The Circular Carbon Network spent a year gathering detailed information about the leading players in the emerging Circular Carbon Economy in a series of living online data Indexes. We believe this is the most comprehensive collection of market data about this critically important emerging sector available anywhere. The purpose of this first-of-its-kind Circular Carbon Market Report is to share an analysis of our data in a way that gives more context, character, and depth to this ecosystem, increases overall societal interest and understanding, and facilitates informed action. We hope you find it useful.

Here are some of the highlights of our analysis:

The Innovator Index and Deal Hub

The Innovator Index and its companion database, our Deal Hub, tracks key technology, product, commercial, and capital data about the solution provider landscape for potential investors, commercial partners, and other key stakeholders.

Key Findings

The Circular Carbon innovator landscape is diversifying and growing rapidly. While it is still early days in the evolution of this space, there is a rapidly increasing level, depth, and breadth of overall entrepreneurial activity. There is a broad spectrum of companies from around the world developing and commercializing a highly varied range of innovative Circular Carbon products and solutions for applications in different end markets. Moreover, even though the sector is still relatively young, there are meaningful numbers of companies at all stages of technology maturity, commercial deployment, and revenue generation, from new startups doing their first pilots to successful, growth stage businesses. The same is true for the increasing depth and breadth of the investment opportunities we are seeing on the Deal Hub, where we find a diversity of deals across investment stages, type and size of investments sought, valuations, target investors, and other key factors. There are growing opportunities for a wide variety of investors.

Read more about the Innovator and Deal Landscape.

The Capital Index 

The CCN Capital Index tracks capital providers who are currently active or interested in Circular Carbon investment opportunities. 

Key Findings

The emerging Circular Carbon investor landscape is already quite diverse and includes a broad range of types of investment institutions, types of investments, and size of investments. It also appears to be growing in size, with well over a third of all investment firms we are tracking having been founded in the last five years. Overall, the firms in the Index are managing a significant amount of capital and express a surprisingly high level of general interest in a wide spectrum of Circular Carbon opportunities. However, the lack of specialization and the somewhat limited amount of capital actually deployed into the sector to date indicates that there is significant room for growth.

Read more about the Investor Landscape.

The Corporate Index

The purpose of CCN’s Corporate Index is to identify, measure, and characterize corporate activity that meaningfully intersects with the Circular Carbon sector.

Key Findings

While large global companies have been involved in conventional carbon capture research and development for many years, we’re now starting to see a noticeable increase in corporate interest and engagement with a far broader range of Circular Carbon solutions, which is both extremely positive and absolutely essential for the large scale deployment of the circular carbon solutions we need to address climate change in the time available. While corporate intersections points with the sector are still clustered at the “front end” of technology development (R&D and investment in technology developers), there are a growing array of different ways that companies are engaging, from supplying critical components to the market, to commercializing their own solutions, hosting commercial demonstration projects, and collaborating across institutional boundaries. These activities, however, are just emerging and there is evidence that there is still a general lack of strategic clarity about their role in, and the impact on their businesses of, the Circular Carbon Economy. Given the slow pace of change in large organizations, this might be understandable; but it may not be enough.

Read more about the Corporate Landscape.

The Catalyst Index

The Catalyst Index is designed to help market participants of all types better understand and access the services, expertise, resources, and support that the growing number of enabling organizations in and around the Circular Carbon sector offer.

Key Findings

The emerging Circular Carbon Catalyst ecosystem includes a diverse spectrum of over 23 types of organizations, with the most common being NGO’s, convenors (like CCN), and commercial service providers (like attorneys, consultants, and engineering firms). These organizations are generally modest in size with less than 100 employees, but are also highly focused on the Circular Carbon sector (high levels of commitment to and expertise in the sector), with a majority focused on Carbontech-related issues specifically. They also offer a large array of over 20 different categories of services from data providers to policy advocacy, technology development and demonstration, due diligence, fundraising, and communications. The target core customers and stakeholders of these organizations are primarily entrepreneurs and corporates, but also include capital providers, governments, and the public.

Read more about the Catalyst Landscape.

CCN’s inaugural Circular Carbon Market Report is the first comprehensive and detailed look at the key players in the emerging Circular Carbon market that we are aware of. It is specifically designed to help address the critical needs of this sector.

Built on Unique Databases

Over the past year, CCN has aggregated data about the leading participants in the growing circular carbon ecosystem into several discrete databases or Indexes. These include an Innovator Index (featuring over 300 leading solution developers), a Deal Hub (detailing nearly half a billion dollars of live investment opportunities for accredited investors), a Capital Index (which profiles over 120 active climate, carbontech, and carbon removal investors), a Corporate Index (focused on the growing list of global companies active in the sector), and a Catalyst Index (which tracks the organizations who are the leading enablers of the Circular Carbon Economy, such as service providers, technical experts, and policy advocates).

Focused on Informing and Inspiring Action

This report summarizes the key market trends and insights that we have identified both from the data and the process of gathering it. Our goals are to share, in an accessible, digestible, data-rich format what we have learned about the state and direction of the emerging circular carbon economy; to identify current opportunities and challenges for the continued growth of this space; and, ultimately, to catalyze increased, more informed activity in the space.

Methodology

The data compiled in this Report comes from a broad combination of sources, including detailed reviews by our research team of publicly available information, the generous cross-sharing of market data by our global partners, and self-reported information by direct market participants in response to multiple rounds of targeted surveys that we sent them. We believe it provides a uniquely detailed, first-of-its-kind resource to the marketplace. We also recognize its limitations. We know there are many gaps in our data and in our coverage. The responsibility for any inaccuracies rests with us alone. As the Circular Carbon Network is not a commercial data research service, but a market catalytic, non-profit initiative, we rely on collaboration and data sharing to improve the depth and richness of our Indexes. If you are actively engaged in the Circular Carbon Economy, we invite you to add or update data about your organization here.

For over a century, we have powered civilization by digging up carbon-rich fossil fuels and burning them for energy or converting them into the polymers, chemicals, fertilizers, and other carbon-based products that are the foundation of the modern economy. It is now clear, however, that this linear carbon economy (dig, burn, pollute) is no longer sustainable for humanity or our planet.

According to the most recent global studies, scientists now estimate that to avoid catastrophic climate change in the decades to come, we not only need to dramatically and rapidly reduce global emissions of CO₂, but we will also need to remove billions of tons of CO₂ annually that have already been added to Earth’s atmosphere and oceans over the past 150 years. This presents a massive, nearly unprecedented challenge to our species. But it also represents a historic, trillion dollar opportunity, arguably the largest economic opportunity of the next hundred years. Let’s quickly review the facts…

The Carbon Mitigation & Removal Imperative

To limit the increase in average global temperatures to less than 1.5°C above pre-industrial levels, we need to reach “Net Zero” CO₂ emissions by 2050 and then move into net negative emissions on a global basis. Thus, we need solutions that BOTH dramatically reduce our ongoing CO₂ emissions AND enable us to remove CO₂ directly from the atmosphere. How much CO₂ are we talking about? The latest UN Intergovernmental Panel on Climate Change report says we need to remove up to 1,000 billion tons of carbon dioxide from the atmosphere by 2100 to avoid catastrophic climate change.

Key Carbon Reduction and Removal Pathways

Reducing and removing that much CO₂ will require a broad portfolio of solutions deployed at massive scale, including accelerating the ongoing transition to renewable energy, the electrification of transportation, increasing the energy efficiency of buildings, and reducing deforestation, among others. It will also require carbon capture and storage or utilization of ongoing emissions (key examples include the conversion of CO₂ to fuels, soils, chemicals, plastics, building materials, and other advanced materials) as well a full range of carbon removal solutions, from technological approaches like Direct Air Capture (DAC) and Bioenergy Carbon Capture and Storage (BECCS), to biological approaches like reforestation, soil carbon sequestration, and engineered wood (as a substitute for cement and steel), and geological approaches like enhanced weathering and seawater carbon capture, among others.

Circular Carbon Defined

Amongst the climate solution pathways outlined above, we define “Circular Carbon” as those carbon reduction AND removal solutions that directly take waste carbon-based molecules (typically CO₂) and cycle them into other purposes in a way that creates a meaningful climate benefit and, ideally, additional economic or ecosystem benefits. We believe Circular Carbon is a useful umbrella term that ecompasses both “Carbontech” (Technology-enabled means of capturing, utilizing, and/or storing carbon-based GHG molecules, whether derived from the atmosphere or ongoing emissions) and “Carbon Removal” (the durable removal of CO₂ from the atmosphere, whether by technological, biological, geological, or other means). We know all too well that the vocabulary in the climate solutions space can be overly arcane, which, in turn, inhibits understanding and action (see our previous report on “Communicating the Value of CO₂: Survey Results”). That’s why we deliberately use the broader, common sense Circular Carbon term in our efforts to lens resources and attention to this critically important set of solutions.

