and insights from a supplier perspective for each category. For Japan to maintain and strengthen its competitiveness, startups, universities and research institutions will need to enhance their capabilities comprehensively and collaborate more closely. In addition, as discussions progress on shifting the government’s role in climate-tech-related industrial development from direct leadership to a more supportive function, it will become increasingly important for these players—together with large companies and local governments—to strengthen their competitiveness strategically, grounded in a clear understanding of the current landscape.

Figure 1: Classification of climate tech technologies

Source: PwC, 'State of Climate Tech 2021: Scaling breakthroughs for net zero'^*2

Overview of technologies

The Energy sector includes renewable energy such as solar and wind power; advanced zero-carbon and carbon-offset energy technologies such as nuclear power, nuclear fusion and hydrogen; as well as other synthetic fuel technologies (Figure 2). In the stage of producing energy, the sector encompasses the design, manufacturing and development of power generation and production equipment, machinery and components, as well as the technologies used to manage and control these systems. In the stages of delivering and using energy, the sector includes transmission and distribution technologies, control systems, hydrogen storage and transportation technologies, technologies for managing and controlling electricity and other forms of energy, infrastructure such as charging stations and hydrogen stations, and technologies for energy reuse. In this way, the sector encompasses a broad range of energy-related technologies that contribute to reducing GHG emissions and minimizing energy loss.

Figure 2: Overview of technologies in the Energy sector

Source: PwC

Technology trend

Figure 3 presents an analysis of current technology trends generated using IBA. The vertical axis represents the market expectations for each technology cluster (measured by minority investment amounts), the horizontal axis indicates the technology score (reflecting technological progress), and the size of each bubble corresponds to the number of patent applications. This chart can be divided into four quadrants based on the technology score and market expectations. Quadrant 1 represents the area for exploring emerging technological seeds. Quadrant 2 comprises technologies with high potential for further development. Quadrant 3 consists of trends that form the core of market creation, where both technological development and investment are already advancing. Quadrant 4 comprises technologies that have undergone long-term development and are reaching maturity.

‘Solar power generation (advanced semiconductor solar cells and related circuits and components)’ and ‘Renewable energy management systems’ both show high technology scores and high market expectations, indicating that they are core technology areas in current market formation. The technology cluster of ‘Energy production using advanced energy technologies’ is in Quadrant 2. Although there is still room for further technological development, it is already attracting substantial investment, suggesting a high likelihood that development will continue to advance. ‘Solar power generation (components, inverters and monitoring technologies)’ is in Quadrant 4, representing a field where technological development has been ongoing for a long time and is considered to have reached maturity. Quadrant 1 may include technology clusters such as wind power generation and various nuclear-reactor-related technologies—clusters that currently exhibit limited technology scores and market expectations but have the potential to become next-generation trends.

Figure 3: Market expectations, technology scores and patent application counts for technologies in the Energy sector

Source: PwC

Technology category and country/region trends

Figure 4 shows the proportion of patents, categorized by energy type, within the high-market-expectation cluster ‘Energy production using advanced energy technologies,’ based on the International Patent Classification (IPC). It can be observed that patents related to solar and wind power account for a large proportion of the total. Among other renewable energy technologies, patents related to solar thermal collection and tidal or wave power generation also account for relatively high proportions, and this area includes patents related to batteries, nuclear fusion and hydrogen.

Figure 4: Share of patents by energy type within ‘Energy production using advanced energy technologies’

Note: Percentages may not total 100% due to rounding to one decimal place.
Source: PwC

Figure 5 presents an analysis of the filing countries and regions for material patents within this cluster—defined as the top 5% of patents with the highest citation counts within the same IPC category^*3—categorized by energy type based on the IPC. Here, the analysis focuses on material patents in order to highlight those with high impact. The filing countries and regions exhibit distinct patterns depending on the energy type, which can be attributed to natural factors and policy environments specific to each country or region.

More than 80% of solar thermal collection-related patents are filed in China, which is likely due to the country’s abundant sunlight and vast land area, as well as government policies that have actively promoted the use of such technologies. More than 80% of patents related to tidal and wave power generation are also filed in China, where both companies and universities are actively driving technological development.

