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Carbonfuture Closes Series A Round, Led by SIX, to Transform Global Carbon Removal Market
Carbonfuture Closes Series A Round, Led by SIX, to Transform Global Carbon Removal Market
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January 13, 2025
Key Takeaways
As the United States prepares for the inauguration of Donald Trump’s second term on January 20, 2025, the trajectory of federal carbon dioxide removal (CDR) policy is at a critical juncture.
Under the Biden administration, the U.S. emerged as a global leader in CDR, driven by significant investments and legislative frameworks that fostered both supply and demand for advanced CDR technologies such as the Inflation Reduction Act (IRA) of 2022 and the Bipartisan Infrastructure Law (BIL). The IRA’s $500 billion allocation to climate-related projects included a tax credit (45Q) aimed at accelerating direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS), as well as funding for technology neutral public procurement of CDR. The BIL further solidified federal support with a $3.5 billion investment in DAC hubs, a critical infrastructure for scaling the industry to meet projected demand.
On the supply side, we now see 170 CDR companies headquartered in the U.S, 30% of CDR companies globally. A similar pattern can be seen in job creation, with 35% of CDR jobs globally created in the U.S.
On the demand side, U.S.-based buyers account for 85%+ of total demand of CDR. Projections for the global CDR market opportunity reach $10 billion to $40 billion in 2030, growing to $20 billion to $135 billion by 2040, highlighting the huge overall opportunity.
Clearly, the U.S. is the global leader in the development and deployment of CDR technologies today. However, the election of Donald Trump on November 5th 2024 has introduced some uncertainty regarding the future of CDR in the U.S. In this article, we will analyse what we know, what potential changes could be, and what this means for companies operating in this space.
While Trump has pledged to repeal the IRA and cut unspent funding, his administration also signed into law the first federal R&D program including CDR in 2020. The upcoming administration’s plans for the $1.8 billion in DAC funding from the Bipartisan Infrastructure Law, which Trump has not addressed in his post-election statements, exemplify this ambiguity.
Adding to the complexity, Elon Musk - the world’s richest man formally appointed to lead a governmental advisory body in the incoming Trump administration - has previously funded a $100 million CDR prize to spur advancements in the sector, the XPRIZE. His involvement in the administration presents an open scenario for the future of CDR. Musk’s influence could significantly influence CDR efforts, potentially accelerating innovation in the sector, but the extent to which this aligns with or diverges from the broader policy direction of the Trump administration remains unclear.
Our analysis of the 2024 election results compared with data from the RMI State CDR Atlas provides additional insight into the relationship between political alignment and CDR potential: it revealed no correlation between a state’s political orientation—whether Republican or Democrat—and its capacity for implementing CDR technologies. States with high CDR potential are distributed across both red and blue states, suggesting that CDR is not inherently partisan. This reinforces the notion that CDR could remain a bipartisan issue - as evidenced by the many bipartisan CDR bills - driven by technological feasibility, economic opportunities, and local priorities rather than federal political divides.
The critical question, however, remains: how will Trump’s second term affect the trajectory of U.S. CDR policy? While bipartisan elements have historically supported certain aspects of CDR, Trump's mixed record on climate policy introduces uncertainty. Whether his administration sustains, hinders, or redefines federal commitments to CDR will have profound implications for the industry.
The potential impacts of Donald Trump’s second term on the carbon dioxide removal (CDR) industry can be understood through three key areas: existing policies, the leadership and role of departments administering these policies, and the potential for new legislative and regulatory initiatives. Each of these areas carries significant implications for the future of CDR in the United States, particularly as federal leadership transitions.
The most immediate concern for the CDR industry under Trump’s administration is the fate of the policies established during the Biden era, particularly the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL). Trump’s campaign pledge to repeal $1.6 trillion in climate-related spending could directly affect critical components of the IRA and BIL that support CDR. These include the 45Q tax credit and federal funding mechanisms that have been instrumental in fostering the growth of direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS) technologies.
The 45Q tax credit provides $180/t for CDR through DACCS and $85/t for BECCS. The credit has garnered strong bipartisan support due to its importance to both the CDR and especially the carbon capture and storage (CCS) industry, which includes applications in traditional fossil fuel sectors. Given the benefits to the oil and gas industry, as well as the benefits seen in largely Republican states, we expect some degree of protection for 45Q under Trump, even amid broader climate policy rollbacks such as plans to ban construction of new wind farms and a U.S. exit from the Paris Agreement.
The $3.5b DAC Hubs initiatives funded by the Bipartisan Infrastructure Law have been instrumental in advancing direct air capture projects. High-profile efforts such as Project Cypress in Louisiana and the South Texas DAC Hub highlight significant investments in Republican states, with notable support from figures like Speaker Mike Johnson. This geographic and political alignment increases the likelihood of continued federal support for these programs, emphasising their economic and industrial benefits.
Flying under the radar, the U.S. Department of Agriculture adopted the NRCS Code 336 in 2022, which provides farmers with up to $700/acre for the application of biochar. The way this code works, it has to be adopted by specific states, even counties, and will thus take years to fully roll out. Given the focus of it is on agricultural resilience and farmers’ livelihoods, it is expected to bypass any climate related rollbacks under Trump.
