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Why the tech giant is so high on Heirloom Carbon
Microsoft is betting millions on the promise of some magic dust spread on a bunch of giant baking sheets stacked in 50-foot-tall towers to reverse the company's carbon emissions.
I’m being cheeky, but the truth is really not much more complicated than that.
Heirloom Carbon, a startup that has pioneered a method to absorb CO2 from the air using crushed rocks, just signed the tech giant to one of the biggest carbon removal deals to date. Microsoft has agreed to pay Heirloom to capture 315,000 metric tons of carbon from the atmosphere over 10 years. For a sense of scale, that’s equivalent to about 75% of the carbon Microsoft emitted in 2022 through its direct operations and energy usage. Neither company would disclose the price, but the Wall Street Journal estimated it would likely cost Microsoft a minimum of $200 million, “based on market prices,” or $635 per ton.
Climate scientists warn that we won’t be able to keep global warming in check solely by cutting emissions, no matter how rapidly the world acts to get off fossil fuels in the coming decades. Finding ways to pull what we’ve already emitted back out of the atmosphere and permanently sequester it can help balance out emissions from industries that might take longer to decarbonize, like aviation. In the long term, it could even cool the planet.
There are now hundreds of startups around the world racing to develop a variety of methods to do this. But many of them, including Heirloom, are still operating at a tiny scale, if they are even at the point of removing carbon at all. So this latest Microsoft deal stands out for signaling a high degree of confidence in Heirloom’s unique approach.
“Heirloom is quickly building a runway to low-cost CO2 removal at the gigaton scale,” a Microsoft spokesperson told me in an email. “This agreement accrues to our goal to become carbon negative by 2030 and remove our historic emissions by 2050.”
Heirloom harnesses the natural ability of minerals to absorb carbon from the atmosphere. The process starts with limestone, which is formed from the detritus of corals, clams, and other sea creatures that use the dissolved carbon and calcium in the ocean to build their shells. Heirloom grinds up limestone and does something that humans have been doing for thousands of years — heats it in a kiln. This loosens carbon dioxide from the rock, leaving behind calcium oxide, a white powder commonly called quicklime. The ancient Romans are believed to have done the same thing, using quicklime in the construction of many of their famous architectural marvels that are still standing today.
But Heirloom's modern kiln, which heats the limestone to about 1,650 degrees Fahrenheit, is electric, meaning it can run on renewable energy. Also, because no fuels are being combusted, the CO2 comes out in a pure gas stream that's easy to capture. Heirloom can either pump it permanently into underground wells, or inject it into long-lived products, like concrete.
This is only the first step. The real trick to Heirloom’s solution is what happens next. The leftover calcium oxide is “super thirsty for CO2,” the company's CEO Shashank Samala told me. “If you put that on your desk, it will start pulling out carbon.”
And that’s more or less what the company does. It spreads the powder on large trays stacked in 40- to 50-foot-tall towers, so that the maximum amount of surface area is exposed to the air. This, along with a proprietary bit of engineering that Heirloom has not disclosed, speeds up the material’s ability to absorb carbon even more. On your desk, it might take a year. In Heirloom's system, it takes a matter of days. Then the company pops the powder, which is now chemically similar to limestone, back into its kiln, and starts all over again.
Stacked trays of calcium oxide at Heirloom's research and development facility in Brisbane, California.Courtesy of Heirloom Carbon
It’s already been a big year for Heirloom. The company was selected by the Department of Energy to receive funding for a commercial-scale plant in Louisiana under the federal government’s $3.5 billion Direct Air Capture Hubs program. Heirloom will fulfill at least some of its contract with Microsoft at that facility, and has plans in the works to build a second plant as well.
Giana Amador, executive director of the Carbon Removal Alliance, an industry association, told me the deal with Microsoft illustrates this positive reinforcing loop that’s happening between the public sector and the private sector, helping the industry to scale faster. She wants to see the federal government do more to set standards around what high quality carbon removal looks like, in order to encourage more deals like this from companies that maybe want to purchase carbon removal, but can’t afford to hire whole teams to vet projects the way Microsoft can.
Samala emphasized that the deal is significant not only for its size but for what he called its “bankability.” It’s “take or pay,” meaning Microsoft has to pay up as long as Heirloom delivers on its end of the bargain. Even though no money is exchanging hands up front, Heirloom can take this binding contract showing a predictable, durable, revenue stream to the bank, and use it to secure financing at a much lower cost than it would otherwise get from a venture capital firm.
