Deep dive: Climate biotech: carbon-negative processes — the fastest-moving subsegments to watch

Between 2020 and 2024, climate biotech's share of total carbon removal funding grew fivefold—from 0.7% to 3.5%—while carbon credit sales surged 650%, jumping from 800,000 tonnes to 5.2 million tonnes valued at $2.1 billion (CDR.fyi, 2024). Yet this acceleration masks a stark reality: current global carbon dioxide removal (CDR) capacity sits at approximately 41 megatonnes per year, while the Intergovernmental Panel on Climate Change (IPCC) estimates that reaching net-zero by 2050 requires scaling to 1–1.5 gigatonnes annually by 2030-2035—a 25- to 100-fold increase in under a decade. This deep dive examines the fastest-moving subsegments in climate biotech, dissecting what's actually working, what isn't, and where the smart money is flowing.

Why It Matters

The urgency for carbon-negative biotechnologies stems from a fundamental arithmetic problem: even with aggressive emissions reductions, residual emissions from hard-to-abate sectors like aviation, cement, and agriculture will require active carbon removal. The U.S. Department of Energy's Carbon Negative Shot initiative, launched with $100 million in February 2024, explicitly targets reducing CDR costs to below $100 per tonne—a threshold that would make gigatonne-scale removal economically viable (DOE, 2024).

Climate biotech occupies a unique position in this landscape because biological systems can theoretically harness free solar energy through photosynthesis, bypassing the enormous energy costs that plague direct air capture (DAC). Current solar-powered DAC systems cost approximately $877 per tonne of CO₂, while cyanobacterial photobioreactors have demonstrated capture rates of 81 grams CO₂ per square meter per day in field trials—at a fraction of the energy input (Frontiers in Climate, 2024).

The stakes are substantial. Natural photosynthesis already fixes 115 billion tonnes of CO₂ annually using only sunlight. If synthetic biology can enhance this process by even 10-30%, the climate impact would dwarf all current engineered CDR combined. This explains why the Chan Zuckerberg Initiative committed $11 million to the Innovative Genomics Institute specifically for CRISPR-enhanced carbon capture in rice and sorghum, targeting the capture of 1.4 billion metric tonnes of CO₂ annually if deployed at scale (IGI, 2024).

Key Concepts

Metabolic Engineering for Carbon Fixation

The central challenge in biological carbon capture lies in improving upon RuBisCO (ribulose-1,5-bisphosphate carboxylase/oxygenase), the enzyme responsible for carbon fixation in photosynthesis. Despite being the most abundant protein on Earth, RuBisCO is notoriously slow and inefficient, processing only 3-10 CO₂ molecules per second.

Synthetic biologists have responded with engineered alternatives. The CETCH cycle, developed by researchers at the Max Planck Institute, combines 17 enzymes from 9 different organisms across 4 kingdoms of life. Its key enzyme—crotonyl-CoA carboxylase/reductase—operates 20 times faster than RuBisCO at CO₂ fixation. However, the CETCH cycle has not yet been successfully implemented in living organisms; balancing 17 enzymes in vivo remains an unsolved engineering challenge (Nature Communications, 2023).

Gas Fermentation Platforms

Gas fermentation represents the most commercially mature subsegment. Companies like LanzaTech have demonstrated that engineered microorganisms can convert industrial waste gases—including CO and CO₂—directly into valuable chemicals. LanzaTech's platform currently captures approximately 150,000 tonnes of CO₂ annually across its commercial facilities, converting emissions into ethanol, sustainable aviation fuel, and precursors for plastics.

CRISPR-Enhanced Photosynthesis

CRISPR gene editing offers precision tools for enhancing natural carbon capture. The Innovative Genomics Institute's three-pronged approach targets: (1) enhanced atmospheric capture through improved photosynthesis efficiency, (2) increased carbon transfer to roots and soil, and (3) engineering soil microbes to retain carbon long-term. Early results suggest photosynthesis efficiency improvements of 30% or more are achievable through stacking multiple beneficial edits.

