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With its Orchard One project in Wyoming, Spiritus thinks it can capture carbon from the air for less than $100 per ton.

Pretty much every startup that’s building machines to suck carbon dioxide from the atmosphere and stash it underground has claimed it will be able to get its costs down to less than $100 per ton — eventually.
But a new contender in the race, a San Francisco-based company called Spiritus, is making a compelling case that it could get there faster. On Tuesday, Spiritus announced plans to build its first direct air capture, or “DAC” project in central Wyoming, nicknamed Orchard One. The company will start small but ultimately wants to expand the facility to capture 2 million tons of CO2 per year.
Achieving that scale at the sub-$100 price point would be game-changing for direct air capture, which is still far too expensive to be a viable climate solution. Most companies in the field are cagey about revealing their current costs, but the industry-average price is believed to be between $600 and $1,000 per ton.
So what makes Spiritus different? Here are three reasons we’ll be keeping an eye on the company.
Spiritus’ project will not look anything like the industrial-style shipping containers full of fans that have become the defining form factor for DAC plants. The company’s central innovation is a squishy white ball that founder Charles Cadieu describes as an artificial lung.
“While it looks kind of simple, it's actually a breakthrough material that has an incredible amount of surface area,” he told me over Zoom, while holding one up and squeezing it like a stress relief toy. “And it has holes all over it that allow the CO2 to go right inside.” Though it’s about the size of a tennis ball, its branch-like interior structure has a surface area equivalent to a tennis court, he said.

The ball is made of a proprietary material that selectively attracts CO2 molecules. As air wafts through it, CO2 sticks to its interior surfaces like a magnet. Spiritus will manufacture millions of these balls, lay them out on trays, and stack the trays on tree-like rigs — hence the name Orchard One. Concept images depict a small colony of cylindrical structures that will house the trays, almost like miniature Wilco towers, sprouting up amid the Wyoming sagebrush.

After a few hours exposed to the elements, the balls, which Spiritus prefers to call “fruits,” will be full of carbon. The company will then transfer them to a separate chamber and apply heat, causing them to expel the CO2. That stream of carbon will be compressed and delivered to an underground CO2 storage well, while the fruits will be returned to their towers to live the same day over and over again.
Though the concept is somewhat whimsical, the company is making serious claims about its cost and performance. The biggest expenses for direct air capture projects are materials and energy, and Spiritus has made significant improvements on both fronts. Cadieu told me they can manufacture their sorbent for a tenth of the cost of other, “state of the art sorbents that are out there today,” and that “furthermore, it’s 10 times as effective” at capturing carbon. In other words, Spiritus claims it can capture more carbon from the air at a time, using fewer, cheaper materials than other methods.
Since the capture part of the process is passive, the company doesn’t need to use energy-intensive fans to filter the air. Also, the temperature required for the second step, where heat is applied to the balls to release the CO2, is lower than 212 degrees Fahrenheit — low enough to be generated using electricity. Cadieu said Spiritus plans to procure energy from renewable sources so that the entire process has net-negative greenhouse gas emissions.
Spiritus isn’t the only company with a low-cost sorbent and passive capture method. Notably, the DAC process pioneered by Heirloom, which opened its first commercial-scale plant in California last year, shares those features, but it requires much higher temperatures — 1,650 degree Fahrenheit — to isolate the captured carbon.
Though Spiritus still has to prove this all works as promised in the real world, the company has earned an early vote of confidence from Frontier, the coalition of tech companies with a $1 billion fund to help carbon removal scale. Last year, Frontier paid Spiritus $500,000 to buy its first 713 removal credits, each of which represents a ton of carbon that will be permanently sequestered underground. (The money is more of a development grant than anything indicative of the company’s costs.)
“We look for companies that learn and iterate quickly, and we were impressed by what we saw from Spiritus when they applied,” Joanna Klitzke, the procurement and ecosystem strategy lead at Frontier, told me. “And actually, since then, the team has made really strong improvements and steady progress on both their sorbent and their process performance.”
According to the company’s application for funding from Frontier, Spiritus estimates that for the first phase of Orchard One — when the project is capturing less than 2,000 tons per year — its levelized cost per ton of carbon will be about $149, not including the cost of burying the carbon underground. By phase two, at a scale of about 500,000 tons per year, it expects to get that cost down to less than $100. And by phase three, at the full scale of 2 million tons per year, it expects to achieve sub-$75 capture.