Huge Markets

While the scale of the challenge is huge and the time to address it is short, the good news (as further detailed in this Report below) is that many of the Circular Carbon solutions we need already exist or are well under development. Moreover, many of these solutions not only address climate change, but, by converting waste CO₂ into useful products or restoring the critical ecosystem services we rely on, actually create significant economic value. Multiple independent studies have laid out the massive market opportunities that a circular carbon economy will create (see our Market Report Library).

Investment Need & Opportunity

Estimates vary about the scale of investment required to meet the climate challenge. We know Circular Carbon solutions are generally capital intensive, so the number is not small. But is it really that big? Science tells us we will likely need to remove at least 10 gigatons of CO₂ from the atmosphere annually by 2050 (and possibly 2-4X that amount) to avoid warming of greater than 1.5C. If one conservatively assumes a broad upfront capital cost range of between $100 and $1,000 dollars for one ton of carbon removal capacity, the capital investment required for building 10 Gigatons of capacity is (roughly) between $1 trillion and $10 trillion. Since governments spent more than $12 trillion in just the first six months of the COVID-19 pandemic to protect society from further catastrophic damage, these numbers are not shocking to contemplate.

Moreover, again, investing in addressing climate change is not just an expense. We’re talking about the wholesale transformation of the energy and materials economy worldwide over the coming decades from a linear, fossil carbon-based approach, to a circular carbon-based model powered increasingly by renewable energy. This will both transform existing industries and create whole new ones. While there will be winners and losers and there are clearly significant uncertainties about timing, which technologies will dominate, which markets will flourish, and how quickly policy will support these changes, there should be little question that this will create an enormous new class of opportunities for investors. As we detail in the report below, this has already begun.

Current Situation – Nearing a Tipping Point?

The Circular Carbon economy is at a pivotal moment in its evolution. The level of interest in the sector has increased dramatically over the last two to three years. The science has become even clearer: we face increasing disruption of the world’s natural systems if we fail to take urgent action. The longer we wait, the more CO₂ we will have to remove from our atmosphere. The everyday evidence has also become obvious: unprecedented global average temperatures, year after year; dwindling arctic sea ice; record storm and wildfire seasons. Meanwhile, the pandemic has shone a harsh light on what happens when we fail to prepare for a known threat, while also demonstrating how quickly governments and societies can act when determined to do so.

Increasing Momentum

These and other factors are driving more attention than ever before to the critical role that the Circular Carbon sector can play in addressing the climate challenge while creating tremendous social and economic benefits. As you will see in the report below, innovators and quality entrepreneurs are entering the sector at an increasing pace, creating and maturing exciting new solutions. As we will show, investors are also beginning to take note, with “climate tech,” “carbontech,” and “carbon removal” now becoming recognized, even popular, investment themes. Similarly, corporate interest has skyrocketed. As described below, in the last year, there has been a blizzard of corporate announcements — from Microsoft to Shell to Amazon to Delta and more — about achieving “net zero emissions” in the coming decades, nearly all of which rely on circular carbon solutions to get there. Likewise, government policy is starting to reflect and support this growing interest, with the EU passing a “European Green Deal” with significant carbon reduction targets and even the US passing, on a bipartisan basis, changes to the tax code (“Section 45Q”) that provide tax credits for carbon capture, sequestration, and utilization. The media, of course, has also taken note…

Ongoing Challenges

While this is all very positive, it is not yet enough. The clock is ticking relentlessly. When science tells us we have approximately a decade to bend our current trajectory away from potentially catastrophic climate outcomes, the progress we can make (or fail to make) over even a few months matters. While investors are definitely taking note, there is evidence, as you will see from our report below, that just a few billion dollars has flowed into circular carbon solutions to date from private investors. This is not nearly sufficient to either the need or opportunity. And indeed, there are real technical and economic questions about what solutions will work, when, if ever.

There is also the challenge of how Circular Carbon solutions will support a just and equitable transition to a more sustainable, resilient economy. Public perception and public acceptance of these solutions is critical if they are to be developed to their full potential and deployed at scale. Getting there must first involve broad outreach to a range of stakeholders beyond the usual technocratic circles. Executing a shift to a Circular Carbon economy is too large of an effort to be carried out by a small community of technologists and investors, and a path forward that places emphasis on equity and justice as well as cost and technical performance is likely the most fruitful.

Though the path ahead is not without its challenges, including the risks associated with any actions we take, there should be no doubt that the risks of inaction are far greater.

Background – The Lifeblood of the Circular Carbon Economy

As the importance of directly mitigating CO₂ emissions has increasingly come into focus in the last several decades, a number of companies started to explore potential “Carbon Capture and Storage” (CCS) solutions. Given that this involved tying into large power and industrial plants at an 8 or 9 dollar figure cost, most of these early actors were large, well capitalized, energy infrastructure companies such as GE, Siemens, Mitsubishi, and others. For a number of reasons (capital intensity, regulatory uncertainty, political controversy, among others) the conventional CCS market has moved along at a relatively slow pace, with less than 20 CCS facilities in operation worldwide today.

About 10 years ago, a number of more entrepreneurial players started to explore alternative approaches to both capturing CO₂ and figuring out what to do with it in the absence of widespread regulatory requirements for sequestering it underground. These focused in particular on building profitable businesses by turning the CO₂ into products the market values, such fuels, fertilizers, polymers, chemicals, building materials, food, and more.

Recognizing that risk takers are the lifeblood of any new human endeavor, the XPRIZE Foundation launched the Carbon XPRIZE in 2015, which was specifically designed to accelerate innovation in the space by offering $20MM in incentives prizes for new, effective capture and utilization solutions. Out of several hundred applicants, 23 companies were chosen as semi-finalists and ten of them have now moved on to become Finalists, vying for the grand prizes (to be decided in 2021).

Prior to the launch of the Carbon XPRIZE, there were no widely known list of companies in the emerging “Carbontech” space. No one really knew how broad and deep the innovator landscape was beyond those 23 companies deemed serious enough to compete. This was one of the core reasons we launched the Circular Carbon Network. It was clear that investment and commercial interest in the space was going to be limited until the market understood whether there was a there there in the solution landscape, in terms of quantity, quality, technical and commercial status, and other key factors that inform and motivate larger market activity.

Overview of the Innovator Index and Deal Hub

CCN developed the Innovator Index and its companion database, our Deal Hub, to address these critical gaps in information about the solution provider landscape for potential investors, commercial partners, and other key stakeholders. While the Innovator Index is focused on characterizing the rapidly evolving and growing solution provider landscape across a broad variety of practical, technical, and commercial dimensions, the Deal Hub is designed specifically to address the needs of capital providers and features investor-relevant information about live investment opportunities in the space. Together, our objectives for these companion database are:

• Help investors find circular carbon companies that fit their thesis
• Help entrepreneurs feature their company to a capital and commercial audience
• Help corporates identify potential startup innovation partners and suppliers
• Help entrepreneurs identify complementary solution providers and collaborators

Both databases include data gathered directly from companies via targeted surveys and through the review of public information by our research team. Because of our US location and the US and European location of many of our data partners, these databases are weighted towards North America and Europe, though we are working to expand our coverage of innovators from other global regions. We welcome your nominations of companies to add to the Innovator Index or Deal Hub. Despite these limitations, we believe we have compiled the largest public databases of Circular Carbon innovators and deals, ever. We hope you find them, and our analysis of the data we have gathered so far below, useful.

Key Findings

As we detail below, the Circular Carbon innovator landscape is diversifying and growing rapidly. While it is still early days in the evolution of this space, there is definitely a there there in terms of overall entrepreneurial activity. There is a broad spectrum of companies from around the world developing and commercializing a highly varied range of innovative Circular Carbon products and solutions for applications in different end markets.  Moreover, even though the sector is still relatively young, there are meaningful numbers of companies at all stages of technology maturity, commercial deployment, and revenue generation, from new startups doing their first pilots to successful, growth-stage businesses. The same is true for the increasing depth and breadth of the investment opportunities we are seeing on the Deal Hub, where we find a diversity of deals across investment stages, type and size of investments sought, valuations, target investors, and other key factors. There are growing opportunities for a wide variety of investors.