Sector-Specific KPIs

Metric	Current State	2030 Target	Gap Factor
Global CDR capacity	41 Mt CO₂/year	1,000-1,500 Mt CO₂/year	25-37×
Biochar cost	$80-200/tonne	<$100/tonne	On track
DAC cost	$250-600/tonne	<$100/tonne	2.5-6×
Synthetic autotroph growth rate	18+ hours doubling	<2 hours doubling	9×
CRISPR crop field deployment	Pilot stage	Commercial scale	—
Carbon credit verification time	Months	Days	30-60×

What's Working and What Isn't

What's Working

Gas Fermentation at Commercial Scale: LanzaTech's public listing (NASDAQ: LNZA) and operational facilities demonstrate that converting emissions to products is commercially viable. The company has proven unit economics across multiple deployment sites, with product sales providing revenue streams independent of carbon credit prices.

Enhanced Trees and Biomass: Living Carbon, based in San Francisco, has developed genetically enhanced trees that grow 50% faster and capture 27% more carbon than unmodified counterparts. The company secured Series A funding to produce 4-5 million seedlings, with deployments underway across the United States. Unlike many climate biotech ventures, Living Carbon's model integrates with existing forestry practices and supply chains.

Biochar as a Wedge Technology: Among engineered CDR approaches, biochar currently offers the best combination of cost ($80-200/tonne), carbon efficiency, and technological maturity. The World Economic Forum's 2025 analysis identified biochar alongside enhanced rock weathering as the most near-term scalable CDR pathways, primarily because both leverage existing agricultural infrastructure.

Corporate Offtake Agreements: Amazon, Alphabet, Meta, and Microsoft have emerged as anchor buyers for carbon removal credits, providing crucial revenue stability for early-stage ventures. Google's backing of DAC purchase agreements and Microsoft's commitment to becoming carbon negative by 2030 have created a nascent but growing demand signal.

What Isn't Working

Synthetic Autotrophs in Industrial Settings: Despite headline-grabbing publications, engineered autotrophic E. coli and yeast strains remain far from industrial relevance. Achieving CO₂-only growth required making the organisms "incredibly unhealthy," with doubling times extending from 30 minutes to over 18 hours. Until growth rates approach wild-type levels, synthetic autotrophs cannot compete with natural carbon-fixing organisms for industrial production.

DAC Cost Trajectories: Direct air capture funding declined more than 60% in early 2025 compared to 2024, reflecting investor skepticism about near-term cost reductions. While Climeworks' Mammoth plant in Iceland represents a technical achievement at 36,000 tonnes per year capacity, the economics remain challenging without significant policy support or technological breakthroughs.

Verification and MRV Infrastructure: The carbon removal market suffers from fragmented measurement, reporting, and verification (MRV) systems. BECCS (bioenergy with carbon capture and storage) projects accounted for 90% of global CDR credits in Q2 2024, but additionality and permanence claims remain contested. The first verified enhanced rock weathering credits—just 235.53 credits—were issued only in 2025, highlighting the nascent state of verification infrastructure.

Regulatory Uncertainty: Policy reversals and shifting incentives create investment hesitancy. While the U.S. Inflation Reduction Act allocated $369 billion for clean energy and climate initiatives, including 45Q tax credits for carbon capture, international coordination remains fragmented and long-term policy trajectories uncertain.

Key Players

Established Leaders

LanzaTech (NASDAQ: LNZA): The pioneer in gas fermentation technology, LanzaTech operates commercial facilities converting industrial emissions to chemicals and fuels. Their proven platform demonstrates the viability of microbial carbon conversion at scale.

Climeworks (Switzerland): The global leader in direct air capture, Climeworks operates the world's largest DAC facility in Iceland. While costs remain high, their technology provides a benchmark for the industry and attracts significant corporate buyers seeking high-permanence removal.

Aker Carbon Capture (AKCCF): This Norwegian company provides modular capture systems using proprietary amine solvents, with a market capitalization of approximately $750 million. Their industrial focus complements biotech approaches by addressing point-source emissions.

Carbon Engineering (Canada): Now majority-owned by Occidental Petroleum, Carbon Engineering's liquid DAC technology targets million-tonne-per-year capacity, representing the largest scale ambition in the sector.

Emerging Startups

Living Carbon (San Francisco): Developing genetically enhanced trees with improved carbon capture and storage characteristics, Living Carbon bridges biotechnology with traditional forestry practices.

