Who is backing carbon capture startups?

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Carbon capture startups raised over $2 billion in 2024 through strategic corporate ventures, government programs, and specialized climate VCs.

The funding landscape reveals three distinct investment tiers: Breakthrough Energy Ventures and Lowercarbon Capital leading early-stage innovation, energy giants like Shell and Chevron securing technology partnerships through corporate venture arms, and government programs like the US DOE's $1.3 billion point-source capture demonstrations creating massive co-investment opportunities. Understanding which investors back specific technologies, their ticket sizes, and deal structures provides actionable intelligence for entrepreneurs seeking funding or investors evaluating entry strategies.

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Who are the major investors currently backing carbon capture startups, and which specific startups have they funded?

Three distinct investor categories dominate carbon capture funding: climate-focused venture capital, energy corporate venture arms, and industrial technology investors.

Breakthrough Energy Ventures leads the climate VC category with over $3.5 billion committed across 110+ companies since 2015, backing direct air capture leaders like Holocene, Deep Sky's DAC test hub, CarbonCure's CO₂-in-concrete technology, and Graphyte's hybrid biomass-DAC approach. Lowercarbon Capital operates a two-fund structure with $550 million raised, investing in Heirloom's limestone-based DAC, Carbon Direct's CO₂ removal credits, and Solugen's enzymatic chemistry.

Energy giants deploy corporate venture arms for strategic technology acquisition. Shell has acquired an 80% stake in Aker Carbon Capture and invested in Carbon Clean's CycloneCC technology, Net Power's Allam Cycle, and the Northern Lights storage joint venture. Chevron led Carbon Clean's record $150 million Series C and maintains positions in Mosaic Materials and CarbonCure. Aramco Ventures focuses on passive DAC through investments in Spiritus ($30 million Series A) and Phlair's DAC materials.

Industrial technology investors target materials innovation and early-stage development. AP Ventures invested $4.3 million in Mitico's point-source sorbent DAC and backs Graphitic Energy's pyrolytic hydrogen production. TDK Ventures contributed €14.5 million to Phlair's seed round, focusing on sorbent and electrolyzer materials. Katapult operates in the Nordic region with typical rounds of €0.5-5 million across 12 early-stage CCUS startups.

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How much funding have these investors provided to each startup, and what were the terms or conditions associated with the deals?

Deal structures vary significantly by investor type, with climate VCs offering patient capital, corporate ventures securing strategic partnerships, and government programs requiring demonstration milestones.

Breakthrough Energy Ventures typically provides seed to growth-stage investments with long-duration equity stakes and technical advisory services, prioritizing technologies capable of removing gigaton-scale CO₂ annually by 2050. Lowercarbon Capital operates through a pre-seed/seed fund ("421.0") and an opportunities fund for follow-on investments, with strict policies excluding capital from entities undermining democracy or climate policy.

Corporate venture deals include strategic conditions beyond equity investment. Shell's investments include technology licensing agreements and joint project development rights in Europe and the USA. Chevron's participation, often as lead investor in Series B-C rounds, secures preferred offtake rights and pilot deployment opportunities in refineries and industrial sites. TotalEnergies structures deals with equity stakes, offtake agreements, and service contracts, particularly focusing on Gulf Coast CCUS hubs.

Government funding comes with demonstration and performance requirements. The US DOE's $1.3 billion point-source capture program requires commercial-scale deployment with specific capture rate targets. UK government grants totaling over £20 million include R&D milestones and technology validation benchmarks. Japan's emerging ETS mandates DAC credits up to 5% of compliance liabilities by 2026, driving investor consortium formation around companies like Heirloom.

Specialized climate investors like AP Ventures co-invest with industrial majors including Halliburton Labs and Gore Ventures, leveraging downstream partnerships for pilot projects and offtake agreements. Katapult emphasizes impact metrics and ESG alignment with performance milestones typically attached to seed through Series A investments.

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Which carbon capture startups received the largest funding rounds in 2024 and in 2025 so far, and how much did they raise?

The largest funding rounds demonstrate investor confidence in commercially viable carbon capture technologies reaching demonstration scale.

What kinds of technologies or scientific breakthroughs in carbon capture are being prioritized and financed right now?

Investors prioritize four core technology categories with specific performance and cost targets driving funding decisions.

