Climate Technology Is A New Battleground for National Sovereignty
We are seeing the green technology transition steadily reshape priorities in boardrooms and ministries. Only a couple of years ago, artificial intelligence dominated strategic discussions. And the fight against climate change became a political football. Now - and perhaps it's just wishful thinking - climate technology seems to be moving back up the agenda, influencing decisions on economic security, energy independence, and geopolitical positioning.
This marks a shift in how regions and industries think about competitiveness and resilience. The focus is no longer only on digital platforms or algorithms, but on technologies that determine who will adapt and prosper. The race to net zero could also provide massive commercial and strategic advantage. While the AI race continues, climate tech is also becoming a defining field of competition, particularly in MENA and Europe, with real implications for policy, investment, and economic structures.
From Silicon to Solar: How the Climate Tech Race Became a Geopolitical Battleground
A Shift from AI to Green Tech Power?
It’s clear: the rivalry between the US and China over AI has shaped global policy for the last few years. Yet, a parallel and arguably even more consequential competition is unfolding in green tech. Climate tech leadership is becoming a critical dimension of geopolitical power, with China and the US competing not only in AI but also in clean energy technologies. The evidence is everywhere: China’s clean energy mandates for AI data centers, its dominance in renewables manufacturing, and America’s surge in corporate investment in clean energy-powered infrastructure (despite the Trump administration's "drill, baby, drill" mandates).
When I speak with policymakers in MENA and Europe, the question is no longer when but how to achieve climate tech sovereignty. The urgency is unmistakable. The new power play isn’t just about who builds the smartest AI, but who controls clean energy, advanced materials, and the technology that will underpin the next economic era. The 'how' of this transition involves coordinated policy, sustained investment, and a willingness to rethink legacy systems at every level.
The Strategic Stakes: Security, Economy, and Influence
What happens when energy security, economic growth, and climate action all depend on the same set of technologies? The answer: nations leading in green tech gain the ability to set global standards, shape trade flows, and project power far beyond their borders. Countries leading in green tech can shape global standards and export markets, gaining geopolitical influence and trade advantages.
Yet, this leadership isn’t just about leverage, it demands a careful balancing act between economic, environmental, and diplomatic interests. For example, the US is seeing major corporate investment in clean energy-powered AI data centers, even as policy remains fragmented. China’s approach is highly coordinated but faces its own hurdles in advanced semiconductors. The race is on, and the winners will be those who can align technology, industry, and policy ambitions most effectively. Understanding the interplay between these factors is critical for any region aiming for climate tech leadership.
Green Tech Sovereignty: Why MENA and Europe Can’t Afford to Fall Behind
Lessons from the AI Race: Dependency Risks and Missed Opportunities
The AI race has taught us a hard lesson: dependency on imported technology can quickly transform from a minor inconvenience to a strategic liability. The same, but on a far greater scale, is true in green tech. If your region is not building its own climate tech backbone, ask yourself: who will you depend on when global supply chains falter?
The consequences of failing to develop sovereign green tech capabilities are severe. Failure to develop sovereign green tech capabilities risks economic marginalization and strategic vulnerabilities. What makes the green tech race even more consequential is its foundational impact, spanning energy, transport, food, and water security. The breadth of this impact means that gaps in one area can have cascading effects across society and the economy.
MENA and Europe’s Green Tech Potential and Barriers
MENA stands at the threshold of transformation. Construction projects worth $2 trillion are planned across the region through 2035, from Saudi Arabia’s Neom to Egypt’s New Administrative Capital. That’s more than just concrete and steel; it’s a massive opportunity for climate technology to leapfrog legacy systems and define new standards for sustainable urbanization. For instance, MENA governments are increasingly piloting large-scale green hydrogen projects and sustainable construction initiatives, signaling a shift toward not just adoption but leadership in new climate solutions. These initiatives are creating a blueprint for other emerging markets.
Europe, on the other hand, has become a policy trailblazer. The Green Deal and Net Zero Technology Outlook are not just slogans; they’re blueprints for domestic production, innovation funding, and supply chain resilience. Europe’s Green Deal and Net Zero Technology Outlook emphasize domestic production and innovation funding. These frameworks demonstrate how coordinated policy can create fertile ground for innovation and industrial renewal.
Yet, building true sovereignty in climate tech requires pragmatic action and sustained investment. It requires mobilizing both public and private sectors, overcoming policy fragmentation, and plugging persistent financing gaps. Yet, the prize, regional autonomy and leadership in the net-zero economy, is well worth the effort. Success will depend on clear vision, long-term commitment, and the ability to adapt to shifting geopolitical realities.
Building Sovereign Capability: The Pillars of Regional Climate Tech Leadership
Policy and Regulatory Frameworks: Robust, stable climate policy is the bedrock. Europe’s Green Deal and MENA’s renewable energy targets are a good example of governments setting clear, ambitious climate technology goals.
Innovation Ecosystems and Talent: Real progress demands more than just capital (although that's important too). It needs practitioner-led support, public-private partnerships, and investment in R&D and talent pipelines. Building a culture of innovation also requires nurturing entrepreneurial spirit and supporting risk-taking at every level.
Supply Chains and Domestic Manufacturing: Strengthening regional supply chains for fundamental emerging technologies like batteries / energy storage, grid technologies, or hydrogen reduces risk and creates high-value jobs. Local production enhances flexibility and allows regions to respond quickly to global disruptions.