Some of the key highlights of our analysis of the data in the Innovator Index and Deal Hub include:

Overall 

• Increasing Pace of Company Formation: 62% of the companies on the Index were founded since 2010. At the same time, nearly 40% were founded before 2010; this sector is growing rapidly, but is neither as immature or as young as the casual observer might assume

Technology Dimensions

• Diverse Product Pathways, with Some Clear Leaders: While there are dozens of product pathways listed, Fuels (20%) and Chemicals (19%) are clearly the most common, followed by Building Materials (15%)
• Several Dominant Macro Technology Pathways: Again, while companies are pursuing many technology pathways, Biological processes dominate (30%), followed by Electrochemical processes (24%) and Thermal processes (23%)
• Technologies Maturing in Readiness: Using U.S. D.O.E. Technology Readiness Levels, a majority of companies that reported this information 58% (78 out of 135) classified themselves as somewhat technologically advanced; nearly half of those (38 of 78) classified themselves as highly advanced

Commercial Dimensions

• Companies also Maturing in Commercial Readiness: 34% of the companies whose commercial stage we were able to classify are in the “Commercial Demo” phase,followed by those in the “Growth” phase (26%), and the Pilot phase (23%),
• Beginnings of Revenue Traction: Of the companies for which we have revenue information (107 / 332), over half are generating revenue, and more than 50% of those firms are generating over $1M; another 44% are still pre-revenue
• Top Target Customers are Energy- and Carbon-Intensive Industries: The Oil & Gas, Chemicals, Utilities, and Building Materials industries are the leading customers industries for companies in the Index, though they are also seeking to serve a broad spectrum of other industries

Capital and Investment 

• Capital Starting to Flow into the Sector: We found 135 companies that had raised nearly $2.2 billion, which is $200MM more than a year ago. While positive and likely significantly understating the total amount invested in the sector given geographic gaps in our data, it is still small relative to the need (and opportunity).
• Diverse Sources of Capital:  Angels & Family Offices are the most common source of capital (32%, combined), followed by Government (22%), and Corporates (18%). While venture capital, and private equity are also prominent sources, there is a clear pattern of non-institutional investors taking the lead in financing the sector
• Increasing Deal Flow: Our Deal Hub has tracked 132 companies raising a total of $714,000,000 in the last year, a significant increase from when we launched the Deal Hub in 2019
• Spectrum of Investment Stages, Weighted to Early Stage: Investment opportunities span the full range of investment types (equity, project finance) and stages, with Seed and Series A deals the most common. However, 30% of all deals are also for later stage opportunities.  
• Broad Spectrum of Investors Sought: Family Office and Angel investors (combined) are the leading target investors, followed by Corporates and Venture Capital.  
• Round Sizes Still Modest: Round sizes are clustered in the sub-$20MM range, with the most common raises being between $2MM and $10MM.
• Valuations Still Modest Too: The largest number of companies are valuing themselves at between $10-$15MM. 40% are below this range, and 60% are at or above. Total stated valuations (based on only partial company data) add to over $1.5 billion. These modest valuations compared to the total market opportunity should make the sector increasingly attractive to investors

Data Highlight – Most Popular Circular Product Pathways

Increasing Company Formation

In a very positive sign for the trajectory of the sector, we observe significant growth in the number of Circular Carbon companies founded in the last ten years. Specifically, 62% of the companies for which we have founding year information were founded after 2010.

Leading Geographies to Date

The companies on our Index come from 27 different countries around the world. These are weighted heavily toward North America — 52% are from the US and almost 10% from Canada alone — and Europe, which has 32% of the total, with Germany and the UK at the top of the list. 

Expanding Our Coverage

It is clear from these numbers and the map below that we have more work to do in sourcing innovator and deal data from other critical geographies around the world. We are almost certainly missing important additional entrepreneurial activities in the sector in Asia, Africa, the Middle East, and South America. The good news is that the magnitude, depth, and breadth of innovation in the sector is likely significantly larger than even the already rich landscape our Innovator Index reveals. We are committed to expanding our coverage and welcome your help in identifying innovators from these regions that should be on our Index or Deal Hub.  You can nominate companies here.

Map of Company HQ Countries in the Innovator Index

Carbon Technology Categories

When tracking the types of technologies being pursued by companies in the Circular Carbon sector, we established a framework that included several macro categories: (1) Capture & Utilization; (2) Utilization; (3) Capture (Flue) (4) Capture (Direct Air) and( 5) Other. Our initial rubric was oriented more towards “Carbontech” companies and less on “Carbon Removal” companies, which overlaps with Carbontech in various ways, but also includes less technologically-driven biological and geological approaches. We plan to expand our categorization rubric to more fully and clearly encompass these Carbon Removal pathways, but for now they are marked as “Other” in the analysis below.

Per the chart above, the highlights of our Carbon Technology Category analysis include:

• Capture & Utilization: Over 41% of the innovators we were able to categorize are pursuing both capture and utilization
• Utilization Only: Another 24% are pursuing carbon utilization only
• Capture Only: Over 21% are carbon capture only (10% are focused on flue gas capture and 11.4% are focused on Direct Air Capture, broadly defined)
• Other: Nearly 13% are pursuing other types of circular carbon approaches, including biological and geological carbon removal, among others

The fact that a plurality of companies on the Innovator Index are pursuing both capture and utilization may indicate that there are technological and/or commercial advantages of doing so. We plan on examining this more closely in the future. 

Product Pathways

Looking at the macro category of product that is being made by companies on our Innovator Index (versus the macro category of technology that is making it, per the above), we find a quite diverse mix of product pathways. Fuels (20%) and Chemicals (19%) are clearly the most common products, followed by Building Materials (15%). But there are significant numbers of companies pursuing the other product categories listed below as well as several product types that don’t fit neatly into these categories (you can find more granular data here).

Key Process Types

Here we track and categorize the key technology processes being used by the companies in the Index to produce their products.  Interestingly, of those companies whose underlying technology process we were able to clearly categorize, Biological processes dominate (30%), followed by Electrochemical processes (24%) and Thermal processes (23%), and a diversity of others.

With the important disclaimer that this is self-reported information, we were surprised to find that companies in the sector may be more technologically mature than commonly assumed: 

• A clear majority of 58% (78 out of 135) classified themselves as somewhat technologically advanced or more, at TRL level 6 or above.
• Of those, nearly half (38 of 78) classified themselves as highly advanced in development at TRL levels 8 or 9 
• As expected, there are also significant number of companies (57) at lower TRL’s (1-5) 

At one level, however, these findings should not be that surprising. Per our Company Vintage data above, about 50 of the companies on our Index were founded before 2010.  These companies and others have had over a decade of time to develop and refine their solutions.  Many of these are now ready for deployment and scaling. This sector is neither as immature or as young as the casual observer might assume.

Commercial Stages

Moving into characterizing the commercial status of the companies on the Innovator Index, we categorize them according to the stages listed below. With the disclaimer that this information is based on a mix of self-reported data by the companies themselves and classifications by our research team using public information (where available), we found that the largest segment of companies for which we have this information in the Index are in the “Commercial Demo” phase (34%), followed by those in the “Growth” phase (26%), and the Pilot phase (23%). That means that almost 85% of the companies that we are tracking this information for are actively commercializing or are already commercial. The remainder are mostly still in the R&D phase, with a handful on the other side of the spectrum being classified as “Mature” companies (with large, established businesses). While this data shows that the companies on the Index are still generally weighted toward the “early stage” of commercialization, the Circular Carbon solution provider landscape is by no means dominated by research-focused, pre-commercial efforts. 

Revenue Ranges

Evaluating revenues, we also see the beginnings of revenue traction across the sector. Of the companies for which we have revenue information (107 / 332), over half are generating revenue, and more than 50% of those firms are generating over $1M. While those companies are breaking out into their growth phase, 44% are also still pre-revenue. This shows again that while the sector is still generally early stage in the largest sense (and thus should offer opportunities with attractive valuations for earlier stage investors), there are signs of real commercial traction and growth (and, in turn, there should be opportunities for investors interested in more mature companies).

Target Customers

To understand the current and potential customer bases of the solution providers in the Index, we surveyed companies about their target customer industries. We found they are seeking to serve a highly diverse array of industrial sectors across the global economy. The Oil and Gas and the Chemicals industries top the list, which is not surprising given that these sectors’ core businesses are not only energy and carbon-intensive — they are focused on carbon-based molecules. Many of the other leading target industries are also carbon-intensive or have challenging pathways to directly de-carbonize (e.g., cement and steel). 

These top target customer industries also accord with the top Product Pathways being pursued by companies on the Index as identified above (Fuels, Chemicals, Building Materials) as well as the sector distribution of global companies in our Circular Carbon Corporate Index, where the leading industries represented on the Index are Oil & Gas, Utilities, Chemicals, and Construction Materials.

Commercial Needs

Our Indexes are not just intended to inform, but also to facilitate cross-industry collaboration and action. We ask the solution providers in our Innovator Index to list and categorize their current top commercial needs to help us and other market participants identify potential partnership opportunities.  

As shown below, companies on the Index are seeking a variety of commercial partners, with a focus on customers and project hosts. 

Modularity of Solutions

Another significant commercial factor we evaluate is the modularity of the solutions provided by Companies in the Index. While there are ongoing debates about which level of modularity is ideal, it clearly depends on the context.  Highly modular solutions can be deployed and distributed at multiple scales and still be cost effective. Less modular solutions can also be extremely profitable and impactful at large scales (which we ultimately need to get to). Like the solar industry (which has very distinct approaches across residential, commercial & industrial, and utility scale applications), we are likely to see a range of sizes of deployments that make sense for circular carbon solutions. 

