Terradot, the carbon removal startup backed by Google and Microsoft, just acquired competitor Eion in what could signal the start of consolidation in the carbon capture industry. The deal comes as a pricing gap between what removal companies charge and what buyers will pay continues to squeeze smaller players. Eion CEO Anastasia Pavlovic Hans told The Wall Street Journal that sovereign wealth funds and other large investors increasingly want partners who can handle massive contracts - something her company couldn't deliver at its current scale.
The carbon removal industry just saw its first significant consolidation play. Terradot, a California-based startup spreading crushed rocks across Brazilian farmland to capture CO2, is acquiring Eion, its U.S.-based competitor doing essentially the same thing with different minerals.
The deal didn't happen because either company was failing. Instead, it's a story about market dynamics forcing smaller players to bulk up or get out. "We were simply too small," Eion CEO Anastasia Pavlovic Hans told The Wall Street Journal, pointing to sovereign wealth funds and institutional investors who want to write big checks to partners capable of removing carbon at massive scale.
Both companies use enhanced rock weathering (EWR), a technique that accelerates a natural process where pulverized minerals absorb atmospheric carbon dioxide when spread on agricultural fields. Terradot focuses on basalt in Brazil, while Eion has been working with olivine across U.S. farms. The science is sound - Yale research suggests EWR could become one of the lowest-cost carbon removal methods available.
But there's a gap between theory and market reality. The spread between what EWR companies need to charge and what corporate buyers will actually pay remains stubbornly wide, according to a . That pricing pressure is now forcing the kind of industry consolidation typical of maturing markets.
