Musk Foundation-Backed XPRIZE Awards $100 Million for Carbon Removal

(Bloomberg) -- After four years, the XPRIZE has winnowed down a list of 1,300 companies to choose the winners of its $100 million competition for startups that remove carbon from the atmosphere. 

The teams in the competition hailed from 88 countries, reflecting the geographic diversity of carbon cleanup efforts. Houston-based Mati Carbon took home the $50 million grand prize for its technological advancements in what’s known as enhanced rock weathering. The 100-person startup applies finely crushed basalt on agricultural lands in India to accelerate a natural weathering process that permanently draws down atmospheric carbon dioxide.

XPRIZE said it was the largest purse it has ever awarded, with funding coming from the Musk Foundation and focused on a nascent industry that needs to be rapidly scaled as emissions remain stubbornly high. In addition to Mati Carbon, XPRIZE awarded money to runners-up and finalists with promising tech.

“A prize could really help move the needle on a new emerging area of climate tech,” said Nikki Batchelor, executive director of XPRIZE Carbon Removal. “It needed to be bold and ambitious and have a lot of money on the line to really get people moving.”

While scattering rocks is relatively low tech compared with techniques that rely on machines or zapping seawater, Mati Carbon uses unique software to track removals across smallholder farms. Last year, the company reported that it removed 20,000 tons of CO2. 

Winning is a “game-changing milestone” for the company, said Shantanu Agarwal, Mati’s founder and chief executive officer. The startup is controlled by a nonprofit, he said, so “we could stay true to our mission of actually choosing the regions where the need was the highest rather than profits.”

Mati’s crushed rocks also improve soil health, and Agarwal said it generated about $1 million of additional income for smallholder farmers last year, an amount expected to grow to $4 million this year. 

Teams were judged on a handful of factors, including successfully removing more than 1,000 net tonnes of carbon dioxide in the final year of the competition. XPRIZE also assessed if teams had a viable pathway to cost-effectively scaling their technology to remove a million tons annually and eventually reach the billion-ton scale, a level the world will likely need to avert the worst impacts of climate change. 

Runners up of the competition included French biochar company NetZero, US-based waste management company Vaulted Deep and UNDO Carbon, an enhanced rock-weathering business operating in Scotland and Canada. They received $15 million, $8 million and $5 million, respectively. Two other finalists — Canadian ocean startup Planetary and United Arab Emirates-based Project Hajar being developed by startups 44.01 and Aircapture — received $1 million for their contributions. Though funding was provided by DOGE leader Elon Musk’s foundation, XPRIZE said he wasn’t involved in choosing the winners.

A range of companies, including Microsoft Corp., Stripe Inc., Alphabet Inc. and others, have spent millions purchasing carbon removal services, largely focused on a subset of technologies. Yet prices remain high, costing hundreds of dollars per ton of removed CO2. The industry is also tiny: In 2024, less than 320,000 tons of novel removal services were delivered, according to data from industry tracker CDR.fyi. That’s a far cry from the billions of tons the world will likely need by mid-century. 

Government funding also remains scarce and what little there is in the US could be under threat as President Donald Trump backslides on climate. That makes it important for novel sources to fill the gap, and Batchelor said she hopes the XPRIZE money “could really jumpstart this industry.”

(Updates with names of companies developing Project Hajar in paragraph 9.)

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