Xprize reveals the starting field carbon removal needs
A large number of contenders are needed to find the technologies that will work best to remove carbon.
Published on Illuminem 25 April 2022.
April 2022 was the biggest month ever for carbon removal. Climeworks received a $650 million investment. The advanced market commitment vehicle Frontier was launched, promising near $1 billion in CDR purchases by 2030. LowerCarbon announced a $350 million carbon removal investment fund. The new IPCC report once and for all showed CDR is unavoidable. And now, Xprize has revealed that 1133 teams entered the competition and has given a $1 million milestone award to 15 teams.
To put the last figure into context, only about 40 companies have made a known sale of carbon removal to date (nearly half of them selling biochar). For the CDR space to thrive, we need a large starting field of companies, therefore it is encouraging to see so many teams working on carbon removal exploring different solutions. And there are more teams out there. Far from all CDR companies entered the competition, many biochar suppliers did not, for example.
Direct air capture the hottest method
287 of the 1133 teams were eligible to compete for the prize. 60 were shortlisted for the milestone award. Xprize had published a list with info on all competitors and we can use it to draw insights on the CDR space.
Xprize had divided the teams into Land, Air, Rock, Ocean or MRV, but to get more context I mapped up the top 60 teams into what specific methods for removal.
The graph above shows that Direct air capture is the most common method in the top 60 teams. Various land-based biomass methods (algae, bamboo for building material, biooil etc) come second, and biochar as its own category comes third. Fewer companies are working with ocean and mineralization solutions.
“It is encouraging that a hard-tech method like DAC attracts so many new companies.“
It is encouraging that a hard-tech method like DAC attracts so many new companies. Direct air capture can be done in many different ways. CO2 can be captured using filters, solvents, electrochemical approaches, and methods that utilize minerals as the capture agent. There are multiple different ways CO2 can be captured and regenerated for each approach, and every DAC company has there own tech. Since we do not know which methods will be the most efficient, it is crucial that a broad group of DAC companies get funded and get to research and deploy their techniques.
The US dominates
Looking at where the teams come from it stands clear that carbon removal is dominated by North America. Of the top 60 teams, 26 came from the US, 8 from Canada, 15 from Europe and 11 from the rest of the world.
If we look at all the 287 eligible teams, the US takes a smaller share but still dominates. The list includes teams from 50 countries. (Including 5 teams from Ukraine, I hope that the people in these teams are safe and will be able to continue their operations.)
The US is also by far, the country that gives most government support to CDR. In 2022 alone $1 billion is used to fund carbon removal, and there are plans to spend much more, for example, $3,5 billion for four Direct air capture hubs.
Looking at the winners
Among the 15 winners of milestone awards, we find:
- Six Direct air capture companies: Heirloom, Sustaera, Mission Zero, Carbyon, Verdox and Calcite (Heirloom and Verdox teaming up with Carbfix, and Mission Zero with 44.01 for mineralization of the captured CO2).
- Three biochar suppliers: Netzero, Takachar, and Bioeconomy institute.
- Three ocean teams, two electrochemical, Planetary and Captura, and one growing Kelp, Marine Permaculture Seaforestation.
- One on-land algae solution (that seems more geared to CCU), Global Algae Innovations.
- One mineralization solution, Carbin Minerals
- One MRV solution, Plantvillage
(You can find four of these companies explaining their methods in great detail at Open Air Collectives This is CDR Video series.)
“It is important to understand that the near future for CDR companies looks very different depending on the method they are working on.“
Ready to scale?
It is important to understand that the near future for CDR companies looks very different depending on the method they are working on.
For most Direct air capture companies, the focus is on getting out of the lab or small demonstration facility and building first of a kind removal plants removing thousands of tons per year. They will also focus on R&D. Bringing down the cost of DAC is only in part about scale, it is also about reaching breakthroughs in the actual tech. (Most CDR companies are starting small, but there is a notable exception with Occidental building a 1 million ton/yr plant with Carbon Engineering and planning 70 more of those up until 2035.)
The same point about R&D applies to ocean CDR companies. But here there are also many unsolved scientific questions regarding how carbon removal methods affect the ocean. We don’t have the answers regarding risks to marine life, nutrient competition, how fast oceans take up CO2 from the atmosphere when it’s removed from the water, and more. Startups working with CDR can provide answers to some of these questions simultaneously as they work at refining their tech, but large scale-up need to wait until we have more answers. For on-land mineralization, similar points apply even if the number of unanswered questions are fewer.
The picture is different for biochar suppliers. There are technological developments to be made (see for example, Climate robotics make-biochar-in-the-field approach), but the technique is more mature and is being rapidly scaled up. As I previously noted most of the near-term volume growth in actual carbon removed will be coming from biochar. A lot of innovation will happen in creating strong business models that also deliver co-benefits. Although even here, there is still more to learn on the scientific side. Even if we are reasonably sure about biochar being a durable method, more studies are needed to give more precise answers.
Now Xprize continues, the grand prize winner of $50 million, and three winners to share $30 million will be announced in 2025, and new teams can still enter the competition. I hope to engage with many companies that applied for Xprize. The Milkywire Climate Transformation Fund that I manage supports CDR companies with prepurchases. It is a very exciting space, the number of companies is growing fast, and buyers will need to evolve how we evaluate and find the most promising solutions.