Cross-Border Collaboration: Especially between Europe and MENA, collaboration multiplies impact and accelerates learning. Joint ventures, shared R&D, and coordinated policy initiatives can bridge gaps and create larger, more resilient markets.
Europe and MENA are taking steps in the right direction. Europe and MENA’s green tech sovereignty efforts emphasize energy independence, domestic manufacturing, and cross-border collaboration. Strengthening supply chains is now a regional strategy, as seen in efforts to localize battery and hydrogen production. Strengthening domestic supply chains for batteries, grid tech, and hydrogen is a stated regional strategy.
Through our work with early-stage ventures, we’ve seen how agile experimentation turns bold ideas into market-ready solutions. For instance, the Nexus Climate Launch program demonstrates how a systematic, practitioner-led approach, emphasizing real-world validation and iterative learning, can de-risk innovation and foster a thriving climate tech ecosystem across MENA. Our focus on real market needs ensures that solutions are not just innovative, but actionable and scalable.
Now, imagine a region where homegrown climate tech not only solves local challenges but becomes a global export. That’s not just a vision, it’s an achievable roadmap if we focus on policy clarity, funding, talent, and collaboration. It also means acknowledging persistent challenges: public funding gaps, regulatory instability, and the need to nurture talent at scale. No single actor can go it alone. Building coalitions such as IDAIC and leveraging the unique strengths of each partner is essential for real progress.
The Economic and Strategic Benefits of Climate Tech Leadership
Energy Security and Economic Resilience
Sovereign green tech capability isn’t just a slogan, it’s a shield against global shocks. Regions that build their own green tech infrastructure reduce dependency on volatile supply chains and external suppliers. Recent MENA initiatives, such as national clean energy accelerators and joint EU-MENA hydrogen corridors, exemplify the tangible steps being taken to localize supply chains and enhance economic resilience. These efforts help ensure that critical infrastructure is protected from global disruptions and that economic benefits are retained locally. Economic implications: Sovereign capability creates high-value jobs, supports economic growth, and reduces supply chain risks.
Jobs, Growth, and Global Standards
The dividends don’t stop at security. New industries, from green manufacturing to AI-powered services, are emerging to serve both domestic and export markets. Countries that lead in climate tech set the standards that everyone else must follow. Electric vehicle (EV) sales have surged, reaching 23% of new light-duty vehicle sales globally in H1 2025, with China leading production and market share (72% of global EV production). What's more, countries leading in green tech can shape global standards and export markets. This leadership translates into long-term economic growth, increased market access, and the ability to influence the direction of future technologies and regulations.
Risks of Inaction
The alternative? Falling behind, economically, strategically, and technologically. Failure to develop sovereign capabilities risks strategic vulnerabilities and consigns regions to the sidelines as others shape the future. The loss isn’t just economic; it’s a missed opportunity to shape global rules and capture new value chains.
The choices made today will decide who sets the rules of the net-zero economy tomorrow. Will your region lead the transition, or watch from the sidelines as others shape the future? While progress may have setbacks, one thing is clear: leadership in climate technology is now essential for national prosperity and security.
The Time Is Now…
The climate tech race is not a distant contest, it is happening now, with stakes in global leadership, economic resilience, and a sustainable future. For governments, public institutions, and investors, the imperative is clear: act, invest, and innovate to build sovereign climate tech capability. Ready to drive real change? Connect with Nexus Climate to access our expertise, network, and practitioner-led programs. Let’s take action together, because the future is being built now.
FAQ
Why is sovereign capability in climate technology so important for regions like MENA and Europe?
Sovereign capability ensures regions can independently innovate, manufacture, and deploy green technologies, reducing reliance on external suppliers and strengthening energy security, economic resilience, and geopolitical influence. This is especially relevant as global supply chains face increasing volatility and competition. Building local expertise also positions regions to capitalize on emerging opportunities.
How does the green tech race differ from the AI race in terms of geopolitical impact?
While both races influence global power dynamics, the green tech race involves critical infrastructure, energy systems, and supply chains that underpin national security and economic growth. Leadership in climate tech also means setting global standards and trade rules in the emerging net-zero economy. The stakes are higher because climate tech is foundational to every sector.
What are the main barriers to building sovereign green tech ecosystems?
Key challenges include policy and regulatory fragmentation, financing gaps, insufficient talent pipelines, and lack of domestic manufacturing capacity. Overcoming these requires strategic public-private partnerships, sustained R&D investment, and regional collaboration. Addressing these barriers unlocks broader economic and social benefits.
How is Nexus Climate contributing to the development of sovereign climate tech capability in MENA and Europe?
Nexus Climate supports innovation ecosystems through programs like Nexus Climate Launch, which uses agile, practitioner-led approaches to help startups envision, build, and validate climate tech solutions, and connects them to new markets, partners, and investors. We also provide tailored policy advisory and market entry strategies, enabling start-ups and public institutions to overcome regional barriers and accelerate impactful deployment.
What are some practical steps governments and investors can take to accelerate regional climate tech leadership?
Practical actions include adopting clear policy frameworks, investing in local manufacturing and R&D, nurturing talent, supporting cross-border collaboration, and partnering with practitioner-led organizations to de-risk innovation and scale deployment. Proactive engagement with stakeholders ensures alignment and maximizes impact.