Right now, much of the nascent carbon removal industry is being supported by venture capital. One of the obstacles to financing projects is that nobody knows what the business model will ultimately look like. Will this be a public service, like waste disposal? A regulated requirement, where polluters are asked to pay? Something else? And in the meantime, how do you raise enough money to scale your idea up to where you can credibly sell it?
The Heirloom deal shows the industry is increasingly looking to replicate the experience of early wind and solar projects. This long-term contract is similar to a power purchase agreement, where wind and solar developers finance new projects by pre-selling the electricity to corporations like Google or Walmart at a set price.
At 315,000 tons over 10 years, this isn’t the biggest carbon removal deal to date, but it may be the biggest for such a fledgeling company. The oil giant Occidental, which is building a facility in Texas designed to suck 500,000 tons of carbon dioxide from the atmosphere per year, has pre-sold 400,000 tons’ worth of carbon removal credits, over four years, to the aircraft manufacturer Airbus. In May, a coalition of tech companies signed a 112,000-ton offtake agreement, over six years, with a small startup called Charm Industrial, for $53 million. Charm is working to turn agricultural waste into oil that can be pumped underground.
Microsoft was an early investor in Heirloom through its Climate Innovation Fund, providing some of the company’s Series A funding last year. “They’ve seen this in the front row seats as we made progress from pulling grams of CO2 from a Petri dish to pulling kilograms and hundreds of kilograms, to tons and hundreds of tons,” Samala told me when I asked what he thought gave Microsoft confidence in the deal.
Part of it was also showing them that this solution is modular, Samala said.
“It helps to see that okay, you just need to build more of these stacks, more of these trays. If you want to pull more carbon, you stack more trays and you put more stacks of trays around."
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A new list of Department of Energy grants slated for termination will hit clean energy and oil majors alike, including Exxon and Chevron.
A new list of Department of Energy grants slated for termination obtained by Heatmap reveals an additional 338 awards for clean energy projects that the agency intends to cancel. Combined with the 321 grants the agency said it was terminating last week, the total value is nearly $24 billion.
While last week’s announcement mostly targeted companies and institutions located in Democratic states, the new list appears to be indiscriminate. Conrad Schneider, the senior U.S. director at Clean Air Task Force, told me in a statement that the move “will have far-reaching consequences — with virtually no region unscathed.”
“The federal government plays an essential role in addressing gaps that stall the commercialization of energy breakthroughs by providing grants and loans to accelerate innovative projects,” he said. “By abruptly canceling funding for several hundred energy projects, the U.S. risks ceding American energy leadership and signals that U.S. innovation is not a priority.”
Some of the most significant new terminations on the list include:
While two of the seven hydrogen hubs — those in California and the Pacific Northwest — were on last week’s cancellations list, all seven have their status listed as “terminate” on this new list. That includes hubs that planned to make hydrogen from natural gas based in Appalachia, the Gulf Coast, Texas, and the Midwest.
Those awards came out of $8 billion allocated by Congress in the IIJA in 2021 to develop hubs where companies and states would work together to produce and test the use of cleaner hydrogen fuel in new industries. The move would hit oil majors in addition to green energy companies. Exxon and Chevron were partners on the Hyvelocity hydrogen hub on the Gulf Coast.
“If the program is dismantled, it could undermine the development of the domestic hydrogen industry,” Rachel Starr, the senior U.S. policy manager for hydrogen and transportation at Clean Air Task Force told me. “The U.S. will risk its leadership position on the global stage, both in terms of exporting a variety of transportation fuels that rely on hydrogen as a feedstock and in terms of technological development as other countries continue to fund and make progress on a variety of hydrogen production pathways and end uses."
The Inflation Reduction Act’s Domestic Manufacturing Conversion Grants, which were meant to support the conversion of shuttered or at-risk auto plants to be able to manufacture electric vehicles and their supply chains, would be fully obliterated based on the new list. All 13 grants that were awarded under the program are there, including $80 million for Blue Bird’s new electric school bus plant in Fort Valley, Georgia, $500 million for General Motors’ Grant River Assembly Plant in Lansing, Michigan, and $285 million for Mercedes-Benz’s next-generation electric van plant in Ladson, South Carolina.
Some of the other projects slated for termination raise questions about other projects from the same grant program that are not on the list. For example, a $45 million grant for the National Rural Electric Cooperative Association to deploy microgrids in seven communities shows up as terminated, along with several other awards made as part of the IIJA’s Energy Improvements in Rural or Remote Areas program. Grants for indigenous tribes in Alaska, Wisconsin, and throughout the Southwest from that program appear to be preserved, however.
