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Instead of rocket fuel, they’re burning biomass.

Arbor Energy might have the flashiest origin story in cleantech.
After the company’s CEO, Brad Hartwig, left SpaceX in 2018, he attempted to craft the ideal resume for a future astronaut, his dream career. He joined the California Air National Guard, worked as a test pilot at the now-defunct electric aviation startup Kitty Hawk, and participated in volunteer search and rescue missions in the Bay Area, which gave him a front row seat to the devastating effects of wildfires in Northern California.
That experience changed everything. “I decided I actually really like planet Earth,” Hartwig told me, “and I wanted to focus my career instead on preserving it, rather than trying to leave it.” So he rallied a bunch of his former rocket engineer colleagues to repurpose technology they pioneered at SpaceX to build a biomass-fueled, carbon negative power source that’s supposedly about ten times smaller, twice as efficient, and eventually, one-third the cost of the industry standard for this type of plant.
Take that, all you founders humble-bragging about starting in a dingy garage.
“It’s not new science, per se,” Hartwig told me. The goal of this type of tech, called bioenergy with carbon capture and storage, is to combine biomass-based energy generation with carbon dioxide removal to achieve net negative emissions. Sounds like a dream, but actually producing power or heat from this process has so far proven too expensive to really make sense. There are only a few so-called BECCS facilities operating in the U.S. today, and they’re all just ethanol fuel refineries with carbon capture and storage technology tacked on.
But the advances in 3D printing and computer modeling that allowed the SpaceX team to build an increasingly simple and cheap rocket engine have allowed Arbor to move quickly into this new market, Hartwig explained. “A lot of the technology that we had really pioneered over the last decade — in reactor design, combustion devices, turbo machinery, all for rocket propulsion — all that technology has really quite immediate application in this space of biomass conversion and power generation.”
Arbor’s method is poised to be a whole lot sleeker and cheaper than the BECCS plants of today, enabling both more carbon sequestration and actual electricity production, all by utilizing what Hartwig fondly refers to as a “vegetarian rocket engine.” Because there’s no air in space, astronauts have to bring pure oxygen onboard, which the rocket engines use to burn fuel and propel themselves into the stratosphere and beyond. Arbor simply subs out the rocket fuel for biomass. When that biomass is combusted with pure oxygen, the resulting exhaust consists of just CO2 and water. As the exhaust cools, the water condenses out, and what’s left is a stream of pure carbon dioxide that’s ready to be injected deep underground for permanent storage. All of the energy required to operate Arbor’s system is generated by the biomass combustion itself.
“Arbor is the first to bring forward a technology that can provide clean baseload energy in a very compact form,” Clea Kolster, a partner and Head of Science at Lowercarbon Capital told me. Lowercarbon is an investor in Arbor, alongside other climate tech-focused venture capital firms including Gigascale Capital and Voyager Ventures, but the company has not yet disclosed how much it’s raised.
Last month, Arbor signed a deal with Microsoft to deliver 25,000 tons of permanent carbon dioxide removal to the tech giant starting in 2027, when the startup’s first commercial project is expected to come online. As a part of the deal, Arbor will also generate 5 megawatts of clean electricity per year, enough to power about 4,000 U.S. homes. And just a few days ago, the Department of Energy announced that Arbor is one of 11 projects to receive a combined total of $58.5 million to help develop the domestic carbon removal industry.
Arbor’s current plan is to source biomass from forestry waste, much of which is generated by forest thinning operations intended to prevent destructive wildfires. Hartwig told me that for every ton of organic waste, Arbor can produce about one megawatt hour of electricity, which is in line with current efficiency standards, plus about 1.8 tons of carbon removal. “We look at being as efficient, if not a little more efficient than a traditional bioenergy power plant that does not have carbon capture on it,” he explained.
