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The carbon removal company has a pitch to solve the industry’s biggest “moral hazard.”

The carbon removal industry has exploded over the past few years, with billions of dollars in government funding and venture capital flowing to startups, nonprofits, and university research centers working on different ways to pull carbon out of the atmosphere. But all the attention has also stirred up a long running controversy about whether this solution is a dangerous distraction.
Critics worry that governments and corporations will not work as hard to cut greenhouse gas emissions if they believe they’ll eventually be able to reverse them. Some have warned this is already happening. On Thursday, Climeworks, one of the leading companies developing machines that suck carbon dioxide from the air, published a manifesto of sorts to fend off the risk that its technology is used to delay climate action.
The Swiss company’s statement calls for “a clear distinction between emissions reductions and carbon removals” in corporate and national climate plans and in the carbon market. It can be read as a pitch to improve the ever-popular but dangerously vague net-zero pledge. In theory, a plan to achieve net-zero emissions should involve both reducing emissions and then reaching a sort of equilibrium where any remaining releases are canceled out by removing carbon from the atmosphere.
The problem with net zero is it puts a lot more emphasis on the second part, and doesn’t require much transparency about the first. For example, a clothing brand pledging to achieve net zero by 2050 might buy renewable energy to power its stores, but avoid making more difficult changes to its production process or supply chain to reduce emissions, with the vague intention to balance them out later.
Climeworks is urging companies and governments to instead set two separate targets: One for how much they plan to reduce their carbon output, and a second for the level of remaining emissions they plan to balance out with carbon removal. It’s an idea with roots in academia; a 2019 paper argued that unpacking net-zero goals this way would help ensure that investments in carbon removal are truly additional to essential investments in emissions reductions.
“What we are saying is that removals should not stand as an excuse to not reduce your emissions,” said Louis Uzor, the climate policy manager at Climeworks.
The prospect of removing carbon from the atmosphere is undeniably seductive. “Depending on how you look at things, the technology represents either the ultimate insurance policy or the ultimate moral hazard,” New Yorker writer Elizabeth Kolbert wrote in a 2017 story about the kinds of machines that Climeworks is building.
It’s not hard to see how the fantasy version could turn into a nightmare. Our future ability to remove carbon will be limited by all kinds of constraints, like clean energy availability, land use, finance, and community support. If we operate under the assumption that we’ll be able to remove huge amounts of carbon from the atmosphere in a few decades, and that capacity doesn’t materialize, we could end up with more catastrophic warming — and still be far off from stabilizing the climate.
“Carbon removal capacity is going to be finite,” said Holly Buck, an assistant professor of environment and sustainability at the University of Buffalo. “Its in our interest to really constrain the residual emissions to the smallest amount possible to make sure that we can, in fact, compensate for them.”
At first glance, it may seem like Climeworks’ manifesto undermines its entire business model. Carbon removal "has a different role to play and should not be substituting emission reductions,” the statement reads. But today, companies like H&M and Square pay Climeworks for carbon removal to compensate for some of their emissions. Even the band Coldplay has bought credits to offset emissions from its tour.
Uzor argues its clients are not purchasing removals in place of cutting emissions. Paying Climeworks to remove carbon is still really expensive — upwards of $600 per metric ton of carbon. “It’s quite obvious that if you can reduce [emissions] for even up to $200 per ton, you’re still better off reducing than going with Climeworks,” he said. Rather, customers are lining up because they have emissions that are considered “hard to abate,” meaning there may not be any way to eliminate them for a long time. Uzor said their clients understand that if they want to achieve net zero in the next few decades, “they better start working with us now, because we have a whole industry that needs to scale up.”
Buck, of the University of Buffalo, pointed out that making it the norm to set a carbon removal goal could actually be great for Climeworks’ business. She’s optimistic that the company’s message comes from a place of genuine concern, but she thinks governments should be the ones leading the way by setting stronger requirements to cut emissions. “If people in the private sector are going to try to basically create policy in the absence of governments doing it, this seems good, but I don't think it’ll solve all the problems.”