Approximately 60% of fusion-related patents are filed in the US. In the US, the Department of Energy (DOE) has released the DOE Fusion Energy Strategy 2024^*4. Through initiatives such as the Fusion Innovation Research Engine Partnership, the US has decided to strengthen investment in the private sector. The government is also promoting fusion as a key policy priority, recognizing it as essential for meeting the enormous power demand expected from the expanding AI market. Approximately 10% of fusion-related patents are filed in Europe, which is actively participating in ITER (the International Thermonuclear Experimental Reactor)^*5. The European Research Roadmap to the Realisation of Fusion Energy^*6, formulated by EUROfusion—an EU-related research consortium—also emphasizes the necessity of future fusion power plants. Japan, which has positioned the Fusion Energy Innovation Strategy^*7 as a government policy and incorporated it into its industrialization vision, accounts for about 5% of patent filings.

Hydrogen-related patents, meanwhile, are filed predominantly in China, which accounts for more than 60% of the total. China has released the Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry^*8 and is promoting the construction of hydrogen infrastructure. During the 14th Five-Year Plan period, the country is also implementing industrial innovation demonstration projects in the sectors of transportation, energy storage, power generation and industry.^*9 Patent filings in the US follow at around 20%, supported by the US commitment to invest more than USD 60 million in the research, demonstration and practical utilization of next-generation clean hydrogen technologies.^*10 In Europe—where hydrogen is positioned as a key element in the Green Deal Industrial Plan^*11 and the Fit for 55 decarbonization policy package^*12—and in Japan, which developed the world’s first Basic Hydrogen Strategy^*13, the share of patent filings remains below 10%.

Figure 5: Filing countries and regions for material patents by energy type within 'Energy production using advanced energy technologies'

Source: PwC

While the analysis presented here focuses on the Energy sector, the full PDF report covers analytical findings across all eight climate tech sectors.

Here, we conduct an analysis from the perspective of players (universities and research institutions, startups, companies excluding startups [hereafter referred to as ‘companies’]) and examine Japan’s distinctive characteristics and the strategic directions it should pursue. Figure 6 presents the average technology scores by country and region, broken down by player type, for two technology clusters within the Energy sector that rank high in market expectations according to the IBA analysis: ‘Energy production using advanced energy technologies’ and ‘Solar power generation (advanced semiconductor solar cells and related circuits and components).’ For each technology cluster, we identified the top 30 players by technology score in each country and region, separately for universities and research institutions, startups, and companies, then calculated the average technology score for each group.

Across both technology clusters, Japan shows a noticeably smaller average technology score for startups compared with companies, relative to other countries and regions. For ‘Energy production using advanced energy technologies,’ universities and research institutions, together with startups in Japan, show negative technology scores where those of companies are positive. Although the average technology score of US companies is lower than that of Japanese companies, the fact that US startups exceed their own corporate average makes the relative contrast particularly striking. In ‘Solar power generation (advanced semiconductor solar cells and related circuits and components),’ all countries and regions commonly show the highest average technology scores among companies. However, in Japan, the average score for startups is noticeably smaller relative to that of companies. It also shows that the average scores of universities and research institutions are relatively low in Japan when compared with those in the US and Europe.

Figure 6: Comparison of average technology scores by player type across countries and regions

^*For each technology cluster, technology scores of the top 30 players in each country and region are averaged separately for universities and research institutions, startups, and companies excluding startups
Source: PwC

These results suggest that, at least for these high-market-expectation technologies, large companies are driving technological development in Japan, while the relative technological capabilities of universities, research institutions and startups have not yet fully developed. Amid concerns about a shrinking economic scale and declining international competitiveness due to Japan’s aging population and declining birthrate, it is considered necessary for companies, universities, research institutions and startups to comprehensively strengthen their competitiveness and to collaborate with one another in order to efficiently improve Japan’s international competitiveness.

As related initiatives, the Ministry of Education, Culture, Sports, Science and Technology (MEXT) has, since FY2023, launched programs that support basic research, talent development and industry-academia collaboration, such as the Innovative GX Technology Creation Program (GteX) and Advanced Low-Carbon Technology Research and Development (ALCA-Next).^*14 At the same time, concerns over the relatively small number of climate-tech startups in Japan, compared with other countries, and the importance of fostering such startups are also being discussed from the perspective of industrial development policy.^*15 In Japan, the government has historically promoted policies related to industrial structure and industrial location since the period of high economic growth. However, in light of increasing uncertainty, a policy direction is now being discussed in which the government shifts to a supportive role for companies aiming to strengthen their competitiveness.^*16 Against this backdrop, industrial location decisions are expected to place greater emphasis on alignment with existing infrastructure, the competitiveness and growth potential of development plans including the participation of startups and venture companies, and the commitment of local governments.^*16 Given this context, it will be essential for companies, startups, universities, research institutions and local governments to work together strategically to formulate a shared vision, drawing on data-driven and objective analyses of technology trends and competitiveness, and to pursue the development of climate-tech and GX technologies as well as competitive industrial location strategies.