The company’s carbon removal price targets are also extremely competitive — in the $50 to $100 per ton range, Hartwig said. Compare that to something like direct air capture, which today exceeds $600 per ton, or enhanced rock weathering, which is usually upwards of $300 per ton. “The power and carbon removal they can offer comes at prices that meet nearly unlimited demand,” Mike Schroepfer, the founder of Gigascale Capital and former CTO of Meta, told me via email. Arbor benefits from the fact that the electricity it produces and sells can help offset the cost of the carbon removal, and vice versa. So if the company succeeds in hitting its cost and efficiency targets, Hartwig said, this “quickly becomes a case for, why wouldn’t you just deploy these everywhere?”
Initial customers will likely be (no surprise here) the Microsofts, Googles and Metas of the world — hyperscalers with growing data center needs and ambitious emissions targets. “What Arbor unlocks is basically the ability for hyperscalers to stop needing to sacrifice their net zero goals for AI,” Kolster told me. And instead of languishing in the interminable grid interconnection queue, Hartwig said that providing power directly to customers could ensure rapid, early deployment. “We see it as being quicker to power behind-the-meter applications, because you don’t have to go through the process of connecting to the grid,” he told me. Long-term though, he said grid connection will be vital, since Arbor can provide baseload power whereas intermittent renewables cannot.
All of this could serve as a much cheaper alternative, to say, re-opening shuttered nuclear facilities, as Microsoft also recently committed to doing at Three Mile Island. “It’s great, we should be doing that,” Kolster said of this nuclear deal, “but there’s actually a limited pool of options to do that, and unfortunately, there is still community pushback.”
Currently, Arbor is working to build out its pilot plant in San Bernardino, California, which Hartwig told me will turn on this December. And by 2030, the company plans to have its first commercial plant operating at scale, generating 100 megawatts of electricity while removing nearly 2 megatons of CO2 every year. “To put it in perspective: In 2023, the U.S. added roughly 9 gigawatts of gas power to the grid, which generates 18 to 23 megatons of CO2 a year,” Schroepfer wrote to me. So having just one Arbor facility removing 2 megatons would make a real dent. The first plant will be located in Louisiana, where Arbor will also be working with an as-yet-unnamed partner to do the carbon storage.
The company’s carbon credits will be verified with the credit certification platform Isometric, which is also backed by Lowercarbon and thought to have the most stringent standards in the industry. Hartwig told me that Arbor worked hand-in-hand with Isometric to develop the protocol for “biogenic carbon capture and storage,” as the company is the first Isometric-approved supplier to use this standard.
But Hartwig also said that government support hasn’t yet caught up to the tech’s potential. While the Inflation Reduction Act provides direct air capture companies with $180 per ton of carbon dioxide removed, technology such as Arbor’s only qualifies for $85 per ton. It’s not nothing — more than the zero dollars enhanced rock weathering companies such as Lithos or bio-oil sequestration companies such as Charm are getting. “But at the same time, we’re treated the same as if we’re sequestering CO2 emissions from a natural gas plant or a coal plant,” Hartwig told me, as opposed to getting paid for actual CO2 removal.
“I think we are definitely going to need government procurement or involvement to actually hit one, five, 10 gigatons per year of carbon removal,” Hartwig said. Globally, scientists estimate that we’ll need up to 10 gigatons of annual CO2 removal by 2050 in order to limit global warming to 1.5 degrees Celsius. “Even at $100 per ton, 10 gigatons of carbon removal is still a pretty hefty price tag,” Hartwig told me. A $1 trillion price tag, to be exact. “We definitely need more players than just Microsoft.”
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Current conditions: Tropical Depression Two strengthened into Tropical Storm Bertha yesterday, recycling the name of the 1996 Atlantic hurricane season’s first major storm • Floods from the monsoon season killed at least four people in Vietnam and left as many missing • Lightning in Utah sparked the state’s latest wildfire, the Meeks Fire, near the Strawberry Reservoir.
