What are the biggest challenges for the future of CDR?  There was a great conversation about this topic at the 2023 SOSV Climate Summit (see https://bit.ly/3BvTEDZ).  In this conversation, Scott Jacobs (Generate Capital), Lara Pierpoint (Prime), and Douglas Schultz (DOE) describe this funding “valley of death” in more detail, where it’s simply too risky for venture capitalists to take a climate start-up from ideation to production. There is so much more that needs to happen on the development side first—not just piloting a project, but proving it can be successfully developed, that it’s meeting a demand, and can work at scale, have a stable, blue-chip customer base signing contracts for output, and more.

Education is also important, but the investor confidence gap goes beyond this. In their quest to lower the risk of climate tech investments, Silicon Valley’s move fast and break things approach is exactly the opposite of what investors in this space want and need.

The takeaway message from this discussion is that we need a better understanding of the life cycle of the capital stack for CDR projects, and we also need much more engagement from governments to help bridge the gap between innovation and scaled deployment—to help make these projects real and viable so the investment community can then step in as late-stage investors (rather than early-stage) and help these more established CDR solutions flourish in the global marketplace. In addition, government also needs to become a buyer—they need to help boost the demand signal in the carbon marketplace.

Not everything is on government, though. CDR companies also need to carefully select the right partners (development, regulatory, etc.), and they need to make sure to emphasize strong community engagement, because that’s how climate projects work today (plus doing engagement right will speed up project development). Education certainly has a role to play in this challenge.

What do you think? Is this summary correct? What’s your sense of most salient challenges facing CDR deployment?