Jun 21, 2023 - Energy & Environment

πŸ‘€ Exclusive: Startup gets cash to unlock climate law credits

Illustration of a golden coin with an emboss of the Earth on it.Β 

Illustration: AΓ―da Amer/Axios

Crux, a new startup aiming to remove friction from the use of hundreds of billions of dollars worth of climate law tax incentives, just landed another $4.25 million in seed financing.

The big picture: It's initially focused on a key piece of the law called "transferability."

  • The provision is designed to broaden the use of incentives for renewable power, low-emissions fuels, clean tech manufacturing and more.
  • It enables companies to transfer credits to third parties in exchange for tax-free finance.

Why it matters: That helps businesses that don't yet have tax liability to monetize the incentives to boost low-emissions tech deployment.

  • β€œWe urgently need to make sustainable finance more efficient ... Transferable tax credits are a key piece of the puzzle," CEO Alfred Johnson said in a statement, calling the new law a "generational opportunity."

State of play: Crux connects developers, credit buyers, banks and others, and works with them to navigate and simplify the process.

  • The seed round extension β€” led by existing investor Ardent Venture Partners β€” brings total fundraising to $8.85 million.
  • QED, Lowercarbon Capital, New System Ventures and Overture are among the first wave of backers also expanding support.
  • New investors include LS Power and renewables giant Ørsted.

Catch up fast: Last week, the Treasury Department announced how it will implement transferability and a related climate law policy called direct pay, which also broadens the pool of credit users.

The bottom line: The law can greatly expand low-carbon tech deployment β€” but turning policy into real-world transactions won't happen on its own.

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