Again (Copenhagen/Berlin): Winner of nova-Institute's Renewable Material of the Year prize, Again uses ancient bacteria combined with modern biotechnology to ferment CO₂ and hydrogen into carbon-negative chemicals through a single-phase process.

Deep Branch Biotechnology (UK): Converts CO₂ from industrial waste gas into single-cell protein for animal feed, addressing both carbon capture and sustainable protein production simultaneously.

Lithos Carbon (US): MIT-founded startup applying enhanced rock weathering with biotech integration, capturing carbon while enriching farmlands. Raised $10 million in seed funding in 2023.

Key Investors & Funders

Lowercarbon Capital: Portfolio includes approximately 30 carbon removal startups, representing one of the most concentrated bets on the sector.

Breakthrough Energy Ventures: Backed by Bill Gates and major tech figures, BEV has invested in foundational climate biotech including Deep Sky ($40 million).

Climate Capital Bio: Specialized pre-seed fund focusing on biotech climate solutions, targeting companies with large total addressable markets in carbon-negative chemical synthesis.

U.S. Department of Energy: Through the Carbon Negative Shot initiative and related programs, DOE has funded over 300 carbon removal projects, including 7 BICRS (biomass with carbon removal and storage) projects announced in May 2024.

Examples

1. LanzaTech's Commercial Gas Fermentation

LanzaTech demonstrates that carbon-negative biotechnology can achieve commercial scale. Their gas fermentation platform captures approximately 150,000 tonnes of CO₂ annually from industrial facilities, converting waste carbon monoxide and carbon dioxide into ethanol and other valuable chemicals. The company's 2023 NASDAQ listing validated the market's appetite for proven carbon conversion technologies. Key to their success: targeting existing industrial emissions rather than atmospheric CO₂, which provides concentrated feedstock and integration with established industrial infrastructure. The lesson for the sector is clear—pathways that augment rather than replace industrial processes face lower adoption barriers.

2. Innovative Genomics Institute CRISPR Carbon Removal Program

With $11 million from the Chan Zuckerberg Initiative, IGI's CRISPR carbon removal program exemplifies the ambition of agricultural biotechnology for climate. The team uses high-throughput screening with plant protoplasts (cells without walls) to rapidly test genetic modifications before deployment. Their target of enhancing rice and sorghum—staple crops covering hundreds of millions of hectares globally—could theoretically capture 1.4 billion metric tonnes of CO₂ annually if modifications achieve 30% photosynthesis improvements at scale. Unlike industrial biotech, this approach leverages existing agricultural systems and farmer knowledge, potentially accelerating adoption. Field trials are expected between 2025-2027.

3. Again's Ancient-Bacteria Carbon Conversion

Copenhagen-based Again represents a new generation of carbon biotech startups combining extremophile organisms with modern synthetic biology. Their platform utilizes ancient archaea—single-celled organisms that thrived in Earth's early, CO₂-rich atmosphere—engineered to convert captured carbon dioxide and hydrogen into valuable chemicals. The nova-Institute's recognition highlights their novel single-phase conversion approach, which simplifies bioprocess engineering compared to multi-stage alternatives. Again's pathway addresses a critical gap: producing carbon-negative feedstocks for the chemicals industry, a sector responsible for roughly 14 gigatonnes of greenhouse gas emissions annually.

Action Checklist

• Evaluate feedstock integration: Identify whether your organization's waste streams (industrial gases, agricultural residues, wastewater CO₂) could serve as inputs for climate biotech processes before investing in atmospheric capture solutions.
• Map regulatory exposure: Assess how Inflation Reduction Act 45Q credits, EU carbon pricing (€85/tonne as of mid-2025), and emerging verification standards affect project economics and timeline.
• Establish MRV partnerships: Engage with verification bodies early—the 2025 issuance of the first ERW credits demonstrates that novel pathways require extended certification timelines.
• Prioritize offtake agreements: Corporate buyers like Frontier Climate, Microsoft, and Google provide demand certainty; prioritize sales relationships alongside technology development.
• Consider blended finance structures: Explore Elemental Impact D-SAFE and similar non-dilutive instruments that convert to equity only upon milestone failure—these tools de-risk first-of-a-kind deployments.
• Monitor CRISPR crop regulations: Gene-edited crops without transgenes may avoid GMO classification in key markets—track regulatory developments in target agricultural regions.

