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Anything decarbonization-related is on the chopping block.

The Biden administration has shoveled money from the Inflation Reduction Act out the door as fast as possible this year, touting the many benefits all that cash has brought to Republican congressional districts. Many — in Washington, at think tanks and non-profits, among developers — have found in this a reason to be calm about the law’s fate. But this is incorrect. The IRA’s future as a climate law is in a far more precarious place than the Beltway conventional wisdom has so far suggested.
Shortly after the changing of the guard in Congress and the White House, policymakers will begin discussing whether to extend the Trump-era tax cuts, which expire at the end of 2025. If they opt to do so, they’ll try to find a way to pay for it — and if Republicans win big in the November elections, as recent polling and Democratic fretting suggests could happen, the IRA will be an easy target.
Yes, the law has created a ton of jobs in states and congressional districts controlled by Republicans. Sure, some in the GOP have moderated on climate and stopped denying the science behind the warming of our planet. Absolutely, the IRA is the kind of all-carrot and no-stick approach to energy that Republicans tend to like, and there would be legal and political challenges to accomplishing anything of consequence in today’s polarized and chaotic Congress.
But while some lawmakers may be evolving on climate, the broader GOP under Trump’s control has grown far more willing to spurn its pro-business past and give industries heartburn in pursuit of other ideological or cultural objectives.
“The Republican Party’s traditional views on climate and business are both changing and result in competing pressures,” Alex Flint, a longtime Senate Republican energy staffer, told me. Flint now runs the pro-business climate group Alliance for Market Solutions. “There is less climate denialism. And less support for business. So on the one hand, more Republicans are comfortable supporting climate policies like those in the IRA, but are less responsive to the businesses that want to defend those programs.”
What that means is that, in the event of a big GOP victory, anything impossible to fully repeal may be fiddled with, whether through legislative or administrative means. On top of all the energy and climate regulations that would be targeted in that event, the nation’s transition away from fossil fuels could lose significant federal policy tailwinds.
On the legislative side, there is already broad GOP support for: repealing the consumer electric vehicle and charging station benefits, nixing the methane fee, killing the national “green bank” program, and eliminating any money labeled “environmental justice.” Broader programs with immense importance to decarbonization such as the “clean electricity” investment and production tax credits could be diminished or gutted at the urging of the party’s rightward flank. (See: this GOP committee chair’s IRA repeal bill, which targeted the investment and production tax credits, specifically.)
Anything that cannot be repealed — as the Heritage Foundation’s Project 2025 instructs — Republicans will attempt to modify. Mike Faulkender, a former Trump official at the Treasury Department who is now chief economist for the America First Policy Institute, explained to me for an Axios story last October that if Trump wins, “We are going to review every rule, every notice, everything the administration has done in its implementation of that statute.” Demonstrating his seriousness, Faulkender also pointed to the IRA’s credit for carbon removal. “The dollar values on this are extraordinary … I would go through that statute and see how we, through the rulemaking process, can narrow it as much as possible.”
It is possible to take these threats with a grain of salt. Kimberly Clausing, a former Biden official for the Treasury Department, told me that while she can imagine “one or two elements” of the law being revisited if they’re political priorities, it would require “too many lawyer man-hours” to “justify that kind of wholescale implementation pivot.”
Industries would also lobby heavily to avoid their credits going away. Going after the tech-neutral ITC and PTC, for example, could spark an immense backlash among a swath of energy sectors Republicans do support, including nuclear energy. Same for incentives to advanced manufacturing. Not to mention there are substantial logistical realities to repealing the IRA or changing its programs, as with Obamacare in the past. Such an effort would require organizing GOP lawmakers at a time when infighting has undermined even seeming slam dunks like a ban on gas stove bans.
But seasoned political veterans and D.C. industry pros I spoke with for this story noted that Republicans may be more receptive to tweaking programs in a selective fashion, going after industries like solar and offshore wind that some have long-standing grievances with. For example, it may be too difficult to repeal the “tech-neutral” electricity credits in their entirety, but legislators could try to limit their reach for these less-favored sectors — as some have proposed doing for solar projects on farmland — in the name of saving the government money or helping other favored interests.