So far, for the companies in our Index who provided us with the relevant information, modularity is far more common than not:

Co-Location Requirements

Another related factor in the nature and speed of the deployment of the Circular Carbon solutions is whether they need to be co-located with existing industrial plants.  Again, there are pros and cons. Existing industrial facilities emit most of the world’s CO2 emissions and arguably have the most need for Circular Carbon solutions. They also possess many of the infrastructural foundations that Circular Carbon companies need — heat, power, and CO2 itself, among many others.  On the other hand, integrating with existing industrial facilities can be complicated and expensive and trigger both institutional and regulatory barriers.  

Per the below, over 45% of the companies who supplied this information (92) stated that co-location is optional or not applicable, while over a third said it is required.

Capital Raised to Date

A critical question we sought to answer in building the Innovator Index was – how much capital has been invested in the sector to date? Our results provide just a partial answer. We were only able to identify investment-to-date totals for 135 out of the 332 companies in the Index. This totaled nearly $2.2 billion, which is not insignificant.  This also compares favorably to the $2.0 billion raised by 89 companies that we tracked when we first launched the Innovator Index in September of 2019.  Thus, we have identified an additional $200 million raised in just the last year.  

However, these numbers likely significantly understate the amount of capital that has flowed into the sector to date for a number of reasons. First of all, our data only covers 40% of the companies in the Index. A linear projection of the amount raised by those 135 companies for whom we have capital raised data to the full 332 companies in the Index, suggest a projected total of over $5.4 billion.  While this may not be a conservative estimate, also remember that our Index itself, as noted above, has significant gaps in coverage regarding technology developers in most major regions outside of North America and Europe, including Asia, the Middle East, South America, and Africa. While it is conjecture to venture a total amount of capital that has gone into the sector so far, we know it is at least $2.2 billion, and very likely substantially more.

Capital Raised by Region

Although clearly biased by our over-weighted coverage of North America in general (our home territory), companies in the Index from North America raised by far the largest amount of capital to date.  

Top Sources of Capital

As clearly outlined in our Capital Index, there is an increasingly broad variety of capital providers starting to invest in the Circular Carbon sector. When we measure the top sources of capital to date for the Companies in the Index, three investor classes clearly stand out. Of all companies in the Index for which we have capital source information (207 companies), the most common sources are: Angels and Family Offices (32% combined), Government (22%), and Corporates (18%). While venture capital, and private equity are also prominent sources, there is a clear pattern of non-institutional investors having taken the lead to date in financing the sector. This is not surprising for an emerging industry, but also highlights that the sector may still have some work to do to attract more conventional investors. In the meantime, companies in the sector clearly seem to appreciate the role that these early investors have played…

About the Deal Hub

The CCN Deal Hub tracks live opportunities in the Circular Carbon sector to inform and facilitate investor investments in the sector. There is no cost to be listed or fees of any kind to any parties at any point in relation to investment opportunities that are listed. However, only Accredited Investors may access the Deal Hub.

The Deal Hub lists both “corporate” investment opportunities (investments into companies) as well as project investment opportunities (investments in specific deployments), though to date, as shown below, it has been weighted toward corporate-type investments. 

The information on the Deal Hub is supplied by the offering entity (e.g. start-up or company or project sponsor). Once a deal has gone 60 days past the “Anticipated Closing Date” as indicated by the company, it is moved from the “Active Deals” list to the “Historic Deals” list.  

Total and Current Investment Opportunities Tracked

The Deal Hub was launched in September 2019. At that time, we identified 51 companies raising approximately $430,000,000. Over the last year, we have identified a significant amount of additional investment opportunities, with the Deal Hub tracking 132 companies raising a total of $714,000,000 during that period. As of the publication of this report, 58 companies raising approximately $307,000,000 are listed as Active Deals on the Deal Hub. In sum, we are seeing an ongoing, increasing flow of live investment opportunities in the sector.

Type of Capital Sought

The companies in the Deal Hub are raising a fairly typical spectrum of types of capital for an emerging technology sector. Corporate Equity is by far the most common, followed by Convertible Debt (which is often used by early stage companies to bridge to the next priced round). It is good to also see a significant number of companies (67) seeking Project Equity and Project Debt, which is a sign that companies in the sector are actively working to finance commercial deployments of their solutions.

Deal Investment Stages (Series)

While the investment opportunities listed in the Deal Hub span the full range of stages, a large majority of the deals are for earlier investment stages (series), with Series A leading, followed by Seed stage deals. It is worth noting, however, over 25% of the “Series A” deals listed are for over $10 million, which is on the high side for the typical Series A. In addition, 40 deals (over 30% of the opportunities listed on the Deal Hub) are later stage deals or listed as “Other” than these earlier stages (examples include companies raising “growth” equity). The bottom line, however, is that the bulk of the capital raises we tracked over the last year are for earlier stage deals.  With more than 60 companies formed from 2015 – 2019, early-stage deal flow makes sense given the accelerating velocity of new startups emerging.

Broad Spectrum of Investors Sought

Companies in the Index are also seeking capital from a broad variety of capital providers. Family Office and Angel investors (combined) are the leading target investors, followed by Corporate Strategics and Venture Capital (note: companies are able to indicate their preference for multiple target investors in the Deal Hub). This largely aligns with the historic sources of capital for companies in the Innovator Index as described above (Family Offices and Angels, Corporates, and Government) though, interestingly, the Government has somewhat dropped in preference for current deals versus historic deals. It also reinforces again that investors with generally longer time horizons (family offices) and strategic objectives (corporates) are preferred (and perhaps more inclined) targets for Circular Carbon innovators than pure institutional, financially-oriented investors for the moment. 

Round Sizes

There is also a relatively broad range of round sizes represented in the Deal Hub for check writers looking to deploy different amounts of capital. The raise sizes are clustered in the sub-$20MM range, with the most common raise sizes being between $2MM and $10MM.

Valuation Ranges

While we only received pre-money valuation information from a portion of companies on the Deal Hub (71/132) , it provides some interesting context on the valuation patterns in the sector (largely pre-Covid, it should be noted). The largest number of companies are valuing themselves at between $10-$15MM.  Forty percent of all deals are below this valuation, and roughly 60% are above. In total, the stated pre-money valuations of this portion of the companies on the Deal Hub summed up to over $1.5 billion. 

Investment Landscape Summary

Our partners at the CREO Syndicate (a non-profit network of family office and aligned investors interested in clean economy opportunities) developed the rubric below to describe the Circular Carbon investment landscape. It sensibly divides the space horizontally by proximity to the end use of the carbon molecule, starting with Supply Chain opportunities as the farthest out (to the left), and then upstream opportunities (carbon capture), midstream opportunities (CO₂ transportation and distribution), and downstream opportunities (carbon-to-value, carbon removal) to the right. On the vertical access, it has capture, utilization, and removal opportunities on the top row, with integrated CCS and EOR opportunities below, followed by Investment Vehicles on the bottom (for more context on the investor space, see our analysis of our Capital Index). 

If our analysis of the various dimensions of the Circular Carbon innovator and deal landscape above haven’t made it clear already, this chart should help you visualize the rich (and growing) diversity of investment opportunities in the sector.  

CREO Syndicate Digest of the Circular Carbon Landscape

Background – The Critical Importance of Capital

As the threat of climate change has come into focus, the question of how to finance solutions has become more urgent. An initial burst of venture capital interest in “cleantech” companies in the late 2000’s largely fizzled due, among other reasons, to the Great Recession and the mismatch (both real and perceived) between the time-bound and capital-limited venture model and the long development cycles and capital intensity of new energy and infrastructure solutions. Nearly 15 years have passed since that first cleantech “bubble” and some of the same challenges remain. However, the threat of climate change is no longer theoretical; we are now seeing its effects all around us. In response, as you will see below, a more diverse set of capital providers — from family offices, to corporates, to governments — are getting engaged in financing “clean economy” solutions. In addition, a growing number of these investors are bringing longer term capital and an “impact” lens to their investment strategies. In concept, the Circular Carbon economy — where you recycle or remove CO2 in the process of creating economic value — offers investors a compelling way to twin economic returns with climate impact (see our Market Reports Library for a compendium of third party assessments of both the climate and market potential of Circular Carbon solutions). Indeed, some would argue that replacing our linear fossil carbon economy represents one of our best opportunities to renew global prosperity, reinvent the economy, and create a more resilient and just society. Still, the amount of time we have to achieve this vision is short and the scale of capital required is large.

Overview of the Capital Index

The CCN Capital Index tracks capital providers who are currently active or interested in circular carbon investment opportunities. It also tracks other leading (mostly clean technology-oriented) investors who are not yet active, but whose mandates or focus suggest they could (and perhaps should) be.

