Climeworks Raises $650 Million For Carbon Capture Tech

SClimeworks AG is a Wiss Startup that has raised 600 Million Francs (or $650 million) to increase its technology which extracts carbon dioxide directly out of the air.

According to Monday’s major United Nations report, the world must reach its peak greenhouse gas emissions by 2025 in order to prevent catastrophic climate change. But most scenarios that keep warming within 1.5°C above pre-industrial levels will also require removing some of the CO₂ that’s already been dumped into the atmosphere.

Climeworks, one of the few startup that offers this technology, is just one. It currently operates the world’s largest direct-air capture plant in Iceland, where trapped CO₂ is injected deep underground and stored permanently.

At present, the plant is capable of capturing approximately 4,000 tons per year. That’s roughly equivalent to 600 individuals living in Europe. To contribute to global climate change goals, the startup must expand quickly.

Climeworks’ $650 million investment is the highest amount ever by a carbon dioxide removal company. Partners Group AG is a private equity firm, while Swiss Re AG and Baillie Gifford are long-term capital managers.

Climeworks plans to use funds from the fund to construct a 40,000-ton capture facility within the next three year, says Christoph Gebald, Chief Executive Officer. The goal is to capture more than a million tons of CO₂ a year by 2030. “Iceland is a top favorite because of its excellent geology,” he said, when asked about possible locations for the next plant. There are other options, such as Norway, Oman and even North America.

Also, the company must find a location that can provide cheap green energy. “Climeworks is committed to using only renewable or sustainable energy sources,” said Gebald.

Climeworks’ technology works by moving large quantities of air over a special chemical that is able to filter out CO₂, similar to a magnet attracting iron fillings. The new compound is then heated to high temperatures to release a pure stream of CO₂ which can be injected underground. It is very energy-intensive and makes no sense for the environment if there is no carbon.

While scientists have said that technologies to remove CO₂ from the air need to grow, experts also stress that they’re not a substitute for reducing emissions. The task of reducing emissions has been left to the last minute in the global economy. This means that both sides must work together.

Climeworks’ direct competitor is Canadian startup Carbon Engineering Ltd., which has partnered with Occidental Petroleum Corp. to try and build a million-ton capture plant. It will be necessary to raise hundreds of millions of money upfront and then continue operating the plant for tens or millions every year. It recently leased land in Louisiana where favorable geology would allow it to bury CO₂.

Global Thermostat in the U.S., another startup for direct-air capture, was established around the same time that Climeworks, Carbon Engineering, and Carbon Engineering a little over ten years ago. However, it has had a difficult run. The company recently announced changes in leadership that saw Graciela Chichilnisky removed from the position of chief executive officers to help overcome managerial issues.

Climeworks continues to expand. Gebald stated that he anticipates 400 employees to be there by next year from the 180 staff he has today.

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