Energy lobbying veteran Frank Maisano put it to me this way: “Businesses will support many things that they have their tentacles into and Republicans will support many things that are going on in their districts that constituents like. The reality is, if you’re going to try to repeal it, you’re going to have to do it through Congress and a lot of the action in the energy transition is in Republican districts. It becomes a constituent issue.”
Or, in plain English: If it’s a successful project in a GOP constituent district and their specific voters like it, that will be what has the most sway.
That won’t stop Republicans from claiming that the renewable sector as a whole is flagging. In an interview with E&E News’ Kelsey Brugger, House Majority Leader Steve Scalise responded to the question of whether the jobs created by the IRA would put Republicans in a tough spot on repeal by — dubiously — downplaying the figures. “Overall, there haven’t been many projects built,” Scalise said. “We’re scrutinizing all of it.”
There’s a reason for this: It creates an opening to point to real market struggles (though possibly in a selective fashion) as a predicate for squeezing benefits to renewables. It’s easy to imagine a world where the impacts of tariffs on domestic solar or hurdles facing offshore wind are used as rationale for paring back credits and other federal supports. You might not be hearing much about this right now as the GOP is quietly letting Democrats knife themselves, but it’ll be worth watching the Republican National Convention next week to see if anyone spills the tea on plans for the IRA next year.
“Which of [these] forces prevail on any specific IRA program and on the totality of the IRA package is impossible to predict,” said Flint, “because members – Republicans who acknowledge the need to address climate – may be aligned with companies that receive those subsidies. But on the other hand, populists not closely aligned with business interests may be willing to criticize those programs without regard to their climate benefits. So what happens to climate policies and all of the IRA is a test case for the future of the Republican Party.”
Developers are starting to ask questions about the durability of IRA programs, Abigail Ross Hopper, president of the Solar Energy Industries Association, told me. Hopper’s optimistic that the marketplace will continue to favor solar. But she is clear-eyed about the risks ahead for certain aspects of the IRA – naming bonuses and the transferability of credits — that may not survive in their current form.
“People ask me all the time about, ‘How do I make educated opinions, not prognostications?’” she said. “There is this kind of built in uncertainty because of the partisanship that clean energy has unfortunately [had] imposed upon us … I am in agreement that the pace of decarb is going to be impacted by these elections and policy decisions. [But] I am not persuaded that we’re going to stop these efforts.”
To Hopper and others, at most risk is any unspent money or unused spending authority left over at agencies at the conclusion of Biden’s first term. Those supports face “probably the highest risk of clawback or not being spent,” she said.
Some agencies are still moving at a brisk pace that has reassured those in industry and advocacy spaces. The Treasury Department has signaled it may complete implementation of several key IRA credits — including the “clean electricity” investment and production tax credits — before Jan. 20, 2025. And the Environmental Protection Agency’s been quite successful at doling out dollars that would otherwise be targeted in a future GOP-controlled Congress, such as those the IRA provided for the Solar For All program and the green bank initiative. These dollars will live on independent of who remains president because once they’re given to states or nonprofits, those parties get to decide how to spend them.
But there are still billions that may wind up in Trump’s control should he win in November. One example is the Department of Energy’s home electrification rebates, which received $8.8 billion. Despite almost all states applying for at least some of the funding, per DOE’s own tracker, only five have been accepted, and only one – New York – had made those rebates available as of this week.
“I’m under the assumption that if it’s not going out in January 2025, then it’s not going out the door,” Harrison Godfrey, who works for energy policy shop Advanced Energy United, told me. “If the dollars get out the door, then the story of ‘25 is that regardless of who’s president, the states are in the driver’s seat.”
There are aspects of the IRA that could survive even a Republican trifecta. The law’s support for low-carbon fuels enjoys apparent bipartisan backing because of the lifeline it can offer corn-based ethanol as the federal renewable fuel standard wanes in relevance. And despite grousing about Biden’s implementation of the hydrogen tax credit, it’s easier to imagine industry lobbying for a rule change under Trump than it is a full-scale repeal of a credit that could be a boon to the oil and gas sector.
