Big bets on thin air


The Mammoth Climeworks facility, the largest operational direct air carbon dioxide capture facility in the world, in Hellisheidi, Iceland. (Inset) Steel, chief executive of Deep Sky. — ©2025 The New York Times Company

BILL Gates recently met in London with some of the world’s richest individuals, including Jeff Bezos, SoftBank founder Masayoshi Son and Prince Al-Waleed bin Talal of Saudi Arabia.

Their agenda? Evaluating investments in companies working to combat climate change – with a focus on a particularly ambitious idea: extracting carbon dioxide from the atmosphere for profit.

As global temperatures soar and emissions reach record levels, carbon dioxide removal is emerging as a high-stakes industry.

Investors see a dual opportunity: environmental impact and financial returns.

Yet the technology, only developed in recent years, remains unproven at scale, raising questions about whether it can deliver on its promise.

“It’s the single greatest opportunity I’ve seen in 20 years of venture capital,” says Damien Steel, chief executive of Canada-based Deep Sky, which has raised over US$50mil to develop carbon capture projects.

“The tailwinds behind the industry are greater than most industries I’ve ever looked at.”

Nascent market with big ambitions

Companies working on carbon dioxide removal have raised more than US$5bil since 2018, according to investment bank Jefferies, marking a dramatic shift from almost no funding before that.

Breakthrough Energy Ventures, a group spearheaded by Gates, is among the biggest backers of the over 800 carbon removal startups launched in recent years.

Other investors include Silicon Valley venture capitalists, Wall Street firms, and corporations like United Airlines.

More than 1,000 major companies have pledged to eliminate their carbon emissions in the coming decades.

As part of these commitments, Microsoft, Google, and British Airways spent a combined US$1.6bil on carbon removal credits last year, a sharp rise from under US$1mil in 2019.

This year, spending on such credits could hit US$10bil, with McKinsey projecting the industry could be worth US$1.2 trillion by 2050.

Despite these figures, the market remains in its infancy, with few facilities currently operational.

A long road to impact

Globally, carbon removal facilities capture only a fraction of daily greenhouse gas emissions. Even if hundreds more were built, their collective impact would be minuscule.

Critics warn that relying on this technology as a major climate solution is premature.

“Let’s not pretend it’s going to be ready in the time frame we need to reduce emissions,” cautions former US vice-president Al Gore, co-founder of Climate Trace, which tracks greenhouse gas emissions.

In 2023, a UN panel expressed scepticism, stating: “Engineering-based removal activities are technologically and economically unproven, especially at scale, and pose unknown environmental and social risks.”

Many scientists argue that the most effective way to combat global warming remains cutting emissions by phasing out fossil fuels.

“We need to obey the first law of holes,” Gore quipped. “When you’re in one, stop digging.”

A question of costs

Pulling carbon dioxide from the air is also costly, with current prices as high as US$1,000 per tonne. Analysts estimate that costs need to fall to around US$100 per tonne for the industry to thrive.

“There’s no liquidity, repeatability, or standards,” Steel admits. “This isn’t a market yet.”

Still, investors believe the industry will eventually scale.

Governments are providing significant support, with the US offering tax credits of US$180 per tonne through the Inflation Reduction Act and US$3.5bil for demonstration projects in the 2021 infrastructure law.

Promise and pitfalls

Critics argue that carbon removal could perpetuate reliance on fossil fuels.

“Carbon capture will increase fossil fuel production; there’s no doubt about it,” says Mark Jacobson, a Stanford University professor. “It does not help climate one bit.”

Others see potential in the industry as emissions fall globally and technology advances.

Many experts, including the Intergovernmental Panel on Climate Change, believe carbon removal may eventually be necessary to cool the planet.

For now, companies are betting on both environmental progress and future profits.

Firms like Stripe, H&M, JP Morgan, and Meta have committed over US$1bil to carbon removal purchases, while Airbus and Boeing are exploring its potential for long-term use.

“This isn’t tied to our day-to-day business,” says Nan Ransohoff, Stripe’s head of climate initiatives. “But we care about progress and trying to help the world move in the right direction.”

High risk, high reward

As with any emerging industry, risks abound. For every successful company, many will fail. Yet for venture capitalists like Clay Dumas of Lowercarbon Capital, the potential rewards outweigh the risks.

“You could be wrong 95% of the time,” Dumas says, “and still look like a genius when you send a bunch of money back to your investors.”

Whether carbon removal becomes a transformative climate solution or a costly distraction remains to be seen. But for now, the race is on to make thin air the next big thing in climate tech. — ©2025 The New York Times Company

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