If humanity is to prevent more of the inhabited parts of our planet from turning into unlivable hellscapes, we’ll need to stop spewing greenhouse gasses into the atmosphere.

Switching to more eco-friendly energy sources will help, of course. But to slow or stop some of the most dire consequences, the growing consensus is that we’ll also need to massively scale carbon capture and storage.

Funding tallies reflect this mindset. So far this year, startups with business models tied to carbon capture, storage and transformation have closed on nearly $1.2 billion in equity and debt financing, per Crunchbase data. That puts 2024 on track for the second-highest annual tally in five years, as charted below.

Twelve leads in fundraising, others follow

By far the largest chunk of capital went to Twelve, a carbon transformation startup that closed on $645 million earlier this month. The financing included $200 million in Series C funding, $400 million in project financing, and a $45 million credit facility, with TPG Rise Climate Fund as a lead backer.

Berkeley, California-based Twelve, founded in 2015, develops technology that converts captured carbon dioxide into chemicals, fuels and other products. The latest investment comes as the company is building a plant in Washington to produce jet fuel from biogenic CO₂, water and renewable energy.

The second most-heavily funded company on our list is Svante, which makes filters and machines that capture and remove CO₂ from industrial emissions and the air. The British Columbia-based company picked up $100 million from cleantech investor Canada Growth Fund in August, bringing its total funding to over $500 million.

Quite a few others raised good-sized rounds as well. To illustrate, we put together a sample list of 16 companies tied to carbon capture, storage and transformation that have secured investments this year.

Carbon removal credits spur interest

The sale of carbon removal credits serves as the business model behind much of the activity we’re seeing.

One case in point is Los Angeles-based CarbonCapture, a maker of direct air capture machines that raised an $80 million Series A this spring. The company lists Amazon, Alphabet, Meta and Microsoft among the companies that have purchased its carbon removal credits.

CarbonCapture’s business model relies on mass-producing modular systems that soak up atmospheric CO₂ when cooled and release it when heated. This summer, the company leased a Mesa, Arizona, manufacturing facility it says could produce enough modules annually to enable 2 million tons of carbon removal.

The rise of direct air capture-focused startups comes amid increasing acceptance of its role in reaching climate goals. The technology got a boost two years ago, when the Intergovernmental Panel on Climate Change stated that carbon capture and storage will likely be a necessary component toward the goal of achieving net-zero for greenhouse gasses.

Debt and equity fuel the next stage

As startups in the carbon capture, storage and transformation space scale, we’ll likely see a rise in project financing alongside traditional venture equity rounds, particularly for those building manufacturing facilities.

This reflects a broader trend we’ve seen in cleantech financing. In the first half of this year, for instance, overall sustainability-focused equity funding fell, but the decline was counterbalanced somewhat by a handful of exceptionally large project finance deals.

For now, as we attempt to march forward to that ever-elusive goal of net-zero, it probably matters little whether the companies attempting to take us there are predominantly debt- or equity-funded. What matters most is that they can scale successfully enough to make a significant contribution toward that end.

Related Crunchbase Pro list:

• Carbon Capture, Storage And Transformation Companies Funded In 2024

Illustration: Dom Guzman