Cadieu told me the company is already in talks with large buyers to purchase carbon removal from Orchard One for “far less” than the per-ton price Frontier paid.
Spiritus doesn’t expect to have phase one of the project up and running until 2026. But it already has a running start. The land lease is locked down, the underground pore space where the company will inject the captured carbon has been identified, and a monitoring well is already scheduled to be drilled — according to its Frontier application.
Wyoming has proved to be a relatively welcoming place for this emerging industry. Orchard One is joining another direct air capture plant already under development in the southwest part of the state called Project Bison. Cadieu gave three reasons the project landed there: There’s a local workforce with relevant experience from the oil and gas industry, the state has the ideal geology to trap the captured carbon underground, and Wyoming has been at the forefront of developing clear regulations for carbon sequestration. It was one of the first states to gain authorization from the Environmental Protection Agency to permit carbon storage wells, and as of December had already permitted three. Another advantage in Wyoming is abundant renewable energy from wind farms.
Spiritus has yet to reveal exactly where in Wyoming Orchard One will be built, but Cadieu told me he has been in close contact with officials at the town, county, and state levels, and that the reception has been enthusiastic. He said the project will create “hundreds of jobs during construction” and “many dozens of jobs” when the facility is operating, and that the company will deliver a portion of its profits back into the community.
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On ‘precariously low’ oil stockpiles, China’s ammonia milestone, and a PFAS destroyer
Current conditions: The wildfires in France and Europe are slowing, but three firefighters have died and the looming heat wave could bring yet more disaster • New York and New Jersey are facing flash floods as a storm system makes its way across the Northeast United States • Days of thunderstorms are causing floods across Vientiane, Laos’ sprawling capital.
Last month, I toured Commonwealth Fusion Systems’ headquarters in small-town central Massachusetts. The place was abuzz in activity. On the factory floor side, workers were assembling the magnets needed to ultimately form the torus-shaped reactor — think a giant doughnut with an interior that curves like the core of an apple — called the tokamak. On the actual reactor side, SPARC — the prototype that CFS expects will make history next year as the first private enterprise and only tokamak to ever generate more energy that it took to start the fusion reaction — was starting to look like a functional machine from my view on a second-story walkway overlooking the sterile assembly room. The old joke that fusion is the energy source of tomorrow — and always will be — certainly didn’t ring as funny now. I’ll tell you who isn’t laughing: All the new investors that just poured another $1 billion into CFS. The company announced its latest funding round early this morning, which brings the startup’s total fundraising since its launch as a spinout from the Massachusetts Institute of Technology in 2018 to $4 billion. CFS now accounts for 30% of all the private capital that has flowed into fusion. What distinguishes this round, my colleague Katie Brigham wrote, is that the money is coming from a bunch of institutional investors, such as pension funds and sovereign wealth funds, rather than venture capitalists. On a call with reporters this week, CFS’s newly-named chief financial officer, Lorence Kim, said it’s the first-time institutional investors comprised the majority of the new funding. When I asked the company’s spokeswoman for a percentage estimate breaking down the new versus old investors in this round, she declined to comment. Kim cautioned that the funding isn’t the kind of capital you raise before launching on a stock market. But his hire is notable. The former Goldman Sachs banker famously helped take the pharmaceutical giant Moderna public and held the top financial role through the start of the Covid-19 pandemic.
Meanwhile, a federal Superfund site at a facility in Kentucky once used to enrich uranium for atomic bombs is being transformed into a data center. On Wednesday, the Department of Energy announced a deal between investment giant Brookfield, utility behemoth NextEra Energy, and three local power providers to redevelop portions of the Paducah site into a $100 billion data center campus. “By transforming former DOE sites into engines of innovation and economic growth, we can revitalize communities with increased tax revenue and thousands of jobs, while also strengthening America’s energy security,” Secretary of Energy Chris Wright said in a press release.
The Federal Reserve held the country’s benchmark interest rate steady at Wednesday’s meeting of the U.S. central bank’s top brass. But three bank presidents voted to increase rates as renewed fighting in Iran sent energy prices upward. The dissent “underscored officials’ fraying patience with looking past another price shock on the heels of tariff-related increases last year and with robust demand stemming from the artificial-intelligence buildout,” The Wall Street Journal reported. That is, of course, bad news for renewables and other clean energy developers who rely on cheap upfront money to build, as my colleague Matthew Zeitlin has written.
