Investing in CO2 removal? Dive into an ocean of opportunity: the opportunity of the ocean!
Not a week goes by without exciting news on CO2 removal technologies and purchases. Microsoft published the yearly results of their carbon negativity pledge, Stripe closed another call for CDR purchases and RepAir, a Direct Air Capture startup I hadn’t even heard about previously raised a round of funding.
With so much activity in a nascent field, investors and grant administrators may be left to wonder: where is there still a good deal to make, and where can my investment make the most impact?
Overview
I recently made an overview of how I see the field of CO2 removal, with some representative start-ups grouped by air/sea capture, and nature-based or technological solutions. The landscape is further divided in a number of overarching technologies.
Direct Air Capture
In the upper-left corner, Direct Air Capture: DAC has already seen massive investments pouring into a relatively small number of start-ups. The disclosed investments are only a fraction of the company’s valuation, and while some of these numbers are nearly astronomical, the CO2 removal production of these companies is actually rather modest (none of these companies capture more than 10 000 tonnes of CO2 per year).
Sub-specialisation has already begun, with some start-ups focussing exclusively on adsorbent development (e.g. mosaic). Moreover, recent innovations in the field (e.g. Noya — combination with cooling equipment, or Sustaera — tweaks in the adsorbent) are not exactly breakthroughs anymore. These are signs that this field is actually becoming mature.
Enhanced Weathering
Secondly, Enhanced Weathering is floating somewhere in the middle: it is possible to extract CO2 from both the ocean and the atmosphere, naturally or industrially. There is a lot of activity in this space, because the technology is mature and rather low-tech. The only thing you really need to get started is an industrial crusher, a vessel, and a beach to spread out the sand.
Nature-based Solutions
Overall, the Nature-based solutions are covered well: Biochar (and bio-oil) has been around for as long as agriculture itself — although the efficiency and overview could be improved, it is known and used all over the world. The challenge here is to consolidate this very fragmented practice, and that is why here, a lot of software platforms — connecting supply and demand — are popping up (e.g. Nori, Puro.earth)
The same goes for ocean-based natural solutions: there are plenty of local initiatives to plant seagrass, kelp or mangroves. However, on this side, the penetration of platforms is much lower, which also provides an opportunity.
Ocean Solutions
The area with the biggest gaps is the upper- right corner: engineered removal of CO2 from the ocean. A handful of electrochemical approaches are being developed, but generally are in a very early stage and received only modest amounts of funding. Moreover, this corner shouldn’t be limited to electrochemical approaches, as I have tried to show with my own CO2 removal start-up, Out of the Blue (temperature swing with porous materials).
The players in this small sub-field are not as far along as other projects in the overview, which is both a blessing and a curse. Personally, I love “Blue Ocean thinking” (surprise surprise): being the first mover in a field, developing something drastically innovative. However, that also means the risk (of failure, delays or budget overruns) are higher.
Still, there are some major advantages to removing CO2 from the ocean (compared to removing it from the air), that are currently underexplored: technical, economical, logistical… A recent WSJ article based on a policy report by the National Academies of Science, Engineering and Medicine came to similar conclusions.
In a Medium post I wrote earlier this year, I touched upon that lack of ocean-based projects in the first Stripe CDR call, as a reason why I applied with Out of the Blue in the Spring 2021 call. Since then, ocean-based start-ups are represented in larger numbers, but still under-hyped compared to their DAC or mineralization counterparts. Please note that some of the projects counted as ocean-based are actually also a bio-based or mineralization solution.
Opportunities and challenges
Focussing on ocean-capture comes with its opportunities and challenges, some of which I’ve listed in the SWOT analysis below.
I want to close by highlighting one of the points in this analysis: the potential synergies of ocean-based CO2 removal. The ocean is such a vital ecosystem to the health of our planet, that it’s logical and straightforward to tie CO2 removal activities into existing ocean protection initiatives, such as sustainable fishing practices, blue tourism, coral reef restoration etc.
Conclusion
We need all the tools in the CO2 removal toolbox to fight the climate crisis. However, the next frontier of CO2 removal can be found in the ocean, and ocean-based approaches are not getting nearly enough attention or funding compared to the importance of the ocean in the climatic equation. There is a lot of untapped potential in this sub-field, so investors, policy makers and entrepreneurs: take note!
Lennart Joos is breathing CO2 (literally and figuratively) and has been working on the topic for over 10 years in a variety of settings. Most recently, he is the founder of CO2 removal start-up Out of the Blue. Always open for collaboration, you can reach him on lennart@co2outoftheblue.com or via Twitter @lennartjoos or LinkedIn.
