Lori Guetre, vice president and head of business development for Carbon Engineering (CE), from left, ... More
There’s a moment in every technological revolution where the story shifts. It stops being about startups and starts being about ecosystems. It's not about invention anymore — it's about scale, integration, and consolidation. That’s where direct air capture (DAC) finds itself in 2025. And the latest sign of this maturation? Occidental Petroleum’s quiet but telling acquisition of Holocene, a young DAC startup with a novel take on liquid sorbents.
To the casual observer, this might look like an oil company hoovering up another climate tech company. But to those paying attention, it’s something else entirely: a tectonic shift in the carbon removal market. And the tremors are only just beginning.
Occidental’s Big Bet on Liquid Sorbents
This isn’t Occidental’s first rodeo in DAC. Less than two years ago, they made headlines with a $1.1 billion acquisition of Carbon Engineering, the Canadian pioneer whose technology now powers Oxy’s flagship Stratos plant in Texas — expected to be the largest DAC facility in the world when it opens later this year.
Now comes Holocene, a scrappy startup spun out of Stanford in 2023, based on tech licensed from Oak Ridge National Laboratory. Their secret sauce? A liquid sorbent system that captures CO₂ using amino acids, offering the promise of lower-temperature regeneration — and therefore, lower-cost carbon removal. Unlike Carbon Engineering, which relies on potassium hydroxide and fossil fuels to complete the CO₂ release step, Holocene’s chemistry is designed for electric heating. In theory, that means waste heat from a data center or a renewables-powered kiln could do the job.
What Oxy is building here isn’t just a technology stack. It’s a portfolio — and a hedge. Two different flavors of liquid sorbent DAC, each with strengths, weaknesses, and unknowns. That’s not just savvy corporate strategy. It’s a recognition that DAC is entering the stage where technology diversity matters. Where cost per ton, energy inputs, and integration pathways will decide who wins contracts from Microsoft and Stripe — and who fades into obscurity.
The Coming Wave of Consolidation
Holocene’s journey — from grad school dream to multinational acquisition in under two years — is breathtaking. Holocene, for example, had only raised about $6 million in grant funding and pre-purchase agreements— yet it landed a headline acquisition thanks to promising tech and a marquee client in Google, which agreed to pay $100 per ton to remove 100,000 tons of CO₂. This is also indicative of a broader shift: the end of the DAC startup boom and the beginning of a consolidation era.
Over 140 DAC companies were operating globally as of 2024, according to CDR.fyi, with more than $1.4 billion in private capital raised cumulatively. Each with their own capture chemistries, process tweaks, and go-to-market theories. Some aimed for household names; others stayed stealthy. But the proliferation had a logic: government funding (especially in the U.S. and Europe) was plentiful, private carbon removal buyers were experimenting, and the sector still had enough white space to reward boldness.
That moment is ending.
The Trump administration’s gutting of the Department of Energy’s carbon removal programs — reducing a $3.5 billion initiative to a skeleton crew — hasn’t helped. But the deeper issue is market dynamics. With voluntary buyers growing cautious and compliance markets years away from maturity, only the best-capitalized players can endure the wait. And that makes M&A inevitable.
This acquisition isn’t an outlier. Last year, Skytree — a European DAC company — acquired ReCarbn, a startup with modular capture units, marking an early wave of horizontal integration in the sector. More such deals are coming. As Jason Hochman of the Direct Air Capture Coalition put it, "I expect to see a fair amount of consolidation of the industry in the near term".
Oxy-Holocene is a louder echo of the same trend. A fossil fuel major buying its way into optionality — but also into IP, talent, and the credibility of being seen as a serious climate player. Whether you see that as co-optation or progress probably depends on your priors. But either way, it’s happening.
What “Mature” Actually Looks Like
Here’s the thing about markets growing up: they stop tolerating exciting ideas that can’t scale. In DAC, scaling isn’t just about building bigger plants. It’s about integration — with power sources, with CO₂ storage infrastructure, and with buyers who can underwrite long-term offtakes.
That’s where companies like Oxy — and, yes, even Exxon or Aramco — have a real advantage. Not because they’re altruistic. But because they already understand geology, permitting, and project finance at a scale that few startups ever will.
This is the paradox of climate tech’s next wave. To move from promise to permanence, it may need the incumbents it once tried to replace. That’s uncomfortable. But it’s also practical.
Of course, there’s still legitimate concern about how companies like Occidental will use this tech. Enhanced oil recovery — injecting captured CO₂ into aging fields to extract more oil — is still part of the plan. Oxy’s CEO Vicki Hollub has framed DAC as a license to operate in a decarbonizing world. Net-zero oil, in her words.
That framing makes many climate advocates nervous, and understandably so. But it also reflects the messy reality of transition: it doesn’t happen in straight lines. Sometimes it takes carbon capture to get to carbon reduction. Sometimes the bridge is built by the very people who profited from the problem.
A Market in Motion
The acquisition of Holocene is a signal. Not of DAC’s arrival — we’re still far from that — but of its adolescence. The experimentation phase is ending. The survival phase has begun.
And with it, the stakes are rising. The technologies that work will be absorbed, integrated, and deployed — not just by Silicon Valley darlings, but by the legacy giants with the balance sheets to scale them. The rest will be footnotes.
That’s not failure. That’s what maturity looks like. The future of carbon removal won’t be clean. But if Holocene’s journey is any indication, it will be real.
Disclaimer: I work for Canadian carbon removals project developer, Deep Sky