🌎 It’s only a carbon credit if it’s from the CRCF region #186

Happy Monday!

Was it the music, or the state’s burgeoning climate tech scene that drew Queen B back to Texas? The album will reveal all.

In another kind of country, the EU announced the Carbon Removal Certification Framework (CRCF). The CRCF will, for the first time, create a regulated process for the issuance of voluntary carbon credits. With avoidance projects ineligible and the requirements well above most existing certifiers, the rules could provide the trust that many argue the market badly needs.

In other news, China hopes to woo back foreign investment with new ESG requirements, Singapore mandates at least some SAFs in the mix for all flights from 2026, and the UK follows European peers in walking out on a treaty often used by fossil fuel companies to sue against climate reforms.

In deals this week there’s $171m for battery recycling across two deals, $150m for thermal batteries, and $71m for green hydrogen.

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EU to become first jurisdiction to regulate carbon removal

Distribution of carbon credits in the VCM (Source: Carbon Direct)

Last Tuesday, the EU took a major step to establish the Carbon Removal Certification Framework (CRCF), becoming the first jurisdiction to regulate the certification of carbon dioxide removal (CDR) credits in the voluntary market. As Lukas May, Head of Policy and Expansion at Isometric, a CDR registry, told us “This is the most significant development in CDR policy to date”.

The framework, which still needs to be finalized by member states, outlines key criteria for CDR projects to be certified.

Atmospheric Removal. Only projects removing carbon from the atmosphere are eligible, so avoidance projects, such as preventing deforestation, can’t qualify.
Durability. Carbon sequestration must last at least two hundred years, well above most voluntary certification requirements today, which require only decades of duration.
Regulation. As well as defining eligibility, the EU will regulate certification bodies for EU CDR credits.
Methodologies. Specific methodologies will be developed for each CDR pathway, including direct air capture (DAC), bio-energy with carbon capture and storage (BECCS), biochar, and enhanced weathering, although the timeline still remains unclear.

This new scheme comes following a difficult year for the VCM, where allegations of overcounting, poor quality, and failing assurance mechanisms led many to lose trust in the market. The CRCF’s impact will be felt through the EU’s broader climate and sustainability goals, including its net zero targets, the Industrial Carbon Management Strategy, and the Green Claims Directive that will ban organizations from making net zero claims unless they can provide robust evidence. The CRCF mark could become essential for any offsets behind EU marketing claims.

The CRCF is expected to enter into force later this year, with methodologies for evaluating durability, additionality and leakage expected in 2025. But before the framework goes live, many questions remain.

Who’s first? Developing methodologies is complex and takes time. How is removal going to be measured? What does MRV look like? If the EU only works on two or three at a time, then the CDR pathways to get approved methodologies first would have a significant head start.
Biochar. Most sequestration technologies are either well below 200 years or well over. Biochar is an exception, with different approaches falling on either side of the line. Given the CRCF threshold, biochar processes may shift to meet the higher durability requirements.
Compliance markets. The EU Emission Trading Scheme, the world’s largest compliance market, is currently entirely separate from the VCM. Will the CRCF change this, with EU certified credits bought and sold in both?

Like the GDPR, the CRCF has the potential to become a global standard. Since the CRCF is the only name (so far) in the regulated CDR certification game, it could lead to fast followers in other regions. This shift has the potential to redefine the VCM, and move the balance of power from avoidance projects to highly durable CDR approaches. But in doing so it may also divert funds away from critical ecosystems like forests and peatlands, which currently rely on carbon credit financing.

Thanks to Lukas May, Isometric, and Gabrielle Walker, CUR8 for filtering through the CRCF’s policy implications.

Deals of the Week (2/19-2/25)

Late-Stage / Growth

🔋 Ascend Elements, a Westborough, MA-based lithium-ion battery recycling and materials platform, raised an additional $162m in Series D funding from Clearvision Ventures, IRONGREY, and Just Climate.

🔋 Antora Energy, a Sunnyvale, CA-based thermal energy storage technology developer, raised $150m in Series B funding from Decarbonization Partners, BHP Ventures, Breakthrough, Emerson Collective, GS Futures, and other investors.

🛵 Yulu, a Bangalore Urban, India-based micromobility platform, raised an additional $19m in Series B funding from Bajaj Auto Finance and Magna Capital Partners.

🌾 Trace Genomics, an Ames, IA-based soil analysis technology developer, raised $10m in Series B funding from Ajax Strategies, S2G Ventures, and Rabo Ventures.

Early-Stage

🏭 AtmosZero, a Fort Collins, CO-based modular electrified boilers platform, raised $21m in Series A funding from 2150, Engine Ventures, AENU, Constellation Technology Ventures, Energy Impact Partners, and other investors.

🚗 Monumo, a Cambridge, UK-based electric motor for EVs developer, raised $13m in Seed funding from LQD VC.

🚗 Vidyut, a Bangalore, India-based EV financing platform, raised $10m in Series A funding from 3one4 Capital, Force Ventures, Saison Capital, and Zephyr Peacock India.

⚒️ Altilium, a London, UK-based battery minerals recovery platform, raised an additional $9m in Series A funding from SQM.

💨 Varaha, a Delhi, India-based carbon credits end-to-end developer, raised $9m in Series A funding from RTP Global, Omnivore, Orios Venture Partners, and The Norinchukin Bank.

☀️ Hohm Energy, a Johannesburg, South Africa-based solar energy marketplace, raised $8m in Seed funding from E3 Capital, 4DX Ventures, Breega, Climate Capital, E4E Africa, and other investors.