Direct Air Capture innovations receive the largest funding allocation, with companies like Heirloom developing limestone-based processes targeting $100 per ton by the early 2030s, Climeworks advancing modular sorbent filters to halve energy consumption, Aircapture commercializing on-site CO₂ service models, and Spiritus deploying passive sorbent DAC systems. These technologies address the critical challenge of atmospheric CO₂ concentration and scalability.

Point-source capture attracts significant corporate investment through advanced sorbents and solvents. Mitico's granulated metal carbonate technology secured $4.3 million for industrial applications, while Carbon Clean's rotating packed bed CycloneCC system achieved a $150 million Series C based on proven industrial deployment. These solutions integrate directly with existing industrial infrastructure, reducing implementation barriers.

Carbon mineralization and utilization technologies appeal to investors seeking immediate revenue streams. CarbonCure's cement integration, Fortera's building materials, and Carbon Built's enhanced weathering create marketable products while sequestering CO₂. This approach addresses both carbon removal and industrial decarbonization simultaneously.

Biological and hybrid systems represent emerging investment themes combining natural processes with engineered solutions. Living Carbon's engineered trees, Charm Industrial's biomass pyrolysis, and Graphyte's biomass-derived carbon blocks offer potentially lower-cost pathways to permanent carbon removal. CO₂-to-products technologies like Svante's solid sorbents, Mosaic Materials' advanced adsorbents, and Synhelion's solar-driven fuels create value-added applications for captured carbon.

Are any of the major oil, gas, or industrial giants backing carbon capture startups, and if so, which ones and under what strategy?

Energy majors deploy three distinct strategies: technology acquisition for operational integration, joint venture development for infrastructure sharing, and corporate venture investment for early-stage technology access.

Shell pursues an acquisition-focused approach, obtaining an 80% stake in Aker Carbon Capture and establishing joint ventures like Northern Lights for CO₂ storage. Their corporate venture investments target technology licensing opportunities and European-US project development, with deals structured to include preferred technology access and integration rights into Shell's existing CCUS infrastructure.

Chevron operates as a lead investor in late-stage rounds, exemplified by their leadership in Carbon Clean's $150 million Series C. Their strategy centers on securing preferred offtake rights and pilot deployment opportunities in refineries and industrial sites, treating carbon capture as both an operational necessity and a revenue opportunity through CO₂ utilization.

TotalEnergies focuses on infrastructure integration, acquiring Talos Low Carbon Solutions and partnering with Equinor and Chevron on Gulf Coast CCUS hubs. Their investment strategy leverages existing oil and gas infrastructure for CO₂ transport and storage, with deals structured as equity stakes combined with offtake agreements and service contracts.

ExxonMobil collaborates with Mitsubishi Heavy Industries on post-combustion capture technology, integrating solutions into existing refinery and petrochemical operations. Aramco Ventures aligns investments with Saudi Arabia's hydrogen and CCUS roadmap, backing passive DAC startups like Spiritus and Phlair to support the kingdom's diversification strategy beyond traditional oil production.

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Which venture capital firms or corporate venture arms are most active in this space, and what stage do they typically invest at?

Investment stages align with technology maturity, from pre-seed materials research to growth-stage commercial deployment.

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Which geographic regions are seeing the most investment in carbon capture startups, and why?

North America dominates with over 60% of funding rounds, driven by the Inflation Reduction Act's enhanced 45Q tax credits and DOE demonstration programs creating unprecedented policy support.

The United States leads global investment through a combination of federal incentives and state-level support. The 45Q tax credit provides $180 per ton for direct air capture and $85 per ton for point-source capture, creating immediate revenue streams for commercial operations. The Department of Energy's $1.3 billion point-source capture demonstration program and regional CCUS hubs in Louisiana, Texas, and other states provide additional co-investment opportunities. Major US-based VCs like Breakthrough Energy Ventures and Lowercarbon Capital concentrate funding in domestic startups.

Europe accounts for approximately 25% of rounds, propelled by the EU Green Deal and emissions trading system inclusion of carbon removals. The UK's £20+ million in government grants supports companies like Carbon Clean, while Germany and Switzerland host major players like Climeworks. European policy frameworks emphasizing compliance markets and industrial decarbonization mandates create stable demand for carbon capture technologies.