A $9.8 million grant to Sparkz to build a first-of-its-kind battery-grade iron phosphate plant in West Virginia also makes an appearance. The award was made as part of a nearly $430 million funding round from the IIJA to accelerate domestic clean energy manufacturing in 15 former coal communities. Similar awards made to Anthro Energy in Louisville, Kentucky, Infinitum in Rockdale, Texas, Mainspring Energy in Coraopolis, Pennsylvania, and a company called MetOx International developing an advanced superconductor manufacturing facility in the Southeast appear to be safe.
When asked about the new list, DOE spokesperson Ben Dietderich told me by email that he couldn’t attest to its validity. He added that “no further determinations have been made at this time other than those previously announced,” referring to the earlier 321 cancellations.
A new list of grant cancellations obtained by Heatmap includes Climeworks and Heirloom projects funded by 2021 infrastructure law.
Trump’s Department of Energy is planning to terminate awards for the two major Direct Air Capture Hubs funded by the Bipartisan Infrastructure Law in Louisiana and Texas, Heatmap has learned.
An internal agency project list shared with Heatmap names nearly $24 billion worth of grants with their status designated as “terminated,” including the Occidental Petroleum’s South Texas DAC Hub as well as Project Cypress, a joint venture between DAC startups Heirloom and Climeworks.
Christoph Gebald, the CEO of Climeworks, acknowledged “market rumors” in an email, but said that the company is “prepared for all scenarios.”
“Demand for removals is increasing significantly, with momentum set to build as governments set their long-term targets,” he said. “The need for DAC is growing as the world falls short of its climate goals and we’re working to achieve the gigaton capacity that will be needed.”
Heirloom’s head of global policy, Vikrum Aiyer, said that the company was not aware of any decision from the DOE and continued “to productively engage with the administration in a project review.” He added that Heirloom remains “incredibly proud to stand shoulder to shoulder with Louisiana energy majors, workforce groups, non-profits, state leaders, the governor and economic development organizations who have strongly advocated for this project.”
Much of the rest of the list overlaps with the project terminations the agency announced last week as part of a spate of retributive actions against Democrats during the government shutdown. “Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being canceled,” White House Budget Director Russ Vought wrote on social media ahead of the announcement.
DOE spokesperson Ben Dietderich told me by email that the department was “unable to verify” the new list of canceled grants, and that “no further determinations have been made at this time other than those previously announced.”
“As [Secretary of Energy Chris Wright] made clear last week, the Department continues to conduct an individualized and thorough review of financial awards made by the previous administration,” Dietderich said.
Direct air capture is a nascent technology that sucks carbon, as the name suggests, directly from the air, and is one of several carbon removal solutions with potential to slow global warming in the near term, and even reverse it in the long run. The $3.5 billion DAC Hubs program, created by Congress in the 2021 Bipartisan Infrastructure Law, promised to “establish a new sector of the American economy and remake another one, while providing the world with an important tool to fight climate change,” as my colleague Robinson Meyer put it.
After a competitive application process, the Biden administration selected two projects that would receive up to $600 million each to build DAC projects capable of removing more than 1 million tons of carbon from the atmosphere per year and storing it permanently underground. Occidental, which first partnered with and later acquired a Canadian DAC startup called Carbon Engineering, would build its hub in South Texas, near Corpus Christi. Two other leading DAC startups, the California-based Heirloom Carbon and Swiss company Climeworks, would work together to build a hub in Louisiana. After the selections were announced, both projects received an initial $50 million award for their next phase of development, which was set to be matched by private investment.
"These hubs were selected through a rigorous and competitive process designed to identify projects capable of advancing U.S. leadership in carbon removal and industrial decarbonization,” Jennifer Wilcox, the former principal deputy assistant secretary for the DOE’s Office of Fossil Energy and Carbon Management, told me in an email. “The burden should be on DOE to clearly demonstrate why that process is being overturned.”
All three companies already have demonstration plants that are either operating or under construction. Climeworks began operating the world’s first commercial DAC plant in Iceland in 2021, designed to capture about 4,000 tons per year, and has since scaled up to a larger plant more than eight times that size. Heirloom opened the first DAC plant in the U.S. in November 2023, in Tracy, California, capable of capturing 1,000 tons per year. Occidental’s first DAC project, Stratos, in West Texas, will be the largest of the bunch, designed to capture 500,000 tons per year. It is set to be completed in the next few months.
