From CO₂ to Cashflow: Investing in Direct Air Capture and Carbon-to-Value Pathways

May 29, 2025 - Discover how Direct Air Capture (DAC) and carbon-to-value (C2V) technologies are transforming CO₂ into investable assets—ushering in a new frontier for climate capital and clean tech innovation.

As the climate crisis intensifies and regulatory pressure mounts, a new generation of climate solutions is emerging—not just to reduce emissions, but to remove carbon dioxide from the atmosphere entirely. Welcome to the era of Direct Air Capture (DAC) and carbon-to-value (C2V) technologies: frontier innovations that are drawing capital from institutional investors, sovereign wealth funds, and climate-focused family offices alike.

These technologies do more than mitigate climate risk—they unlock asymmetric upside potential in a rapidly evolving market built around carbon itself.

Direct Air Capture: Turning Emissions into Assets

Direct Air Capture refers to the process of extracting CO₂ directly from ambient air, independent of emissions sources like factories or power plants. This decoupling allows DAC systems to be deployed flexibly—near geological storage sites or renewable energy hubs—making them key infrastructure for a net-negative future.

Companies such as Climeworks, Carbon Engineering (recently acquired by Occidental), and Heirloom are scaling up modular DAC plants globally. What’s shifted the momentum is policy: the U.S. Inflation Reduction Act increased 45Q tax credits to $180 per tonne of CO₂ removed via DAC, while Europe is advancing a Carbon Removal Certification Framework and exploring integration with the EU Emissions Trading System.

Carbon-to-Value: The Rise of CO₂ as Feedstock

Beyond sequestration lies a more lucrative frontier: carbon-to-value (C2V). This suite of technologies captures CO₂ and transforms it into valuable products—from jet fuel and building materials to polymers, proteins, and carbon nanotubes. The premise is simple but powerful: if carbon can be reused rather than buried, it moves from liability to commodity. This shifts carbon management from cost center to potential revenue engine.

Catalysts and chemical intermediates are used in CO₂ utilisation chemistry—part of the process converting captured carbon into fuels, chemicals, and industrial materials.

Startups like Twelve (electrochemical CO₂ conversion), CarbonCure (CO₂-injected concrete), and Air Company (CO₂-based ethanol and spirits) are pioneering these transformations. Institutional capital is flowing into these ventures, attracted by the dual appeal of decarbonisation and commercialisation.

The technical backbone of most carbon-to-value platforms lies in CO₂ utilization chemistry. In fuel and chemical production, captured CO₂ can undergo electrochemical or thermochemical reduction to produce carbon monoxide (CO), methanol, or syngas—key building blocks for synthetic fuels and plastics. These processes typically use renewable electricity and advanced catalysts to drive reactions at lower temperatures and pressures, improving both efficiency and scalability. In other applications, CO₂ can be mineralised into carbonates for use in low-carbon cement or bound into polymers for sustainable packaging materials.

Yet these processes are energy-intensive, particularly when splitting stable CO₂ molecules. High purity CO₂ capture, electrolysis, and downstream synthesis all demand substantial power, which raises both cost and carbon footprint concerns. However, this is where the convergence with renewables and grid decarbonisation becomes pivotal. When powered by wind, solar, or even excess renewable energy during off-peak hours, these processes can achieve near-zero lifecycle emissions. Furthermore, emerging technologies like solid oxide electrolysers, biocatalytic pathways, and integrated solar thermochemical reactors are being explored to reduce energy input and increase conversion efficiency.

As a result, C2V is moving from theoretical to bankable, especially as policy frameworks begin to price carbon intensity into procurement, transportation, and materials markets. For investors, this opens an opportunity to back the infrastructure and platforms that will sit at the nexus of clean energy, carbon removal, and industrial innovation.

The Carbon Markets: From Compliance to Voluntary Frontiers

Investing in DAC and C2V is inherently tied to the growth of carbon markets—mechanisms that put a price on CO₂ and create liquidity for removals and offsets.

Compliance markets such as the EU ETS, California’s Cap-and-Trade Program, and the UK ETS are beginning to explore how engineered carbon removals like DAC could be integrated into credit systems. While most of these currently cover point-source reductions, future iterations may include DAC as a verifiable removal pathway—particularly in hard-to-abate sectors.

Voluntary carbon markets (VCMs) are where DAC and C2V credits are already active. Corporates seeking to offset residual emissions in their net-zero strategies are paying premiums for high-integrity, durable carbon removal credits—especially those verified under frameworks like Puro.Earth and Carbon Direct.

With estimates from McKinsey and Bloomberg projecting the VCM to exceed $50 billion annually by 2030, these markets represent a critical revenue stream and valuation lever for carbon tech ventures.

Infrastructure, Integrity, and Investment Opportunity

Despite the promise, challenges remain: DAC is energy-intensive, infrastructure-light, and capital-heavy. Scaling it will require long-duration finance, cross-border policy alignment, and robust Measurement, Reporting, and Verification (MRV) frameworks.

This is where impact-aligned investors can play a catalytic role. Early participation enables influence over market standards, access to pre-regulation pricing arbitrage, and long-term positioning in an emerging asset class. Infrastructure funds, blended finance vehicles, and family offices seeking generational returns are uniquely suited to these plays.

Why Smart Capital Is Moving In

Direct Air Capture and carbon-to-value aren’t just climate solutions—they’re market-building mechanisms that create entirely new value chains around CO₂. Their rise mirrors the early days of solar or lithium-ion batteries: misunderstood, capital-intensive, and deeply transformative.

This is frontier climate tech—and the capital flowing into it isn’t chasing incremental change. It’s positioning for the next wave of industrial innovation, built around carbon circularity, policy tailwinds, and premium markets.

General Information Disclaimer

The information provided in this blog is for general informational and educational purposes only and should not be considered as financial, investment, or legal advice. While we strive to ensure accuracy and relevance, we make no representations or warranties, express or implied, regarding the completeness, reliability, or suitability of the information provided.