Meanwhile, the administration and other industry groups continue to sound an optimistic note.
“The Inflation Reduction Act credits have spurred a clean energy boom in communities across the country and markets have responded overwhelmingly,” Treasury spokesperson Michael Martinez told me in a statement. Jason Ryan, a spokesperson for American Clean Power, said that “with the new tax credits in place,” more than $488 billion investments have been announced, including new or expanded utility-scale manufacturing plants, and that “with over a third of those manufacturing facilities already up and running or under constructions, these numbers translate to real-world positive impacts.”
But even if some of the IRA remains, without regulations to drive demand for decarbonization solutions, its climate benefits would be substantially undermined. One must look only at research from Clausing and others, who found even a partial IRA repeal combined with weakened EPA regulations could significantly harm odds of meeting the current administration’s goal of slashing emissions in half by 2030.
In other words, deep breaths! It’s only four months until the election and six months until the tax conversation begins.
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Reflections on a rock ’n’ roll road trip.
I expected touring the whole country with my rock band could change me. I didn’t think it would shatter my understanding of the U.S. energy transition.
First, a quick word about myself for any Heatmap readers who may not know: Along with delivering you scoop after scoop, I’ve been writing and playing music as the front person of a band called Ekko Astral. Last fall, we had the privilege of touring the entire U.S. opening for two of my favorite rock acts, PUP and Jeff Rosenstock. The tour itself was immensely successful, with packed-out rooms full of thousands of screaming fans. Getting to play those stages was the culmination of a dream I’d had since playing guitar at age 11 at the local coffeeshop open-mic. It was awesome.
What I hadn’t considered about this cross-country rock n’ roll tour, however, was that it would take me through the fields of wind turbines and solar projects being built across the country that I’d reported on but mostly hadn’t seen in person.
Driving across the country with my band, I saw solar and wind projects in Wisconsin, Kansas, Arizona, and Idaho. One drive from Austin, Texas to Rozwell, New Mexico, sent me through a dizzying maze of wind farms in a western portion of the Lone Star State that surrounded my vehicle on all sides with spinning blades and transmission lines — and fracking rigs, because it was Texas. It felt like some sort of twisted, magnificent energy wonk video game level.
I also drove through myriad pockets of rural America where companies have been fighting tooth-and-nail to build utility-scale renewable energy and sometimes losing to hardened opposition. I drove through open fields and farmland in the Midwest and the Great Plains, for example, including places where building solar or wind is banned outright. I drove straight through the part of central Idaho where Lava Ridge, once the largest wind farm in the country, would have been built this year if not for Donald Trump. Sure, there were counties where I could understand wanting to avoid solar farms on farmland, or wind turbines cluttering more picturesque vistas. But I can’t tell you how many times I looked out the window of my vehicle and thought, Why isn’t this a solar farm? There’s no one here!
At the same time, I was trapped in my own form of climate hypocrisy, touring the country in a gas-powered Ford Transit van. I kept longing for us to have the capacity to tour by electric van. But setting aside the limited availability of electric vans for touring purposes, the sheer logistical requirements of going electric would be difficult for any touring band. Music venues do not always have reliable charging access, and calculating when and how to charge the van on our tour probably would’ve made already time-limited logistics impossible. Sure, Ed Sheeran might be able to do it, but not an up-and-coming band on a budget.
To make matters more frustrating, it turns out band merch isn’t great for the planet. Yes, you can choose greener materials for T-shirts and record packaging, but vinyl records are produced with petrochemicals. Cleaner alternatives, known as biovinyl, have been tried but can have serious quality issues (see: the Billie Eilish experiment). Then add in the shipping required to get multiple rush orders of shirts dropped in random spots across the country and, well, you’re looking at quite a lot of potential carbon emissions.
One day, late in the tour, I walked off stage in Salt Lake City and opened my phone to a text from a source notifying me that Esmeralda 7 — the largest solar project in the U.S. — had been killed. I wrote the piece, then went back to selling more copies of Ekko Astral songs printed onto petroleum discs.
