Carbon tech investment defies venture capital downturn, says PitchBook

Venture capital investment in carbon and emissions-related technologies such as carbon capture hit $13.8 billion in 2022, close to a record high and defying a sharp drop in broader fundraising volumes, research firm PitchBook said on Tuesday.

The amount raised in 2022 for carbon and emissions technologies was only 2% below 2021's record $14.1 billion, according to a report by the venture capital data specialist.

The wider venture capital market, however, registered a steep fall in deal activity, the report said.


Regulatory changes and pledges to cut carbon emissions have spurred investment in early stage companies in carbon-related technologies, PitchBook said, adding that the United States' Inflation Reduction Act - which involves widespread subsidies for greener technologies - would provide a further boost.

"From the perspective of carbon and emissions tech, perhaps the largest impacts will be to the various forms of carbon removal, which already saw their highest year of VC (venture capital) investment in 2022," PitchBook's report said.

"Looking at European markets, the replacement of Russian fossil fuels has - in some cases - caused an increase in coal use, and this may increase the need for carbon capture if pledges are to be met."

The largest carbon and emissions deal in the last three months of 2022 was Canada-based carbon capture hardware company Svante's $318 million deal, led by Chevron Technology Ventures, PitchBook noted.

Corporate fundraising, from early stage venture capital to private equity, fell sharply in 2022 as rising interest rates, inflation and concern over the global economy heightened investor caution.