Analysis Using Intelligent Business Analytics

Intelligent Business Analytics is a new strategic analysis tool that uses AI to analyze global patent data and corporate financial and investment information for specific technology domains. It enables qualitative analysis of patented technologies and quantitative analysis of corporate investments, and offers a range of capabilities such as providing a market-oriented overview of technology trends and companies’ technology portfolios. By identifying macro trends and understanding each company’s technology strategy, IBA provides new insights for corporate strategic planning through its consulting services.

IBA utilizes data related to patents, financials and investments. By combining business data with technology data, IBA supports a wide range of use cases, including new business development, R&D strategy formulation, the identification of alliance partners or M&A targets, and technology due diligence. In addition, the ability to visualize an individual company’s technology portfolio and to drill down into its financial and patent data serves as a key differentiating feature of IBA. This enables both idea generation through trend identification and hypothesis testing, allowing companies to formulate more concrete and robust new business development and R&D strategies.

Source

^*1 ‘The Paris Agreement.’ United Nations Climate Change
https://unfccc.int/process-and-meetings/the-paris-agreement

^*2 PwC, 'State of Climate Tech 2021: Scaling breakthroughs for net zero'
https://www.pwc.com/gx/en/services/sustainability/assets/pwc-state-of-climate-tech-report-2021.pdf

^*3 Sugimitsu, Tatemoto, et al. (2023). ‘A Study on the Impact of Material Patents on Corporate Financial Data.’
http://fdn-ip.or.jp/files/ipjournal/vol24/IPJ24_26_38.pdf

^*4 US Department of Energy ‘Fusion Energy Strategy 2024’ 
https://www.energy.gov/sites/default/files/2024-06/fusion-energy-strategy-2024.pdf

^*5 ITER ITER Organization
https://www.iter.org/

^*6 EUROfusion ‘THE ROAD TO FUSION ENERGY’
https://euro-fusion.org/eurofusion/roadmap/

^*7 Cabinet Office, Government of Japan. ‘Fusion Energy Innovation Strategy.’ August 2024.
https://www8.cao.go.jp/cstp/fusion/7kai/siryo2.pdf

^*8 National Development and Reform Commission and National Energy Administration of China. ‘Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021-2035).’ March 2022.
https://www.ndrc.gov.cn/xxgk/zcfb/ghwb/202203/t20220323_1320038_ext.html

^*9 New Energy and Industrial Technology Development Organization (NEDO), Beijing Office. ‘Trends in Hydrogen-Related Developments in China.’ April 2023.
https://www.meti.go.jp/shingikai/energy_environment/suiso_nenryo/pdf/031_06_00.pdf

^*10 US Department of Energy ‘Selections for Hydrogen and Fuel Cell Technologies Office Funding Opportunity Announcement to Advance the National Hydrogen Strategy’
https://www.energy.gov/eere/fuelcells/selections-hydrogen-and-fuel-cell-technologies-office-funding-opportunity-0

^*11 European Commission ‘The Green Deal Industrial Plan Putting Europe’s net-zero industry in the lead’
https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan_en

^*12 European Commission ‘Fit for 55: Delivering on the proposals’ 
https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/delivering-european-green-deal/fit-55-delivering-proposals_en

^*13 Ministerial Council on Renewable Energy, Hydrogen and Related Issues. ‘Basic Hydrogen Strategy.’ 6 June, 2023.
https://www.meti.go.jp/shingikai/enecho/shoene_shinene/suiso_seisaku/pdf/20230606_2.pdf

^*14 Subcommittee on Innovative GX Technology Development. ‘Interim Summary of Discussions on the Direction of Research and Development Required of Academia for Achieving GX.’ October 2024.
https://www.mext.go.jp/content/20241031-mxt_kankyou-000038563-1.pdf

^*15 GX Implementation Promotion Office, Cabinet Secretariat. ‘On GX Industrial Location Policy for Realizing a GX-Oriented Industrial Structure — Secretariat Materials for the 4th Meeting of the Working Group on GX Industrial Location for Achieving a GX-Oriented Industrial Structure.’ 5 August, 2025.
https://www.cas.go.jp/jp/seisaku/gx_jikkou_kaigi/sangyoritchi_wg/dai4/shiryo.pdf

^*16 GX Implementation Promotion Office, Cabinet Secretariat. ‘Key Issues in Energy and GX Industrial Location Policy.’ 3 October, 2024.
https://www.cas.go.jp/jp/seisaku/gx_jikkou_kaigi/senmonka_wg/dai8/siryou2.pdf