Musk Funded the Carbon-Removal XPrize but Is Now Slashing Climate Research

Scientific American

23-04-2025

CLIMATEWIRE | Time magazine selected Elon Musk as its "person of the year" in 2021 after the billionaire entrepreneur upended the car market, reinvigorated the space industry and funded a $100 million competition for climate technologies that would remove carbon dioxide from the air and sea.
But Musk won't attend Time 's event in New York City on Wednesday to fete the winners of that groundbreaking contest. The $50 million grand prize will go to Mati Carbon, a Houston-based startup founded three years ago that works with crushed rocks and subsistence farmers to soak up climate pollution.
It's unclear why Musk — an environmental hero turned MAGA diehard — is skipping the capstone event for a climate contest bankrolled via his eponymous foundation. Neither he nor Time responded to requests for comment. The XPrize will be announced at the Time100 Summit, the magazine's annual event featuring 100 influential people.
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In addition to running electric-vehicle-maker Tesla and the aerospace firm SpaceX, Musk is leading President Donald Trump's effort to downsize the federal government. The Department of Government Efficiency has slashed climate funding for research, projects and agencies.
"We live in very complicated times," said Nikki Batchelor, who led the Musk-funded carbon removal competition at the XPrize Foundation. Prior to joining the nonprofit, she worked as an innovation adviser for the U.S. Agency for International Development — the first federal bureau effectively shuttered by Musk. (Musk has no ties to the three-decade-old foundation aside from being a donor.)
"He was one of the leading voices trying to push clean energy forward and think about innovative solutions to tackling climate change," she said of Musk, the world's richest person. "We've continued on with that."
Batchelor spoke with POLITICO's E&E News before XPrize publicly announced the final carbon removal contest winners, each of which removed at least 1,000 tons of CO2 in a year and provided a business plan for how they'll reach 1 million tons annually. Since 2019, carbon removal companies have locked away about 650,000 tons in total — less than the annual emissions of two natural gas power plants.
The runners-up were NetZero, Vaulted Deep and Undo Carbon, which netted prizes of $15 million, $8 million and $5 million respectively. Undo Carbon uses an enhanced rock weathering approach similar to Mati to remove CO2 from the air faster than the natural carbon cycle. NetZero and Vaulted Deep both lock away CO2 by preventing carbon-rich organic matter from biodegrading.
Commercializing carbon removal technologies is important because the world is unlikely to reduce the burning of oil, gas and coal quickly enough to prevent the buildup of dangerous levels of heat-trapping carbon dioxide in the atmosphere and oceans. As a result, climate scientists have concluded that it will be necessary in the coming decades to increase the Earth's carbon removal capacity by billions of metric tons annually.
During the course of the four-year XPrize competition, then-President Joe Biden signed legislation and oversaw the establishment of programs that sought to reduce the nation's dependence on fossil fuels and spur carbon removal innovation. Now the Trump administration — with help from Musk and a Republican-controlled Congress — is moving to undo many of those federal climate initiatives, which Trump has derided as a "green new scam."
As a result, critics say Musk has gone from one of the carbon removal industry's earliest supporters to perhaps its biggest threat.
"Musk sold himself out, and I think that's reprehensible," said Wil Burns, the co-director of the Institute for Responsible Carbon Removal at American University, who helped set up guidelines for the XPrize contest.
Musk's $100M tweet
Musk announced the contest four years ago with a cryptic tweet that seemed to conflate technologies to remove carbon that's already been emitted with ones that capture CO2 from smokestacks.
"Am donating $100M towards a prize for best carbon capture technology," he wrote in January 2021. "Details next week."
On Earth Day that year, XPrize founder Peter Diamandis joined Musk near Cape Canaveral, Florida, for a livestreamed conversation about the carbon removal contest. Musk, who wore a black T-shirt and no shoes, downplayed the risks of climate change and said he was more concerned about "super-advanced" artificial intelligence and "population collapse."
At that point, carbon removal technologies were widely viewed as theoretically possible rather than scientifically sound.
