If humanity is to forestall more inhabited parts of our planet from turning into uninhabitable hells, we must stop emitting greenhouse gases into the atmosphere.
Of course, switching to greener energy sources can be helpful. But to slow or stop some of the most dire consequences, the growing consensus is that we will even have to massively scale up carbon capture and storage.
Funding data reflects this pondering. So far this 12 months, startups with business models tied to carbon capture, storage and transformation have accomplished nearly $1.2 billion in equity and debt financing, in accordance with Crunchbase data. This implies that 2024 can be the second highest annual result in five years, as shown below.
Twelve fundraising leads, others follow
By far the largest a part of the capital went to Twelvecoal transformation start-up Closed $645 million earlier this month. The financing included $200 million in Series C financing, $400 million in project financing and a $45 million line of credit from TPG Rise Climate Fund as the fundamental sponsor.
Berkeley, California-based Twelve, founded in 2015, develops technology that converts captured carbon dioxide into chemicals, fuels and other products. The latest investment comes as the company builds a plant in Washington, D.C. to supply jet fuel from biogenic CO₂, water and renewable energy.
The second best-funded company on our list is Svantewhich produces filters and machines that capture and remove CO₂ from industrial emissions and air. A British Columbia-based company has raised $100 million from a cleantech investor Canadian Growth Fund in August, bringing total funding to over $500 million.
Quite a lot of other players also raised big rounds. To illustrate this, we have prepared a sample list of 16 carbon capture, storage and processing corporations that have secured investments this 12 months.
Carbon removal credits are increasing interest
Selling carbon dioxide removal credits is the business model behind most of the activities we observe.
One example is the Los Angeles location Carbon capturemaker of direct air capture machines, which raised $80 million for Series A this spring. Company lists Amazon, Alphabet, Meta AND Microsoft among corporations that purchased its carbon dioxide removal credits.
CarbonCapture’s business model is based on mass-produced modular systems that absorb CO₂ from the atmosphere when cooled and release it when heated. This summer, the company leased a manufacturing facility in Mesa, Arizona, that it said could produce enough modules per 12 months to remove 2 million tons of carbon dioxide.
The growth in the variety of direct air capture start-ups is linked to growing acceptance of their role in achieving climate goals. The technology gained popularity two years ago when Intergovernmental Panel on Climate Change he stated that carbon capture and storage is more likely to be an essential a part of achieving the goal of achieving net zero greenhouse gas emissions.
Debt and equity fuel the next stage
As space-scale carbon capture, storage and processing startups, we’ll likely see an increase in project financing alongside traditional enterprise capital rounds, particularly for corporations building manufacturing facilities.
This reflects a broader trend we have seen in clean technology financing. For example, overall sustainability-focused equity financing declined in the first half of this 12 months, but the decline was somewhat offset by several exceptionally large project financing transactions.
For now, as we attempt to work towards the ever-elusive goal of net zero, it probably doesn’t matter much whether the corporations attempting to get us there are funded primarily by debt or equity. The bottom line is that they could be scaled enough to make a significant contribution to achieving this goal.