All of this made me feel angry and helpless. By the time the tour ended I wasn’t quite a doomer, but I was tired, and my views on climate action had changed in three important ways.
First, we need to rethink what kind of “permitting reform” is necessary for the energy transition. After driving through so many open areas with so little economic development and no new renewable energy generation, I no longer think that changing federal environmental laws will make much of a difference, except to make more polluting forms of energy more economical. The permitting issues delaying projects in these places are, as I have reported for Heatmap, sometimes caused by people on social media who are manipulating a decline in civil engagement and participation in municipal government to block energy projects they personally dislike, even when the developments enjoy broad community support.
This is not a federal permitting problem, it’s a local one. But national politicians could help mitigate this issue if they really wanted to. New gas pipelines need approval from just one entity — the Federal Energy Regulatory Commission — but transmission lines have to cross all the Ts with every state agency along their path. Lawmakers trying to rectify that problem should also turn their attention to the local moratoria and restrictive ordinances holding up what Heatmap Pro data shows is more than a thousand renewable energy and battery storage projects across the country. I do not know what the specific policy solution is here, but we need policy experts to start coming up with ideas.
Second, I believe that artists need to practice what we preach.
In the wake of my tour, I’ve found myself daydreaming about what a true climate-friendly tour would look like, and have spoken with fellow musicians — and climate wonks — about how to make it happen. Maybe one day I will commandeer an electric vehicle and bring only enough gear to play music off the battery in the car. Or perhaps I will put on an outdoor concert run entirely on renewable-powered generators, as the band Massive Attack did earlier this year, claiming it slashed most of the emissions from their performance. In any case, these forms of radical thinking will be crucial because culture is upstream of politics, and art is the soundtrack that defines action.
Lastly, I think more of us need to go out and see the rest of our world, because it’s frustrating it took me a rock n’ roll tour to see what was right there this whole time: the frustratingly slow pace of progress.
I’m used to hearing from all sides that renewable energy deployment in the U.S. is moving at a rapid clip, even in spite of Trump’s rise to power. Nearly half of all new power coming online this year is going to be solar and wind. Battery manufacturing investments continue to be a bright spot. Carbon emissions are going down, albeit slowly. All of this is nice to hear, but I just traveled the whole country and it didn’t feel like I was seeing or feeling the transition that is supposedly underway.
This country has a lot of potential. I want to see us go so much further towards a greener electric grid, transportation system, and arts community.
Because you never know what’s going to take off.
Not even 12 months of unceasingly bleak climate news could keep climate tech founders and funders from getting involved in some seriously sci-fi sounding ideas. While the first half of the year may have been defined by a general retrenchment, the great thing about about early-stage venture capital is that it very much still allows for — nay, encourages — the consideration of technologies so far beyond the mainstream that their viability is almost entirely untethered from current political sentiment.
Below are seven of the most fantastical technologies investors took a bet on this year, with almost all announced in just the past quarter alone. In an undeniably rough year for the sector, perhaps VCs are now ready to let their imaginations — and pocketbooks — run just a little bit wilder.
In November, the startup Terranova emerged from stealth with $7 million in seed funding and a plan to lift low-lying areas out of flood zones by deploying robots to inject a wood-based slurry deep underground, thereby raising the land above sea level. The lead investors were Outlander and Congruent Ventures.
“Terranova’s mission is nothing less than to terraform the earth and usher in a new era of resilience and societal abundance,” Terranova’s 24-year old CEO Laurence Allen said in a press release. He cofounded the company with his father, Trip Allen, who lives in the flood-prone Bay Area city of San Rafael.
The company says that its system, which consists of three robots and one “mothership,” can lift one acre by a foot per day, making it more cost-effective than other options for defending against climate change-driven flood risk, such as building a levee or a sea wall. Already the startup has quoted San Rafael $92 million to lift about 240 acres of land about four feet.
Not one, but two space-based solar companies made headlines this year. Just this month, Overview Energy emerged from stealth with plans to deploy satellites that beam energy via lasers directly to Earth, targeting preexisting utility-scale solar farms. The company has already raised $20 million in seed funding in a round led by Lowercarbon Capital, Prime Movers Lab, and Engine Ventures, and is now raising a Series A expected to close next spring.