🛵 Pure EV, a Sangareddi, India-based electric vehicle and battery manufacturing platform, raised $8m in Series A funding from Bennett Coleman and Company, Hindustan Times Media Ventures, and Ushodaya Enterprises Pvt Ltd.

💨 Clairity Technologies, a Los Angeles, CA-based carbon dioxide removal technology developer, raised $7m in Seed funding from Initialized Capital and Lowercarbon Capital.

♻️ Cyclize, a Stuttgart, Germany-based plasma technology for chemical recycling developer, raised $5m in Seed funding from UVC Partners, Aurum Impact, High-Tech Grunderfonds, and UnternehmerTUM.

⚡ Evios, a Stewartby, UK-based electric vehicle home charging platform, raised $5m in Series A funding from Beringea.

🚢 EST-Floattech, a Badhoevedorp, Netherlands-based maritime energy storage solutions developer, raised $4m in Seed funding from Energy Transition Fund Rotterdam, PDENH, Ponooc, Rotterdam Port Fund, and Yard Energy Group.

⚡ Kvasir Technologies, a Gladsaxe Municipality, Denmark-based biomass-to-fuel conversion technology developer, raised $3m in Seed funding from Denmark’s Export and Investment Fund and The Footprint Firm.

🥩 Pacifico Biolabs, a Berlin, Germany-based alternative seafood technology company, raised $3m in Pre-Seed funding from FoodLabs, Simon Capital, Exceptional Ventures, and Sprout and About Ventures.

🏠 Rock Rabbit, a Palo Alto, CA-based AI-powered energy rebate platform, raised $3m in Seed funding from Powerhouse Ventures, Berkeley SkyDeck, Better Ventures, and MUUS Climate Partners.

Other

⚡ Geopura, a Nottingham, UK-based hydrogen-based zero emission fuels developer, raised $71m in funding from UK Infrastructure Bank, Barclays Sustainable Impact Capital, GM Ventures, Siemens Energy Partners, and Swen Capital Partners.

⚡ ev.energy, a London, UK-based EV smart charging platform, raised $41m in Grant funding from the California Energy Commission.

🚗 Niron Magnetics, a Minneapolis, MN-based rare earth-free magnets developer, raised $25m in funding from Samsung Ventures, Allison Ventures, and Magna International.

☔ Climate Policy Radar, a London, UK-based climate policy analysis platform, raised $7m in Grant funding from Environmental Defense Fund, Google.org, Open Society Foundations, Patrick J McGovern Foundation, Quadrature Climate Foundation, and other investors.

⚡ Arnergy, a Lagos, Nigeria-based distributed renewable energy solutions platform, raised $3m from All On.

💨 Carbominer, a Kyiv, Ukraine-based carbon capture technology platform, raised $2m in Grant funding from European Innovation Council.

Exits

⚡Walcha Energy, a Walcha, Australia-based renewable energy developer, was acquired by Origin Energy for an undisclosed amount.

New Funds

Overture Climate VC, a Los Angeles, CA-based investment firm, raised $60m for its debut fund that invests in early-stage climate companies.

Bluestein Ventures, a Chicago, IL-based investment firm, raised $45m for its third fund that invests in early-stage food tech companies.

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In the News

China proposed new ESG rules that aim to align its standards with European requirements in order to bring foreign investors back to its struggling economy. The goals require more than 400 companies to publish sustainability reports by 2026 to help standardize reporting and reduce greenwashing. Meanwhile in the US, JP Morgan and State Street's decision to leave Climate Action 100+ has sparked questions about "Greenhushing" and whether anti-ESG pressure has reduced their climate goals, or just incentivised them to stay quiet about them.

Singapore will require all departing flights to use SAFs starting in 2026. Almost 110,000 flights took off from Singapore’s Changi airport in 2022, with that number expected to grow. The exact requirement isn’t specified, but Singapore’s prior stated goal is for 1% of fuel to be SAF by 2026 with an increase to 3-5% by 2030.

The UK quit the Energy Charter Treaty (ECT), that allowed fossil fuel firms to sue the government over climate policies. The UK joins countries like France, Germany, Spain and the Netherlands in leaving the treaty. The ECT is the world’s most litigated investment agreement, and the UK’s continued involvement had raised concerns over its position on decarbonization.

Engie announced it lost $774 million in US onshore wind last year due to turbine issues, coupled with a drop in long-term US energy prices. Engie also signed a novel deal with Schneider Electric, who purchased $80m in transferable IRA tax credits to fund four solar + storage projects in Texas. In turn, Schneider will utilize the cost savings to buy 110,000 MWH of renewable energy credits every year for the next decade.

Shell exited South Korea’s floating offshore wind market. The company cited a focus on more profitable projects, and will sell 80% of its stake in a 1.25GW project off the coast of South Korea. While wind in Europe faces the challenge of an aging onshore wind fleet, with one-fifth of turbines nearing the end of their typical lifespan within the next five years, placing investors in the crossroads to decide whether to invest in upgrades or abandon these assets.

The LPO announced a conditional commitment of $544m to SK Siltron. The funding will go to expand their American manufacturing facility of high quality silicon carbide, a critical component of EV drivetrains, in Michigan. Meanwhile five graphite companies in the US and Canada call for Biden to reinstate tariffs on natural and artificial graphite, the largest component in EV batteries.

Fusion developer Type One Energy agrees a location for Project Infinity. The stellarator prototype being developed in partnership with the DOE’s Oak Ridge National Laboratory and the utility company Tennessee Valley Authority (TVA) will be built at the Bull Run coal plant, with construction slated to begin in 2025.

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