Finally, the U.S. Department of Energy has been implementing the first government public procurement of CDR globally through its Carbon Dioxide Removal Purchase Pilot Prize, allocating $35m to date, with a potential top up of another $20m in 2025. This initiative in particular seems more prone to change, given the expected repurposing of the DOE (see below) as well as the Republicans’ general dislike for public procurement..
The role of federal departments in administering CDR policies will be shaped by new leadership under the Trump administration. Appointments to key departments will significantly influence how existing policies are implemented and whether new initiatives are developed.
The U.S. Department of Energy, through its Fossil Energy and Carbon Management (FECM) office has been the primary driver of CDR under the Biden administration, overseeing the development of a national CDR strategy and allocating substantial funding for research and deployment, including the DAC hub initiative.
Under Trump, Chris Wright—a prominent oil executive—has been named as appointee to lead the DOE. This decision suggests a potential realignment of CDR efforts to focus on synergies with the oil and gas sector, potentially prioritizing CCS projects that align with oil and gas interests. While some of the DAC specific policies described above will likely be protected, the FECM could see its priorities shift back toward fossil energy-centric goals, with implications for CDR funding, e.g. a halt to the public procurement initiative.
At the Environmental Protection Agency (EPA) Lee Zeldin—another likely appointee–brings along a mixed track record. While Zeldin has expressed support for extending fossil fuel production, his past co-sponsorship of the Carbon Capture Improvement Act of 2021 suggests some openness to supporting CCS-related initiatives. The EPA’s expected relaxation of CDR permitting - from class VI wells to pyrolysis - in particular could prove crucial for supporting the implementation of CDR projects, though Zeldin’s leadership could steer the agency away from broader climate-focused mandates overall.
Finally, the U.S. Department of Agriculture (USDA) has played a key role in promoting climate-smart agriculture under Biden, including investments in biochar through the NRCS Code 336 and ecosystem restoration projects. Brooke Rollins, a potential appointee, has previously opposed major climate policies, raising questions about how her leadership might influence the USDA’s climate-related initiatives. The $7 billion already allocated to farmers under the IRA for climate-smart practices, along with an additional $13 billion in pending funds, could face repurposing or elimination under new USDA leadership, although smart practices like Code 336 face less risk given their positive non-climate impact. This would have direct implications for CDR practices like biochar application and soil carbon sequestration.
Given control of both chambers of Congress, Trump will have the ability to pass decisive legislation. However, this power is not expected to be used to pass policies that would benefit the climate tech or CDR sector, with one noteworthy exception.
The Farm Bill, extended into 2025, offers a significant opportunity for advancing CDR technologies such as biochar carbon removal (BCR) or enhanced weathering (EW). With an estimated budget of $1.5 trillion over the next decade, the bill includes provisions for research, commercialization, and demonstration projects for biochar applications. These efforts are supported by the bipartisan Biochar Research Network Act (BRNA) of 2023, which emphasizes performance-driven projects and commercialization within a five-year timeframe, allocating $50m/year. Further policies focused on farmer resilience and agricultural productivity, such as NRCS code for BCR and EW, could also find their place in the Farm Bill.
The Carbon Dioxide Removal Investment Act (CDRIA), introduced in 2024, by Senator Michael Bennet (D-CO) and Senator Lisa Murkowski (R-AK) proposes a new tech neutral tax credit worth $250 per metric ton of CO₂ removed and $110 for point-source removal like BECCS. This credit is broader and more generous than the existing 45Q and reflects bipartisan recognition of the need for stronger incentives for CDR. If reintroduced in 2025, CDRIA could transform the economic landscape for CDR technologies. However, its success will depend on the political dynamics in Congress and the Trump administration’s willingness to support such measures. We thus deem the chances of success low in the coming administration.
So where does this all leave us? What will CDR look like in 2, 3, 4 years from now? Honestly, we do not expect that much to change. Despite what we on the inside of this industry see, CDR is still in early stages and - luckily - enjoys bipartisan support, a result of both its comparative infancy as well as the widespread benefits of CDR. As such, it is unlikely to be engulfed in partisan fights or reach the radar of Trump himself.
The narrative will have to change though. Appeals to morality or the need to fight the climate crisis will prove ineffective. Instead, we have to highlight the economic benefits of CDR in the U.S. According to CDRjobs, the U.S. is already creating more than a third of all carbon removal jobs globally, with a median salary of $130,000/year, around 39% higher than the global average. This is testament to the U.S.’ potential to create tens of thousands of high-quality jobs in the coming years.
Another angle, especially for BCR and EW, will be around disaster prevention, e.g. wildfire prevention, and supporting struggling American farmers by reducing their costs, generating new income streams, and improving the quality and quantity of their crops. CDR will be a welcome side-effect, not the primary purpose, of such policies.
Finally, we will undoubtedly see a rise in state level CDR policy. Our own analysis in 2023, as well as a fantastic recent study by RMI, highlight the potential across the country of state based efforts, from California, to Washington, to Texas, to Massachusetts. Given the size and authority of some of these U.S. states, we might be able to progress significant CDR policy and pave the way for future federal successes.
Now, all eyes are on January 20th and Trump’s first 100 days in office, which will finally remove much of the uncertainty and indicate whether our prediction above turns out to be accurate or not.
At Carbonfuture, we build trust throughout the carbon removal journey with our rigorous, data-driven approach, ensuring unmatched quality and reliability of carbon removal.