President Donald Trump’s on-again, off-again feud with America’s northern neighbor is, as of Monday, back on again. The White House imposed 50% tariffs on most Canadian goods, accusing the nation’s geographically nearest ally and closest cultural bedfellow of unfairly discriminating against American automotives, alcohol, and dairy products. The move threatens to unleash what the Associated Press called “a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return” to office.
In its announcement, the Trump administration said the new tariffs would “apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement,” referring to the Trump-negotiated North American free trade agreement, which the U.S. opted this month not to renew. This struck my colleague Robinson Meyer as ominous. “If the White House now thinks it can levy taxes despite that pact,” he wrote in yesterday’s Heatmap Daily newsletter, “then the risks for Ford, General Motors, and their suppliers have increased.”
Perhaps the only thing growing faster than voters’ antipathy toward data centers is the market’s desire for more of them. Demand for data centers is ballooning at such a rapid clip that BloombergNEF just raised its total forecast for 2035 by a jaw-dropping 83%. The latest data outlining the best-case scenario from the energy consultancy, released Tuesday morning, shows the total installed capacity of U.S. data centers reaching 194 gigawatts in the next nine years. The surge reflects how quickly new server farms are flowing into the project pipeline. In a bid to hedge against the continued expansion, BNEF created a new scenario based on the implied power demand of forecast shipments of microchips for AI computers up to 2033. This scenario implies an even greater need for power: 229 gigawatts of demand from data centers in just the next seven years. And that doesn’t count the continued growth of demand from data centers carrying out non-AI functions, such as traditional cloud computing workloads. This comes as the latest Heatmap Pro polling shows that seven in 10 Americans now oppose data centers in their backyard, a marked shift from last September, when the same survey showed voters evenly split in support and opposition.
That ballooning demand is already showing up in power markets. Of the $16.4 billion in charges from PJM Interconnection’s most recent capacity auction, $6.3 billion — some 38% — stems from data centers. That’s what Joseph Bowring, president of PJM’s independent market monitor Monitoring Analytics, told Utility Dive last week. In the last four base capacity auctions the nation’s largest grid operator held, 46% of capacity charges were driven by data centers. “PJM is continuing to act like it’s business as usual,” Bowring told the trade publication Friday. “You have to open your eyes and recognize that it is really a paradigm shift, and failing to do that imposes costs on other customers.”

On a logical level, it’s a simple supply and demand problem. The supply of electricity is not growing as quickly as demand, all while the Trump administration eliminates subsidies that once buoyed investments in new supply. As a result, corporate electricity deals look poised to increase in price. But not for every generating source. New estimates from LevelTen, a marketplace for power purchase agreements, found that solar PPAs were 5% cheaper in the second quarter of this year compared to the first quarter. In a piece by my colleague Matthew Zeitlin, LevelTen attributed the decline to an especially steep drop in prices in California’s electricity market. Excluding CAISO, solar PPA prices nationwide dropped slightly less than 2%. While hyperscalers are still buying solar, LevelTen found that commercial and industrial buyers are pulling back, creating a “continued softening in the market’s buy-side.” “We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told Matthew.
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Ah, Germany. The land of the Autobahn. Diesel-powered industry. The purring engines of BMWs, Porsches, and Mercedes-Benzes. The nation’s automotive might makes its latest milestone particularly important: Electric vehicles just outsold gas and diesel cars for the first time. New data from the Federal Motor Transport Authority shows that Germans registered 84,057 new electric vehicles in June, a more than 78% year-over-year increase. Traditional hybrids, meanwhile, saw 83,315 registrations, followed by gasoline-powered cars with 60,796, diesel with 33,862, and plug-in hybrids with 32,212. “The automotive history books will need a new page sooner rather than later, after electric cars outsold every other fuel type in Germany for the first time,” InsideEVs reporter Iulian Dnistran wrote. “It’s a huge shift in Europe’s biggest car market, which has traditionally been associated with diesel-powered cars that could travel hundreds of miles at highway speeds without breaking a sweat.” The Tesla Model Y was by far the best-selling EV in Germany, with nearly twice as many registrations as the No. 2 vehicle, the Volkswagen ID.3.
