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It’s useful for more than just decarbonization.

Now that President Donald Trump has been officially inaugurated and issued his barrage of executive orders celebrating fossil fuels and shelving climate technologies such as wind energy and electric vehicles, climate tech startups are in a pickle. Federal funding can play a critical role in helping companies scale up and build out first-of-a-kind projects and facilities. So how to work with a government hostile to one of these startups’ core value propositions: aiding in the energy transition?
Talk of clean tech and electrification may be out of vogue, but its utility is not. The potential of many of these companies goes beyond mitigating climate change and into the realm of energy security and resilience — something the Department of Defense is well aware of.
The White House’s climate webpage has gone dark; the Department of Defense’s climate resilience portal lasted a little longer, but that’s now down, too. Once upon a time, though, the site read, “The changing climate is one of many threat multipliers to National Security, which adds complexity to Department of Defense decisions.” That’s a major reason why this agency can’t stop, won’t stop funding climate technologies. Another reason is that many technologies that happen to be good for the planet might also simply be the best tool for the job, meaning the DOD need not utter the word “climate” at all when justifying its decision to deploy new solutions.
“The Defense Department, so far in our experience, has framed things largely in terms of alternative benefits that our technology can have, such as fuel supply chain redundancy and reliability,” Ted McKlveen, co-founder and CEO of the hydrogen storage company Verne, told me. Verne received a $250,000 Small Business Innovation Research grant from the Army last May to work on the development of hydrogen vehicles.
Cindy Taff, CEO of the next-generation geothermal startup Sage Geosystems, told me something similar. “What the military likes to talk about is energy resilience,” she said, though she has heard the DOD tout the climate benefits of her company’s tech, too. Sage currently has multiple DOD engagements, including feasibility studies with both the Army and Navy and a $1.9 million grant to build a demonstration project for the Air Force.
That’s not to say it’s clear what the Department of Defense’s funding priorities under Trump will be. When I contacted the DOD in mid-December to request an interview for this story, a spokesperson initially told me they would help connect me to the right person. But as Trump’s inauguration drew nearer, I got a message saying the agency would have to hold off until it got more guidance, as “it remains to be seen in the next few weeks what direction the new administration is going.”
Regardless of how the priorities shake out, practically every climate-focused company and venture capitalist I talk to emphasizes that their companies will only succeed if they can make or invest in products that can compete on economics and/or quality alone, sans government support. That was true even before a second Trump turn in the White House started to look like an inevitability, and this new administration will at least partially reveal which companies can do that. But while everybody aims to be independent of federal support, they might not actually need to say goodbye to that funding stream, so long as they can tout their economic and performance benefits to the right customers.
Take Pyka, for example. When Michael Norcia co-founded the autonomous electric aircraft company in 2017, the ultimate goal was to design a passenger plane. “We want that to be our legacy, but we were also very, very realistic about the challenges associated with actually doing that,” he told me. So when the DOD took an interest in the company’s commercial cargo planes and their potential ability to deliver supplies in contested environments, the startup jumped at the opportunity, delivering its first aircraft to AFWERX, the innovation arm of the Department of the Air Force, early last year. Interest from such a lucrative government customer helped the company to close its $40 million Series B round in September.
Of course, the decarbonization benefits of electrifying military cargo delivery would be huge. But unsurprisingly, Norcia told me that the DOD primarily frames the opportunity in terms of the capabilities of all-electric or hybrid-electric planes, which could take a variety of fuels, operate quietly, and give off minimal heat, making them more difficult to detect via thermal imaging. Plus, the more equipment is electrified the better, “in terms of having them be able to operate in a highly contested environment, where moving fuel around maybe is not feasible,” Norcia explained. Not to mention the fact that if a manned aircraft is shot down, people die, meaning that in a counterfactual sense, Pyka’s tech is saving lives.
Verne’s North Star is also decarbonization. And given that the military is the world’s largest oil consumer, McKlveen was excited to partner with the Army to put its hydrogen storage tech to use in medium and heavy-duty vehicles. The company stores hydrogen (ideally green hydrogen, produced via renewables-powered electrolysis) at high density as a cold, compressed gas, making it possible to build hydrogen vehicles with greater range and lower cost than has traditionally been done. Similar to Pyka, the Army is enthused that these vehicles would be difficult for adversaries to detect, as they’re quiet and give off little heat. Likewise, McKlveen told me that hydrogen power could replace the Army’s notoriously noisy generators.
