Climate tech’s dual-use moment

What happened: Canada is exploring how Canadian-made EV batteries could be repurposed for military applications, including ships and submarines, according to Industry Minister Joly.

The details: Canada pledged to raise defence spending to 5% of GDP over the next decade. That commitment is fuelling “dual use” strategies - repurposing civilian tech like EV batteries - to ramp up security and industry growth.

The big picture: Defence spending is up around the world as security concerns are growing. China is doubling its investments, NATO member spending now averages 2% of GDP - even Japan is starting to ramp up spending.

VC dollars are following: new defence-focused funds are emerging and 8/10 of the largest climate tech deals this year were tied to security themes.

Governments and investors are also looking at defence and security beyond conventional military capabilities. Energy security, supply chains, critical minerals and grid reliability are all now being viewed through a defence lens.

And climate change itself is a security accelerant, fuelling resource scarcity, climate migration, and - for Canada - contested access to the Arctic.

Why it matters: While defence tech is attracting hype, this shift is creating new opportunities for climate solutions.

• Energy security = electrification. Electricity generated from wind, solar, nuclear can be produced in the same market where it's consumed, limiting exposure to geopolitical pressure and price swings

• Securing supply chains. Modern militaries and the energy transition both depend on copper, lithium, cobalt, rare earths, etc, making securing these supply chains a strategic priority.

While climate builders might not see their work through a defence lens, technologies like distributed energy generation, modular food production, or remote-earth sensing can meet civilian climate needs while solving real defence procurement problems.

Defence buyers also have a high bar for reliability and durability, and those who meet them often find sticky contracts and validation for wider markets.

The bottom line: As Canada ramps defence spending, climate tech can be part of the playbook for energy security, supply chains, and resilience. The opportunity is to frame climate tech as both a decarbonization tool and a security asset to unlock customers and capital.

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