But there are potentially bigger problems afoot for American energy consumers. U.S. crude stockpiles fell sharply last week as American refineries ramped up production to seize on surging fuel prices as fighting erupted in Iran. The stocks have now reached “precariously low” levels, analysts told the Financial Times, meaning there’s far less cushion if the war worsens the supply shock.
Last month, the energy team at the liberal policy shop Third Way assembled 100 swing voters from across the country to talk about the data centers that poll after poll shows are becoming less and less popular, to put it mildly. The conclusion of the discussions was this: “America’s opposition to data centers has less to do with their feelings about artificial intelligence and more to do with their anger and distrust of large corporations and government.” The findings, shared with me exclusively in advance, showed that most participants were open to a new data center if they believed it would come with tangible benefits for their communities. While some investors, such as “Shark Tank” star Kevin O’Leary, have tried to present those offerings, “the trust isn’t there.” While Emily Becker, the director of Communications for Third Way’s Climate and Energy Program, told me she was “not surprised by how much opposition there was, what was heartening is people understood that benefits were possible. They just didn’t think they would receive them.”
Speaking of data centers and the public trust: NV Energy has accused one of the biggest developers of data centers in Nevada of attempting to illegally bypass state regulators to determine through private arbitration how and when the Berkshire Hathaway-owned utility should provide power to its operations. The lawsuit, filed Friday in Washoe County’s Second Judicial District Court, alleges that the developer, Tract, is trying to skirt the usual process by which the state Public Utilities Commission determines what share of the utility’s electricity should go to the large power user. Tract, according to the complaint, “wants NV Energy to reserve and provide enormous amounts of power for Tract's private development while shifting the infrastructure and energy costs to Nevada families, small businesses, and existing customers who did not cause them.” Sorting out those questions through arbitration would help to “keep these issues hidden” from state regulators and the public, NV Energy said, according to The Nevada Independent.
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When the Biden administration attempted to overhaul regulations on electrical transformers to make the key grid components more efficient, the proposal drew fierce bipartisan pushback amid a years-long nationwide shortage of the equipment. Ultimately, the Biden administration backed down and changed the proposal after receiving public comments. That would have seemed to provide some certainty for factories. But just two years after the final rule won acclaim from across the industry, the Trump administration is now considering revising the requirements for rules set to take effect in 2029. “We’re not aware of anyone asking for this,” Andrew deLaski, executive director of the Appliance Standards Awareness Project, told Utility Dive. The group supported the 2024 transformer rule and other stricter efficiency requirements DOE finalized during the Biden administration.
China has signaled it’s planning to take on what Bloomberg described as a bigger role in steering global negotiations over climate change. The 15th five-year plan published Monday by the Ministry of Ecology and Environment and other key agencies outlines how Beijing “will constructively lead the multilateral governance process to address climate change” and states that “China’s influence, guiding capacity, shaping power, and moral appeal in global climate governance will be significantly enhanced” through the end of the decade. Beijing is already looking to increase how much renewable energy it consumes, as I told you last week.
As you may recall, China is going all in on figuring out how to make green hydrogen work, especially now that the People’s Republic is throwing everything at the wall to diversify its domestic supply of fuels as the Iran War chokes off its regular supply of hydrocarbons. One of the trickier questions with green hydrogen is how to ship the world’s small molecules without leaks. A popular solution is to convert the hydrogen into green ammonia. On Tuesday, SPIC Green Energy announced the successful loading of 3,750 metric tons of green ammonia produced in Jilin Province onto a vessel at the Lianyungang Port in Jiangsu Province and shipped to South Korea. “The shipment represents the world’s largest single-batch delivery of green ammonia,” analyst Jian Wu wrote in his China Hydrogen Bulletin newsletter. “It marks China’s transition from technical demonstration to large-scale international commercial delivery.”
A company promising to put an expiration date on so-called forever chemicals just raised a bunch of money to bring its technology to market. Claros Technologies is developing a proprietary system that can break down the per- and polyfluoroalkyl substances, or PFAS, contaminating millions of Americans’ drinking water systems. This week, the startup closed a $55 million Series B financing round. “Over the past year, Claros has crossed the threshold from breakthrough technology to successful commercial reality,” CEO Michelle Bellanca said in a statement.
Risk-averse but deep-pocked institutional investors join the party.
