Opinion
Hormuz is the wake-up call: Climate tech is now an economic necessity
The Hormuz disruption did not create a new market, but it did make the existing one impossible to ignore.
In recent years, climate tech has moved in and out of favor. At times it was framed as a moral imperative, at times as a policy-driven trend, and at times as a corporate priority. But the reality shaping the market is no longer ideological, it is structural.
The disruption in the Strait of Hormuz is the clearest reminder of that shift.
A significant share of the world’s energy and industrial inputs flows through a narrow and fragile corridor. When that flow is threatened, the impact moves quickly, into prices, supply chains, and economic stability. For a small, import-dependent country like Israel, this exposure is not theoretical. It raises a basic question: how much of our core systems can we afford to leave dependent on external and unstable supply?
This pressure is not only geopolitical. It is layered on top of a physical one. 2024 was the first year global temperatures exceeded 1.5°C, something that is already showing up in more frequent weather disruptions, infrastructure strain, and less predictable operations.
That is the context in which climate tech needs to be understood, as a response to that instability. Local energy production reduces dependence on imports. Energy storage helps stabilize supply when energy production fluctuates. Smarter grids improve flexibility under stress. Electrification reduces direct exposure to oil markets. These are not new technologies, but their role is shifting from optimization to resilience. And when resilience becomes a requirement, markets follow.
We’ve seen this dynamic before. As cybersecurity threats increased, security became a foundational layer of every system. As computing demand scaled, cloud infrastructure followed. In both cases, the companies that reduced dependency and friction captured disproportionate value. Climate tech is entering a similar phase driven less by sentiment and more by necessity.
Israel has the DNA to be a major player in this shift. It combines strong scientific research with experienced entrepreneurs and a proven ability to build companies under constraint.
But too much of that potential remains disconnected. Israel produces world-class science in its universities, yet too little of it becomes companies. Bridging that gap requires more than funding, it requires real points of contact between universities and company-building, where research is pushed toward commercial application and tested against real market demand.
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At the same time, the ecosystem needs more companies that operate as anchors. Companies like SolarEdge, Ormat, and Netafim didn’t just generate returns, they created a school for talent. What follows from that is familiar. We’ve seen it before with the PayPal mafia: alumni who go on to build, fund, and lead the next generation of companies
There is also a role for government. Climate technologies often require longer timelines and deeper integration with physical infrastructure. Making them investable depends on shared infrastructure, access to labs, and early risk absorption, areas where public support can unlock private capital rather than replace it.
For Israeli founders, the opportunity is clear. The problems are harder, but they sit closer to real constraints. And as those constraints tighten, the value of solving them increases.
The Hormuz disruption did not create a new market, but it did make the existing one impossible to ignore.
For Israel, climate tech is not only a resilience play. It is a strategic economic opportunity: to reduce local exposure while building companies that serve a growing and increasingly unavoidable global demand.
Gil Shai is a Managing Partner at Meron Capital (focused on climate tech) and co-founder of CloudEndure (acquired by Amazon) and AcceloWeb (acquired by Limelight Networks).