Raising capital is challenging during the best of times. This is especially true for an emergent, capital-intensive sector that is establishing itself in the midst of a global pandemic and other geopolitical and geophysical challenges. By tracking a broad range of data about the investment profiles, preferences, and performance of capital providers active or interested in the sector, our goal is to accelerate and increase the smart flow of capital into the Circular Carbon economy. Specifically, the Capital Index is designed to:

• Help investors build syndicates and identify potential co-investors across stages
• Help investors identify potential sources of follow-on capital
• Help Limited Partners find funds active in the carbon sector
• Help entrepreneurs find potential sources of capital across asset classes (e.g. equity, project finance, grants, etc.)
• Help strategic corporate VCs identify institutional investors to collaborate with

The data for the Capital Index was compiled from a mix of direct responses by capital providers to a structured series of questions and a review of publicly available information by our research team. It currently includes 122 clean technology-oriented capital providers of all types (from individuals to venture and private equity firms to project finance firms, corporates, and more) from 12 countries (primarily North America and Europe), representing more than $195 billion in assets under management (AUM). It’s still a relatively small slice of the global capital pie, but we believe it represents the largest and most detailed database of Circular Carbon-curious investors ever compiled.

Investor Interest in Circular Carbon Opportunities is Growing

Key Findings

The emerging Circular Carbon investor landscape is already quite diverse and includes a broad range of types of investment institutions, types of investments, and size of investments. It also appears to be growing in size, with well over a third of all investment firms we are tracking having been founded in the last five years. Overall, the firms in the Index are managing a significant amount of capital and express a surprisingly high level of general interest in a wide spectrum of Circular Carbon opportunities. However, the lack of specialization and the somewhat limited amount of capital actually deployed into the sector to date indicates that there is significant room for growth. All of these different factors can be filtered and viewed in the Capital Index here.

Data Highlight – Significant Investor Interest in Carbontech

Types of Investment Institutions Represented

Venture capital firms dominate the Index to date, representing nearly 60% of all firms we are tracking, followed by private equity firms (25%), family offices and angels (18% combined), corporate investors (13%) and a diversity of other types of institutions. This likely reflects the still-nascent state of the circular carbon sector, with earlier stage investors generally being more active in the sector so far.

Firm Vintages

The overall Clean Technology investor landscape appears to be growing again, in both numbers of firms and assets under management. While many of the newer investors may use terms other than “cleantech” to describe their focus (versus “Energy Tech” or “Carbontech” or “Climate Tech”), the Index shows an increasing variety of capital providers have entered the space in recent years at a growing pace. Specifically, over 58% of all investment firms we are tracking having been founded in the last ten years, with over 28% founded in the last 5 years (with one of those five years highly impacted by Covid-19 and still unfinished as of the writing of this report).

Countries Represented by Investors in the Index

Investment firms headquartered in 12 different countries are represented in our Capital Index. The vast majority (69%) are based in the U.S. The rest are mostly based in Europe (14%), and Canada (4%), with a small number from Asia and the Middle East. This is in significant part a reflection of our location, familiarity, and ease of data access. We are committed to expanding our research coverage to these and other important global regions and welcome the help of our Network and partners to bring data about investment activities in these areas to our attention. You can access the form to nominate a capital provider for our Capital Index here.

Types of Investments Made

The capital providers in the Index are deploying a fairly broad range of types of investments. Reflecting the dominance of venture and private equity firms, corporate equity and convertible debt are the most common investment types, followed by project equity and debt, and corporate debt. There are also a meaningful number of firms that indicated they are making Mission Related Investments (MRI’s), Program Related Investments (PRI’s), and grants, reflecting that there are several foundations and family offices with philanthropic arms in the Index.

Direct and/or Fund Investments

The majority of investors in the Index make “direct” investments only (investments directly into companies versus into funds). However, 20 (16%) say they also consider and make investments into funds. This is a positive indication that there is appetite and room for capitalizing new fund managers who might incorporate a Circular Carbon investment thesis into their approach.

Assets Under Management (AUM)

The firms in the Capital Index are currently managing a total of $196 billion dollars. This is heavily influenced, however, by two very large investors, TPG and Generation Investment Management, with $119B and $26B under management respectively. While those firms do allocate a minority portion of their funds to cleantech (including circular carbon) investments, the remaining investors manage a total of $51B between them. Excluding the outliers, the average AUM is $685 million, while the median is $215 million. The largest investor manages $6 billion, and the smallest $8 million.

Investment Stage Focus

Investors in the Index are deploying capital across many investment stages, from pre-seed to public equity. Much of the focus, however, is on the earlier stages, with nearly 47% doing pre-seed, seed, and Series A investments. A significant percentage (43%) are also deploying capital into later stages (Series B – E). In contrast, only 6% of the firms we are tracking are investing at the mezzanine stage or in public securities, and 4% are doing project investments. We hope to find and track more project investors active in the circular carbon space in the near term especially, as a robust project finance ecosystem will be critical for scaling and deployment.

Initial and Total Investment Size

There is a cluster of typical initial investment sizes for investors in the Index at the low end from $100K to $1MM and then again from $1MM to $10M, showing there is some investment size range and flexibility amongst potential Circular Carbon capital providers.

Meanwhile, the majority of Investors who responded indicated they could deploy from $1MM to $10MM into a single company over the life of an investment. Fifteen investors indicated they could commit a total of $10MM in a given opportunity. As the sector matures, we hope to identify more capital providers who can supply the increasing capital needed for its growth

Pre- or Post-Revenue Preference

Two thirds of the investors who indicated a preference said they always, regularly, or sometimes consider investing in pre-revenue companies. This is positive as it reflects the early stage focus of a significant percentage of investors in the Index (per the above) as well as the status of many of the emerging opportunities in the sector.

Target Company Revenue Range

Again reflecting the generally still-early stage focus of investors in the Index, the vast majority are targeting companies with revenues of less than $5MM (or pre-revenue altogether). Still, 37 also indicated they are targeting companies with revenues over $5MM as well.

Lead Preference

Most investors in the Index prefer to lead, with a similar number willing to either lead or follow. Very few prefer to follow. It’s positive that there are both willing price-setters in the market and some flexibility to follow given that it is unlikely that all investors in our Index have yet built up the diverse and sophisticated technical due diligence capabilities that evaluating circular carbon opportunities often requires.

Investor Geographic Focus – By Region

Following on the fact that most of the capital providers in our Index to date are headquartered in North America or Europe, most also say they are focused on investing in those regions. However, a significant number also indicate that they have a global investment lens. As we have stated elsewhere, we are working to increase the diversity of this and other Indexes and welcome your input on capital providers we should consider in that vein.

Investment Horizon

The investment horizon of the majority of investors in our index who indicated a timeframe is fairly typical for conventional institutional investors in general, clustered in the three to seven year time frame. We are starting to see, however, the emergence of longer term capital, with 20 capital providers indicating that their investment time horizon is seven years or more (including a small number with permanent capital).

Impact and Returns Focus

“Investing for impact” used to indicate a willingness to earn sub-market returns in exchange for having a positive impact on issues of concern. Today, there are many signs that impact investing both means more than that and is increasingly going mainstream. The expressed preferences of the investors in our Index reflect that, with the largest number of respondents on this issue stating that impact and returns were equal factors in their investment decision making and another significant group saying that impact is a core objective while they seek market returns. On the other hand, very few stated they are willing to take below market returns for impact. While there are still a substantial number who state that returns are their primary driver, these results suggest that investors are increasingly coming to the conclusion that impact and returns can and should be twinned. Overall, this is good news for the Circular Carbon sector, where most companies are working to create successful businesses while having a positive impact on climate change.

General Investment Focus Areas

At the highest sectoral level, the capital providers in the Index are focused on investing in quite a broad spectrum of industries. Not surprisingly, a focus on the energy and industrial sectors dominate in this cohort of cleantech-oriented investors (see below). However, many other sectoral focus areas are represented from consumer, to information technology, real assets, and beyond.

Level of Interest in Clean Technology

Our search for capital providers to include on the Circular Carbon Capital Index naturally led us to bias towards firms that are already active or interested in the broader cleantech sector. Reflecting that, 100% of the investors on the Index indicate that clean technology investing broadly defined (see a more detailed breakdown of clean tech sector focus areas below) is their core focus, a core focus, or at least something they currently consider.

Clean Technology Focus Areas

Investors in the Index are deploying capital across a very broad cross-section of clean technology sectors or themes. Topping the list are some of the more known, well-established, and “hot” sectors such as energy storage, solar, mobility, and sustainable agriculture. Because of the focus of this Index, we were pleased to see that carbon-related sectors also make a strong appearance. This is not a reflection of the cleantech investment sector as a whole necessarily, but rather a measure of the relative effectiveness of our selection of firms who are already active or interested. We also intentionally over-selected and profiled general and clean technology-focused investors who may not be active in carbon-related investments yet, but we believe will (or should) be soon.

Level of Interest in Carbontech

Drilling down from investors’ general and cleantech focus areas to discern the level of current interest in “carbontech” (technology-enabled means of capturing, utilizing, and/or storing CO2) opportunities specifically, we found that while only six capital providers indicate that it is their “core focus,” well over half (56%) of the investors in the Index indicate carbontech is at least a sector they currently consider.