Back in April, another space-based solar startup called Aetherflux raised a $50 million Series A led by Index Ventures and Interlagos. That funding will support the startup’s first launch, targeted for next year, which will deploy a constellation of satellites into low-earth orbit — a far lower altitude than Overview is targeting. These satellites will also use lasers to transmit solar energy to ground stations on Earth, where the power will be stored in batteries for later use.
If these companies can prove that their tech actually works in space, they have the potential to turn solar into an always available, 24/7 resource. That’s not going to happen in the next few years, though. Overview’s CEO Marce Berte told me that the company is aiming to put megawatts of power on the grid by 2030 and gigawatts by the mid-2030s, with the ultimate goal of building a system that can deliver the equivalent of 10% to 20% of global electricity use by 2050.
Did you know that low-frequency sound waves can extinguish a fire? It’s a relatively well-understood phenomenon, but now one company, Sonic Fire Tech, has raised $3.5 million to turn this hypothetical concept into a commercial firefighting tool. With a seed round co-led by Khosla Ventures, Third Sphere, and AirAngels, the startup hopes to launch pilots with homeowners, utilities, and firefighting agencies at the beginning of next year.
As Scientific American explained, the system emits low-frequency sound waves below the threshold of human hearing, which prevent and extinguish flames by displacing oxygen away from the fuel. This deprives a potential or existing fire of the air it needs to sustain combustion. The system can channel the soundwaves through ducts atop a building’s roof and beneath its eaves, or be installed on utility equipment. There’s even the potential for a “sonic backpack,” which would offer portable protection for firefighters.
The startup’s goal is to produce 500 units by the second quarter of next year, and it’s now seeking public-sector grant funding as well as partnerships with insurance companies for its novel “infrasound-based fire suppression.”
My colleague Robinson Meyer broke the news in October that an Israeli geoengineering startup called Stardust Solutions had raised a $60 million round led by Lowercarbon Capital. The company aims to develop tech that would enable solar radiation management — an as-of-now hypothetical method of cooling the planet by injecting aerosols into the stratosphere to reflect sunlight away from Earth — by the end of the decade.
The tech is controversial, however. Many experts believe that solar radiation management systems, if they’re developed at all, should be built by governments after much public deliberation. Stardust, by contrast, is a for-profit company seeking patent protection for its proprietary sunlight-reflecting particle. While the company says that the particle meets certain standards for safety and reflectivity, it has not disclosed what those standards are or anything about its composition.
The company’s CEO, Yanai Yedvab, said that Stardust is farther along than any other research efforts, public or private. And while some dispute the viability of Stardust’s proprietary particle, the fact that the company received a vote of confidence from a prominent climate tech VC indicates that this tech is entering the mainstream. As Rob put it, “Stardust may not play the Prometheus here and bring this particular capability into humanity’s hands. But I have never been so certain that someone will try in our lifetimes.”
Though climate tech investors have poured millions into the long-held dream of fusion energy, we’re likely still a long ways away from connecting a commercial reactor to the grid. But one startup, Maritime Fusion, is already looking to put fusion reactors on ships. The company raised a $4.5 million seed round last month led by the transportation firm Trucks VC to do just that.
The startup is developing a low power-density tokamak reactor that requires less power and less uptime than grid-connected power systems. According to TechCrunch, the startup projects that its first reactor will be up and running by 2032 and will cost about $1.1 billion to build, a far lower price than reactors on land will likely command. Another potential advantage is that at sea, fusion won’t have to compete with low-cost solar and wind resources, but rather more costly green shipping fuels such as ammonia and hydrogen.
"Breakeven fusion is on the horizon, but the grid may not be the first place fusion achieves commercial success," said Maritime Fusion’s CEO Justin Cohen in a press release.
Even with the rapid rise in grid-scale batteries, pumped storage hydropower still leads the world in total energy storage capacity. But traditional pumped hydro is costly to build and only feasible in specific geographies. One startup, Sizeable Energy, thinks it can overcome these constraints by building pumped hydro out at sea, raising $8 million in a round led by Playground Global to do so.