Gilles Dufrasne, a lead on global carbon markets at the nonprofit Carbon Market Watch, said his organization supports the ideas in the statement, noting that this clear distinction would bring more transparency to climate plans and progress.
Climeworks’ statement also included a second, related plea. The company wants carbon credit certifiers to distinguish between projects that reduce or avoid emissions, like a wind farm or protection of a forest that might otherwise be chopped down, and those that remove carbon from the atmosphere, like Climeworks’ direct air capture plants. Thus far, Uzor said, Climeworks has refrained from working with large carbon registries like Verra or the American Carbon Registry, where many companies go to buy carbon offsets, because it couldn’t compete in that environment as long as its projects were lumped together with those that reduce emissions, which sell offsets for a fraction of the price.
This is another delicate subject. The growth of carbon removal projects is colliding with major tumult in the carbon market. Traditional carbon offset projects that purport to reduce emissions have been raked over the coals by researchers and journalists who have found time and again that those projects exaggerated their benefits. Derik Broekhoff, a senior scientist at the Stockholm Environment Institute, said that the Science Based Targets Initiative, a nonprofit that creates voluntary standards for corporate climate action, has also begun discouraging companies from buying these kinds of offsets while encouraging investments in carbon removal. “It’s led to this kind of perverse outcome where everyone’s chasing removals,” said Derik Broekhoff, a senior scientist at the Stockholm Environment Institute. “Yet if you look at a global level, what we really need to do is reduce emissions rapidly and significantly. So it ends up being a bit of a distraction.”
Uzor said some have opposed the idea to clearly separate removals because it could make them seem like a superior product. But he insisted that wasn’t Climework’s intent. “Currently, global emissions are still on the rise, so any avoided emission that is timely and properly done, based on robust assessment, is massively needed.”
It doesn’t seem like this will end up being such a big ask. Verra, the largest carbon offset registry in the world, plans to introduce a “removals” label in the middle of this year, said Anne Thiel, Verra’s senior manager of communications in an email.
But shoring up the integrity of the market is another question altogether — and one where Climeworks does have a clear advantage. The benefits of a direct air capture project are pretty easy to measure, but other types of carbon removal projects, like those that involve storing carbon in soil or sinking it to the bottom of the ocean, will be a lot harder to verify.
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With investment in AI booming, any business that can promise quick generation is looking pretty good right now.
It’s a good time to be selling stuff to data center developers.
That was the message from the beginning of earnings season for the renewables and the energy industry: If you can promise power to data centers quickly, you’re doing good business. (If you’re just a software business that investors think will be displaced by large language models, the value of your company has probably fallen by a quarter so far this year).
Caterpillar, while better known for its gargantuan mining and construction equipment, also sells gas turbines and reciprocating engines — basically giant car engines that run on natural gas. Its power generation business is now by far its biggest segment, outpacing oil and gas and industrial, and its revenue of $3.2 billion in the fourth quarter was 44% more than a year earlier.
“Sales increased in large reciprocating engines, primarily data center applications. Turbines and turbine-related services increased as well,” the company said in its earnings release late last month. And it’s not likely to stop: “We anticipate growth in power generation for both CAT reciprocating engines and solar turbines driven by increasing energy demand to support data center build-out related to cloud computing and generative AI.,” the company’s chief executive officer Joe Creed said on a call with analysts. We “talk to hyperscalers and large data center customers weekly and make sure we stay in line with their plans.”
And those hyperscalers are going to spend even more in 2026.
Big tech companies have some $600 billion in capital expenditures planned for this year, with the growth in spending coming largely from data centers.
And while the vast majority of the cost of owning an AI datacenter is the chips, you need power to run a data center, and the more quickly you can get that power, the sooner your data center can be up and running.
This “speed-to-power” problem has thus put a massive premium on any power generation technology that can be deployed quickly.
Like fuel cells.
