Interview: practitioners on Climate biotech: carbon-negative processes — what they wish they knew earlier

Climate biotech companies raised over $4.2 billion in venture funding during 2024 alone, yet fewer than 12% of carbon-negative bioprocess ventures have achieved positive unit economics at demonstration scale. This stark disparity between capital inflows and commercial viability represents both the extraordinary promise and the sobering reality that practitioners in this space confront daily. We spoke with founders, operations leaders, and technology officers across the US climate biotech ecosystem to understand what they wish they had known before embarking on their carbon-negative journeys—and what decision-makers should prioritize in 2025 and beyond.

Why It Matters

The United States has committed to achieving net-zero emissions by 2050, a goal that requires removing between 1 and 2 billion metric tons of CO2 annually by mid-century according to the National Academies of Sciences. Traditional carbon capture approaches—direct air capture (DAC) and point-source capture—face significant energy penalties and cost barriers, with DAC currently running between $400 and $1,000 per ton of CO2 removed. Climate biotech offers an alternative pathway: leveraging biological systems to capture and sequester carbon at potentially lower costs and with co-product revenue streams.

In 2024, the US Department of Energy allocated $3.5 billion through the Bipartisan Infrastructure Law specifically for carbon removal demonstration projects, with a significant portion earmarked for biologically-based approaches. The Inflation Reduction Act's enhanced 45Q tax credits—now offering up to $180 per ton for direct air capture and $85 per ton for point-source capture with geological storage—have fundamentally altered the economics for biotech-based carbon solutions.

According to the Rhodium Group's 2025 climate outlook, carbon-negative biotechnologies could address up to 15% of the US carbon removal requirement by 2040 if current scale-up trajectories hold. However, practitioners we interviewed emphasized that this potential hinges on solving persistent challenges in unit economics, regulatory navigation, and market development that continue to slow commercial deployment.

Key Concepts

Carbon-Negative Bioprocesses: Biological systems—including engineered microorganisms, algae cultivation, and enhanced biomass approaches—that remove more CO2 from the atmosphere than they emit throughout their lifecycle. Unlike carbon-neutral processes that merely balance emissions, carbon-negative approaches achieve net removal, typically verified through rigorous lifecycle assessment.

Unit Economics: The direct revenues and costs associated with producing a single unit of output—in this context, typically expressed as dollars per ton of CO2 equivalent removed. Practitioners emphasize that unit economics must account for all operational costs, maintenance, labor, and feedstock expenses, not just marginal production costs.

CAPEX (Capital Expenditure): The upfront investment required to build production facilities. In climate biotech, CAPEX intensity varies dramatically—from $50 million for a first-of-a-kind algae cultivation system to over $500 million for integrated biorefinery complexes. High CAPEX creates significant financing risk and extends payback periods, making early-stage capital structure critically important.

Lifecycle Assessment (LCA): A systematic evaluation of environmental impacts across a product or process's entire lifecycle, from raw material extraction through disposal or sequestration. For carbon-negative claims to hold, LCA must demonstrate that system boundaries capture all emissions sources—including upstream inputs, transportation, and end-of-life pathways.

Scope 3 Emissions: Indirect emissions occurring in a company's value chain, both upstream (supplier activities, purchased goods) and downstream (product use, end-of-life treatment). Corporate buyers increasingly require Scope 3 accounting, creating demand for verified carbon-negative inputs that reduce their own emissions inventories.

What's Working and What Isn't

What's Working

Engineered microbial platforms achieving cost reductions at scale. Companies deploying precision fermentation for carbon-negative chemical production have demonstrated 40-60% cost reductions between pilot and demonstration phases. "The learning curve is real," noted one Chief Technology Officer at a Bay Area synthetic biology firm. "Our third reactor train is operating at half the per-ton cost of our first. That trajectory continues as we move toward commercial scale."

