Sustainability/Climate Tech/Analysis/ Elon Musk has $80m to fund a carbon removal startup. Here’s what he’s after “He said explicitly, this is not about space, it’s not about Mars. This is about Earth.” By Freya Pratty 11 August 2022 Elon Musk, dmoberhaus is licensed under CC BY 2.0. Elon Musk, dmoberhaus is licensed under CC BY 2.0. \Mobility The European startups transforming supply chains, according to VCs By Freya Pratty 23 February 2023 Sustainability/Climate Tech/Analysis/ Elon Musk has $80m to fund a carbon removal startup. Here’s what he’s after “He said explicitly, this is not about space, it’s not about Mars. This is about Earth.” By Freya Pratty 11 August 2022 When non-profit XPrize first approached Elon Musk about funding carbon removal tech, they thought he could be interested in solutions tied to his more extraterrestrial interests. “We wondered if he might have an interest in carbon removal solutions that could produce rocket fuel, or those that might be tuned to a Martian environment, because he has other businesses focused on those types of things,” says Marcius Extavour, chief scientist at XPrize. “But he said explicitly, this is not about space, it’s not about Mars. This is about Earth, keep the focus on Earth.” XPrize runs competitions aimed at encouraging tech development that could benefit humanity. Elon Musk’s foundation stumped up $100m to fund the largest incentive prize in history, a competition to find solutions that could collectively remove 10 gigatonnes of CO2 from the atmosphere per year by 2050. For context, in 2021 global energy-related carbon emissions were at 36.3 gigatonnes a year, according to the International Energy Authority. Earlier this year, 15 startups received $1m each from Musk’s XPrize, including several from Europe. Now the race is on to try and win the grand prize, where one startup will receive $80m in 2025. Musk’s investment comes amid ramped up investor focus on the industry. Climeworks, the best-funded startup in the sector, raised a giant $650m round earlier this year, around the same time that Stripe, Meta, Alphabet, Shopify and McKinsey pledged a collective $1bn for carbon removal tech. So what are Musk’s team after? Carbon removal is a broad church. It includes high-tech solutions, like direct air capture, as well as nature-based ideas like new agricultural techniques or carbon sequestration using plants. Extavour says the team are looking for three central things. First, the tech has to work. To win the grand prize, startups have to show a working solution removing 1,000 tonnes a year. Second, teams have to be able to estimate the cost of their process — there’s too much speculative pricing in the market at the moment, Extavour says, and getting the price down is intrinsic to growing the sector. That’s the third element: teams need to show the solution can scale up, from a thousand to a million to a billion tonnes a year. It’s a particular concern of Musk’s, Extavour says. Musk’s values are “extreme focus, to go as fast as possible in a prudent way and get to near the scale at which you’re going to have meaningful impact as soon as you can”, Extavour says. Europe’s role Several European startups secured $1m each in the first round of the prize. Among those to win the first round of the prize are Project Hajar, a British company working on direct air capture and then storing the carbon in peridotite rock formations in the Omani mountains. Another is French startup Net Zero, which pairs with farmers to turn agricultural waste into biochar, a high-carbon form of charcoal used to sequester CO2. European companies, Extavour says, could have a particular advantage when it comes to carbon removal. “The American way assumes that you can form a business with entirely private capital,” he says. Carbon removal is more like infrastructure than typical tech businesses, however — so startups need a lot more capital. That could mean, Extavour says, that a place like Europe, where there’s integrated private and public sector financing, might show itself to be a more supportive environment for the young sector. So did Musk have any other advice for the team? “He basically said, make this mean something,” Extavour says. “If we look back at the prize, 10 years on, and we find that nothing really happened, that’s a disaster.” ‘The oceans are most overlooked’ Given that there’s a billionaire tech founder behind the prize, first assumptions might be that a techie solution is guaranteed to win. It’s not the case, Extavour says. “You don’t have to build something that runs on electricity and is made of metal and plastic. All we care about is if the carbon is removed or not,” he says. There are a few avenues that the team finds particularly interesting. Mineralisation is one. Some minerals naturally react with CO2 in the air and absorb it slowly over time. Some startups are working on accelerating the process and deploying the rocks more widely. “That’s really interesting, because it has the potential to be very cheap,” says Extavour. The ocean also has a huge amount of carbon removal potential, he adds. “The oceans are probably the most overlooked and maybe hold the most potential” — down to their enormous size and the relative lack of competition for food or land use. Regenerative agriculture — farming techniques which increase the amount of carbon sequestered in the soil — is another exciting area, he says, because the solutions could also boost sustainable food production as a byproduct. Freya Pratty is a reporter at Sifted. She tweets from @FPratty and writes our climate tech newsletter — you can sign up here. Related Articles Can vertical farming survive the downturn? By Freya Pratty Click here to read more Why should investors care about clean energy? 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