Traditional pumped-hydro systems store energy by using excess electricity to pump water into an elevated reservoir, then releasing it downhill through turbines when demand rises. Sizeable’s concept is the same, just offshore: One reservoir floats on the water’s surface, while the other — connected by a pipe and turbines — sits on the seafloor. When power is plentiful, brine is pumped into the upper reservoir; when it’s scarce, the brine gets released. And because that brine is heavier than the surrounding seawater, it naturally flows downwards to spin turbines.
Sizable is now working to deploy its pilot plant in Italy, with the goal of installing commercial projects at a variety of sites around the world next year.
This one’s a bit of a bonus. Technically Deep Fission, a startup planning to build tiny fission reactors in underground boreholes, raised its pre-seed round last year, But this year it went public via a curious SPAC merger on the lesser-known stock exchange OTCQB, raising $30 million in the process.
The idea is that building a reactor a mile underground will save costs and enhance safety, as it negates the need for the large pressure vessels and containment structures that are typically responsible for holding a reactor in place and preventing radioactive leaks. Instead, the company says that the surrounding rock will serve as a natural barrier and containment vessel.
But as Latitude Media pointed out, some are questioning whether the recent raise will be enough for the company to build what’s sure to be an expensive pilot by next July — as it aims to do — and to deploy reactors at the three project sites that it’s already announced. Next year certainly promises to be a reckoning for the hitherto unconsidered fortunes of the underground small modular reactor industry.
Microsoft dominated this year.
It’s been a quiet year for carbon dioxide removal, the nascent industry trying to lower the concentration of carbon already trapped in the atmosphere.
After a stretch as the hottest thing in climate tech, the CDR hype cycle has died down. 2025 saw fewer investments and fewer big projects or new companies announced.
This story isn’t immediately apparent if you look at the sales data for carbon removal credits, which paints 2025 as a year of breakout growth. CDR companies sold nearly 30 million tons of carbon removal, according to the leading industry database, CDR.fyi — more than three times the amount sold in 2024. But that topline number hides a more troubling reality — about 90% of those credits were bought by a single company: Microsoft.
If you exclude Microsoft, the total volume of carbon removal purchased this year actually declined by about 100,000 tons. This buyer concentration is the continuation of a trend CDR.fyi observed in its 2024 Year In Review report, although non-Microsoft sales had grown a bit that year compared to 2023.
Trump’s crusade against climate action has likely played a role in the market stasis of this year. Under the Biden administration, federal investment in carbon removal research, development, and deployment grew to new heights. Biden’s Securities and Exchange Commission was also getting ready to require large companies to disclose their greenhouse gas emissions and climate targets, a move that many expected to increase demand for carbon credits. But Trump’s SEC scrapped the rule, and his agency heads have canceled most of the planned investments. (At the time of publication, the two direct air capture projects that Biden’s Department of Energy selected to receive up to $1.2 billion have not yet had their contracts officially terminated, despite both showing up on a leaked list of DOE grant cancellations in October.)
Trump’s overall posture on climate change reduced pressure on companies to act, which probably contributed to there being fewer new buyers entering the carbon removal market, Robert Hoglund, a carbon removal advisor who co-founded CDR.fyi, told me. “I heard several companies say that, yeah, we wouldn't have been able to do this commitment this year. We're glad that we made it several years ago,” he told me.
Kyle Harrison, a carbon markets analyst at BloombergNEF, told me he didn’t view Microsoft’s dominance in the market as a bad sign. In the early days of corporate wind and solar energy contracts, he said, Microsoft, Google, and Amazon were the only ones signing deals, which raised similar questions about the sustainability of the market. “But what it did is it created a blueprint for how you sign these deals and make these nascent technologies more financeable, and then it brings down the cost, and then all of a sudden, you start to get a second generation of companies that start to sign these deals.”
Harrison expects the market to see slower growth in the coming years until either carbon removal companies are able to bring down costs or a more reliable regulatory signal puts pressure on buyers.