Strategic co-product revenue streams. The most financially successful carbon-negative ventures have built business models where carbon removal is one of multiple value streams rather than the sole product. Algae-based companies generating both protein ingredients and carbon credits, or fermentation platforms producing bioplastics alongside certified carbon offsets, show meaningfully shorter paths to profitability. One practitioner observed: "Pure-play carbon removal is a tough business at current credit prices. The winners are those who designed for multiple revenue streams from day one."

Policy tailwinds creating bankable offtake. The 45Q enhancement, combined with state-level low carbon fuel standards (particularly California's LCFS program), has enabled long-term offtake agreements that satisfy project finance requirements. Several practitioners reported that 10-year carbon credit purchase agreements from corporate buyers—including Microsoft, Stripe, and Frontier coalition members—provided the revenue certainty needed to unlock debt financing.

Modular and containerized system designs. Rather than betting on single mega-facilities, successful deployments have emphasized modular architectures that can be replicated and improved iteratively. "We built our first five modules before committing to a full commercial facility," explained one operations director. "Each module taught us something that reduced the next one's cost and improved uptime."

What Isn't Working

Underestimating MRV (Measurement, Reporting, Verification) complexity. Multiple practitioners cited monitoring, reporting, and verification as a persistent bottleneck. "We spent 18 months and over $2 million developing our MRV protocol before we could sell a single credit," reported one founder. Registry requirements, third-party verification costs, and the lack of standardized methodologies for novel bioprocesses create significant overhead and timeline risk.

Feedstock supply chain fragility. Carbon-negative bioprocesses often depend on specific feedstocks—agricultural residues, organic waste streams, or CO2 point sources—that prove more variable and costly than initial models projected. "Our pilot ran beautifully on lab-grade feedstock," admitted one CEO. "Scaling to real-world agricultural waste meant dealing with seasonal variability, contamination, and logistics we hadn't fully costed."

Talent scarcity at the intersection of biology and engineering. The climate biotech sector competes for process engineers, fermentation scientists, and lifecycle assessment specialists with pharmaceuticals, food tech, and traditional biotech—sectors that often offer higher compensation and more predictable career trajectories. "We've lost three key hires to Big Pharma in the past year," shared one VP of Operations. "Building depth in bioprocess engineering while constrained to climate-tech salary bands is genuinely hard."

Corporate procurement timelines misaligned with startup runway. While Fortune 500 companies express strong interest in carbon-negative solutions, their procurement cycles often extend 18-36 months—longer than many startups can sustain without additional bridge financing. "The demand is there, but the contracting process nearly killed us," recounted one founder.

Key Players

Established Leaders

LanzaTech: A leader in gas fermentation technology, LanzaTech has deployed commercial-scale facilities converting industrial emissions into ethanol and chemicals. Their carbon-smart platform has been licensed globally, with US operations demonstrating carbon-negative pathways through integration with steel and refining facilities.

Ginkgo Bioworks: Operating the world's largest cell programming foundry, Ginkgo partners with climate-focused ventures to accelerate organism development. Their biosecurity and synthetic biology capabilities underpin multiple carbon-negative applications across agriculture and materials.

Zymergen (now part of Ginkgo): Prior to its acquisition, Zymergen pioneered machine learning-driven microbial strain development for biomanufacturing, with applications in carbon-negative polymers and materials that continue under Ginkgo's umbrella.

Novozymes (now Novonesis): The Danish enzyme giant, operating significant US facilities, supplies critical biocatalysts for carbon-negative fermentation processes. Their enzyme portfolios enable more efficient biomass conversion and reduced energy inputs across multiple biotech applications.

Cargill: Through partnerships and internal innovation, Cargill has invested heavily in fermentation-derived ingredients and biofuels with carbon-negative potential, leveraging its agricultural supply chain to source sustainable feedstocks.

Emerging Startups

Living Carbon: Developing genetically enhanced trees and plants for accelerated carbon capture and durable sequestration, Living Carbon has planted over four million enhanced seedlings across US forests and has secured significant carbon credit forward sales.

