Breakthrough Energy’s first annual report identifies hydrogen, carbon removal and smarter electricity grids as potential “decarbonization fast-forward buttons.” But its central message is more cautious than the headline suggests: promising climate technologies still need customers, infrastructure, policy support and years of reliable commercial operation before they can transform the global economy.
What the report is—and what it is not
Breakthrough Energy published State of the Transition 2023: Accelerating the Clean Industrial Revolution in November 2023. The report examines how innovation, investment, deployment and public policy could reduce emissions across the economy.
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It is best read as Breakthrough Energy’s own investment and policy thesis—not as an independent scientific ranking of climate technologies. The organization invests in companies, supports commercialization and participates in climate policy. Its assessment is useful for understanding where it sees opportunity, but the report does not independently validate every company or technology it discusses.
Breakthrough Energy is the broader organization. Breakthrough Energy Ventures is its venture-investment arm, while Breakthrough Energy Catalyst focuses on financing and deploying large-scale climate projects. The 2023 report brings those perspectives together.
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This report should also not be confused with the separate, government-backed Breakthrough Agenda Report produced through work involving the IEA, IRENA, the United Nations climate champions and participating governments.
The three technologies Gates called “fast-forward buttons”
1. Hydrogen
Hydrogen can act as both an industrial feedstock and an energy carrier. Breakthrough Energy’s report points to potential uses in steelmaking, fertilizer and chemicals, high-temperature industrial processes, shipping, aviation and long-duration energy storage.
Hydrogen is particularly relevant where direct electrification is difficult. For example, replacing a fossil-fuel furnace with an electric system may not be practical for every industrial process, while hydrogen could be used as a fuel or chemical input.
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For applications that can be electrified directly, using electricity in a battery, heat pump or electric industrial process is often more efficient than converting it into hydrogen first. The commercial risk identified by the report is therefore not simply whether hydrogen can be produced. Production may advance faster than demand, infrastructure and firm customers.
A credible hydrogen project needs a transparent lifecycle-emissions assessment, access to low-carbon energy, suitable storage and transport infrastructure, and customers willing to sign long-term contracts.
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2. Carbon removal and storage
Carbon removal means taking carbon dioxide already in the atmosphere and storing it. That differs from emissions reduction, which prevents greenhouse gases from being released in the first place. Carbon capture generally refers to capturing CO₂ from an industrial process or concentrated source; storage is the step that keeps it out of the atmosphere for a sufficiently long period.
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The report treats carbon removal as potentially necessary for residual emissions that are difficult or expensive to eliminate completely. Possible approaches include nature-based removal, direct air capture, mineralization, biomass-based systems and other engineered storage methods.
Breakthrough Energy’s ecosystem has referenced hybrid nature-and-technology approaches and Graphyte as an example of a backed company. Those references describe the organization’s portfolio and thesis; they are not, by themselves, independent validation of a company’s removal volume, permanence or climate benefit.
Carbon removal cannot substitute for rapidly cutting fossil-fuel and industrial emissions. Methods differ substantially in cost, energy use, land and water requirements, transport needs, monitoring and permanence. A removal claim should account for the emissions created by building and operating the system, not just the gross tonnes captured.
The key questions are whether storage is durable, whether results can be measured and verified, and whether a pilot can become a repeatable system capable of removing millions of tonnes without creating unacceptable environmental trade-offs.
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3. Smarter, expanded electricity grids
A clean-energy transition requires more than clean generation. Electricity must also be moved, balanced, stored and managed across a larger and more variable system.
The report highlights transmission expansion, distribution-grid modernization, interconnection, flexible demand, grid-scale and long-duration storage, software, controls and coordination among electric vehicles, buildings, batteries and the grid.
Grid modernization is an enabling requirement rather than a single gadget or fuel. A region can have inexpensive wind and solar resources yet struggle to use them if transmission is unavailable, projects wait years for interconnection or local transformers cannot handle new demand.
Storage also has no universal solution. Batteries may serve short-duration balancing, while other technologies could be better suited to longer discharge periods or seasonal storage. Software cannot replace missing wires, generation capacity, transformers or market reforms.
