Carbon Capture Comes Back Down to Earth

Six months ago, the prospects for the nascent carbon removal market seemed as vast as the sky.

Bill Gates and other investors were lining up to fund start-ups that promised to suck carbon dioxide out of the atmosphere, helping to curb global warming. Big-name companies like Google, Airbus and Amazon moved in to buy carbon removal credits. And McKinsey projected the market could be worth as much as $1.2 trillion by 2050. One investor called it “the single greatest opportunity I’ve seen in 20 years of doing venture capital.”

But less than six months into President Trump’s second term, in which he has moved to drastically reshape climate policy, the carbon capture industry is decidedly more subdued.

The Energy Department last month terminated 24 awards worth $3.7 billion, most of which had been earmarked for carbon removal projects. Applications for new carbon capture and sequestration permits in the United States were down 55 percent in the first three months of the year.

And last month Climeworks, the most prominent carbon removal company, which I reported on last year, cut 22 percent of its staff in anticipation of slower growth. Two other carbon capture start-ups, Heirloom and Pachama, have also announced layoffs in recent weeks.

“There is a new administration in the U.S.,” Jan Wurzbacher, the co-chief executive of Climeworks, told me. “That’s a fact, and the new administration puts certain things in question.”

Yet it’s not just the political landscape that has changed. There are also new questions about the viability of some prominent carbon capture technologies.

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