According to an industry overview released by research firm and financial data provider PitchBook’s Institutional Research Group, the carbon and emissions technology sector is expected to demonstrate remarkable resilience and growth, garnering $17.7 billion in venture capital (VC) investments in 2024.
of Carbon and Emissions Technology Overview 2024The July 1 issue of Carbon and Emissions Technology Landscape highlights the latest trends, technology advancements and market developments shaping the carbon and emissions technology landscape.
Lithium battery recycling startups attracted the most funding as they try to navigate the various regulations and standards surrounding battery use, development and disposal.
These companies, like their peers, are constantly affected by changing global policies and political conditions.
The report highlighted several key findings, most notably that the carbon and emissions technology sector is set to attract a record $17.7 billion in venture capital investment across 1,133 deals in 2023, surpassing previous year’s figures.
The surge highlights growing investor confidence and the importance of sustainable technology in tackling climate change.
Furthermore, the technology landscape is categorized into several key areas: direct air capture (DAC), point source carbon capture, biological carbon capture, carbon utilisation, carbon accounting and analytics, voluntary carbon market (VCM) infrastructure, and carbon fintech and consumer technologies.
These categories reflect the diverse approaches and innovative solutions being developed to tackle carbon emissions.
Related: Carbon tech startups raked in a record $7.6 billion in VC funding in the third quarter of 2023, according to a new analysis.
Another key finding is that the carbon and emissions technologies sector has demonstrated resilience despite challenging market conditions.
Median company pre-money valuations remained stable, fluctuating between $13.6 million and $15 million from 2021 to 2023. The median deal size for Q1 2024 was $4.2 million, indicating continued investor interest.
However, VC deal volume in Q1 2024 was $2.7 billion, the lowest quarterly volume since Q1 2021.
Exit activity in the sector peaked at $3.8 billion in 2021, declining to $1.9 billion in 2023, reflecting overall market conditions and the cyclical nature of VC investments and exits.
Key drivers of investment in Carbon Capture, Utilization and Storage (CCUS) technologies include tax incentives, government funding and a market shift towards high-reliability carbon credits.
The report also details sector segmentation and investment trends focusing on carbon technologies, industrial applications, the built environment and land use.
Top VC investors in the carbon and emissions tech sector since 2018 include Climate Capital, Lowercarbon Capital, and SOSV.
Overall, this industry overview reveals a dynamic and evolving sector that continues to attract significant VC investment.
read more: NETL Releases Report on Scaling of Carbon Capture Development