Asia, particularly Japan, shows growing corporate venture activity through companies like TDK Ventures and strategic partnerships with Mitsui and Mitsubishi. Japan's upcoming emissions trading system inclusion of DAC credits up to 5% of compliance liabilities by 2026 drives investor consortium formation and technology partnerships. The region's focus on materials innovation and industrial integration aligns with Asian manufacturing strengths.

The Middle East operates as a demonstration hub with pilot projects like Carbon Clean's deployment at ADNOC/Fertiglobe facilities and Aramco Ventures' strategic investments. The region leverages existing oil and gas infrastructure for CO₂ storage and utilization, with investments supporting national diversification strategies beyond traditional hydrocarbon revenues.

Which government bodies or public funding programs are supporting carbon capture innovation, and which startups have benefited?

Government support operates through three primary mechanisms: direct grants for research and development, demonstration project co-funding, and policy incentives creating market demand.

The US Department of Energy leads global public funding with its $1.3 billion Notice for Point-Source Capture Demonstrations, supporting companies like Heirloom through direct hub grants for Louisiana projects. The DOE's ARPA-E program funds breakthrough research, while the Office of Clean Energy Demonstrations coordinates regional CCUS hubs providing infrastructure sharing and co-investment opportunities.

UK government programs have allocated over £20 million in grants to companies like Carbon Clean for rotating packed bed R&D and COP26 demonstration projects. The UK Net Zero Technology Centre provides additional funding for early-stage innovations, while the Department for Business, Energy & Industrial Strategy coordinates industrial decarbonization grants including carbon capture components.

The European Union's Green Deal framework co-funds CCUS pilots through Horizon Europe and Innovation Fund programs. These initiatives support technology validation and commercial demonstration while preparing for emissions trading system inclusion of carbon removals. Member states like Germany and the Netherlands provide additional national funding for industrial carbon capture integration.

Japan's Ministry of Economy, Trade and Industry supports carbon capture through its Green Innovation Fund, with specific allocations for direct air capture credit systems. The upcoming emissions trading system mandate for DAC credits drives government support for technology development and international partnerships, particularly with companies like Heirloom establishing Japanese investor consortiums.

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What is the total amount of private and public investment in carbon capture startups in 2024 and so far in 2025?

Combined private and public investment exceeded $2 billion in 2024 and surpassed $1.7 billion in 2025 year-to-date, representing a 139% year-over-year increase in private funding.

Private venture capital and corporate venture funding reached approximately $700 million in 2024 across CCUS startups, with notable rounds including Heirloom's $150 million Series B, Carbon Clean's $150 million Series C, and multiple smaller rounds supporting early-stage technology development. This represents a significant acceleration from previous years as technologies mature toward commercial demonstration.

2025 year-to-date private funding totals $342 million from major disclosed rounds: Climeworks' $162 million equity round, Aircapture's $50 million Series A, Spiritus' $30 million Series A, Mitico's $4.3 million seed round, and additional undisclosed investments across the sector. The year's funding trajectory suggests potential to exceed 2024 totals.

Public funding contributions include the US DOE's $1.3 billion point-source capture demonstration program, UK government grants exceeding £20 million, and EU Green Deal co-funding across multiple member states. Total public sector commitment reached approximately $1.3 billion in 2024 and over $1.35 billion in 2025 year-to-date when including all national and supranational programs.

The combined private and public funding totals reflect growing confidence in carbon capture commercialization, with public programs de-risking technology development and private investors scaling proven solutions toward market deployment.

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What trends or types of carbon capture approaches are attracting the most capital or attention from investors?

Four technology trends dominate investor attention: cost reduction pathways targeting sub-$200 per ton capture costs, modular deployment systems reducing capital requirements, industrial integration solutions, and hybrid biological-engineering approaches.

Direct air capture cost reduction drives the largest funding allocations, with companies like Heirloom targeting $100 per ton by the early 2030s through limestone-based processes and Climeworks focusing on halving energy consumption through improved sorbent materials. Investors prioritize technologies demonstrating clear pathways to economic viability without permanent subsidization.

Modular, containerized systems attract significant capital through their ability to reduce upfront capital expenditure and accelerate deployment timelines. Aircapture's "CO₂ as a Service" model, Carbon Clean's transportable CycloneCC units, and similar approaches allow faster market entry and reduced project risk for both companies and customers.

Industrial integration solutions receive substantial corporate venture investment because they address existing emission sources while generating immediate revenue streams. Technologies that integrate with cement production, steel manufacturing, petrochemicals, and power generation offer dual benefits of emissions reduction and industrial process improvement.