Bloom Energy, the long-tenured fuel cell company, reported around $780 million in quarterly revenue in the fourth quarter, up 36% from the year before. “Our growth has been fueled by seismic changes in customer attitude towards power,” the company’s founder and chief executive, KR Sridhar, said on the company’s earnings call Thursday. “On-site power has moved from being a decision of last resort to a vital business necessity. This shift has led large power users to seek Bloom to fulfill their needs. Our demand from data centers and commercial and industrial or C&I customers is secular and growing.”
Bloom has been kicking around for two decades, but it took the data center boom for the company to really, well, bloom.
Large turbines for natural gas power are sold out through the end of the decade; meanwhile, Bloom claims to be able to get fuel cells on site before the data center itself is fully constructed. “We can ramp up and provide that additional power to that customer before they are ready,” Sridhar said. “Typically, it takes more than a year to stand up a greenfield data center. It takes more than a year to stand up a factory, from permits all the way to full implementation. We can be ready for them before then.”
While on-site power can be crucial to actually beginning operations, data centers tend to want to connect to the grid eventually, which means more demand for services from utilities and large scale developers of power. The utility and developer NextEra has long promoted the “speed to power” narrative, pointing out that it’s far easier to procure and assemble solar panels and batteries than it is gas turbines.
“Battery storage now represents almost one-third of our 30-gigawatt backlog, with nearly 5 gigawatts originated over the past 12 months. We don’t see this demand slowing. Nearly every region in the country needs capacity, and battery storage is the only new capacity resource available at scale,” NextEra chief executive John Ketchum said on the company’s earnings call late last month.
He also said that he would be “disappointed” if the company’s plans for 15 gigawatts of “data center hubs” doesn’t double to 30 gigawatts by 2035. These hubs, Ketchum said, will be powered “through a mix of new renewables, battery storage and gas generation.”
The Minnesota-based utility Xcel said it expects to have 3 gigawatts of contracted data centers by the end of this year and six by 2027.
“If you think about where we sit in sustainability goals as a company, where these hyperscalers and data centers and customers of data center developers wanna be, it’s a highly sustainable product,” Xcel’s chief executive Bob Franzel said on the company’s earnings call Thursday.
As for the companies actually making the solar panels and batteries that could power data centers, they largely haven’t reported earnings yet, although the American solar manufacturer First Solar did get a scare recently when its share price dropped 13% last Thursday — and no, not because of a change in tariffs or tax credits or permitting rules. It was because Elon Musk said he wanted to build 100 gigawatts of solar panels a year. The speed to power question, at least for Elon Musk, is not limited to Earth.
“We think the best way to add significant capability to the grid is solar and batteries on Earth and solar in space,” Musk said on Tesla’s fourth quarter earnings call last week.
And it’s blocking America’s economic growth, argues a former White House climate advisor.
Everyone is talking about affordability and the rising cost of energy to power our lives — with good reason. Leading up to Winter Storm Fern, natural gas prices skyrocketed more than 50% in just two days. Since President Trump took office, electricity prices have risen by 13%, despite his promise to cut them in half in his first year. Now, 16% of U.S households are behind on their electricity bills, and that number is expected to rise throughout the winter.
And we all know that much more energy will be needed in the years ahead to meet our electrification needs. The Trump administration and its well-funded allies in the fossil fuel industry are blocking our ability to put the cheapest, most reliable energy onto the grid. They are standing in the way of progress, pushing a false narrative that our country needs more dirty, expensive energy to bring costs down.
Our state and local leaders, environmental advocates, and businesses are the ones pushing to build more. They are the ones focused on a pro-growth agenda that invests in the U.S. economy and meets new energy demand with clean energy. Now is the time for all Americans to stand together, not in anger or frustration, but with hope, inspiration, and resilience. We already have the technologies, policies, and practices we need to deliver a cleaner, safer, and more affordable world. We just have to build it.
It’s time to push for common-sense policies that quickly scale up the cheapest forms of energy — solar, wind, and battery storage — to protect our health and natural resources. And it’s high time we let families keep their hard-earned money rather than pay to keep dirty coal and other volatile and expensive fossil fuels — including natural gas — alive.