Cemvita Factory: Houston-based Cemvita uses synthetic biology to convert CO2 into chemicals and fuels, partnering with industrial emitters to create carbon-negative petrochemical alternatives. Their pilot facilities target the Gulf Coast's petrochemical corridor.

Kiverdi (now Air Protein): Pioneering CO2-to-protein conversion, Air Protein's fermentation platform produces nutritional ingredients with negative carbon footprints, addressing both food security and climate challenges simultaneously.

Twelve (formerly Opus 12): Combining electrochemistry with downstream bioprocessing, Twelve converts CO2 into jet fuel, chemicals, and materials. Their partnership with the US Air Force demonstrates carbon-negative aviation fuel pathways.

Charm Industrial: Using bio-oil injection for permanent geological storage, Charm Industrial has delivered thousands of tons of verified carbon removal to corporate buyers and represents one of the few startups achieving positive unit economics on pure carbon removal.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-backed BEV has deployed over $2 billion into climate technologies, with significant allocations to carbon-negative biotech including investments in LanzaTech, Pivot Bio, and other leading platforms.

Lowercarbon Capital: Chris Sacca's climate-focused fund has backed numerous carbon removal and climate biotech startups, providing early-stage capital alongside strategic guidance for first-of-kind deployments.

US Department of Energy (DOE): Through ARPA-E, the Loan Programs Office, and direct grants, DOE has become the largest single funder of carbon-negative biotech demonstration projects, with over $1 billion deployed since 2022.

Frontier (Stripe, Alphabet, Meta, Shopify, McKinsey): The advance market commitment consortium has contracted over $1 billion in carbon removal purchases, providing critical demand signals and revenue certainty for emerging technologies.

DCVC (Data Collective): Deep-tech focused DCVC has backed multiple climate biotech companies, emphasizing computationally-driven biology and process optimization approaches to carbon-negative production.

Examples

1. LanzaTech's Shandong Shouguang Facility (technology licensed to US partners): Operating since 2018, this commercial-scale gas fermentation plant converts steel mill emissions into ethanol at a cost of approximately $320 per ton of CO2 avoided. The technology has since been licensed for US deployment, with a 2024 announcement of a new facility in Indiana targeting 100,000 tons of annual carbon conversion. Unit economics improved 35% between the first and third operational years through process optimization and feedstock integration improvements.

2. Living Carbon's Pennsylvania Planting Program: In 2024, Living Carbon planted 1.2 million enhanced poplar seedlings across degraded mine lands in Pennsylvania, contracting carbon removal credits to Microsoft and Shopify at prices between $30 and $50 per ton. Early growth data indicates 27% accelerated carbon uptake versus control plantings. The program employs local forestry crews and has catalyzed state-level discussions about biotechnology-enhanced reforestation incentives.

3. Charm Industrial's Bio-Oil Sequestration in Kansas: Charm Industrial operates a bio-oil production and injection system that has permanently stored over 6,500 tons of carbon dioxide equivalent in geological formations. Their 2024 operations achieved verified costs below $350 per ton—among the lowest for permanent carbon removal—with forward contracts in place for an additional 50,000 tons through 2027. The Kansas operation sources agricultural residues from within a 100-mile radius, creating supplemental income for regional farmers.

Action Checklist

• Conduct a rigorous lifecycle assessment before claiming carbon-negative status, engaging third-party verifiers early to validate system boundaries and emissions accounting
• Design for multiple revenue streams from project inception, avoiding pure-play carbon removal models until credit prices exceed $150 per ton at sustained volume
• Engage with registries (Verra, Gold Standard, Puro.earth) and MRV methodology developers at least 12 months before anticipated credit sales
• Build feedstock supply agreements with diversification clauses to mitigate single-source dependencies and seasonal variability
• Structure CAPEX financing with milestone-based drawdowns aligned to technical de-risking rather than fixed timelines
• Develop talent pipelines through university partnerships and cross-training programs that address the biology-engineering skills gap
• Secure letters of intent from corporate offtakers before major construction commitments, using these to support project finance negotiations
• Engage with state and federal policy processes (DOE, EPA, USDA) to shape emerging methodologies and incentive structures
• Build modular systems that enable iterative learning and cost reduction before committing to large-scale single facilities
• Establish clear communication protocols with local communities and regulators to maintain social license throughout deployment