Hybrid biological-engineering approaches represent emerging investment themes combining natural carbon sequestration with technological enhancement. Living Carbon's engineered trees, Charm Industrial's biomass pyrolysis, Graphyte's biomass-derived carbon storage, and similar companies offer potentially lower-cost pathways to permanent carbon removal while creating additional revenue streams through sustainable materials production.

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Are any notable exits, IPOs, or acquisitions expected in this space, and how are investors positioning themselves for 2026?

The carbon capture sector approaches its first major exit cycle, with strategic acquisitions leading the way and IPO preparations beginning for scale-up companies.

Aker Carbon Capture's 80% acquisition by Schlumberger represents the sector's most significant exit to date, demonstrating strategic value for industrial integration and technology scaling. Climeworks reportedly explores public listing options post-Mammoth facility scaling, positioning as the potential first major carbon capture IPO given its operational track record and revenue generation.

Investor positioning for 2026 emphasizes follow-on funds and opportunities vehicles to double down on proven technologies. Lowercarbon Capital's second fund structure allows aggressive follow-on investment in successful portfolio companies, while Breakthrough Energy Ventures maintains patient capital approaches for longer-term technology development cycles.

Infrastructure partnerships with energy majors de-risk capital expenditure requirements for scaling companies. Shell, Chevron, and TotalEnergies position themselves as strategic acquirers and partners for companies demonstrating commercial viability, with deal structures including equity stakes, technology licensing, and operational integration agreements.

Public market readiness targets companies achieving multi-hundred million dollar revenues and tangible carbon removal credit generation. Investors focus on companies with demonstrated unit economics, scalable technology platforms, and substantial offtake agreements from corporate customers seeking compliance and voluntary carbon removal credits.

What can be expected in terms of investment volume, investor behavior, and breakthrough technologies in carbon capture for 2026?

Investment volume could exceed $2 billion annually by 2026 as technologies mature from demonstration to commercial deployment, with policy developments and compliance markets driving sustained capital flows.

Investor behavior shifts from exploratory seed rounds toward growth-stage capital for demonstration-to-commercial projects. Conditional offtake agreements and public-private co-investment will dominate deal structures as companies require larger capital commitments for industrial-scale facilities. Corporate venture arms increasingly lead rounds to secure technology partnerships and supply chain integration.

Breakthrough technologies targeting 2026 deployment include next-generation sorbents achieving over 95% capture efficiency at lifecycle costs below $200 per ton, integrated DAC plus utilization plants producing fuels and materials, and AI-enabled operations for process optimization and predictive maintenance. Carbon Clean's AI pilot programs and similar initiatives demonstrate the integration potential of digital technologies with physical carbon capture systems.

Policy and market developments will create multi-billion dollar compliance demand through full inclusion of DAC and removals in EU ETS and Japan ETS systems. Expanded 45Q tax credit enhancements and new global carbon removal procurement frameworks drive corporate commitment expansion beyond voluntary markets toward regulatory compliance requirements.

The convergence of proven technology performance, supportive policy frameworks, and industrial partner integration positions 2026 as a pivotal year for carbon capture commercialization and investment returns.

Conclusion

Sources

1. Breakthrough Energy - Holocene Project
2. Carbon Herald - Deep Sky Investment
3. Graphyte - Bill Gates Carbon Removal
4. Breakthrough Energy Ventures
5. Heirloom Carbon - Series B Funding
6. Axios - Lowercarbon Capital
7. AP Ventures - Mitico Investment
8. DecarboFuse - Carbon Capture Future
9. US News - Carbon Capture Investments
10. Carbon Herald - Carbon Clean CycloneCC
11. Carbon Clean - Company Journey
12. Global Venturing - DAC Startups
13. TechCrunch - Heirloom Carbon Funding
14. Climeworks - $162M Funding Round
15. Reuters - Aircapture Series A
16. US Department of Energy - Carbon Capture Demonstrations
17. Oliver Wyman - Clean Energy VC Funding
18. ESG News - Climeworks Investment
19. Energy Digital - Top Carbon Capture Companies
20. Alt Energy Magazine - Carbon Capture Funding
21. Mitsui - Carbon Capture Initiatives
22. Net Zero Insights - Carbon Removal Investors
23. Carbon Credits - Carbon Removal Stocks