While the level of investor interest in carbontech obviously needs to grow quickly for the sector to scale in the timeframes needed for it to contribute to addressing climate change, these “carbon curious” investors already represent $168 billion of total assets under management.

Carbontech Focus Areas

Looking in more detail at where investors in the Index are focused on deploying capital in carbontech, it seems capital providers are currently generally open to most of the known carbontech techno-economic pathways. This may be a reflection of the still-emergent nature of the sector and, in turn, the lack of specialization of investors around specific pathways (to date).

Two slight outliers on the relatively evenly expressed level of interest include carbon-to-building materials on the high end and carbon-to-enhanced oil recovery (EOR) on the lower end. The former echoes our general impression and corroborating evidence from the Innovator and Corporate Indexes that companies that are trying to reduce the carbon intensity of building materials (especially concrete and cement) are garnering significant interest and investment.

The low level of interest in carbon-to-enhanced oil recovery is somewhat surprising, however, considering that it has long been considered an attractive existing entry market for carbon capture companies to exploit. On the other hand, the recent Covid-driven drop in global oil markets has no doubt reduced those opportunities. On top of that, EOR has a controversial profile amongst some audiences, especially environmental advocates, who view it as counter-productive to capture carbon to produce more fossil carbon.

Level of Interest in Carbon Removal

The Index also tracks investor interest in Carbon Removal (the durable removal of CO2 from the atmosphere, whether by technological, biological, geological, or other means), the other critical emerging topic under the Circular Carbon umbrella. Carbon Removal overlaps with carbontech, but also encompasses human-enhanced biological and geological pathways.

Here, we found slightly less interest than for carbontech (51% versus 56%), but still a majority of investors in the Index who indicate that carbon removal is either a core focus or a sector they currently consider. This is actually quite encouraging considering that carbon removal has only just emerged as a general topic, never mind investment theme, in the last several years.

These carbon removal-interested investors represent $167 billion of total assets under management.

Carbon Removal Focus Areas

Direct Air Capture to durable carbon-based products tops the list of current investor interest in carbon removal pathways amongst the capital providers in our our Index, followed by soil carbon sequestration, biochar, Bioenergy with Carbon Capture and Storage (BECCS), and again Direct Air Capture to geologic sequestration. The next tier of interest includes a spectrum of mostly biological and geological solutions. A handful of investors also say they don’t know enough about the space to have an opinion yet or they have no interest in carbon removal. This bolsters our impression that investors are still learning about carbon removal opportunities and are both broadly open to the different pathways and not necessarily fully committed to any quite yet.

Capital Deployed into Circular Carbon

Across all 122 investors in the Index, we found 26, or 21% overall, that had already deployed capital into Circular Carbon (both carbontech and carbon removal) opportunities. Since this was a question that only 56% of the capital providers on the Index supplied a self-reported answer to and we have limited external visibility into investors’ detailed portfolios, we are likely under-counting the percentage of investors on the Index who have in fact deployed capital into the sector.

Amount of Capital Deployed in Carbontech

Our research identified 16 investments totaling over $130MM in Circular Carbon-specific opportunities by capital providers in the Index. The average deal size was just over $9MM, while the median was $5MM.

Private equity and family offices/angels have deployed the most capital to date ($50M and $34M respectively), followed by corporates and venture capital (approximately $20MM each) and foundations ($7MM).

Of additional note, the majority of individual investments (by number of investments, not dollars) that we have tracked come from family offices and angels and venture capital firms.

Again, because our investment data is based on a combination of self-reported data from some investors and our external research on others, it likely under counts the total deals completed and capital deployed to date. Indeed, we know that the companies in our Innovator Index have already raised at least $2.2B in capital from all sources (and likely more given that we only were able to secure that information for a portion of the 300-plus companies in that Index). Similarly, we have listed nearly half a billion dollars of live investment opportunities (need) in our Deal Hub over the last year.  

This clearly suggests that our Capital Index has significant room to grow to account for all active circular carbon investors and investments (please Nominate a capital provider or Update the data for your firm to increase the extent and accuracy of our coverage).  Most importantly, however, it is clear that the amount of capital going into the space is still small compared to both the current and long-term needs of the sector and the climate.

Quality of Carbontech and Carbon Removal Deal Flow To Date

Out of the 63 investors who responded to our query about the quality of their circular carbon deal flow, only three rated it as “excellent.” However, 44 (or 69%) rated it as “good” or at least “fair,” with another 15 rating it “poor” or “non-existent.” Clearly, there is room for improvement in both the actual flow of circular carbon deals and investor visibility to them. This is one of the core challenges CCN is focused on addressing.

Sources of Carbontech and Carbon Removal Deal Flow

Investors mention other investors, in-bound inquiries, and research roughly equally as their top sources of circular carbon-related deal flow. CCN itself merits an appearance on the list of Deal Flow sources, at a level we hope to grow as our visibility increases.

Investor Participation in Relevant Industry Groups

We asked capital providers to name other organizations they are members of that they felt were relevant to their explorations of the circular carbon sector. A significant number mentioned the CREO Syndicate (a clean economy-focused family office investor network), reflecting the significant representation of family offices in the Index. The Global Impact Investor Network and Impact Capital Managers, amongst others, were also mentioned several times.

Background – The Key to Deployment at Scale

Large, global companies have a critical role to play in scaling the Circular Carbon economy. They have the balance sheets, world class technical expertise, global commercial reach, and the installed infrastructure that are key ingredients for the growth of the sector under any scenario. As some of the world’s largest emitters of CO2, large corporations also have a tremendous stake in the transition to a Net Zero carbon economy. Beyond complying with evolving regulatory requirements and reducing climate-related business risk, these companies also have much to gain in the form of new revenue streams, new innovations, brand enhancement, and other strategic benefits.

Overview of the Corporate Index

The purpose of CCN’s Corporate Index is to identify, measure, and characterize corporate activity that meaningfully intersects with the circular carbon sector. Our goal is to both better inform the marketplace about these activities as well as facilitate more efficient collaborations between corporates, and with technology innovators, investors, and other key societal actors critical to the growth of the Circular Carbon economy. In that vein, a corporation must have at least one concrete intersection point with the sector to be included in the Index (specifically, Circular Carbon-related R&D, Investment, Project Hosting, Purchasing, Sales, or other material intersections). Our research team gathered this information through a review of publicly available information. In all likelihood, therefore, our inaugural Index under-represents the level of corporate activity in the Circular Carbon sector globally. We welcome nominations and updates to the Corporate Index to continue to improve its usefulness and accuracy.

As of September 2020, CCN’s Corporate Index covers 61 large global corporations from 21 countries and 22 industry verticals (from oil and gas, power, and chemicals companies to technology and consumer products companies). While still a relatively modest total number of companies, the index represents some of the biggest players in the world, both financially and in terms of carbon impact. These companies already represent approximately 10% of global CO2 emissions and Fortune 500 corporate revenues respectively and employ over 5 million people.

Key Findings

While large global companies have been involved in conventional carbon capture research and development for many years, we’re now starting to see a noticeable increase in corporate interest and engagement with a far broader range of Circular Carbon solutions, which is both extremely positive and absolutely essential for the large scale deployment of the circular carbon solutions we need to address climate change in the time available.  While corporate intersections points with sector, as detailed below, are still clustered at the “front end” of technology development (R&D and investment in technology developers), there are a growing array of different ways that companies are engaging, from supplying critical components to the market, to commercializing their own solutions, hosting commercial demonstration projects, and collaborating across institutional boundaries. These activities, however, are still just emerging and there is evidence that there is a general lack of strategic clarity about their role in, and the impact on their businesses of, the Circular Carbon Economy. Given the slow pace of change in large organizations, this may be understandable; but it may not be enough.

Some of the key highlights of our analysis include:

Overall Trends

• Broad Industry Representation: The Corporate Index includes 22 industry verticals (sub-sectors). Top verticals are oil & gas (15), Utilities (8), Chemicals (8), and Consumer Products (4)
• Growing Corporate Climate Commitments: 95% (58 of 61) of the corporates in the Index have identifiable carbon mitigation goals. To date, however, only a handful of companies have explicitly stated Carbon Removal goals, including Microsoft, Amazon, Google, Total, Shopify, and Stripe
• Increasing Corporate Circular Carbon Intersection Points: Corporates are intersecting with the Circular Carbon sector in increasingly diverse ways. The most common intersection point is R&D (44), followed next by Investment (28) and the general bucket for “Other” (28), and then Project Hosting (22), and finally Purchasing and Sales (19 each). 