The five sectors covered by the report
Breakthrough Energy frames decarbonization as an economy-wide systems problem rather than an electricity-generation problem alone.
- Electricity: Clean generation, transmission, storage, flexibility and reliability.
- Manufacturing: Steel, cement, concrete, chemicals, industrial heat, hydrogen and carbon management.
- Agriculture: Livestock methane, fertilizer, rice cultivation, alternative proteins, soil carbon, crop resilience and measurement.
- Transportation: Electric vehicles, batteries, charging, sustainable aviation fuel, shipping, heavy-duty transport and critical-mineral supply chains.
- Buildings: Heating and cooling, insulation, air sealing, smart controls, heat pumps, thermal systems and embodied emissions in construction materials.
Why hard-to-abate sectors matter
Wind, solar, batteries and efficiency measures can reduce emissions substantially, but they do not solve every source of climate pollution. Steel and cement require industrial processes that produce emissions through both energy use and chemistry. Aviation and shipping have demanding fuel and energy requirements. Agriculture produces methane and nitrous oxide, while buildings are difficult to decarbonize because millions of properties require different retrofits.
Breakthrough Energy’s current manufacturing portfolio illustrates its interest in low-carbon cement, green steel, hydrogen, mineralization and industrial heat storage. Its transportation portfolio includes areas such as batteries, aviation and grid-connected mobility. These pages describe portfolio priorities, not independent performance assessments.
From invention to climate business
The report’s implicit commercialization pathway runs from research and startup formation to demonstration, manufacturing, customer adoption and policy-supported deployment.
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsThat distinction matters. A technology can work in a laboratory and still fail commercially because it cannot be manufactured repeatedly, obtain materials, secure permits, attract financing, find customers or compete with an established incumbent.
The report uses the history of technology companies, including Microsoft, as an organizational analogy for how climate companies might grow. That analogy is illustrative, not evidence that climate startups will follow the same trajectory. Climate infrastructure typically requires more capital, longer development periods, physical assets and coordination with regulators and public utilities.
By 2023, Breakthrough Energy said it had invested nearly $2 billion in more than 100 companies, according to GeekWire’s report. That figure should be treated as an attributed organizational claim, not as an independently audited measure of emissions avoided or climate impact.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to judge whether a technology is genuinely promising
“Promising” should mean more than technically interesting or well funded. Readers evaluating a climate technology should ask:
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- What does it cost at commercial scale, not just in a pilot?
- Does it perform reliably and for how long?
- Can its raw materials, energy and water requirements be met?
- What infrastructure, permits and grid connections are required?
- Who will buy the output, and under what contract?
- Does the business depend on subsidies, mandates or a green premium?
- Can the process be repeated across many sites?
- For carbon removal, how permanent and independently verifiable is the storage?
- Does the solution reduce emissions or shift them elsewhere?
What the report gets right—and where readers should be skeptical
The report is strongest when it emphasizes deployment. It recognizes that decarbonization requires industrial facilities, transmission lines, storage, building retrofits, agricultural adoption and commercial customers—not just laboratory breakthroughs.
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It also correctly connects technology to policy and markets. New industrial processes may need public procurement, contracts, standards, tax incentives or other mechanisms while they move down the cost curve.
But the report should not be treated as proof that its preferred technologies will succeed. Readers should question whether emissions reductions are independently verified, whether lifecycle boundaries are complete, what public support is assumed and whether conventional alternatives were considered.
Emerging technologies complement, rather than replace, mature solutions such as efficiency, direct electrification, renewable generation, transmission expansion, methane reduction, demand management and better building envelopes.
What changed after the inaugural report?
Breakthrough Energy’s website now lists later reporting, including a 2024 annual report titled SOT 2024: The Rebar Revolution. That means the 2023 document should be described as the organization’s first annual State of the Transition report—not its latest climate-tech assessment.
The organization continues to organize its portfolio around electricity, manufacturing, agriculture, transportation and buildings. A later report or current portfolio listing does not, by itself, confirm that every 2023 prediction has been realized.
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