Removing carbon from sky could be the next climate gold rush

UNITED KINGDOM: This summer, Bill Gates huddled in London with representatives of some of the world’s wealthiest people, including the Amazon founder, Jeff Bezos, the SoftBank founder, Masayoshi Son, and Prince al-Waleed bin Talal of Saudi Arabia.

They were evaluating their joint investments in companies that could help the world combat climate change. Among the businesses in their portfolio, four stood out as having a particularly audacious goal: They were working to strip carbon dioxide from the atmosphere, for a profit.

As countries around the world continue to pump planet-warming pollution into the skies, driving global temperatures to record levels, the financial world is racing to fund the emerging field of carbon dioxide removal, seeking both an environmental miracle and a financial windfall.

The technology, which did not exist until a few years ago, is still unproven at scale. Yet, it has a uniquely alluring appeal. Stripping away some of the carbon dioxide that is heating up the world makes intuitive sense. And with a small but growing number of companies willing to pay for it, investors are jockeying to be first movers in what they believe will inevitably be a big industry that is necessary to help fight global warming.

Companies working on ways to pull carbon dioxide from the air have raised more than $5 billion since 2018, according to the investment bank Jefferies. Before that, there were almost no such investments.

“It’s the single greatest opportunity I’ve seen in 20 years of doing venture capital,” said Damien Steel, the chief executive of Canada-based Deep Sky, which has raised more than $50 million to develop carbon dioxide removal projects. “The tailwinds behind the industry are greater than most industries I’ve ever looked at.”

The group assembled by Mr Gates, known as Breakthrough Energy Ventures, is among the biggest backers of the more than 800 carbon removal companies that have been started in recent years. Others investors include Silicon Valley venture capitalists, private equity firms from Wall Street and major corporations like United Airlines.

Investors believe the market is poised for explosive growth.Damien Steel, the chief executive of Deep Sky, which has raised more than $50 million to develop carbon dioxide removal projects.

More than 1,000 big companies have pledged to eliminate their carbon emissions over the next few decades. As part of those efforts, more corporations are starting to pay for carbon dioxide removal. This year, Microsoft, Google, and British Airways were among the companies that committed a total of $1.6 billion to purchase removal credits.

That figure was up from less than $1 million in 2019, according to CDR.fyi, a website that tracks the carbon dioxide removal industry. Next year, industry executives believe companies could spend up to $10 billion on such purchases. In a recent report, McKinsey estimated the market could be worth as much as $1.2 trillion by 2050.