While Verne has also partnered with the Department of Energy and its R&D arm, ARPA-E, McKlveen said that working with the DOD has been unique in a few ways. “The key difference is the DOD is a customer and a grant provider. So they can say both what their needs are as a potential customer and represent a potential customer,” he explained. This, along with the agency’s clear, phased approach that it puts companies through, helps bring a level of transparency to the whole process, from pilot to full-fledged military implementation, that McKlveen appreciates.
And lest we forget, “they also have a very large budget,” he told me. For fiscal year 2025, the DOD has requested $849.8 billion, while the DOE, by comparison, has requested a mere $51.4 billion.
“I find military people to be get-it-done type of people,” Taff of Sage Geosystems told me. “So I think that helps to create a sense of urgency and also push things along a lot faster than you would see with maybe other organizations.” Sage uses drilling technologies adopted from the oil and gas industry to access heat for clean electricity production across a wide variety of geographies. This is an especially attractive option for the DOD as the majority of geothermal infrastructure is underground, and thus well protected from attack. And unlike other renewables, this tech can provide 24/7 energy no matter the weather conditions. So it’s no surprise that the military is pouring money into this sector, pursuing partnerships with other big names in the geothermal space such as Fervo Energy and Eavor.
Electric planes, hydrogen, and geothermal all felt intuitively justifiable to me from a defense standpoint, but I was more surprised to learn that the DOD has gotten into the alternative proteins, a.k.a. “fake meat”, industry. Though meat substitutes won’t power tankers or keep the lights on, the Defense Department’s $1.4 million grant to The Better Meat Co. is intended to strengthen the American supply chain. China’s Ministry of Agriculture and Rural Affairs views lab-grown meat as critical to its five-year agricultural plan. “So we don’t want to have the United States be importing clean protein in the way that we’re currently dependent on Asia for our semiconductors and photovoltaics,” Paul Shapiro, the company’s CEO, told me.
The Better Meat Co. produces a protein called Rhiza that’s derived from microscopic fungi, which it then sells as an ingredient to other companies to make either 100% animal-free meat or a meat blend. “This isn’t an alternative protein program. It’s a domestic biomanufacturing program,” Shapiro told me when I asked if military funding for meat substitutes could be at risk under Trump. Looking at some of the other companies that got grants through the same program, he said, “it’s literally like bio manufacturing things for military planes and jet lubricants and chemical catalysts for bullets.” That is, probably not Republican targets for defunding. “It’s clearly solely about wanting the U.S. to be a leader in biomanufacturing for the products that the world is going to depend on in the future.”
The DOD also sees promise in numerous other clean energy technologies, including nuclear microreactors for their portability and ability to provide off-grid energy in remote locations and alternate battery chemistries that could help the U.S. move away from a dependence on Chinese-produced lithium-ion batteries.
But despite the deep well of funding and pragmatic approach to deployment that the Department of Defense offers, agreeing to work with the DOD isn’t always an obvious choice. Many fear their company’s tech could be used in ways and in wars that they oppose. In 2018, for example, thousands of Google employees signed a letter opposing the company’s participation in Project Maven, a partnership with the Pentagon that uses artificial intelligence to improve the accuracy of drone strikes. Supporters of the project said it would lead to fewer civilian deaths, while protestors argued that Google “should not be in the business of war.” Google did not renew the contract. More recently, employees at Microsoft, Google, and Amazon have signed petitions opposing their company’s provision of cloud computing and AI services to the Israeli government.
Norcia noted that most, but not all of his employees were neutral to positive when it came to working with the Air Force, while “for a small minority of the company, it unfortunately was not something that they really wanted to devote their life to.” While he understands that perspective, Norcia does believe that Pyka’s work with the DOD is a net positive for the world. “If you assume wars are going to keep happening — which, unfortunately, I think is the reality — I’d rather have it be the case that they’re more of a robot war than a human war,” he told me. And at the end of the day, passenger planes are still the goal.
As for his team at Verne, McKlveen told me everybody was on board. “The Defense Department has led to some of the biggest innovations of the last century, whether that’s the internet or GPS. And our team knows that.” Plus, even if the DOD doesn’t talk much about the climate benefits of sustainability-focused tech, that doesn’t negate them. A 2019 study revealed that the Pentagon purchases an average of 100 million barrels of oil per year, so from that perspective, “it’s hard to find a bigger customer that we can address,” McKlveen told me.
Norcia agreed. “I think the gains of your impact get turned way up if you’re doing work with the DOD,” he said, “as opposed to, you know, building an app that makes something incrementally more efficient or more addictive.”
Editor’s note: This story has been updated to reflect that DOD’s climate resilience portal has been taken down.
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Welcoming the world’s first clean energy trillionaire.