Removing carbon from the air with one of these facilities is currently extremely expensive and energy-intensive. Today, companies pre-sell carbon credits to airlines and tech companies to raise money for the projects, but will likely require government support to continue to innovate and bring the cost down. While both Climeworks and Heirloom announced the sale of credits that would support their DAC hub projects, it’s not clear whether those credits were meant to be fulfilled by the projects themselves.
The DOE grants would have helped prove the viability of the technology at a scale that will make a measurable difference for the climate, while also demonstrating a potential off-ramp for oil companies and the economies they support. Both projects said they expected to create more than 2,000 local jobs in construction, operations, and maintenance.
“The United States, up to this point, was the direct air capture leader and the place where top innovators in the field were choosing to build facilities as well as manufacture the actual components of the units themselves,” Jack Andreasen Cavanaugh, a global fellow at the Columbia University’s Carbon Management Research Initiative, told me. “The cancellation of these grants to high-quality projects ensures that these American jobs will be shipped overseas and cede our broader economic advantage.”
That’s already happening. On the same day last week that the DOE announced it was terminating an award for CarbonCapture Inc., another California-based DAC company, the startup said it would move its first commercial pilot from Arizona to Alberta, Canada. Gebald, of Climeworks, said the company has “a pipeline of other DAC projects around the world,” including opportunities in Canada, the U.K., and Saudi Arabia.
Cavanaugh also pointed out there was a disconnect between the terminations, Congress’ recent actions, and even actions under the first Trump administration. Trump’s DOE revised the 45Q tax credit for carbon capture in 2018 to allow direct air capture projects to qualify. In July, the reconciliation bill preserved that credit and strengthened it. “These were bipartisan-supported projects, and it goes expressly against congressional intent.”
As the DAC hubs program was congressionally mandated and the awards were under contract, the companies may have legal recourse to fight the terminations. The press release from the DOE announcing last week’s terminations said that award recipients had 30 days to appeal the decision. “That process must be meaningful and transparent,” Wilcox said. “If DOE is invoking financial-viability criteria, companies and communities deserve to see the underlying metrics, thresholds, and justification — and to understand whether those criteria are being applied consistently across projects.”
While this isn’t a death knell for DAC in general, it will be a “massive setback for American climate and industrial policy”, Erin Burns, executive director of the carbon removal advocacy group Carbon 180, told me. “The need for carbon removal hasn’t changed. The science hasn’t changed. What’s changed is our political will, and we’ll feel the consequences for years to come.”
Editor’s note: This piece has been updated to add comment from the Department of Energy and to correct the total value of canceled grants.
On Trump’s metal nationalization spree, Tesla’s big pitch, and fusion’s challenges
Current conditions: King tides are raising ocean levels near Charleston, South Carolina, as much as eight feet above low water averages • A blizzard on Mount Everest has trapped hundreds of hikers and killed at least one • A depression that could form into Tropical Storm Jerry is strengthening in the Atlantic as it barrels northward with an unclear path.
Solar and wind outpaced the growth of global electricity demand in the first half of 2025, vaulting renewables toward overtaking coal worldwide for the first time on record, according to analysis published Tuesday by the research outfit Ember. This year’s growth resulted in a small overall decline in both coal and gas-fired power generation, with India and China seeing the most notable reductions, despite the United States and Europe ratcheting up fossil fuel usage. “We are seeing the first signs of a crucial turning point,” Malgorzata Wiatros-Motyka, a senior electricity analyst at Ember, said in a statement. “Solar and wind are now growing fast enough to meet the world’s growing appetite for electricity. This marks the beginning of a shift where clean power is keeping pace with demand growth.”
Wind and solar installations matched 109% of new global demand for power in the first half of 2025.Ember
That growth is projected to continue. Later on Tuesday morning, the International Energy Agency released its own report forecasting that renewable capacity will double over the next five years. Solar is predicted to make up 80% of that growth. But, factoring in the Trump administration’s policies, the forecast roughly cut in half previous projections for U.S. growth. Domestic opposition to renewables runs beyond the White House, too. Exclusive data gathered by Heatmap Pro and published in July showed that a fifth of U.S. counties now restrict development of renewables.
President Donald Trump signed an executive order Monday directing federal agencies to push forward with a controversial 211-mile mining road in Alaska designed to facilitate production of copper, zinc, gallium, and other critical minerals. The project, which the Biden administration halted last year over concerns for permafrost in the fast-warming region, has been at the center of a decadeslong legal battle. As part of the deal, the U.S. government will invest $35.6 million in Alaska’s Ambler Mining District, including taking a 10% stake in the main developer, Trilogy Metals, that includes warrants to buy an additional 7.5% of the company. The road itself will be jointly owned by the state, the federal government, and Alaska Native villages. “It’s a very, very big deal from the standpoint of minerals and energy,” Trump said in the Oval Office.
