Illustration:Aïda Amer/Axios
Xprize, which runs a $100 million contest for carbon removal startups backed by Elon Musk and The Musk Foundation, granted $1 million each to 15 startups trying to crack the carbon removal problem.
Why it matters: The tech industry's laser focus on carbon removal signals a mismatch between what tech investors will fund and what climate experts are calling for.
Context: Investors are under pressure from LPs to act on climate but still have a fiduciary duty to those LPs to post returns.
State of play: There's no doubt that funneling money into early-stage startups can help new technologies scale rapidly and actually get to market, as competitions like Xprize aim to do.
- And given how little money has gone into the carbon removal sector to date, many technologies are rightfully still in early stages of commercialization.
- The 15 finalists are focusing on carbon removal via four subgroups: air (i.e. direct air capture), land, ocean and rocks.
- The group will go on to compete for the $80 million grand prize that will be awarded in 2025.
What they're saying: A plurality of the finalists are in the air subgroup, though scientists and specialist investors have been skeptical of direct air capture's feasibility and whether it could draw down carbon to the extent needed to meet Paris Agreement standards.
- Specialist climate investors are hesitant to write off the technology completely, but have cautioned that there is likely more hype than substance.
The bottom line: The tech industry, from companies like Stripe to the industry's biggest investors, is ready to go all-in on a technology that remains largely unproven and is in incredibly early stages.