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A column chart of the annual U.S. venture investment in carbo monitoring and utilization from 2015 to 2024. The final total for 2024 is projected to be $2.5 billion, a significant increase over every other year that had less than $1 billion. 2021 was the only other year with more at $2.2 billion.

U.S. venture investment in carbon monitoring, utilization

Companies working to track and use carbon emissions defied the slump in U.S. climate tech investment this year.

Why it matters: A report Wednesday from J.P. Morgan illustrates which climate tech sectors were winners and losers in 2024.

Stunning stat: Companies converting carbon emissions into jet fuel and other products, or using captured emissions to produce more oil, are on track to see investment triple to $2.5 billion this year.

The activity was driven by megadeals such as Twelve's nine-figure raise this fall, plus smaller rounds such as Sora Fuel's $6 million round this summer. Both companies are working to make aviation fuel from carbon.

Context: The boom is a bright spot in U.S. climate tech, which is on pace to see venture investment slump 38% this year to $26.2 billion, the lowest total in five years, per the J.P. Morgan report.

Zoom in: EV charging, shared mobility, food-tech, and industrial decarbonization have been especially hard hit.

These sectors require big upfront investment in physical assets and high operating expenses, and they've struggled to compete on cost with incumbent technologies.

Yes, but: Data center demand fueled by AI has unleashed soaring need for electricity — and, in turn, a surge in emissions from new fossil fuel power plants.

Investors are betting that the tech giants buying all that electricity, and the power developers bringing it online, will look for ways to mitigate or monetize those emissions.

That can be done by selling the carbon their plants produce, or buying credits from startups working to convert those emissions into products like jet fuel.

👀 What we're watching: Companies developing batteries and grid upgrades, and those working on building technologies such as energy management software and efficiency tech, saw comparatively modest declines in investment — suggesting investors are still interested in those sectors heading into 2025.

Carbon startups are defying the climate slump

Funders flock to startups tracking and using emissions.

Companies working to track and use carbon emissions defied the <a class="gtmContentClick" data-vars-link-text="slump" data-vars-click-url="https://www.axios.com/pro/climate-deals/2024/12/03/climate-tech-exits-ipos-mergers-2024-data" data-vars-content-id="748d09dc-c6c2-4c4b-9232-26b42a07fc14" data-vars-headline="Carbon startups are defying the climate slump" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/climate-deals/2024/12/03/climate-tech-exits-ipos-mergers-2024-data" target="_self">slump</a> in U.S. climate tech investment this year.Why it matters: A <a class="gtmContentClick" data-vars-link-text="report Wednesday" data-vars-click-url="https://www.jpmorgan.com/insights/esg/sustainable-financing/climate-tech-industry-trends" data-vars-content-id="748d09dc-c6c2-4c4b-9232-26b42a07fc14" data-vars-headline="Carbon startups are defying the climate slump" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.jpmorgan.com/insights/esg/sustainable-financing/climate-tech-industry-trends" target="_blank">report Wednesday</a> from J.P. Morgan illustrates which climate tech sectors were winners and losers in 2024.

Carbon startups are defying the climate slump

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