When the Fusion Industry Association surveyed the sector earlier this month, it found that the industry’s 56 active companies had collectively raised more than $14.2 billion over the past five years. But an ever-larger share of that money is ending up in the hands of one startup: Commonwealth Fusion Systems.
With its latest $1 billion funding round, announced today, the MIT spinout now accounts for nearly 30% of all capital in the industry. The new financing, led by a wave of institutional investors entering the sector for the first time, will support construction of the company’s first commercial power plant in Chesterfield County, Virginia, which CEO Bob Mumgaard says is on track to come online in the early 2030s.
In a media briefing, Mumgaard noted that this latest raise marks “the largest single funding round among fusion energy companies since our last large round of $1.8 billion in 2021.” It brings the total capital raised by CFS to an even $4 billion as the company races to complete construction of SPARC, its demo reactor. If all goes according to plan, it should begin operating sometime next year, proving out the physics and engineering approach underpinning ARC, the planned commercial plant.
The new financing deviates from the typical venture capital round, as it brings in a broad but unnamed mix of “large pension funds, sovereign wealth funds, infrastructure funds doing project finance, and industrial corporates.” These risk-averse investors would typically steer clear of expensive, first-of-a-kind facilities, demonstrating the degree to which CFS has succeeded in building confidence in an industry long critiqued for overpromising and underdelivering.
The company credits the trust it built to its extensive peer-reviewed research as well as its decision to build a tokamak — widely regarded as the most mature fusion reactor design. “I don’t think there’s any other company that’s been as transparent and open with their physics and how it actually works,” Katie Rae, CEO and managing partner at Engine Ventures, told me. Rae has participated in every one of CFS’s funding rounds, and while she says her firm has evaluated virtually every startup in the sector, the company remains its only fusion investment.
But even flush with institutional capital, Mumgaard is clear that the company will need billions more to fully finance ARC and the numerous reactors to follow. It’s unclear where exactly that money will come from, though he’s pushing for government involvement. Alongside the Fusion Industry Association, Mumgaard is advocating for a one-time, roughly $10 billion federal infusion of cash into the broader industry to expand public-private partnerships, build shared research infrastructure, and help finance first-of-a-kind plants in an effort to keep pace with China’s rapidly growing fusion program.
According to reporting from Politico, a Department of Energy official told CFS and other fusion companies that such a level of federal funding is “unrealistic in this environment.” But though insiders argue it’s what the industry needs to scale, Rae says CFS doesn’t depend on it. “I think it is the right kind of investment to make, but we didn’t count on it from an investor perspective,” she told me.
One obvious alternative is the public markets. The IPO window for climate tech has reopened, with geothermal giant Fervo and nuclear fission startup X-energy both completing successful public offerings in recent months. SPACs have also made a comeback, as numerous nuclear companies are opting for this faster, though riskier, path to the public markets. But CFS’s newly appointed CFO, Lorence Kim, said during the briefing that this latest round proves “that the private markets have a lot of capital to deploy toward our mission.” Whether an IPO is in the company’s near future remains an open question, though he cautioned against interpreting his hiring as any indication of “IPO prep in a specific way.”
For what it’s worth though, Kim has taken another high-profile, pre-revenue startup public before: Moderna. As CFO from 2014 to 2020, he helped the company scale its mRNA platform and lead its blockbuster $600 million IPO in late 2018 — the largest ever in the biotech industry at the time. Notably, this all happened before Moderna had an approved product or the Covid pandemic made its signature vaccine a household name, similar to where Commonwealth finds itself today.
“Moderna was in this moment in time where the science worked, and the strategy was focused on execution and scale and deploying capital in a way that could enable real impact on the world,” Kim explained. CFS is now at the same juncture, he said. “And so in the same way that Moderna industrialized mRNA and made it inevitable and made it ubiquitous, it was really clear to me that CFS could do the same for fusion.”
Of course, CFS is not alone in its confidence — other fusion companies are equally bullish on their own approach. Take Inertia Enterprises, a Lawrence Livermore National Laboratory spinout, which last week unveiled its own commercial roadmap for a laser-driven fusion reactor. The company emphasized it’s the only one to have definitively demonstrated the viability of its underlying physics in a real-world experiment, rather than through theoretical work or simulations.
Or take Helion, which has raised $1.5 billion and secured a highly ambitious power purchase agreement with Microsoft to supply electricity to the tech giant by 2028. Or Pacific Fusion, which netted a staggering $900 million Series A to be doled out in milestone-based tranches. There are dozens of others — many with hundreds of millions in funding — pursuing a range of approaches that some of the field’s brightest minds consider technically feasible.