It’s just the latest stake the Trump administration has taken in a mineral company. In July, the Department of Defense became the largest shareholder of MP Materials, the company producing rare earths in the U.S. at its Mountain Pass mine in California. The move, The Economist noted at the time, marked the biggest American experiment in direct government ownership since the nationalization of the railroads in World War I. Last week, the Department of Energy renegotiated a loan to Lithium Americas’ Thacker Pass project in Nevada to take a stake in what’s set to become the largest lithium mine in the Western Hemisphere when it comes online in the next few years. The White House’s mineral shopping spree isn’t over. On Friday, Reuters reported that the administration is considering buying shares in Critical Metals, the company looking to develop rare earths production in Greenland. In response to the news, shares in the Nasdaq-traded miner surged 62% on Monday. Partial nationalization isn’t the only approach the administration is taking to challenging China’s grip over global mineral supplies. Last month, as I reported for Heatmap, the Defense Logistics Agency awarded money to Xerion, an Ohio startup devising a novel way to process cobalt and gallium.
Tesla looks poised to unveil a cheaper, stripped-down version of its Model Y as early as today. In one of two short videos posted to CEO Elon Musk’s X social media site, the electric automaker showed the midsize SUV’s signature lights beaming through the dark. The design matches what InsideEVs noted were likely images of the prototype spotted on a test drive in Texas. The second teaser video showed what appears to be a fast-spinning, Tesla-branded fan. “Your guess is as good as ours as to what will be revealed,” InsideEVs’ Andrei Nedelea wrote Monday. “Our money is on the Roadster or a new vacuum cleaner design to take on Dyson.”
The new products come amid an historic slump for Tesla. As Heatmap’s Matthew Zeitlin reported, the company’s share of the U.S. electric vehicle sales sank to their lowest-ever level in August despite the surge in purchases as Americans rushed to use the federal tax credits before they expired thanks to Trump’s landmark One Big Beautiful Bill Act law. Yet Musk has managed to steer the automaker’s financial fate through an attention-grabbing maneuver. Last month, the world’s richest man bought $1 billion in Tesla shares in a show of self confidence that managed to rebound the company’s stock price. But Andrew Moseman argued in Heatmap that “the bullish stock market performance is divorced not only from the reality of the company’s electric car sales, but also from, well, everything else that’s happened lately.”
On Monday, Trump warned that medium and heavy-duty trucks imported to the U.S. will face a 25% tariff starting on November 1. The president announced the trade levies in a post on Truth Social on the eve of a White House visit by Canadian Prime Minister Mark Carney, whose country would feel the pinch of tariffs on imported trucks. As the Financial Times noted, Trump had threatened to impose 25% tariffs on some trucks in late September but “failed to implement them, raising questions about his commitment to the policy.”
Fusion startups make a lot of bold claims about how soon a technology long dismissed as the energy source of tomorrow will be able to produce commercial electrons. Though investors are betting that, as Heatmap’s Katie Brigham wrote last year, “it is finally, possibly, almost time for fusion,” a new report from the University of Pennsylvania’s Kleinman Center for Energy Policy shows that supply chain challenges threaten to hold back the nascent industry even if it can bring laboratory breakthroughs to market. Tritium, one of two main fusion fuels, has a half life of just 12.3 years, meaning it does not exist in significant quantities in nature. Today, tritium is primarily produced by 30 pressurized heavy water fission reactors globally, but only at a total of 4 kilograms per year. As a result, “tritium availability could throttle fusion development,” the report found. That’s not the only bottleneck. “The fusion industry will require specialized components that don’t yet have well-established supply chains, like superconducting cables and the aforementioned advanced materials, and shortages of these components would delay development and inflate costs.”
Scientists mapped the RNA — the molecules that carry out DNA’s instructions — of wheat and, for the first time, identified when certain genes are active. The discovery promises to accelerate plant breeders’ efforts to develop more resilient varieties of the world’s most widely cultivated crop that use less fertilizer, resist higher temperatures, and survive with less water as the climate changes. “We discovered how groups of genes work together as regulatory networks to control gene expression,” Rachel Rusholme-Pilcher, the study’s lead author and a researcher at Britain’s Earlham Institute, said in a statement. “Our research allowed us to look at how these network connections differ between wheat varieties, revealing new sources of genetic diversity that could be critical in boosting the resilience of wheat.”