The consensus began to shift later in 2021 when the Swiss firm Climeworks opened the world's first commercial-scale carbon removal facility outside of Reykjavík, Iceland. In the U.S., lawmakers passed a bipartisan infrastructure bill that included $3.5 billion to establish four hubs capable of removing 1 million tons of CO2 per year using the direct air capture technology Climeworks had pioneered.
The following year, the United Nations Intergovernmental Panel on Climate Change concluded that deploying tech to filter CO2 from the air and oceans would be necessary to avoid catastrophic global warming.
The economic case for carbon removal got a boost in 2022 when a coalition of tech companies committed to purchasing $925 million for carbon removal by the end of the decade and U.S. lawmakers expanded subsidies for direct air capture.
Crushed rock and small farms
Musk helped set in motion a wave of support from big business and U.S. policymakers that led to a surge in carbon removal startups. Of the 1,300 teams that took part in the Musk-funded carbon removal competition, XPrize estimates that half were formed after the contest began.
That includes Mati, the grand prize winner, which is a public benefit corporation owned by a nonprofit. The unusual legal structure allows the company to prioritize its mission to deploy carbon removal while benefiting subsistence farmers in the Global South, according to CEO Shantanu Agarwal. He is a former oil field services engineer and venture capitalist who previously founded the direct air capture firm Sustaera.
'The funding cuts that Musk is effectuating, and lopping off expertise in government that's really critical to drive this development, certainly outweighs whatever benefits we get from the XPrize.' —Wil Burns, co-director of the Institute for Responsible Carbon Removal at American University
"I saw the potential of enhanced rock weathering as a much more scalable pathway right now, in the current world, and the significant co-benefits, which it brings to the smallholder farmers," Agarwal said.
Mati works with farmers in India, Zambia and Tanzania to spread locally sourced minerals on their fields. The crushed rocks soak up carbon and reduce runoff for the rain-dependent farms. The company also sells carbon removal credits and shares the revenue with the farmers, who are vulnerable to drought, extreme weather and other climate perils.
"We have to create business models which add value to human life [and] at the same time solve for climate," Agarwal said. "You can't just do climate in isolation. It just doesn't work. It cannot be done because humans are not wired that way, to go and clean a common good."
Mati's $50 million prize is five times more than the company had previously raised, Agarwal said. The infusion of cash should allow it to expand to several new countries faster than it had planned and reduce the cost of its removals to $100 per ton, down from nearly $400 today.
The Musk effect
But the potential good Mati can do for farmers and the climate pales in comparison to the work previously done by the federal government via agencies like USAID, which spent a combined $11 billion on humanitarian and agricultural assistance in fiscal 2024.
Musk in February called USAID"a criminal organization" and said it was time for the agency "to die." The Trump administration's 2026 budget request is expected to complete the dismantling of the six-decade-old agency and roll its remaining programs into the State Department.
Mati and other carbon removal companies have also benefited from collaborations with researchers in academia and the federal government. The Trump administration has canceled thousands of university research grants and purged the U.S. bureaucracy of much of its carbon removal know-how.
"The funding cuts that Musk is effectuating, and lopping off expertise in government that's really critical to drive this development, certainly outweighs whatever benefits we get from the XPrize," said Burns, the carbon removal expert who is also an environmental policy professor at Northwestern University. Those efforts have "tainted it, to be associated with him."
"That's unfortunate," Burns added, acknowledging the significance of the capital and publicity the competition has provided for the winners. "A lot of people are going to hear Musk and just walk away."
XPrize, which previously collaborated with the divisive billionaire on a global education contest, seems ready to move past Musk.
Batchelor, the group's executive director of carbon removal, said "there are no conversations" at this time with the Musk Foundation about supporting future competitions.
XPrize hopes the announcement of the winners can be "a bright spot for folks in climate and the carbon removal industry, especially, to rally around how much progress we've made in four years," she said. "It can also be a jumping off point for others to build momentum around scaling, despite some of those distractions in the background."