Take on a podcast episode from The Carbon Curve, originally published Thu, 25 Ju. Listen: https://carboncurve.substack.com/p/carbon-removal-is-not-one-thing

TL;DR

  • Counteract has screened 1,000+ CDR companies, invested in 27 — one of the widest dealflow vantage points in the sector. That alone justifies the listen.
  • Core thesis: carbon removal is a category, not a pathway, so no single financing model fits — CREW’s small-ticket wastewater units vs. big DAC infrastructure need entirely different capital.
  • Most striking claim: e-SAF costs $1,000+/t CO2 abated vs. $200–300/t durable removal, so aviation mandates should accommodate a removal share. Useful framing for policy fights.
  • “Policy is expectation management” — the landfill tax analogy for how compliance signals unlock private capital. Not new, but well argued.
  • Counteract is pivoting from early-stage venture to a “delivery fund” for first commercial projects. Worth watching who they raise it with.

Na’im Merchant hosts Richard Barker, partner at Counteract, the 2021-vintage early-stage fund dedicated to carbon removal, on The Carbon Curve. The episode is an investor’s-eye tour of how capital actually flows into CDR (carbon dioxide removal) right now — pathway by pathway, with biomethane as the cautionary historical parallel.

Two threads stand out. First, Barker’s argument that industrial byproduct plays are quietly the most investable corner of durable CDR. His example: Magrathea, a California startup making magnesium from brine via electrolysis. The metal — 90% of which currently comes from China and Russia — carries 95%+ of the revenue stack; the magnesium hydroxide byproduct is a CO2 sorbent that’s “essentially free for the CDR sector.” Conventional magnesium runs ~30 t CO2 per tonne of metal; Magrathea claims ~1 t, potentially carbon-negative once the byproduct is counted. Whether those lifecycle numbers survive scrutiny, the investment logic — removal riding shotgun on a strategic-metals business — is a genuinely different answer to the “who pays” question than offtakes or compliance. He gives a second example, a UK cement-additive startup whose fertilizer byproduct may out-earn both the CDR and the cement product.

Second, the financing-heterogeneity argument. Barker’s line: financing CDR with one instrument is like financing rooftop solar the way you’d finance a two-square-kilometer solar farm. CREW Carbon’s alkalinity units bolted onto wastewater plants are asset-finance or even bank territory; standalone DAC needs infrastructure project finance that won’t arrive “until you have a long-term market.” His biomethane history (2009 onward: enthusiastic amateurs, hype, feedstock price wars, margin collapse, then professionalization via institutional capital over 17 years) is the sobering template — expect that rollercoaster per pathway, not once for the sector. The policy section is standard demand-certainty fare, but the SAF (sustainable aviation fuel) arbitrage point — why mandate $1,000+/t abatement when $200–300/t removal exists — is the kind of argument that could actually move a fuels-mandate discussion.

The closing news item matters for the ecosystem: Counteract decided against a second early-stage fund and is instead structuring a delivery-stage vehicle with infrastructure and project-finance partners, targeting first commercial projects against existing offtakes. That slots into the same gap the episode identifies around Frontier-style pre-purchases and Microsoft’s offtakes: demand signals exist, but the FOAK-to-project-finance bridge doesn’t. It also echoes the Schmidt-backed first-loss structures Barker name-checks as early project-finance experiments.

Worth an hour for CDR founders approaching first commercial deals, and for anyone structuring capital for the sector. Skip if you want technical pathway depth — this is a finance episode through and through.