Putting on my Mesopotamian metal merchant hat again: Copper prices are back up. The price of the metal needed for virtually all electrical infrastructure rose 1.3% to just under $14,000 per metric ton, according to Mining.com. The price ultimately hovered at the red metal’s record set in early June. The spike stems from data showing rising tightness in the Chinese market, namely a hike in the premium buyers will pay in Shanghai for shipments of the metal. The price hiked further after a series of storms halted production in Chile for a few days.
While the West dithers on hydrogen, China is making huge strides. It already may be too late to catch up to Beijing on manufacturing the key machinery needed to produce the zero-carbon fuel. The latest data point, via Hydrogen Insight: China just shipped its largest electrolyzer order yet to Europe, via Romania.
A new report from LevelTen Energy shows that advance purchase prices are down for solar but up for wind.
The renewables market is in a state of flux. On the one hand, the tax credits that were a key pillar of wind and solar project financing have started to expire, while the race to be up and running in time to claim those that remain is on.
At the same time the renewables industry is getting whacked by federal tax policy, it’s also getting a shot in the arm from hyperscalers and data center developers, many of whom are hungry for power that can be deployed quickly to the grid and complies with their clean energy pledges.
“There’s a massive onslaught of demand, not enough supply to meet that demand and then Trump’s administration effort to slow down certain types of supply,” Jon Powers, the president of solar and storage developer CleanCapital, told me, describing how data center buyers are snapping up whatever power they can.
So what does this mean for pricing in the market? LevelTen, a marketplace for power purchase agreements, looked at the data and, in a report released Tuesday, found that solar PPAs were almost 5% cheaper in the second quarter of this year compared to the first quarter.
LevelTen attributed this decline in part to an especially steep drop in prices in CAISO, the California electricity market; excluding CAISO, solar PPA prices dropped slightly less than 2%. And while those hyperscalers are still buying, LevelTen found, other commercial and industrial customers are pulling back — what the analysts described as a “continued softening in the market’s buy-side.”
“We saw a lot less corporate energy buyers in the space in 2025 — 40% less — and that is just due to the increase of hyperscalers and data centers getting projects and snapping them up quickly,” Sarah Wolf, LevelTen’s director of North American transactions, told me.
To explain California specifically, Wolf said that the market there tends to be more volatile than in the rest of the country due to the expense and regulatory hurdles to development. With fewer new projects coming online, especially as compared to a larger, more light-touch market like Texas, individual project pricing can swing average prices more.
The tax credit cliff is “creating this very competitive atmosphere, where buyers are feeling like — in order to safe harbor their equipment, to keep on the development timelines that they have — they need to get a PPA in place,” Wolf said. “They’re looking competitively for a buyer. That’s driving some pricing down.” The same holds for renewables developers, who have wanted to get a PPA in place as quickly as possible, giving leverage to buyers who can demand lower prices.
The other factor driving down prices LevelTen identified was potential revisions to standards issued by the Greenhouse Gas Protocol, which are currently the subject of a long and fraught overhaul process.
“We have many buyers who are fully leaning in and want to contract now,” Wolf said. “And we have buyers who are in a kind of a ’wait and see’ — they want to better understand what that’s going to be, so there’s not a risk that they might have to unwind something.”
As for wind, PPA prices have actually risen, according to LevelTen’s data — up 5.5% on the quarter and 17.5% on the year. “We’re also seeing wind just being less competitive than solar,” Wolf added.
The report attributed this to tariffs, gas prices pushing up delivery costs, and the “ongoing federal permitting bottleneck that has largely ground new-build wind development to a standstill.” That means specifically the Department of Defense’s efforts to hold up wind projects on potentially spurious national security grounds.
This has meant a “fast-dwindling pipeline of viable wind assets,” LevelTen’s report says, “and price premiums for fully permitted projects available for offtake.”
In short, the best news for individual wind developers may be bad news for the industry — and the climate — as a whole.