Governments in Europe and the United Kingdom introduced a few weak-ish signals this year. The European Union continued to advance a government certification program for carbon removal and expects to finalize methodologies for several CDR methods in 2026. That government stamp of approval may give potential buyers more confidence in the market.
The EU also announced plans to set up a carbon removal “buyers’ club” next year to spur more demand for CDR by pooling and coordinating procurement, although the proposal is light on detail. There were similar developments in the United Kingdom, which announced a new “contract for differences” policy through which the government would finance early-stage direct air capture and bioenergy with carbon capture projects.
A stronger signal, though, could eventually come from places with mandatory emissions cap and trade policies, such as California, Japan, China, the European Union, or the United Kingdom. California already allows companies to use carbon removal credits for compliance with its cap and invest program. The U.K. plans to begin integrating CDR into its scheme in 2029, and the EU and Japan are considering when and how to do the same.
Giana Amador, the executive director of the U.S.-based Carbon Removal Alliance, told me these demand pulls were extremely important. “It tells investors, if you invest in this today, in 10 years, companies will be able to access those markets,” she said.
At the same time, carbon removal companies are not going to be competitive in any of these markets until carbon trades at a substantially higher price, or until companies can make carbon removal less expensive. “We need to both figure out how we can drive down the cost of carbon removal and how to make these carbon removal solutions more effective, and really kind of hone the technology. Those are what is going to unlock demand in the future,” she said.
There’s certainly some progress being made on that front. This year saw more real-world deployments and field tests. Whereas a few years ago, the state of knowledge about various carbon removal methods was based on academic studies of modeling exercises or lab experiments, now there’s starting to be a lot more real-world data. “For me, that is the most important thing that we have seen — continued learning,” Hoglund said.
There’s also been a lot more international interest in the sector. “It feels like there’s this global competition building about what country will be the leader in the industry,” Ben Rubin, the executive director of the Carbon Business Council, told me.
There’s another somewhat deceptive trend in the year’s carbon removal data: The market also appeared to be highly concentrated within one carbon removal method — 75% of Microsoft’s purchases, and 70% of the total sales tracked by CDR.fyi, were credits for bioenergy with carbon capture, where biomass is burned for energy and the resulting emissions are captured and stored. Despite making up the largest volume of credits, however, these were actually just a rare few deals. “It’s the least common method,” Hoglund said.
Companies reported delivering about 450,000 tons of carbon removal this year, according to CDR.fyi’s data, bringing the cumulative total to over 1 million tons to date. Some 80% of the total came from biochar projects, but the remaining deliveries run the gamut of carbon removal methods, including ocean-based techniques and enhanced rock weathering.
Amador predicted that in the near-term, we may see increased buying from the tech sector, as the growth of artificial intelligence and power-hungry data centers sets those companies’ further back on their climate commitments. She’s also optimistic about a growing trend of exploring “industrial integrations” — basically incorporating carbon removal into existing industrial processes such as municipal waste management, agricultural operations, wastewater treatment, mining, and pulp and paper factories. “I think that's something that we'll see a spotlight on next year,” she said.
Another place that may help unlock demand is the Science Based Targets initiative, a nonprofit that develops voluntary standards for corporate climate action. The group has been in the process of revising its Net-Zero Standard, which will give companies more direction about what role carbon removal should play in their sustainability strategies.
The question is whether any of these policy developments will come soon enough or be significant enough to sustain this capital-intensive, immature industry long enough for it to prove its utility. Investment in the industry has been predicated on the idea that demand for carbon removal will grow, Hoglund told me. If growth continues at the pace we saw this year, it’s going to get a lot harder for startups to raise their series B or C.
“When you can't raise that, and you haven't sold enough to keep yourself afloat, then you go out of business,” he said. “I would expect quite a few companies to go out of business in 2026.”
Hoglund was quick to qualify his dire prediction, however, adding that these were normal growing pains for any industry and shouldn’t be viewed as a sign of failure. “It could be interpreted that way, and the vibe may shift, especially if you see a lot of the prolific companies come down,” he said. “But it’s natural. I think that’s something we should be prepared for and not panic about.”