Our federal government is propping up polluting sources of energy that are draining our economy. They are forcing coal plants to stay open while costing ratepayers millions. In fact, Trump’s U.S. Department of Energy just extended its order to keep Michigan’s JH Campbell coal plant running for four more months, forcing consumers to pay a whopping $113 million in costs so far, despite the state’s utility saying that “no energy emergency exists.”
Trump’s Environmental Protection Agency is stripping states and Tribes of their authority to protect water resources that their communities depend on to allow more oil and gas pipelines and other fossil fuel infrastructure to be built, doubling down on the very problem that is driving prices up. Retail natural gas prices have risen 11% year over year, far outpacing inflation. Moreover, gas price spikes have been a major factor in rising retail electricity bills, particularly in the Northeast and Southeast. We’re seeing similar cost increases as a result of Trump’s liquified natural gas export policies and his constant attacks on the Inflation Reduction Act.
Let me be clear: Renewable energy is the fastest and cheapest option to add power to the grid. Period. Full Stop. Already nearly 80% of planned power plant capacity is tied to renewable sources, according to Cleanview.co. Solar made up 98% of new capacity this fall. States with the highest levels of wind and solar generation, like Iowa and Oklahoma, have the lowest utility bill rate increases in America. States like New Mexico are already ahead of schedule to meet their clean energy goals, while also keeping rates down.
So don’t buy what the Trump administration is selling. We can have long-term, stable economic growth built on cheap, clean energy that doesn’t trash our watersheds and destroy the places we love. In Nevada and Utah, the Sierra Club worked alongside Fervo to secure a new deal to supply 24/7 carbon-free energy to a large Google data center built with new environmental principles for advanced geothermal. And in Michigan and Illinois, a broad coalition of environmental leaders worked with industry stakeholders to achieve common sense permitting reform to facilitate faster adoption of more affordable energy onto the grid in the Midwest.
We all know from experience that the fossil fuel industry will do everything it can to force us to stick with the status quo. They aren’t going to stand idle and give up their foothold on dirty energy, which they have long enjoyed. That’s why we must deliver pro-growth solutions and stand up against those blocking progress to line their pockets with families’ hard-earned money.
It’s time for us to take charge and build a clean, affordable energy future. We need to call on our policymakers in states and cities to stand up for their constituents. And we need business leaders to invest in our economic future. Now is the time to demand the healthy, low-cost, clean energy future that empowers all of us.
Plus, consolidation in carbon removal.
On Wednesday, I covered a major raise in the virtual power plant space — a sector that may finally be ready to make a tangible impact on the grid after decades of theorizing. Beyond that, investors continued to place bets on both fusion and fission, as the Trump administration continues pushing for faster deployment of new nuclear reactors. This week also saw fresh capital flowing to fleet electrification and climate-resilience solutions, two areas that have benefited less, shall we say, from the president’s enthusiasm.
The fusion startup Avalanche Energy raised $29 million to develop its tabletop-sized microreactors and scale its fusion test facility, FusionWERX, in Washington State. Led by RA Capital Management and joined by existing climate tech-focused backers such as Congruent Ventures and Lowercarbon Capital, this funding round follows what CEO Robin Langtry described to me as multiple breakthroughs in stabilizing the company’s fusion plasma and ridding it of impurities such as excess oxygen.
“Now we really have a very straight technical path to get to this Q > 1 fusion machine,” Langtry told me, referring to the point at which a fusion reaction produces more energy than was used to initiate it, often called “scientific breakeven.” Now that the pathway to commercial viability is coming into focus, Avalanche is starting to invest in expensive, longer-lead-time equipment such as superconducting magnets and systems to manage the fusion fuel, which it expects to arrive at the FusionWERX facility in early 2027. At that point, the startup will begin running tests that could achieve breakeven.
Avalanche is pursuing a technical approach called magneto-electrostatic fusion, a lesser-known method that uses strong magnetic and electric fields to accelerate ions into fusion-producing collisions while keeping the plasma contained. The startup aims to commercialize its tech, which Langtry says has numerous defense applications, in the early 2030s. In the meantime, much of the latest funding will go toward scaling the FusionWERX facility, where other fusion entrepreneurs and academics can test their own technologies — offering the startup a nearer-term revenue opportunity.