R&D

• Corporate R&D Focused on Capture and Carbon-to-Value: 73% of firms with an R&D intersection point are focused on “Carbon Capture (from existing sources)” followed by 30% focused on “Carbon-to-Value (Fuels)” and “Carbon-to-Value (Chemicals) 
• Corporates are Partnering with Innovators: A majority (56% or 34 corporations) of those corporations doing R&D are partnering externally with circular carbon innovators as a part of their efforts

Investment

• Significant Corporate Investment Interest: Corporate investment in the circular carbon sector is the second most common corporate intersection point overall. 19 corporates are either active or interested in carbontech specifically. 
• Carbontech Investment Interest Focused on Capture and Carbon-to-Value:  Corporate Carbontech investor interest is clustered in: (1) Carbon Capture (traditional flue gas capture is still the top focus, but Direct Air Capture (DAC) is now firmly on the radar screen); and (2) Carbon-to-Value – where a broad variety of carbon-to-value opportunities are being pursued 
• Growing Investment Interest in Carbon Removal: Of the 28 companies that have an investment arm active in cleantech, 16 (57%) have some level of interest in carbon removal. This is slightly less than interest in carbontech (16 v. 19), which is not surprising given that carbon removal is a newer part of the sector
• Diverse Carbon Removal Investment Interests: Direct Air Capture (DAC) is rising up the agenda as a top enabling technology for carbon removal. There is also significant focus on DAC to Geologic Storage and growing interest in carbon-to-value solutions

Purchasing

• Initial Evidence of Circular Carbon Purchasing: 1/8th of Index companies are engaged in Circular Carbon purchasing, with the most common being purchasing CO2 for food & beverages and Enhanced Oil Recovery (EOR). Only 3 are purchasing CO2 derived products or solutions. We also found 14 companies that are currently buying credits.

Sales

• Growing Activity in Corporate Sales: There is even more activity on the supply side. 17 Corporates are currently active sellers of CO₂, CO₂-Derived Products, Circular Carbon Solutions, or Carbon Credits. A majority of these companies (10) are engaged in sales of circular carbon solutions, followed by five providing CO₂-derived products. 

Project Hosting

• Active Project Hosting: We found 22 corporates in our Index who are currently hosting one or more Circular Carbon solutions on sites they control, with a majority of such companies coming from the energy, materials, and utility industries.The majority of hosted solutions relate to flue gas carbon capture, with small numbers of hosted projects across EOR, CO₂-to-chemicals, polymers, and fuels, and other Circular Carbon applications.

Data Highlight – Key Corporate Roles in Circular Carbon

Who’s in the Index?

ENERGY

BP
Canadian Natural Resources Limited (CNRL)
Cenovus
Chevron
CNOOC
ConocoPhillips
Equinor
ExxonMobil
Imperial Oil
Occidental Petroleum
Royal Dutch Shell
Saudi Aramco
Schlumberger Technology Corporation
Suncor
Total

MATERIALS

Air Liquide
Air Products
ArcelorMittal
BASF
BHP Billiton
Cemex
Corning
Dow
Haldor Topsoe
Heidelberg Cement
Lafarge Holcim
Linde
SABIC
Siam Cement Group
Sumitomo Chemical

UTILITIES

Duke Energy Corporation
E.ON SE
ENEL
ENGIE
National Grid
NRG Energy
Orsted
Southern Company

Top Industry Sectors Represented

The Corporate Index includes 22 industry verticals (sub-sectors). Top verticals are oil & gas (15), Utilities (8), Chemicals (8), and consumer products (4), followed by Construction Materials [4], and a broad spectrum of other industries, including notably digital and internet companies (2), iron and steel (2), and automotive (2). This shows that while interest in circular carbon is still dominated by heavy industry (not surprisingly), there are a growing number of other business sectors getting involved.

Leading Geographies to Date

Corporations headquartered in 21 different countries are represented in the Index, with a heavy bias towards North America and Europe. This is in significant part a reflection of our location, familiarity, and ease of data access. We believe there are exciting corporate activities in the Circular Carbon space taking place in Asia, South America, and Africa. We are committed to expanding our research coverage to those important global regions and welcome the help of our Network and partners to bring data about these activities to our attention. You can access the form to nominate a corporation for our Corporate Index here.

Growing Corporate Climate Commitments

Even a casual follower of corporate positioning around climate issues would likely have noticed a measurable increase in corporate commitments to reduce carbon emissions since the Paris Climate Agreement was signed in 2016. Among other observers, the Boston Consulting Group has laid out the case why this might (and should) be so:

Indeed, 95% (58 of 61) of the corporates in our Index have identifiable carbon reduction and/or mitigation goals. To date, however, we have only found a handful of companies that have explicitly stated Carbon Removal goals, including Microsoft, Amazon, Google, Total, Shopify, and Stripe. They are the first early adopters with a willingness to pay higher prices for verified carbon removal. We expect that this group will grow amongst companies who can gain from a brand, recruiting, and data perspective.

Key Corporate Intersection Points with the Circular Carbon Economy

To track and analyze corporate activity in the Circular Carbon Economy we identified five archetypal roles that large companies typically play in bringing emerging technologies to market:

• Research & Development (internal and/or with third parties)
• Investment (in other companies or projects)
• Purchasing (of CO2, carbon-to-value products, carbontech or carbon removal solutions, or carbon-related offsets)
• Sales (of CO2, carbon-to-value products, carbontech or carbon removal solutions, or carbon-related offsets)
• Project Hosting (hosting of third party solutions on corporate-controlled sites)

We also have a bucket for any “other” material intersection points that fall outside of the classifications above, such as sponsorship of startup accelerators, participation in industry coalitions, and carbon policy initiatives.

The most common intersection point is R&D (44), followed next by Investment (28) and the general bucket for “Other” (28), and then Project Hosting (22), and finally Purchasing and Sales (19 each).  Perhaps not surprisingly, corporate engagement is still packed at the “front end” of new technology development (R&D, investment, hosting), but we are encouraged to see significant and diverse activity in the other buckets.

R&D Focus Areas

73% of firms with an R&D intersection point are focused on “Carbon Capture (from existing sources)” followed by 30% focused on “Carbon-to-Value (Fuels)” and “Carbon-to-Value (Chemicals). and then increasingly smaller numbers for CO2 to Enhanced Oil Recovery (EOR) (25%), polymers (20%), geologic sequestration (16%), building materials (16%), forestation (14%, and the only natural strategy that our research identified, industrial gas applications, and direct air capture to durable products.

R&D Partnerships

We found that a majority (56% or 34 corporations) of those corporations doing R&D are partnering externally with circular carbon innovators as a part of their efforts. This is a positive indication that there is real interest in collaboration with emerging technology providers (and perhaps also an acknowledgment that it will be difficult to drive all the innovation needed internally).

Level of Corporate Investment Interest in Carbontech

Corporate investment in the circular carbon sector is the second most common corporate intersection point with the sector overall. We found 28 corporate investment groups actively investing in the general cleantech space (nearly half of all firms in the Index). Of those, 19 (68%) are either active or interested in carbontech specifically. Most of these corporates are investing in company equity, while a small number are also starting to finance projects.

Corporate Carbontech Investment Focus Areas

Corporate carbontech investor interest was clustered in the following categories: (1) Carbon Capture – where conventional Carbon Capture and Storage (CCS) is still the top focus, but Direct Air Capture (DAC) is now firmly on the radar screen; and (2) Carbon-to-Value – where are broad variety of carbon-to-value opportunities are being pursued, with fuels, chemicals, and polymers, and building materials at the top of the list. Interestingly, Enhanced Oil Recovery (EOR) is not high on the list of corporate investment focus in carbontech, despite the heavy representation of oil and gas companies in the Index.

Companies investing in the sector seem to be looking for outcomes that can both be deployed commercially and have a significant, positive climate impact. Some examples of corporate circular carbon investment focus areas in their own words:

Shell

“Technologies that have an economically viable way to turn CO2 into a product for a significant market. Technologies that lower the cost of CCS and Nature Based Solutions.”

Stripe

“We will work with experts to select winning carbon capture solutions based on cost-effectiveness, and we may choose to buy from more expensive providers whose approach we think is particularly promising. Eligible solutions are ones that sequester greenhouse gases from the atmosphere in secure, long-term (century+) storage.”

Danone

“Livelihoods Carbon Funds (LCF) leverage the carbon economy to finance ecosystem restoration, agroforestry and rural energy projects to improve food security for rural communities and increase farmers’ revenues.”

Level of Corporate Investment Interest in Carbon Removal

Of the 28 that have an investment arm active in cleantech, 16 (57%) have some level of interest in carbon removal.

This is slightly less than interest in carbontech (16 v. 19), which is not surprising given that carbon removal is a newer part of the sector

Corporate Carbon Removal Investment Focus Areas

Direct Air Capture (DAC) is definitely rising up the agenda as a top enabling technology for carbon removal. There is also significant focus on DAC to Geologic Storage, as reflected in recent announcements by Microsoft and others, and growing interest in carbon-to-value solutions

A small number of other carbon removal solutions are being explored, with forestation and Bio-Energy with Carbon Capture and Storage (BECCS) standing out.