SpaceX is now a public company. The rocket and satellite maker’s shares began trading this morning, surging 19% from their initial price of $135 to more than $160 at the market close. With the sale, Elon Musk became the world’s first trillionaire; his wealth has roughly tripled since President Donald Trump won re-election in 2024.
I’ll let other observers judge the IPO’s success, the firm’s long-term prospects, and the meaning of a world where we now have trillionaires. So I will make a few other points:
I remain agog at Musk’s ability to raise enormous amounts of cash from public equity markets to do hardware and manufacturing development. To some degree, the idea of a venture-backed firm doing hardware engineering — or what some now call “deep tech” — is Musk’s most impressive creation. The SpaceX IPO raised $75 billion today. That money will now go in part to scaling and commercializing rockets, factory equipment, and allegedly, at some point in the future, orbiting data centers.
Let’s not forget how crucial the U.S. government is to Musk’s story. In the world of climate, energy and manufacturing, we wail about financing’s “missing middle,” the elusive type of investment that can help scale and deploy early-stage technologies by bridging the gap between expensive venture capital and cheap bank lending. But this is at least partially a solved problem. SpaceX and Tesla survived the valley of death with government help: The Energy Department’s Loan Programs Office (which the Trump administration has dubbed the Office of Energy Dominance Financing) extended a $465 million loan to Tesla to build its Fremont, California, factory in 2010; NASA’s 2008 commercial resupply contract gave SpaceX guaranteed offtake for its Falcon rocket. Neither firm would likely have survived without those key injections of financial certainty.
To some degree, Musk has already made his mark on the American economy by creating a new culture of manufacturing engineering. I cannot recommend enough my colleagues Matthew Zeitlin and Emily Pontecorvo’s report on the new cadre of climate tech founders who came up at SpaceX and Tesla. As it happens, I spent Wednesday touring a clean energy factory founded by a Tesla alumnus, and I was struck by how many signs of Musk’s bottlenecks-focused management approach were visible, even at a company seemingly run more humanely than Musk’s famously “hardcore” firms.
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To that point, Emily and Matt asked a number of clean tech executives who worked for SpaceX or Tesla what they learned from the experience. Their responses are fascinating; you can read them in full here. These comments from Justin Lopas, the COO of Base Power, stuck out — he was asked the “one thing” he learned from working for Musk:
You can get way more done in a day and can move way faster than you think. This does not mean necessarily more hours (although solving any hard problem requires that too), but instead being thoughtful about sequencing work, not accepting delays from suppliers or external counterparties without solid rationale, parallel pathing, accelerating critical learnings to early in the project, etc
To step back, one irony of Elon Musk’s situation — at least to me — is that relatively few American politicians are eager to talk about what has actually driven his wealth. I’m not just talking about his firms’ reliance on public financing, although that counts too. I mean Tesla itself. Although Musk now describes that business as a “robotics company,” it is and remains an electric vehicle and battery manufacturer. (It recently began high-volume production of the Tesla Semi, a potentially game-changing long-haul electric truck.) After today, Musk’s Tesla stake makes up less than half of his wealth, but, still, he would not be a trillionaire without EVs, solar panels, and batteries.
But that is not a particularly convenient fact. That Musk is a clean energy trillionaire remains unpalatable to Republicans, who would prefer to cast EVs as an inferior substitute made to satisfy government mandates. And Musk’s antisemitism, far-right politics, and gleeful destruction of the U.S. Agency for International Development — not to mention Tesla’s violation of labor law — have obviously destroyed his reputation among Democrats.
Yet his elevation to a 13-digit net worth nonetheless marks a new era in American capitalism. The richest Americans in history have almost always been oilmen: John D. Rockefeller became the country’s first billionaire by creating the Standard Oil trust; when he died in 1937, his net worth of $1.4 billion represented 1% to 2% of the country’s gross domestic product. In the 1960s, J. Paul Getty became the country’s richest person by negotiating Saudi and Kuwaiti oil concessions. Yet Musk became a billionaire not by harnessing commodities, but through his mastery of software, hardware, and clean energy.
Musk’s fortune now exceeds 3% of U.S. GDP. He is the richest American in history, judged as a share of national production. And it was electricity, lithium, and modern factory production — and, if you wish, the kerosene and methane that fuel SpaceX’s rockets — that got him there. As the science fiction writer William Gibson almost said, the future is already here; it’s just not evenly distributed in your retirement portfolio yet.
Many thanks for reading, and have a wonderful weekend.
Plus SAF, another SPAC, and more of the week’s biggest money moves.
With SpaceX’s historic IPO dominating headlines this week, Heatmap turned its attention to the impact Elon Musk’s protégés have had on the climate tech landscape. Right after we published the story, an underwater geothermal startup founded and staffed by SpaceX alumni announced a sizable Series A, with its founder telling TechCrunch that his “experience at a very hardcore company like SpaceX” helped shape his approach to this new endeavor.
