As political winds shift in the U.S. and big corporations pull back on their climate ambition, investors, too, are giving the cold shoulder to a nascent technology that will be vital to tackling climate change.
U.S.-based startups developing direct air capture (DAC) — machines that suck planet-warming carbon dioxide straight out of the air — received about $58 million from venture capitalists in the first three months of 2025, a more than 60% decline from a year ago, according to market research firm Pitchbook. The dip stands in contrast to the overall U.S. climate tech sector, which saw a nearly 65% increase in investment during the same period.
The decline is a worrisome sign for the DAC industry, which needs every dollar it can get to scale. DAC and other technologies delivered less than 320,000 tons of carbon removal credits last year, according to industry tracker CDR.fyi. By mid-century, though, the world will almost certainly need to clean up billions of tons of CO2 in the atmosphere annually.
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