Climeworks raises $650M for direct air capture

Climeworks, a Swiss carbon removal startup, raised $650m from such backers as Partners Group, Swiss Re and Baillie Gifford, Axios Pro Rata's Dan Primack reports.

Why it matters: There's an emerging consensus that carbon-emissions removal is key to stemming climate change, though not nearly as key as reducing emissions.

• There's little agreement on whether carbon removal can really be done at scale — or, indeed, if the technology fundamentally works as claimed.
• This money, the most ever raised for a carbon removal startup, could help answer that question, as Climeworks currently operates the world's largest direct air capture facility.

Yes, but: The IPCC, in its latest climate report Monday, acknowledged that carbon capture technology such as direct air capture may play a role in mitigating the climate crisis — but placed far more emphasis on sharply reducing greenhouse gas emissions.

The bottom line: "Climeworks’ technology works by moving large quantities of air over a special chemical that is able to filter out CO₂, similar to a magnet attracting iron fillings. The new compound is then heated to high temperatures to release a pure stream of CO₂ which can be injected underground. The entire process is quite energy intensive and only makes sense for the planet if the main source of energy is carbon-free." — Akshat Rathi, Bloomberg

💭 Our thought bubble: Talk to any number of investors, climate scientists and engineers off-the-record, and there remains pronounced skepticism whether direct air capture technologies truly remove more emissions than they generate, even when powered by renewables.

• What you don't want to hear as an investor: Theranos mentioned in the same sentence as direct air capture — which continues to happen regularly in our conversations with sources. Watch this space.