FAQ

Q: What is the current cost range for carbon-negative biotech approaches, and how does it compare to direct air capture? A: Carbon-negative bioprocesses currently operate across a wide cost spectrum, from approximately $50 per ton for enhanced biomass approaches with co-product revenues to $400+ per ton for fermentation-based permanent sequestration. This compares favorably to direct air capture, which ranges from $400 to $1,000 per ton at current scale. However, biotech approaches often face additional complexity in verification and permanence assurance that can add $20-50 per ton in MRV costs.

Q: How do corporate Scope 3 requirements influence demand for carbon-negative products? A: Corporate Scope 3 reporting requirements—driven by SEC climate disclosure rules, EU CSRD, and voluntary frameworks like SBTi—create meaningful demand for carbon-negative inputs. Companies purchasing carbon-negative chemicals, materials, or ingredients can reduce their reported Scope 3 emissions, potentially avoiding carbon costs or meeting reduction targets. Practitioners report that Scope 3 accounting rigor varies significantly among buyers, making verified LCA documentation and third-party certification essential for premium pricing.

Q: What regulatory pathways govern carbon-negative biotech in the United States? A: Carbon-negative biotech sits at the intersection of EPA (for environmental claims and emissions reporting), USDA (for agricultural biotechnology), and FDA (for food or pharmaceutical applications). The EPA's Renewable Fuel Standard and California's LCFS provide market incentives, while 45Q tax credits require IRS-compliant monitoring. For genetically engineered organisms, the Coordinated Framework for Biotechnology involves EPA, USDA-APHIS, and FDA depending on application. Practitioners emphasize early regulatory engagement, as pathways remain less defined than for traditional biotechnology applications.

Q: What should decision-makers watch for in 2025-2026? A: Key developments to monitor include: finalization of DOE-supported MRV protocols for biological carbon removal; scaling outcomes from Frontier-backed demonstration projects; potential updates to 45Q eligibility for bio-based approaches; corporate procurement commitments following SEC disclosure rule implementation; and progress on synthetic biology safety frameworks that could accelerate or constrain deployment. The gap between laboratory performance and field-scale economics remains the critical variable—projects demonstrating consistent unit economics below $200 per ton will attract significant follow-on capital.

Q: How permanent is carbon removal through biotech approaches? A: Permanence varies dramatically by approach. Enhanced forestry and soil carbon face reversal risks from fire, disease, or land-use change—typically warranting 10-20% buffer pool allocations in credit methodologies. Fermentation-derived bio-oil injected into geological formations (Charm Industrial's approach) achieves permanence comparable to fossil carbon, measured in thousands of years. Biochar and mineralization approaches fall between these extremes. Buyers increasingly differentiate pricing based on permanence duration, with 1,000+ year sequestration commanding premiums of 50-100% over shorter-duration removal.

Sources

• National Academies of Sciences, Engineering, and Medicine. "Negative Emissions Technologies and Reliable Sequestration: A Research Agenda." 2019. Washington, DC: The National Academies Press.

• Rhodium Group. "Taking Stock 2025: US Greenhouse Gas Emissions Outlook." January 2025.

• US Department of Energy. "Carbon Negative Shot: Achieving Net-Zero by 2050." DOE Office of Fossil Energy and Carbon Management, 2024.

• BloombergNEF. "Climate Tech Venture Capital Flows 2024 Annual Report." January 2025.

• Frontier Climate. "Lessons from Purchasing 50,000 Tonnes of Permanent Carbon Removal." 2024 Annual Report.

• Internal Revenue Service. "Section 45Q Credit for Carbon Oxide Sequestration: Final Regulations." Treasury Decision 9944, 2024.

• California Air Resources Board. "Low Carbon Fuel Standard 2024 Annual Report." Sacramento, CA.