FAQ

Q: How do biological carbon capture costs compare to direct air capture? A: Biological approaches offer significant potential cost advantages because they harness free solar energy through photosynthesis. Current DAC systems cost $250-600 per tonne of CO₂, while biochar production achieves $80-200 per tonne. Gas fermentation platforms like LanzaTech's can be net-revenue-positive when product sales (ethanol, chemicals) offset operational costs. However, biological systems face different constraints including land use, water requirements, and slower scaling timelines compared to modular industrial technologies.

Q: What are the main barriers preventing synthetic biology from achieving gigatonne-scale carbon removal? A: Three categories of barriers exist. Technical barriers include the inability to implement complex synthetic pathways (like the 17-enzyme CETCH cycle) in living organisms without severe fitness penalties—engineered autotrophs currently grow 36 times slower than their wild-type counterparts. Infrastructure barriers include fragmented MRV systems and limited verification capacity for novel biological CDR. Economic barriers persist because carbon credit markets remain nascent, with removal credits representing only 3.5% of climate tech funding despite their necessity for net-zero scenarios.

Q: Are CRISPR-enhanced crops for carbon capture commercially available? A: Not yet. The Innovative Genomics Institute's CRISPR carbon removal program expects field trials between 2025-2027, with commercial deployment dependent on regulatory approval and farmer adoption. Living Carbon's enhanced trees are further along, with millions of seedlings in production, but these are not CRISPR-edited—they use traditional transgenic approaches. The regulatory pathway for gene-edited (versus transgenic) crops may be faster in some jurisdictions, as edits without foreign DNA may not trigger GMO classification.

Q: How should investors evaluate climate biotech companies given long development timelines? A: Focus on three factors: (1) unit economics at current scale—companies like LanzaTech that generate product revenue reduce dependence on carbon credit price volatility; (2) integration with existing infrastructure—approaches that fit into agricultural, industrial, or forestry systems face lower adoption barriers; (3) verification readiness—the 2025 issuance of first ERW credits highlights that MRV infrastructure development can take years. Non-dilutive financing tools like the Elemental Impact D-SAFE can bridge first-of-a-kind deployment risk.

Q: What role do corporate carbon removal purchases play in sector development? A: Corporate purchases are essential for de-risking early deployment. Frontier Climate (backed by Stripe, Alphabet, Meta, McKinsey, and others) has committed over $1 billion to permanent carbon removal, providing revenue certainty for emerging technologies. These advance purchase agreements allow companies to invest in capacity before carbon credit markets mature. However, current corporate demand remains orders of magnitude below what's needed for gigatonne scale—policy mechanisms will likely be necessary for the sector to reach IPCC targets.

Sources

• U.S. Department of Energy. (2024). "Carbon Negative Shot: Technological Innovation Opportunities for CO2 Removal." DOE/GO-102024-6600. netl.doe.gov
• World Economic Forum. (2025). "Clearing the Air: Exploring the Pathways of Carbon Removal Technologies." weforum.org/stories/2025/01/cost-of-different-carbon-removal-technologies
• Innovative Genomics Institute. (2024). "Supercharging Plants and Soils to Remove Carbon from the Atmosphere." innovativegenomics.org
• CDR.fyi. (2024). Carbon Removal Market Data and Analytics. cdr.fyi
• Nature Communications. (2023). "The potential of CO2-based production cycles in biotechnology to fight the climate crisis." doi.org/10.1038/s41467-023-42790-6
• Frontiers in Climate. (2024). "Recent advances in engineering fast-growing cyanobacterial species for enhanced CO2 fixation." frontiersin.org/journals/fclim.2024.1412232
• NetZero Insights. (2024). "The Investors Driving Growth in Carbon Removal and Storage." netzeroinsights.com
• Stanford Doerr School of Sustainability. (2024). "Ocean microbe's unusual pair of enzymes may boost carbon storage." sustainability.stanford.edu