In other news, one of the biggest players in the sustainable aviation space, Twelve, opened its first commercial fuels plant and is preparing to begin supplying low-carbon jet fuel to Alaska Airlines later this month. Meanwhile, the battery sector saw two SPAC announcements: In a bid for survival, Factorial Energy officially went public this week through a SPAC merger, while ZincFive announced plans to do the same later this year. And finally there was some positive news for Germany’s heat pump market, as the startup Galvany raised fresh funding to simplify the end-to-end process of buying, installing, and operating a heat pump.
Drawing from an increasingly familiar playbook for Musk alumni, Endurance Energy founder and former SpaceX engineer Andrew Redd applied the lessons he learned from the rocket company’s notoriously “hardcore” culture and rapid pace of development to something completely different. Now that he’s pivoted away from rocket tech, Redd wants to harness geothermal energy from underwater volcanic activity, and his startup just raised a $54 million Series A to make it happen While a growing crop of geothermal startups including Fervo and Zanskar are focused on tapping into the heat beneath our feet, no other company in the sector has sought to develop the resource beneath the ocean floor.
There are good reasons for that, of course. Offshore infrastructure is notoriously difficult and expensive to build, maintain, and repair, and saltwater is corrosive. But if Endurance can crack the code, Redd told TechCrunch he thinks the company could unlock about 6 terawatts of geothermal energy in the coming decade.
Investors seem to be convinced: Peter Thiel’s Founders Fund led the startup’s latest funding roundSeries A, its second capital raise since launching less than two years ago. Other backers include First Round Capital, Felicis Ventures, and Voyager Ventures. EnduranceThe startup is initially targeting remote islands, where electricity costs are often far higher than on the mainland. It’s already launched an initial pilot off the coast of Tonga, which still gets about 80% of its electricity from imported diesel.
Twelve, one of the best capitalized sustainable aviation fuel startups, opened its first e-fuel facility in Washington State this week. The demo plant has officially started production, and the company’s strategic partner and investor, Alaska Airlines, expects to begin using it on commercial flights as soon as this month. The plant’s launch comes roughly two years later than originally planned, a delay that’s hardly unusual for first-of-a-kind industrial projects like this. Last September, Twelve raised $645 million to complete buildout of the facility, as well as to jumpstart development of future plants, which it says will be orders of magnitude larger.
The company’s process begins with renewable-powered electrolysis. Using a proprietary catalyst, Twelve’s electrolyzer splits apart CO2 captured from a nearby ethanol plant at a lower temperature than conventional approaches, making it better suited to running on renewable energy. The company combines the resulting carbon monoxide with hydrogen to create a syngas, which gets refined into sustainable jet fuel. Airlines can blend the resulting product with conventional jet fuel (the Federal Aviation Administration allows a maximum 50% blend) to create a drop-in replacement that requires no engine modifications.
To cover the cost premium of SAF, Twelve and Alaska partnered with Microsoft. The tech giant is buying SAF certificates — essentially carbon credits — from the project to help offset Scope 3 emissions associated with employee travel. “We are seeing strong demand from the corporate offtake side, not only for employee travel, but also for freight and logistics,” Twelve’s CEO, Nicholas Flanders, told me. “Everything from pharmaceuticals to data centers use a lot of air travel.” There are also some policy tailwinds — the European Union now has a sustainable fuels mandate that requires the use of synthetic e-fuels like Twelve’s beginning in 2030.
The plant also comes online at a moment of heightened volatility in the jet fuel market. As my colleague Alexander C. Kaufman noted in Wednesday’s morning newsletter, the closure of the Strait of Hormuz has led to soaring fuel prices, prompting domestic refiners to ramp production to record highs. By contrast, Flanders argues that SAF offers customers greater price certainty via long-term offtake agreements. “You can fix the cost of our key inputs like electricity and CO2 and so that actually makes it a more attractive project from a project financing perspective,” he explained.
SPACs are back. But this week, it’s not just another pre-revenue nuclear company that’s looking to get to market as quickly as possible. Solid-state battery startup Factorial Energy, which has yet to develop a commercial product, has merged with the blank check company Cartesian Growth Corporation III, netting it $100 billion at a $1.3 billion valuation.
The company was upfront about needing the SPAC to stay afloat after racking up losses since its founding in 2013. Factorial’s SEC filing states that prior to this new capital, “its liquidity wasn’t sufficient to fund twelve months of operations.” Yet it does have real traction in the industry — Mercedes-Benz, Stellantis, Hyundai, and Kia have all made strategic investments, looking to use Factorial’s tech in their electric vehicles to achieve higher energy density, longer range, and faster charging.