Cement, plywood, and some electronic equipment will face 50% levies. But the real cost is much higher.
Here we go again. The United States will impose new 50% tariffs on a slew of imports from Canada, the White House announced on Monday afternoon. The trade levies — which will hit more than 500 categories of goods, from anoraks, beer, and curtains, to yarn, wool, and whey protein — will take effect in 30 days.
The new tariffs don’t seem to be wildfire-related. President Trump threatened to impose new tariffs last week after smoke from Canadian wildfires drifted south over the northern U.S. border, but administration officials have claimed to CNN that these new levies were already in motion by then.
Even so, a few aspects of the announcement stand out. Most important, at least from a generalist perspective, is the legal mechanism that President Trump is using to apply them: Section 338 of the Smoot-Hawley Tariff Act. This passage, which has never been used by a previous president to levy tariffs, allows the United States to tax trade from countries that the president says have “discriminated against” U.S. commerce.
Significant, too, is the fact the White House asserts this new kind of tariff could apply to any kind of product — even those that would normally be covered by the North American free trade pact, the U.S.-Mexico-Canada Agreement. So far, the “Big Three” automakers — whose supply chains cross the Mexican or Canadian borders half a dozen times before a car is finally assembled — have avoided major tariff danger because auto parts and other inputs fall under the USMCA’s auspices. If the White House now thinks it can levy taxes despite that pact, then the risks for Ford, General Motors, and their suppliers have increased.
Energy and critical minerals are exempt from the new tariffs, so Canadian crude oil, gasoline, diesel, natural gas, and electricity will presumably keep flowing into the United States. (That explicit carve-out might be ominous in its own right, because energy had been protected by USMCA so far, too.) By omitting energy, Trump and his officials may be calculating they can avoid major inflationary hazards from this round of tariffs.
Who knows. In any case, to my eye, these tariffs do seem like they could aggravate construction costs and possibly contribute to wider U.S. inflation. There’s already some evidence that data centers are driving a new wave of inflation, for instance, by hiking construction input and labor costs. Yet data centers use a lot of cement — and cement will now face a 50% tariff under the new regime. So too will plywood, plaster, and paperboard, as well as industrial cooling equipment, chemicals, and some circuit boards.
I could keep listing the potential economic costs here — I could point out that overall inflation risk is rising or that average U.S. gas prices rose to $4 a gallon today on the Iran war news — but I think it’s important to look at least one step beyond the hits to commerce alone.
I mentioned earlier that these tariffs are meant to punish “discrimination.” In this case, some of the “discrimination” appears to be what some Canadian provinces did to retaliate against the president’s earlier tariffs. The state-owned liquor stores in Quebec and Ontario, for instance, stopped buying U.S.-made booze after Trump slapped 25% tariffs on Canada in March 2025; those boycotts are mentioned by name in today’s proclamation. Canada, you see, is not supposed to respond to Trump’s tariffs. It is just supposed to take it — just like it’s supposed to take the constant stream of falsehoods, abuse, belittling, and invasion threat.
Over the past few years, politicians and pundits have learned to respond to Trump’s policies by appealing to U.S. self-interest — by explaining how the president’s policies are making Americans poorer. It is a sensible strategy for a morally denuded era. A recent statement from Senate Minority Leader Chuck Schumer about Canada, for example, criticized the president for hurting “our closest ally and partner … right when summer tourism season is arriving.” I get the move here — and I think, in some sense, Schumer is trying to avoid polarizing Trump’s treatment of Canada along partisan lines — but Canadians are more than their tourism dollars.
For the past several years, Trump has threatened to strip Canada of its sovereignty and its dignity. He has treated what was once a deep and secure relationship as something to be bartered and mined and dissipated. It is a mucilaginous approach to statecraft, and as recent reporting has made clear, its long-term costs will exceed any simple accounting. We Americans have been robbed of an honorable friendship. Some losses cannot be counted in dollars.