Climeworks, a Swiss startup, has raised $650 million for scaling up its carbon removal technology (direct air capture).
Global GHG emissions should peak before 2025 to avoid disastrous climate change effects, according to a report by the IPCC. It says that the world has to act now to prevent warming from going beyond the critical temperature of 1.5°C.
Such a scenario does not only need massive reductions in carbon emissions. It also requires removing the existing CO2 in the air. And Climeworks is one of the startups that provides a means to do it.
Climeworks Carbon Removal Technology
Climeworks is running the biggest carbon removal plant in the world, based in Iceland. This direct air capture (DAC) technology traps CO2 and injects it into the underground.
The image below illustrates how this carbon removal technology works.
As shown above, it works by moving huge quantities of air through a special chemical that filters out CO2. It functions like a magnet that attracts iron fillings.
The captured air is heated to release the pure CO2 stream that is then pumped deep underground, where it becomes stone.
Currently, Climeworks’ DAC plant can capture only around 4,000 tons a year. This corresponds to the yearly emissions of about 600 people only residing in Europe.
So, if Climeworks wants to have significant contributions to meeting climate goals by 2050, it has to scale up its DAC operations. This is why the funding is very important for its purpose of scaling up.
Where Will the Equity Funding Go?
So far, the $650 million equity funding is the biggest amount ever raised by a carbon removal company.
The financing is from some of the most renowned and largest institutional technology investors. These include Partners Group, BigPoint Holding AG, GIC, and Global Founders Capital. Other investors are from Baillie Gifford, Swiss Re, John Doerr, M&G, and more.
The funding will help unlock the next phase of Climeworks’ carbon removal growth, ramping up its DAC to a multi-million-ton capacity.
The startup will use the money to build a 40,000-ton DAC plant with the goal of capturing over a million tons a year by 2030.
When asked about the plant’s location, the CEO, Christoph Gebald, said, “Iceland is a top favorite because of its excellent geology.”
Other potential locations are Norway and Oman. Or it could be somewhere else in North America where there is access to cheap green energy. This is vital due to the nature of the direct carbon removal process.
The DAC technology is very energy-intensive because of the procedures involved. And thus, using only renewable or carbon-free energy is a must so as not to negate its goal of cutting emissions.
Right now, Climeworks’ direct competitors are the Canadian startup Carbon Engineering Ltd. and the US-based Global Thermostat.
Meanwhile, Climeworks continues to scale up. It was a Venture Kick winner in 2010, a Venture Leader in 2017, and one of the TOP 100 Swiss Startups from 2011 to 2014.
The startup expects to grow and reach 400 workers by the end of next year, up from 180 employees today.