Carbon capture
The startups on an (e)mission to save the planet
Last updated: 5 May 2022
Market 101
Nothing quite divides environmentalists like carbon capture. While denounced by some as a distraction from reducing emissions, it’s touted by others as a necessity, with most people sitting in the latter camp in 2022. And interest is gathering pace. First came scientist backing in the latest Intergovernmental Panel on Climate Change (IPCC) report, then the buying signals, when mega payments company Stripe teamed up with other US giants like Alphabet and Facebook parent Meta to commit $925m to carbon removal by 2030. Their message to cautious investors: There’s a market for this kind of wild bet.
And yet there are still huge hurdles to overcome. The most obvious one is scaling up the removal process so it has the potential to dent global emissions — and, in doing so, making it more price competitive, especially for industries that lack a clear pathway to decarbonisation. Then there’s the question of how to store or reuse the carbon once it’s been captured. With startups already working on both sides of the equation, the biggest risk is they achieve too little, too late.
Early stage market map
Key facts
10bn
tonnes of CO2 that need to be removed annually by 2050 to meet UN goals1
$100/t CO2
price target for carbon capture to succeed at scale (with big players like Zurichbased Climeworks currently at $500-600/t CO2)2
0.25%
of global GDP needed in funding over the next three decades to remove enough carbon to limit warming to 1.5C3
Trends to watch
1. One step at a time
→ Direct air capture uses filters or solvents (“capture materials”) to capture CO2, before releasing it to be stored elsewhere — but high cost and energy intensity are holding the subsector back.
→ From bringing CO2 into contact with capture materials through wind or natural airflow, to using new sorbents in the release, startups are improving the process step by step.
2. Mother nature does it best?
→ Nature-based approaches for capturing carbon are readily available today and much more affordable than their high-tech counterparts. But concerns remain around durability and scalability.
→ Some startups are trying to find a sweet spot in between cost and efficiency by using tech to accelerate processes from reforestation to seaweed cultivation.
3. CO2: the sequel
→ Rather than locking carbon away permanently, a new wave of startups is working on giving waste CO2 a second life by converting it into new products.
→ Targeting big, hard-to-decarbonise industries like construction, startups need to break into their supply chains without having reached price parity with conventional products.
4. Straight to the source
→ Some startups are trying to capture carbon at their industrial source, where CO2 can be found at higher concentrations and hoovered up more cheaply per tonne.
→ Here, too, the challenge lies in partnering with companies eager to reduce their emissions and support pilot facilities close to their factories.
Startups tracked by Sifted
Sifted take
There have been cases where, thanks to economies of scale, the cost of environmental technologies has fallen much faster than expected — think of solar PV or onshore wind, for example. But these technologies have had a long head start on carbon capture. The challenge for the sector will be not only to reduce costs dramatically, but to do so fast enough by 2050.
Rising stars
Turns waste biomass — which releases carbon as it degrades — into biochar, small pebbles storing carbon which can be used for soil, water filtration or biomaterials. The startup counts the likes of True Ventures and Cherry Ventures among its investors.
Round
Seed
Valuation
€28.2m
Date
Size
€5.6m
Total funding
€8.9
Is developing technology for direct air capture based on electrochemistry, with the potential to significantly reduce energy demand and associated costs.
Round
Seed
Date
2022
Size
€4.3m
Is developing thermoplastics that are carbon negative — meaning they store more CO2 than they release — from biochar. The resulting material can be used in sectors such as construction, furniture and transportation.
Round
Seed
Date
2021
Size
€5m
Early stage startups to watch
44.01
Carbon capture
Mineralisation
€4.5m
€4.5m
-
Arkeon Bio
Carbon-to-value
Agriculture & food
€6.5m
€6.5m
€25m
Carbfix
Carbon capture
Mineralisation
-
-
-
Carbo Culture
Carbon capture
Biochar
€6.2m
€5.6m
€28.2m
Carbofex Oy
Carbon capture
Biochar
€2.5m
€1.4m
€10m
Carbominer
Carbon capture
Direct air capture
-
-
-
Carbon Instead
Carbon-to-value
Materials
-
-
-
Carbon Kapture
Carbon capture
Nature-based
€600k
€350k
€1m
Cquestr8
Carbon capture
Nature-based
€270k
€270k
-
Made of air GmbH
Carbon-to-value
Materials
€5m
€5m
-
Mission Zero Technologies
Carbon capture
Direct air capture
€8.9m
€4.3m
-
neustark
Carbon-to-value
Materials
€1m
€1m
-
Ocean Rainforest
Carbon capture
Nature-based
€1.4m
€1.4m
-
Parallel Carbon
Carbon capture
Direct air capture
€175k
€175k
-
Phycobloom
Carbon-to-value
Fuel
€400k
€400k
€2.6m
Seabound
Carbon capture
Point-source
€4.3m
€4.2m
-
Seafields
Carbon capture
Nature-based
€1.2m
€737k
€5.9m
Soletair Power
Carbon capture
Direct air capture
€1.5m
€1.5m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Recovers carbon from organic waste, and turns it into products such as green gas and fertilisers
→ Has expanded from Europe to the US and is eyeing Asia next
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Helps industrial facilities capture their emissions by providing modular carbon capture units
→ Claims to have captured 1.4m tonnes of CO2 across 44 facilities globally
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
→ Operates the world’s first and largest plant for direct air capture and storage, converting CO2 from the air into stones
→ Aims to capture 1% of global emissions by 2025
Sources
Research reports
Direct Air Capture | December 2021 | Third Derivative
News articles
1 April 2022 has been a great month for the carbon capture industry | April 2022 | QZ
Three Approaches to Ocean CDR | April 2022 | Third Derivative
Carbon Removal Startups: Scaling Up to Turn Down the Heat | April 2022 | Viva Technology
3 Carbon dioxide will have to be removed from air to achieve 1.5C, says report | March 2022 | The Guardian
From pollutant to product: the companies making stuff from CO2 | December 2021 | The Guardian
2 Can carbon-capture startups make it big with small-scale tech? | October 2021 | Canary Media
Carbon capture is all the rage. Can these startups make it profitable? | March 2021 | PitchBook
How are Europe's startups capturing carbon? | February 2021 | Sifted
The Air Mining Rush of Carbon Capture | January 2021 | Climate Tech VC
Carbon to value: Not your mother’s carbon capture | November 2020 | Climate Tech VC
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