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⚡ Situational awareness: BlackRock is raising $30 billion to invest up to $100 billion in data centers and related power infrastructure, with commitments from Microsoft, UAE's MGX, and others.

Read Katie's deep dive from last week on data center energy needs and the ecosystem being built around them.

🗓️ Mark your calendars: Our annual dealmakers summit, Axios BFD, returns to NYC on Oct. 22.

View our lineup and purchase your ticket here.

Giant construction firm Turner Construction plans to start investing in climate tech startups, the company said at an industry event.

Why it matters: Turner is one of the largest commercial contractors in the U.S. and could play a significant role in decarbonizing buildings.

Zoom in: Turner plans to invest in early-stage startups, from pre-seed to Series A, so it can act as "a guide and advisor," executive Jim Barrett said during a panel at a climate summit held by the venture firm Fifth Wall during the Blueprint conference in Las Vegas yesterday

Turner, which develops data centers, hospitals, and other large facilities, could also act as a test bed for new climate products, said Barrett.

Zoom out: The company's investing plan was just one of the ideas that came out of Fifth Wall's climate summit.

Three sources of uncertainty for decarbonizing real estate looms above the industry: the election, high interest rates, and data center energy consumption, said Fifth Wall's CEO Brendan Wallace to a room of entrepreneurs, limited partners and real estate investors.

Yet data center owners are an opportunity, said Wallace, explaining that Big Tech is more willing to try new solutions today than they would have three or four years ago. "Data center owners are now the tip of the spear on innovation for decarbonizing real estate."

They're also where the money is. Turner's Barrett said his firm is building some data center campuses that require 1 GW of capacity, and they're seeing data center operators buy up all available power equipment, like switch gear, for years to come, crowding out other sectors.

The big picture: The built environment makes up 40 percent of global carbon emissions.

Executives at the summit said the sector is moving too slowly to commercialize decarbonization technologies and needs to speed up the pace of deployments.

Turner Construction turns climate VC

Illustration of a welcome mat decorated with a green leaf 

Air Company, the vodka distiller turned aviation fuel maker, announced this morning that it's raised $69 million Series B to develop a commercial production plant.

Why it's the BFD: The round drew a range of likely fuel buyers, from airlines to fuel suppliers.

The big picture: Air Company makes sustainable aviation fuel (SAF) by heating water and carbon using renewable power.

It's signed fuel-purchase contracts with JetBlue, Virgin Atlantic and aircraft developer Boom Supersonic.

The NYC-based startup inked a $65 million fuel deal with the U.S. Air Force last year.

The latest: Avfuel, a Michigan-based aviation fuel supplier, led Air Company's new equity raise, which closed in August. Avfuel CEO C.R. Sincock joined the board of directors.

Zoom in: Lowercarbon Capital, In-Q-Tel, Alaska Airlines, Connecticut Innovation's Climate Tech Fund, Duncan Aviation, JSSI and the owners of Sheltair Aviation participated in the round.

Existing investors Carbon Direct Capital, JetBlue Ventures and Toyota Ventures also joined.

Flashback: Air Company closed a $30 million Series A in April 2022.

State of play: The startup has already started making SAF. It declined to disclose production volumes, but is "producing enough SAF to meet current agreements with our defense partners and fine-tune our regulatory processes," a spokesperson tells Axios.

"We anticipate achieving commercial production within the next 5 years."

From bottles to throttles

Illustration of an airport runway shaped like a checkmark.

Microsoft plans to buy carbon removal credits from the first commercial plant of a young startup created by SpaceX vets.

Why it matters: A deal from the deep-pocketed tech behemoth is both a vote of confidence and revenue for a new player in an emerging sector.

Zoom in: Arbor, founded in 2022, says it has a deal to sell 25,000 tons of carbon removal credits to Microsoft, including 5,000 tons per year starting in 2027.

The project, deploying Arbor's power systems paired with carbon capture, will potentially be built in Calcasieu Parish, La., and leverage the local carbon storage infrastructure in the region.

While Arbor has tested its tech at the pilot scale in San Bernardino, Calif., the project will be its first built at a commercial scale. The company says it will eventually reach the size of removing 2 million tons per year by 2030.

In addition to removing carbon, Arbor's systems produce power. The commercial plant will initially generate 5 MW of clean electricity and 100 MW by 2030, says Arbor.

How it works: Arbor has developed tech pioneered at SpaceX to build a "vegetarian rocket engine," as Arbor co-founder and CEO Brad Hartwig describes it.

The power engine turns waste biomass, like from forestry or agriculture, into CO2, which the company then captures and sequesters.

The process uses oxygen at high temperature and pressure, mimicking the conditions in reactors for rocket engines.

Follow the money: The company's investors include Gigascale Capital, Voyager Ventures, Lowercarbon Capital, and Cantos Ventures.

The big picture: Big tech companies, led by Microsoft, are making significant investments in carbon removal projects as their emissions from AI data centers rise.

Post-combustion carbon capture and storage projects are also starting to slowly gain momentum thanks to incentives like the U.S. IRA and Canada's ITC.

What's next: Arbor will need to switch into project developer mode and get its facility deployed and operating by 2027.

Arbor lands Microsoft 

Startup Arbor's power engine combusts waste biomass and produces CO2, which can be captured and stored

Startup Arbor's power engine combusts waste biomass and produces CO2, which can be captured and stored. Photo: Courtesy of Arbor

Woodland Biofuels plans to build a $1.35 billion facility in Louisiana to produce biofuel, the company announced yesterday.