Corporate Circular Carbon Purchasing Behaviors

We looked at corporate purchasing behavior in the circular carbon space to see where there might be initial indications of demand. Specifically, we looked for purchases of CO2, CO2-Derived Products, or Circular Carbon Solutions.

While it is still early days, 1/8th of the companies in our Index appear to be engaged in circular carbon purchasing. Of those, most are purchasing CO2 for food & beverages and Enhanced Oil Recovery (EOR). Only 3 are purchasing CO2 derived products or solutions.

It is a slightly different story on the carbon credits side. We found 14 companies that are currently buying credits. The overlap with only 3/14 directly engaged with purchasing CO2 or Carbontech solutions and products indicates that many corporates are still focused on offsets versus direct involvement in purchasing CO2 or physical circular carbon solutions.

Corporate Circular Carbon Sales Behaviors

There is even more emerging activity on the supply side. Our research found 17 Corporates that are currently active sellers of CO2, CO2-Derived Products, Circular Carbon Solutions, or Carbon Credits. A majority of these companies (10) are engaged in sales of circular carbon solutions, followed by five providing CO2-derived products.

Only one company each is directly selling CO2 or providing carbon credits to the market. We found only two companies selling multiple circular carbon solutions and only three companies who are both purchasing and selling circular carbon solutions.

The low level of activity in gaseous CO2 sales may indicate the challenges of selling into CO2 merchant markets that many emerging carbon capture firms will face before the various carbon-to-value potential markets grow into their own. And the apparent low level of sales of carbon credits perhaps signals that companies are missing an opportunity to gain revenues from producing and selling credits.

Currently Hosting Circular Carbon Solutions

Large corporates have critica existing infrastructure (power plants, industrial facilities, pipelines, oil fields) that can integrate with a variety of circular carbon solutions, from upstream capture, to downstream product production and more.

We found 22 companies in our Index who are currently hosting one or more circular carbon solutions on sites they control, with a majority of such companies coming from the energy, materials, and utility industries. Interestingly, although we only identified approximately a third of the companies in the Index as Project Hosts, these companies represent over half of all emissions by all companies in the Index (1.9 billion tons out of 3.7 billion tonnes annually, across Scopes 1, 2, and 3). This suggests (perhaps not surprisingly) that the largest emitters are generally the most active in exploring novel circular carbon solutions to date.

Category of Hosted Circular Carbon Solutions

The vast majority of hosted solutions we found relate to flue gas carbon capture, with small numbers of hosted projects across EOR, CO2-to-chemicals, polymers, and fuels, and other circular carbon applications. Again, given the heavy industries and large emitters listed as project hosts in our Index, it is not surprising that upstream capture would be the most common hosted solution to date.

Finally, during our research, we found that a majority of the Corporates in our Index (35) have an additional range of activities that intersect with the Circular Carbon sector in meaningful ways, but fall outside of the main intersection points detailed above. These include active engagement in relevant policy initiatives (such as the Bipartisan Policy Center’s Direct Air Capture Advisory Council), participation in circular carbon-related industry groups (such as the the Oil and Gas Climate Initiative and the Carbon Capture Coalition), the use of internal carbon pricing systems, and the establishment of circular carbon-related grant programs, among others.

Background – Essential Support for a Growing Ecosystem

If start-up founders, venture capitalists, and corporate CEO’s are the traditional “stars” of a new market trend, there is a more hidden — but no less important — cohort of supporting players that are vital to the success of any new sector. These “market catalysts” can take many shapes and forms — from individual “thought leaders” to non-profit advocacy organizations and industry associations to more commercial service providers, project developers, and more. These actors both help stitch together a critical supportive infrastructure and bring a level of vision, passion, and missionary zeal that a new space needs to survive and thrive.

The idea and growing reality of the Circular Carbon Economy has visibly benefitted from these Catalysts in recent years as the potential and need of this sector has come into focus. As just one example, there is a growing array of organizations focused on this space with “Carbon” or “CO2” in their names, starting with us, the Circular Carbon Network, and many of our sponsors and partners… the NRG COSIA Carbon XPRIZE, Carbon180, the Global CO2 Initiative, CO2 Value Europe, and more. While this has the potential to be confusing, we see it more as a sign of the growing vibrancy and heft of this sector.

Overview of the Catalyst Index 

The Catalyst Indexis designed to help market participants of all types better understand and access the services, expertise, resources, and support that the growing number of enabling organizations in and around the Circular Carbon sector offer. Our scan of the Catalyst landscape and review of our existing contact database identified several hundred candidate organizations (and individuals) that touch the Circular Carbon sector in some non-trivial way.  For our inaugural Index, we prioritized the top 63 organizations that we felt have the most significant current impact on supporting the growth of the sector. All the data in the Catalyst Index is derived from our direct experience in working with many of these organizations as well as our research team’s review of publicly available information.  Any inaccuracies are our responsibility, and we welcome nominations and suggested updates to the Index. We know that our Index just represents the tip of the iceberg of this growing ecosystem.

Key Findings

The emerging Circular Carbon Catalyst ecosystem includes a diverse spectrum of over 23 types of organizations, with the most common being NGO’s, convenors (like CCN), and commercial service providers (like attorneys, consultants, and engineering firms). These organizations are generally modest in size with less than 100 employees, but are also highly focused on the Circular Carbon sector (high levels of commitment to and expertise in the sector), with a majority focused on Carbontech-related issues specifically. They also offer a large array of over 20 different categories of services from data providers to policy advocacy, technology development and demonstration, due diligence, fundraising, and communications. The target core customers and stakeholders of these organizations are primarily entrepreneurs and corporates, but also include capital providers, governments, and the public. All of these different slices can be filtered and viewed in the Catalyst Index here.

Data Highlight – Diverse “Catalyst” Organizations in the Index:

Organization Types

The most common organization type in the initial Index is non-governmental organizations (NGO’s), followed by “convening” organizations (such as the Circular Carbon Network itself), and then service providers and a broad spectrum of other types of organizations. Because of the emergent nature of this sector, these tend to be weighted to the non-commercial and “market catalytic” to date, but there are a growing number of commercial entities that we see entering the space and playing a meaningful role, from legal service providers, to consulting and engineering organizations, to accelerators, and project developers. This speaks to the growing richness of the overall ecosystem.

Countries Represented by Catalysts in the Index

Like our other Indexes, our Catalyst Index remains strongly weighted toward organizations headquartered in North America, with a smattering of institutions from Europe and other regions of the world. We look forward to expanding our geographic coverage with the assistance of our Network. You can nominate new organizations to add to the Catalyst Index here.

Organization Sizes

The majority of organizations in the initial Catalyst Index are relatively modest in size, having less than 100 employees. There are also a small number of larger organizations with over 1,000 employees. This size distribution is not surprising. Given the still-early stage of the sector, more entrepreneurial, fleet-of-foot organizations have been the first movers into the space.

Core Support Activities

Since our core goal for the Catalyst Index is to help participants in the circular carbon economy find the specific types of support they need to advance their respective work, we tracked and coded the types of circular carbon-relevant activities that each of our catalysts undertake. We found a very broad set of diverse activities, with “data provider,” “monitoring and reporting,” “policy,” technology development & demonstration,” and “consulting” topping the list. “Professional development,” “due diligence,” and “fundraising” were also prominent, among others. These specific supportive activities can be filtered and sorted in the Index on the CCN website, thus facilitating users ability to directly identify potential collaborators.

Target Customers & Stakeholders

In order to understand who the organizations in our Index seek to pair themselves with, we identified each of their core target customers or stakeholders. The two top target customer groups are on opposite ends of the size spectrum — corporates and start-ups. Other large target customer groups are capital providers, governments, and the general public.  As the numbers below suggest, many catalyst organizations seek to serve multiple of these groups (like CCN itself), which we believe is helpful given the “stitching” between stakeholders that is still required to grow the Circular Carbon ecosystem.

Level of Focus on Circular Carbon

Not surprisingly, as we filtered down our initial Catalyst Index organizations to profile from amongst several hundred candidates, all the organizations on the Index have Circular Carbon as either a core focus or something they currently consider, with the weight being towards organizations that are more highly focused on the sector. This is not statistically significant per se, but simply confirms that the organizations listed do indeed intersect in meaningful ways with the sector and may be worth considering as collaborators for market participants who are looking for specific types of support tracked in the Index.

Carbon Technology Focus Areas

The catalyst organizations in the Index are focused on a wide variety of Circular Carbon techno-economic pathways, with carbon capture and carbon-to-value pathways clustered at the top. This may reflect both CCN’s historic focus on carbontech (and hence knowledge of and interactions with related catalyst organizations) as well as the more “established” nature of carbontech in general in comparison to the newer biological and geological carbon removal pathways that have started to come into focus more recently.  Nearly all the pathways, however, have a meaningful number of catalyst organizations that we have identified as having some level expertise or interest in them.