Solid state batteries typically use a solid electrolyte in place of the flammable liquid electrolytes found in conventional lithium-ion cells, but Factorial is starting with more of a hybrid approach. Its initial design relies on a “quasi-solid” gel-like electrolyte, which allows it to use an energy dense lithium metal anode while preventing the needle-like dendrite growth that predisposes solid-state batteries to short circuit. Factorial is manufacturing these cells at a pilot plant in Massachusetts, while working on a prototype with a fully solid electrolyte that could offer even greater performance gains.
Factorial isn’t the only battery company with SPAC news this week. ZincFive, a nickel-zinc battery producer, also announced plans to go public via SPAC in a deal expected to close in the second half of this year. Unlike Factorial, however, ZincFive is already making money, selling its batteries to hyperscalers and other data center operators as a backup power solution to bridge the gap in between when the power goes out and when the backup generator turns on. As the company’s CEO Tod Higinbotham told Bloomberg, “We have the backlog. We have the capacity. We have the demand. We really need capital.”
Navigating the maze of consumer clean energy incentives and coordinating home energy upgrades is hardly a U.S.-specific challenge. Just a few years ago, heat pump sales in Germany were falling precipitously despite generous subsidies and proven tech. One startup, Galvany, theorized the problem wasn’t the heat pumps themselves, but rather the unnecessary complexity of the surrounding ecosystem. Now it’s raised roughly $11.5 million to help streamline the process of getting heat pumps into consumers’ homes and apartments.
“In Germany, heat pumps do not fail because of the technology, but because of the gap between subsidy bureaucracy, installation capacity, and economic viability for the end customer,” the company’s CEO, Raik Belka, said in a press release. This is exactly the gap we are closing.” The approach is already paying off — Galvany has installed more than 2,500 heat pumps to date and became profitable last year after increasing its revenue sevenfold.
The startup produces its heat pump in partnership with Panasonic, but its real innovation lies in the way it streamlines sales, procurement, installation, and ongoing heat pump operations into a single platform. Potential customers enter their building data online and, after a feasibility check, get a quick quote that factors in subsidies. They can then purchase a standardized kit that’s simple for installers to assemble. Once operational, the heat pump’s energy management system, which launches this summer, will automatically adjust heating loads based on the cost of electricity, saving customers money without them having to actively manage the system.
The administration filed to dismiss an appeal of a December ruling that overturned its wind permitting freeze.
Trump’s Department of Justice is giving up on defending the president’s wind permitting moratorium.
The DOJ filed a motion on Wednesday to dismiss its appeal of a federal court’s December decision vacating the order to halt wind energy approvals. The plaintiffs in the case — New York and 16 other states, as well as the Alliance for Clean Energy New York, a trade group — did not oppose the motion. The case will not be officially dismissed, however, until the First Circuit Court of Appeals approves the request, which typically happens quickly when both parties support the dismissal.
The case stems from an executive order President Trump issued on the first day of his current term temporarily withdrawing all areas of the outer continental shelf from offshore wind leasing and pausing all federal authorizations for onshore and offshore wind projects while the administration conducted a review of leasing and permitting practices.
States took the administration to court last May, arguing that the order was arbitrary and capricious and violated the Administrative Procedures Act. They claimed it harmed their ability to source reliable and affordable energy and threatened billions of dollars in investment in supply chains, workforce development, and wind industry-related infrastructure.
On December 8, Judge Patti B. Saris of the U.S. District Court for the District of Massachusetts ruled in the states’ favor and vacated the wind order. More specifically, the judge vacated the portion of the order directing agencies to pause permits and other authorizations. The withdrawal of areas eligible for new leases remains in effect.
What it means is that federal agencies will now have to proceed with permitting wind projects using the existing statutory and regulatory framework, Kit Kennedy, the managing director for power, climate, and energy at the Natural Resources Defense Council, told me in an email. “The door to federal permitting is now unlocked again and each developer will be able to make the case for permitting their individual project based on the facts and the law,” she said.
The Trump administration appealed the ruling to the First Circuit in February, but never submitted an opening brief. The initial deadline was May 11, but on May 4, the DOJ requested additional time to file the brief. The judge gave the defendants until June 10. On that date, the defendants filed the motion to dismiss.
This is a developing story and we’ll update it as we learn more about the administration’s actions and their effects.
Editor’s note: This story has been updated to reflect that the freeze and ruling apply to onshore as well as offshore wind. It also adds a quote from Kit Kennedy.