The Paris-based small modular reactor company Newcleo announced an $88 million growth investment, as existing European investors doubled down and new EU-based industrial backers jumped aboard, bringing its total funding to over $760 million. The startup, which is now eyeing expansion into the U.S., differentiates itself by running its reactors on recycled nuclear waste and cooling them with liquid lead, which is intended to be safer and more efficient than conventional standard water- or sodium-cooled reactors.
The startup is already investing $2 billion in a strategic partnership with the Sam Altman-backed SMR company Oklo to develop the infrastructure needed to produce and reprocess advanced nuclear fuel in the U.S. Newcleo’s CEO, Stefano Buono, told The Wall Street Journal that he expects to benefit from the Trump administration’s push to expedite domestic nuclear development, which he hopes will help Newcleo speed up its own commercialization timeline. Currently the company plans to complete its first commercial units sometime after 2030.
The company also has a number of creative collaborations underway with Italian firms. These include partnerships with the shipbuilder Fincantieri, which is exploring the potential of nuclear-powered vessels, engineering giant Saipem which is looking to develop floating nuclear plants, and the metals equipment company Danieli, which aims to use SMRs for green steel production.
Mitra EV, a commercial vehicle fleet electrification platform, just raised $27 million in a funding round that includes an equity investment from Ultra Capital and a credit facility from the climate-focused investment firm S2G Investments.
The startup focuses on small- and medium-sized businesses, which often face capital constraints and lack a dedicated fleet manager. While the financials of fleet electrification often pencil out for these companies, the real barriers frequently lie in the maze of logistics — acquiring electric vehicles, building charging infrastructure, coordinating with utilities, and navigating a web of incentive programs. Mitra EV aims to streamline all these tasks through a single platform, claiming to offer immediate cost reductions of up to 75%.
The new capital will help Mitra to expand its suite of offerings, which includes EV leasing, overnight charging infrastructure, and access to a network of shared fast-charging hubs designed specifically for fleets. For now the company operates exclusively in California, but it plans to deepen its presence across the state before expanding into additional regions. Other states such as Oregon, Colorado, Michigan, and New York have also adopted zero-emissions fleet mandates, creating ready markets for the company if it continues to grow.
The software startup Forerunner raised $39 million to scale its platform for local governments to manage and mitigate environmental risk. The company’s AI-powered tools help to centralize detailed geospatial data such as land parcels, infrastructure, inspection records, permitting information, hazard zones, and more into a single system, allowing communities to run stronger risk assessments, stay compliant with environmental regulations, and coordinate responses when floods, storms, or other emergencies hit. The startup works with over 190 local and state agencies across 26 U.S. states.
The round includes a $26.3 million Series B led by Wellington Management, alongside a previously unannounced $12.7 million Series A led by Union Square Ventures. Forerunner first gained traction by helping governments manage floodplains, and this new capital will help fuel its expansion into new areas such as infrastructure management, wildfire risk, and code enforcement.
All of this is unfolding as the Trump administration slashes staff at the Federal Emergency Management Agency, even as extreme weather events are becoming more frequent. The result is mounting pressure on state and local governments, who often still rely on fragmented, outdated systems to get a comprehensive view of their communities and the environmental hazards they face.
Carbon removal company Terradot has acquired the assets, intellectual property, projects, and removal contracts of one of its former competitors, Eion. Both are pursuing a method of carbon removal known as “enhanced rock weathering,” which accelerates the natural process by which CO2 in rainwater reacts with silicate rocks, forming a stable bicarbonate that can permanently lock away CO2 when it’s washed out to sea.
While typically this process takes thousands of years, spreading crushed minerals like basalt or olivine on agricultural fields can dramatically accelerate the process — though precise measurement and reporting remains a challenge. Terradot’s early projects have focused on basalt rocks in Brazil, whereas Eion operates in the U.S. doing olivine-based weathering. This deal could signal a forthcoming wave of mergers and acquisitions in the sector, where there’s a plethora of startups vying to commercialize novel methods of permanent carbon removal.