07 April 2022 |

Keep Cool- 04/07/2022

By Nick Van Osdol


This one simply can’t wait until the weekend. 

Direct Air Capture startup Climeworks raised ~$640M (!!) from a bevy of big names institutional tech investors including Partners Group and GIC. That’s an absolutely massive round, and the biggest ever for a company in the DAC space.

You can read more from Climeworks directly here.

Climeworks’ Orca plant

Climeworks is a leader in direct air capture at current, considering their ‘Orca’ plant in Iceland has the highest level of actual annual carbon removal throughput. To be sure, almost every startup and tech in the space is rolling out of or is still in the lab stage anyways, so there isn’t a ton of direct competition as far as operational facilities are concerned. But the first mover advantage is laudable too.

The amount of CO2 that Climeworks’ Orca plant is hoovering up out of the atmosphere per year is diminutive relative to the scale it will need to get too to justify the amount of money they just raised. This year, the Orca plant will remove ~4,000 tonnes of CO2 from the atmosphere. Contrast that with ~30B tonnes of CO2 of annual global greenhouse gas emissions.

Said differently, it’s all about the future.

First, Climeworks will need to scale their tech to a point where it can remove hundreds of thousands or millions of tonnes of CO2 per annum from the atmosphere (across many different sites). In parallel, the market price for carbon removals with secure and long-duration sequestration will need to remain at or rise above where it is now (~$50-$100). If those two conditions hold, run some quick math and you’ll see how these could be quite lucrative businesses.

More than half a billion dollars is obviously a ton of capital to go to absolute town building dozens of carbon removal plants around the world. Climework’s press release for the raise ambitiously cited goals of:

[scaling] direct air capture up to multi-million-ton capacity and implementing large-scale facilities as carbon removal becomes a trillion-dollar market.

What’s the net net for me here? I feel like I’m a broken record, but every passing week seems to feature bigger and bigger deals in the carbon capture, storage, and removal space. 

We already included this as a key trend in our roundup of climate tech for Q1 2022

And then talked about another multi hundred $M deal on Sunday.

And here we are on Thursday, with Climeworks coming in and setting a new high watermark!

Next up? A $1B raise? Never say never. 


Earlier today, Bloomberg put out an exceptionally well researched piece covering how tokenization of some carbon offsets has been hurting offset markets more than it’s helped. How? Well, by bringing old offsets onto the blockchain and stimulating demand for them, Toucan + Klima DAO (previously covered here) created demand for offsets that had long been sitting idle on registries like Verra.

These offsets were gathering dust on the shelves for a reason – no one that applied a degree of analysis as to whether they were valuable offsets wanted them.

The project developers behind these previously zero bid offsets had stopped creating offsets because no one was buying them (good). 

But since the whirlwind of crypto activity last fall, they’ve turned on the faucets again, as undiscerning buyers came in to buy their old assets.

In light of this read, which I highly recommend digesting in full, it may seem strange to come in here and talk about a different crypto token tied to carbon removal.

But that’s exactly what I’m going to do. Also because it offers a sterling opportunity for contrast. And because I’m excited to finally talk about this.


Carbon removal marketplace Nori released their ‘litepaper’ for their upcoming NORI token launch this week. Read it here.

The inside scoop? I helped them write it 💪. 

I was at brunch with Nori’s CEO Paul yesterday in Miami where he articulately described the next phase of Nori’s development as equal parts focused on carbon price discovery as building out their carbon marketplace and onboarding more carbon removal supply.

That’s what the NORI token is for. When I first covered Nori last year, the token was still a ways out on the roadmap. Now, it’s only months away and will soon become integral to completing Nori’s flywheel.

Currently carbon removals are sold in Nori’s marketplace at a fixed price. For carbon markets to scale however, it’s critical that they feature universal prices that reflect real time market supply and demand. Why? Here’s my shot at an even more distilled 10 steps about how the token works + potential key benefits:

  1. Most carbon removal transactions today are ‘ad-hoc’. Large scale buyers engage consultants and brokers to source supply for them from a bunch of different carbon removal suppliers.
  2. Overall carbon removal supply is thus also fractured across countless sources (whether suppliers or different marketplaces) and removal methodology types. 
  3. Standardizing supply in a marketplace (as Nori has done) is the first step. Then, you can start to create a liquid market with more seamless transactions.
  4. To do so however, you also need a tradable instrument that’s separate from the carbon removals themselves. 
  5. If you trade the underlying asset, it inevitably leads to double counting, which has been a scourge of carbon markets.
  6. The NORI token fixes this. While redeemable 1-1 for carbon removals, the token itself is a step removed from the underlying asset. 
  7. This means it can be actively traded and enable price discovery while still serving as a faithful carbon removal reference price (given its redeemability).
  8. Price discovery that’s reflective of actual market supply and demand dynamics is critical for all kinds of things, e.g. for suppliers to make better forecasts for their businesses.
  9. Similarly, paying suppliers in an asset tied to carbon removal prices allows them to participate in marketwide price increases, aligning incentives to onboard more supply. 
  10. Buyers can also use the NORI token to secure future carbon removal supply (i.e. even if the removals haven’t happened yet), hedging against price increases and stimulating the supply side of the market in the process.

To tie this back to where we started, it’s all important to note that Nori’s entire marketplace is built on the premise of a highly rigorous vetting & verification process for the carbon removals it sells. Which distinguishes it significantly from the offsets in question in the Bloomberg piece we first touched on.

There’s no point to a crypto layer if the underlying assets are junk.   

For lots more? Again, read the litepaper

It was an honor distilling the Nori mission + NORI token value proposition and token dynamics with the Nori team. Lots more to come on this front in coming months.