Why it matters: It will be the world's largest carbon-negative "renewable" natural gas plant, officials say.

The big picture: The Toronto-based company expects to build at the Globalplex multimodal facility at the Port of South Louisiana in Reserve. 

Operations are scheduled to start in 2028, according to a press release.

The project will create 110 direct jobs and about 500 construction jobs.

Zoom in: Louisiana Economic Development offered Woodland an incentive package that includes a $10 million performance-based grant.

The company is also expected to participate in the state's programs that offer industrial tax exemptions and cash rebates based on payroll.

How it works: The company says it will use biomass to produce biofuel used in transportation, heating and electricity generation.

Woodland didn't say what types of biomass it will use in Louisiana. The company uses forest industry waste, agricultural waste and municipal waste elsewhere.

It also plans to remove carbon dioxide from the atmosphere, the press release said, and store it underground. The carbon sequestration site hasn't been determined.

💭 Alan's thought bubble: RNG replaces conventional natural gas, reducing emissions associated with producing and burning the fossil fuel.

But companies have struggled to produce RNG more cheaply than natural gas. Fuels producers have also recently backpedaled on carbon-capture commitments, citing costs.

Woodland Biofuels also has not disclosed the planned production capacity at its plant.

Canadian biofuels on the bayou

Image shows a plant with a bunch of blue and yellow pipes.

Woodland Biofuels' demonstration facility in Sarnia, Ontario. Photo: Courtesy of Woodland Biofuels

🎙️ Checking in with Al Gore: Corporate giants and some countries are backsliding on their climate commitments — a worrying sign in a year that otherwise saw hopeful growth in renewables, the former vice president and his investment colleagues say in a new report from Generation Investment Management.

"The way we see it, there is a big wheel turning in the right direction, and some smaller wheels turning in the opposite direction," Gore told Generate's Andrew Freedman.

"The big wheel is going to prevail in setting the direction of travel for the world, but the pace of the transition away from fossil fuels is what's being struggled over now."

💰 Pre-purchase priorities: A diverse group of young carbon removal startups share a strategy: hitching their wagons to huge, incumbent industries through lucrative advanced-purchase agreements, Ben Geman writes in Generate.

Carbon removal consortium Frontier, for example, this morning announced $4.5 million in deals in which established mining and ag companies pre-purchased carbon credits from CO2 removal startups.

🏛️ Offshore wind on the agenda: The Senate Energy and Natural Resources Committee plans to push ahead legislation on offshore wind revenue-sharing, Axios Pro's Nick Sobczyk scooped yesterday in Energy Policy.

The RISEE Act would enable states to collect lucrative offshore wind royalties, which currently flow to the Treasury Department.

📉 Solar restructuring: Gunter Erfurt and Markus Nikles stepped down as CEO and CFO, respectively, of Swiss solar manufacturer Meyer Burger, which plans to cut 19% of its workforce after posting net losses of $330 million last year, per PV Tech.

The company has two production plants: a module assembly site in Goodyear, Arizona, which gets solar cells from a company facility in Germany.

Temperature check

Illustration of an earth in space covered in red and blue meteorological color lines.

• CarbonEthics, an Indonesian carbon projects developer, raised $2.1m in seed funding led by Intudo Ventures. Go deeper

• Sceye, a Moriarty, N.M.-based developer of high-altitude aerial systems, raised an undisclosed Series C led by Saudi firm Mawarid Holding Company. Go deeper

• Pairwise, a Durham, N.C., plant gene-editing company, raised a $40m Series C led by Deerfield Management. Pairwise also formed a five-year JV with Indianapolis ag and chemicals giant Corteva. Go deeper

• Blume Equity, a London climate-focused growth equity investor, secured British Patient Capital and Queensland Investment Corporation as LLPs. Go deeper

• Aclima, an SF air-pollution measurement startup, closed a $13m term loan from Leonid Capital Partners. Go deeper

• Opal Fuels, a White Plains, N.Y., RNG producer sold ~$11.1m of IRA investment tax credits from its Emerald landfill-gas-to-RNG plant in Northville, Mich., to an Apollo Global Management subsidiary. Go deeper

• EarthGrid, a Richmond, Calif., tunnel-boring tech startup for infrastructure development, signed a JV with Kuwaiti power generation holding company EnerTech to develop projects in the U.S., Europe and the Middle East. Go deeper

• ReNRG, an Austin, Texas, renewables developer, rebranded as Clean Cloud Energy as it pivots to data-center energy development. Go deeper

Hot deals

• Joseph Vellone and Kalidindi Raju were named CEO and CTO, respectively, of ChargeScape, the NYC EV charging software JV between BMW, Ford and Honda. Vellone joined from Boston Consulting Group; Raju was at Amazon. Go deeper

• Oi-Yee Choo was named CEO of Climate Impact X, a Singapore carbon credits market. Choo was previously CEO of Addx. She succeeds interim CEO Mark Glossoti, who will return to the COO role. Go deeper

• Matt Vining joined the board of Ion Clean Energy, a Boulder, Colo., carbon-capture tech developer, as an independent director. Vining is CEO of Navigator Energy Services. Go deeper

It's personnel

🎰 Twelve hours is enough time for Katie in Las Vegas. She's back in the Bay.

🙃 Today in Washington Bridge news: Rhode Island's DOT halted demolition of the long-shuttered westbound span, citing a need to "preserve evidence" relevant to the legal fight sparked by the bridge's abrupt shutdown last year. 

Thank you to Michael Flaherty and Chris Speckhard for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and SAF buyers.

September 18, 2024

1 big thing: Turner Construction turns climate VC