The carbon removal industry is experiencing its first major consolidation, as Terradot, a startup focused on enhanced rock weathering (ERW), has acquired its competitor Eion. The deal, announced on , signals a potential shift in the market as companies grapple with pricing pressures and the need for scale to attract significant investment.
According to Eion CEO Anastasia Pavlovic Hans, the acquisition wasn’t driven by financial distress, but by the realities of a market increasingly demanding the ability to handle large-scale contracts. “We were simply too small,” Hans told the Wall Street Journal, explaining that sovereign wealth funds and institutional investors are prioritizing partners capable of removing carbon at a massive scale. This demand for scale is forcing smaller players to either merge or risk being left behind.
Both Terradot and Eion employ enhanced rock weathering, a technique that accelerates the natural process of carbon dioxide absorption by spreading pulverized minerals on agricultural land. This method leverages naturally occurring geochemical reactions to permanently remove CO2 from the atmosphere. Terradot focuses on utilizing basalt rock in Brazil, while Eion has been working with olivine across farms in the United States. Yale research suggests that ERW holds promise as a potentially low-cost carbon removal method, but realizing that potential requires widespread deployment.
The consolidation comes amidst a challenging economic landscape for carbon removal companies. A survey by CDR.fyi highlights a significant gap between the price removal companies want to charge and what buyers are willing to pay. This pricing pressure is a key driver behind the need for consolidation, as larger entities can potentially achieve economies of scale and negotiate more favorable contracts.
The combined entity will span operations in both Brazil and the United States. Terradot’s existing contracts total over 400,000 tons of carbon removal with major buyers including Microsoft, Google and Frontier. Eion recently secured its first carbon removal credits through Puro.earth from its 2023 deployments, adding to the portfolio. This combined volume positions the new organization as a leading player in the ERW market.
Terradot’s investors include Gigascale Capital, Google, Kleiner Perkins, and Microsoft, demonstrating significant backing from both venture capital and technology giants. Eion’s investors include AgFunder, Mercator Partners, and Overture. The involvement of these prominent investors underscores the growing interest in carbon removal technologies and the potential for significant returns.
The acquisition is expected to accelerate the deployment of ERW technology and raise the bar for credible carbon removal at scale. Dr. Scott Fendorf, Terradot’s CSO, emphasized the importance of “scientific integrity, measurement rigor, and strong real-world data” in scaling durable carbon removal. By integrating Eion’s operating learnings and technical contributions, Terradot aims to strengthen its measurement approach and accelerate its path to delivering high-quality carbon removal services.
Ana Pavlovic Hans of Eion echoed this sentiment, stating that scaling ERW requires substantial capital, specialized capabilities, and complex financing expertise – elements that are often inefficiently developed by individual companies. She believes that consolidation is a natural progression towards building the platforms needed for large-scale land-based carbon removal.
The deal highlights a broader trend within the carbon removal industry: a move from pilot projects to large-scale implementation. As the market matures, companies are recognizing the need to consolidate resources and expertise to meet the growing demand for durable carbon removal solutions. The success of this consolidation will likely be watched closely by other players in the industry, potentially triggering further mergers and acquisitions in the coming months and years.
While the science behind ERW is sound, challenges remain in ensuring accurate measurement and verification of carbon removal. Both Terradot and Eion are focused on addressing these challenges, with Eion having developed a patented approach to measuring CO2 removed via ERW on farmland. The integration of these technologies will be crucial for building trust and credibility in the ERW market.
