Counteract, a new venture capital (VC) fund solely dedicated to carbon removal technologies, has raised around $42 million in its inaugural fund. The London-based fund, which focuses on bioenergy, direct air carbon capture with storage (DACCS), and natural climate solutions (NCS), has just reached a first close of $18 million. Counteract is targeting a total of $42 million for its fund, which only invests in companies with the capacity to remove 500 million tonnes of carbon by 2050.
This recent fundraising is a major boost for the carbon removal industry, which is expanding rapidly. In 2022 alone, the sector received a staggering $13.8 billion in global investment. Private money came pouring in from big tech companies like Stripe, Alphabet, Meta, Shopify, and McKinsey, who launched an initiative called Frontier to invest around $1 billion in carbon removal by 2030.
A guide to carbon removal strategies for companies: How to meet net-zero targets through nature-based solutions
The need for carbon dioxide removal (CDR) technologies has become increasingly important as the Intergovernmental Panel on Climate Change (IPCC) stresses that emissions reductions alone aren’t enough to achieve the Paris Agreement climate goals. The IPCC believes that CDR is necessary to remove billions of tonnes of carbon dioxide from the air. The global CDR capacity needs to increase 1,300 times by 2050.
Counteract has 12 companies under its portfolio and invests in all forms of carbon dioxide removal. It plans to expand globally, noting that emerging countries offer better opportunities for CDR. The fund is also looking for solutions with co-benefits, such as technology that produces cement from recycled carbon, which can help decarbonise the cement industry.
While there are questions and uncertainties surrounding the scalability of CDR technology, Counteract expects to reveal more deals soon. The fund’s recent success signals that investors are willing to bet on the emerging and rapidly rising industry of CDR, which offers a good business opportunity with government incentives like carbon pricing and subsidies. Carbon compensation is easy and there is a simple solution. DGB Group can provide the tools to measure your footprint and develop a compensation plan.
