By Valerie Volcovici and Simon Jessop
WASHINGTON (Reuters) - Los Angeles-based CarbonCapture, which aims to build machines that suck carbon dioxide out of the air to fight climate change, said it had raised $80 million from investors that include Saudi oil giant Saudi Aramco (TADAWUL:2222).
The money raised in CarbonCapture's latest major funding round represents one of the largest injections of private capital into direct air capture (DAC) – a technology that has yet to be proven at scale - over the last five years, according industry tracker PitchBook.
"This is exactly what has to happen - this alignment with large industrial partners who have the capacity, the access to capital, the skills to actually scale DAC to a meaningful level," CarbonCapture CEO Adrian Corless said in an interview with Reuters.
The Series A fundraising was led by Prime Movers Lab and also included Amazon (NASDAQ:AMZN)'s Climate Pledge Fund, Siemens Financial Services, Idealab X, and Marc Benioff's TIME Ventures, the company said.
CarbonCapture builds modular machines that contain material that absorbs carbon dioxide when cooled and releases it when heated. That allows it to capture the climate-warming gas for storage underground or used in products such as concrete.
Its Wyoming-based Project Bison plans to capture 5 million metric tons of CO2 annually by 2030 - a tiny fraction of U.S. overall carbon emissions of more than 6 billion tons per year. The company hopes to use improve its technology and scale it up.
Worsening climate change and inadequate efforts to cut greenhouse gas emissions have led some governments and investor to bet on carbon removal as a last-ditch hope to avert the most dire impacts of global warming. Carbon removal is also seen as a way for the most difficult-to-abate sectors of the economy to reach carbon neutrality, including aviation and cement production.
Other carbon removal companies like Climeworks and Carbon Engineering, along with startups Verdox and Heirloom, have also raised tens of millions of dollars over the last few years, while the U.S. Department of Energy has appropriated more than $11 billion to support the technology.
Saudi Aramco is among several fossil fuel companies backing carbon removal efforts, including U.S.-based Occidental Petroleum (NYSE:OXY) and UAE rival ADNOC. The oil industry sees the technology as a potential lifeline because it can remove carbon dioxide produced from burning fossil fuels.
Oil companies also are experienced putting carbon dioxide below ground, historically as a means to force out more crude.
Corless said while some companies in the DAC industry have shunned partnering with oil companies, he sees the need for a variety of different partners.
"It's not going to be enough to just have a number of small isolated tech companies in this industry," he said.