How carbon removal tech is poised to be the next tool for tackling the climate crisis

Three years ago, Karan Khimji’s carbon removal company was in its infancy. The first-time founder had recently launched it with two friends after they read a New York Times article about how certain rocks abundant in their native Oman could be used to rapidly and permanently remove carbon dioxide, a key driver of climate change, from the air.

Though the group managed to recruit the scientists featured in the article to their startup and successfully test their theory, they still didn’t have a website, not to mention the funds and technology needed to scale their carbon removal process. The method involved dissolving carbon dioxide and injecting it into underground peridotite formations to mineralize it, essentially locking the greenhouse gas emissions into stone, and ensuring it can never escape back into the atmosphere.

As they worked on raising more money, they came across an intriguing tweet. “Am donating $100M towards a prize for best carbon capture technology,” Elon Musk wrote. Days later, XPRIZE, the global leader in incentive competitions to solve humanity’s greatest challenges, formally launched XPRIZE Carbon Removal.

Motivated by the purse size, but also the rare funding opportunity open to innovators based anywhere in the world, Khimji and his co-founders Talal Hasan and Ehab Tasfai entered their company, 44.01 (named for the molecular mass of carbon), into the competition. So too did more than 1,300 other teams of entrepreneurs, students, engineers, and scientists from 88 countries, representing pioneering members of an emerging industry at the forefront of urgently needed climate solutions.

Until recently, projects aimed at pulling carbon dioxide out of the air or sea were rare. The few companies working in the nascent space were mainly focused on planting carbon dioxide-absorbing trees, or capturing it directly from the smokestacks of industrial plants. But even these projects were limited in quantity and scale and together had nowhere near the capacity to undo the damage caused over more than 150 years of burning fossil fuels.

The International Panel on Climate Change called this out in a pivotal 2018 report that made clear that carbon dioxide removal would be essential to preventing the planet from warming more than 1.5 degrees Celsius beyond pre-industrial temperatures. The report projected that the world would have to eliminate 100 to 1,000 gigatons of carbon dioxide from the atmosphere by the end of the century — roughly two-and-a-half to 25 times total annual carbon emissions — to avoid the most damaging climate scenarios.

Nikki Batchelor, the executive director of XPRIZE Carbon Removal, said the report drove interest among governments, companies, investors, and entrepreneurs in the emerging carbon removal space and within XPRIZE, too, where they had started designing what a major competition around carbon removal could look like. “That [IPCC] report marked the first time the world started to really wake up to the fact that this is something that urgently needs to happen,” Batchelor said.

With funding from the Musk Foundation, XPRIZE launched the $100 million prize in 2021, inviting anyone to demonstrate solutions that can pull carbon dioxide directly from the air or oceans and sequester it safely and securely for hundreds or even thousands of years. XPRIZE awarded $1 million milestone prizes to each of the 15 teams showing the most promise and progress 18 months into the competition, as well as 23 awards to student teams ranging from $100,000-$250,000.

To qualify for the $50 million grand prize and $30 million pool for runner-up prizes, innovators or teams have to demonstrate a solution that removes 1,000 tons of carbon dioxide per year — roughly the amount of carbon dioxide emitted from a dozen tanker trucks’ worth of gasoline — and convince judges they have a plan to eventually remove gigatonnes of the greenhouse gas. They also need to show that their innovations will help and not hurt both the environment and local communities. “Responsible deployment needs to be front and center so that this new industry can be built with equity and justice in mind from the beginning,” Batchelor explained.

More than 8,400 people on over 1,300 teams responded to the call. The participants range from students to companies, working everywhere from farms, to mountains, to boats, and laboratories. They’re pioneering solutions to remove carbon dioxide from the air and ocean and lock it away for centuries in soil, rock, concrete, plants, and other places on land and sea.

Some have tapped known solutions, like agroforestry and direct air capture technology, which sucks air into facilities, extracts carbon dioxide, and converts it into a liquid that can then be stored underground or sold as a raw material to businesses making everything from jet fuel to sustainable plastic.

Others have explored much more cutting-edge approaches, like cultivating carbon dioxide-absorbing seaweed, adding crushed up limestone into the ocean to change its alkalinity and boost its carbon dioxide absorption, or mineralizing carbon dioxide into rocks.

One team, Captura, entered the competition as a four-person company in California with a vision for a system that extracts carbon dioxide directly from seawater. Another company team from California, Heirloom, was lab-testing technology to speed limestone’s ability to absorb carbon dioxide from years to days. And 44.01 in Oman was raising seed money and taking early steps to get the permits and equipment needed to dissolve more carbon dioxide captured from the air and sea and pump it into deep peridotite formations where it would turn to rock.

At the time the competition launched in 2021, most teams had never piloted their innovation or even built a prototype. But that rapidly changed. By the spring of 2022, when XPRIZE distributed milestone awards to 15 companies — including Captura, Heirloom, and 44.01 — carbon removal technology was progressing and a wave of new companies were emerging. By September 2023 — just two and a half years after the competition launched — nearly a third of the teams said they would be ready to demonstrate a carbon removal project by 2024. Remarkably, more than half of the 333 teams remaining in the competition were founded after the prize launched and yet now represent a sizable chunk of the active carbon dioxide removal industry, Batchelor, the prize’s executive director, said.

“Only a few years ago there wasn’t really a carbon removal industry,” she said. “But the growth we’ve seen since 2021 is staggering.”

Since registering for the competition, Captura’s team has grown nearly 10 times in size, raised $30 million in private equity funding, proved its concept at a pilot facility capable of removing 1 ton of carbon dioxide per year, and recently installed a second pilot facility capable of removing 100 tons per year. The company is now also partnering with multinational energy company Equinor to develop industrial-scale solutions for ocean carbon removal, beginning with an initial pilot plant in Norway that will remove 1,000 tons of carbon dioxide from the ocean annually. “When I joined Captura, we probably had about two months of money in the bank,” recalled Steve Oldham, Captura’s CEO. “The network this prize has given us, along with the $1 million [milestone award], helped us finance the business for six months, allowed us to find investors, buy all the equipment for our first system, demonstrate it, and go back to investors with a fully working prototype. That was huge to us.”

Heirloom now operates the first and only commercial direct air capture facility in the United States. Fully powered by renewable energy, the California-based plant is able to capture up to 1,000 tons of carbon dioxide per year, which will be stored for centuries in concrete. The team was also selected for up to $600 million in federal funding to open a carbon capture facility in Louisiana, signed one of the largest-ever carbon dioxide removal deals with Microsoft, and released a list of guiding principles to ensure the burgeoning industry deploys its technology in a socially and environmentally responsible way. To put that progress in perspective: “Twenty-seven months ago we were capturing CO2 in a Petri dish,” said Christian Their, Heirloom’s communications manager.

The team from 44.01, meanwhile, also won the high-profile Earthshot Prize, successfully piloted their concept, joined forces with the Abu Dhabi National Oil Company and others on the first carbon-negative project by an energy company in the Middle East, and partnered with Oman to create the world’s first commercial-scale peridotite mineralization project (set to kick off in late 2024).

These teams remain among the hundreds of other participants still competing for the grand prize. The competition enters the homestretch this spring when 20 finalists will be selected to demonstrate their solutions for 12 months in the finals of XPRIZE Carbon Removal and compete for the top prizes, which will be announced in Spring 2025.

“Our long-term vision for the industry is that as many of these companies as possible are able to scale up to megaton and hopefully gigaton scale, to meet the magnitude of the climate crisis,” Batchelor said.