Tech Giants Back Terradot in Carbon Removal Acquisition
▼ Summary
– Terradot, a carbon-removal startup, is acquiring its competitor Eion, a move largely driven by large investors seeking companies capable of handling big contracts.
– Both companies use enhanced rock weathering (EWR), spreading pulverized rocks on farmland to accelerate the natural absorption of atmospheric carbon dioxide.
– The EWR method is a promising, low-cost carbon removal approach but requires extensive, distributed operations to be effective.
– A significant gap exists between the prices EWR companies want to charge and what carbon credit buyers are willing to pay, according to market data.
– Terradot operates primarily in Brazil using basalt, while Eion operates in the U.S. using olivine, and each company has a distinct set of major investors.
The carbon removal sector is witnessing strategic consolidation as Terradot, a startup backed by major technology firms, moves to acquire its competitor Eion. This transaction, driven significantly by large-scale investors including sovereign wealth funds, highlights a growing market preference for companies capable of executing substantial contracts. According to Eion’s CEO, the company’s smaller operational scale ultimately made it an acquisition target.
Both firms specialize in a technique called enhanced rock weathering (EWR), which involves applying crushed minerals to agricultural land. This process accelerates a natural geochemical reaction that pulls carbon dioxide from the air, offering a promising and potentially economical pathway for large-scale carbon dioxide removal. However, its effectiveness depends on managing vast, geographically dispersed operations. A persistent challenge for the industry is a notable gap between the prices companies need to charge to be viable and what buyers are currently willing to pay, as noted in recent market surveys.
While their core science is aligned, the two companies have developed distinct operational footprints. Terradot, headquartered in California, runs its primary operations in Brazil utilizing basalt rock. In contrast, Eion has focused its efforts within the United States, employing a mineral called olivine. The acquisition brings together notable investor groups. Terradot’s financial backing includes Gigascale Capital, Google, Kleiner Perkins, and Microsoft, signaling strong tech-sector interest in this climate solution. Eion has been supported by investors such as AgFunder, Mercator Partners, and Overture.
(Source: TechCrunch)