But when I mused to Rae about how exciting it is that institutional investors now appear willing to back an industry once viewed as bordering on science fiction, she was quick to correct me.
“They’re willing to bet on Commonwealth Fusion — that’s what you mean.”
At least one hyperscaler’s big bets seem to be paying off.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
Good evening. Let’s start with the news. Meta and Microsoft released their most recent quarterly earnings this evening, and Wall Street was watching to figure out if their enormous AI spending plans are paying off. We were watching because those proposals are shaping one of the most important energy stories today: the data center boom and the sharp return of electricity demand.
The returns were … mixed. Meta missed analysts’ estimates, and its profit fell 14% from the same quarter a year earlier. It increased the lower bound of how much it plans to spend on capital expenditures such as data centers this year, from $125 billion to $130 billion, but left the upper bound of $145 billion unchanged.
Microsoft, meanwhile, said its AI investments are starting to pay off. Revenue at its cloud business, which uses its data center space, increased by 43%, more than analysts expected. It spent $41 billion on capital expenses in the three months ending in June.
Meta’s stock was down 7% in after-hours trading, while Microsoft is up 8%. When Heatmap surveyed climate insiders last year, they ranked Microsoft as among the most decarbonization-friendly hyperscaler and Meta as among the worst.
Permitting odds up — thanks to Shift Key?
I do not regularly follow such things, but this afternoon I was told that the Kalshi market for “Will permitting reform become law this year?” surged to 77% today after trading for days around 50%:
I have no idea why it budged today, but perhaps what moved the market was our new episode of the Shift Key podcast (Apple, Spotify). On today’s show, I spoke with Daniel Palken, a former Capitol Hill policy staffer now at Arnold Ventures, about the current state of permitting reform negotiations in Congress. While we don’t know the exact shape of a deal yet, permitting reform is likely to be the biggest new policy for clean energy that we could get by the end of the year.
Daniel is a fantastic guide to the negotiations, and if you’re curious about the policy at all, I recommend that you listen. Here are few of my takeaways from the conversation:
1. A permitting reform deal will probably have six buckets.
They are (1) changes to the National Environmental Policy Act and the judicial review process that environmental studies face after completion; (2) reforms to the transmission process; (3) changes to the Clean Water Act; (4) a deal to make it harder for presidents to yank permits from approved projects; (5) changes to the National Historic Preservation Act, and (6) “everything else,” a grab bag of smaller fixes including to geothermal energy.
2. Wonky committee politics are shaping the deal.
The National Historic Preservation Act, for instance, is an archeological law that hasn’t been in the mix for previous reform proposals. It’s up for discussion now because Senator Mike Lee of Utah chairs the Senate Energy and Natural Resources Committee — and the NHPA is the major environmental bill under his jurisdiction. Likewise, observers think that a permitting deal has a much better shot of passing during this Congress (as compared to next year) because of an expected series of changes to committee chairs.
3. It’s way, way better to hook data centers to the power grid than run them off behind-the-meter power plants — even if they run off 100% natural gas.
Any permitting reform proposal will seek to expand the transmission system. That could have big benefits for the emissions intensity of data centers. Why? I’ll let Daniel explain:
If you look at the data centers that are hooking up off grid — when they’re not using repurposed jet engines, they’re using 20% thermally efficient gas plants. Whereas if you’re hooked up to the grid, there’s really two types of gas plants that live on the grid. There’s like 60% efficient combined-cycle gas turbines, which are most of the gas power that’s generated, and then there’s peaker [plants], which have low efficiency, but are run at capacity factors of like 5% — so from an emissions perspective, they don’t matter all that much.
So even if solar and wind didn’t exist at all, and nuclear didn’t exist, and hydro didn’t exist, it would still be a much, much cleaner option [to connect data centers to the power grid]. Like we’re talking factors of three in efficiency to connect your data center to the grid if it was purely powered by gas, which is, I think, an important point to understand.
I thought that was an interesting point, and while I’d seen some of those ideas in isolation, I’d never seen them laid out in one place. (And even if grid-scale gas plants are much more efficient than behind-the-meter plants, it’s still even better to power data centers with solar, batteries, and other clean firm power plants — which is also easier when they’re hooked up to the grid.)
I’ll stop glossing the episode and just link to it one more time. Thanks for reading.