Catalyzing Capital for Carbon Management

Catalyzing Capital for Carbon Management

How do we encourage breakthroughs in energy and climate?

What is the role of carbon utilization and carbon management in this effort?

How do we accelerate the deployment of capital, and what are the investment opportunities, gaps, and risks?

This is a pivotal time for the carbon management space. There is an active conversation about the emergent role of carbon management and carbon utilization solutions to address energy and climate. At the same time, there is an upswell of interest and investment in these solutions. XPRIZE and our partners in the cleantech world are excited to capitalize on this moment by coming together for the first-of-its-kind, private Clean Innovation Investor Forum and Carbon XPRIZE Summit in New York City, the global investment and finance capital.

Why Now?

Last week’s announcement of the United States’ intention to withdraw from the Paris climate accord highlights just how much we need leadership from the private investment community on carbon management. The good news is that capital providers are clearly motivated to play a greater role, especially absent regulatory and government support. All this is set against a background of growing public appetite for action on climate and sustainability, and corporate leadership in greenhouse gas emissions reductions and sustainable practices.

So how can we make the most of this moment and capitalize on the opportunities? The answers may lie the new generation of cutting edge carbon management technologies that together represent some of the most dynamic potential game-changers for our energy and climate future.

Introducing Carbon Management

Carbon management refers to the suite of technologies, strategies, and solutions focused on curtailing, preventing, and managing carbon dioxide emissions. It includes technologies like carbon utilization (CCU or CCUS), carbon capture and reliable storage (CCS), direct air capture (DAC), but also both new and traditional practices in forestry, grassland, and agricultural land management that can increase the uptake of carbon in plants, roots, and soils.

We know that deploying solutions at scale will require a range of capital tools, including private equity, venture capital, angels, and institutional investors, but also traditional program-related investments such as loans or loan guarantees from both the private sector and government. But what is the optimal entry point for patient (or not-so-patient) capital to enter these spaces? What are the best business models? How do we achieve successful exits? We want to ask and answer these questions in New York by drawing on new momentum already evident in the community.

Grassroots and Corporates are Activated

The Center for Carbon Removal continues to champion an array of policy options for US federal and state leaders. The Global CO2 Initiative is raising capital to grow early stage R&D in CCU, and to back emerging ventures. XPRIZE has joined with Global CO2 Initiative and Climate-Kic on a project that will establish much-needed technical benchmarks and standards for CO2 utilization technologies and businesses, essential building blocks to support investment decision and due diligence.

At the corporate level, the SCOT (“Smart CO2 Transformation”) network is passing the torch to a new European industrial consortium in carbon dioxide utilization, founded by Fortune 500 companies in energy, chemicals, manufacturing, and materials. Among them is Covestro, who are convening the Reimagining Carbon Basecamp in London this month --  a dialogue on their open-source approach to support and measure climate-related innovation and improvement.

Learning from the Cleantech Community

Cleantech and carbon management communities have rarely found the space in which to meet and share learnings, including addressing questions of scalability, business models, and operational sustainability at an early stage. Catalyzing the growth of a new industry in carbon management and carbon utilization will require a willingness to learn from and build on past success and challenges in cleantech. The late 2000’s showed us that traditional models of investment and commercialization that work for IT may not apply to cleantech. The same may be true in the carbon management space, in which technologies are capital intensive, science-based, and tend to address heavily regulated markets. We will need to harness different models of risk assessment, due diligence, and scale-up.

Investor Forum and Summit

To address this gap, the NRG COSIA Carbon XPRIZE team is working alongside some of the continent’s leading accelerators and incubators including the Canadian Consulate in New York City,  The [email protected], Urban Future Lab, MaRS,  and Greentown Labs to convene the Clean Innovation Investor Forum & Carbon XPRIZE Summit. This private event will bring together a select group of capital providers, corporate leaders, and innovators and entrepreneurs, including competitors in the NRG COSIA Carbon XPRIZE. The event will showcase some of the emerging game-changers in the space, and facilitate a conversation about how to further catalyze its growth.

From Exchange to Action

Solving grand challenges represents an enormous investment opportunity. Our technological and capacity to build a positive, resilient energy future has never been greater. Our mission is clear: unlock capital, accelerate deal-flow, commercialize breakthrough technologies, and jumpstart a critical industry in carbon utilization.

Marcius Extavour is Director of Energy and Resources at XPRIZE and prize lead for the NRG COSIA Carbon XPRIZE, a global competition for conversion of carbon dioxide from power plants into valuable products.

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