Arbor Raises $41M for Carbon Capture to Power Data Centres

Arbor, a climate-tech startup aiming to deliver both carbon dioxide removal and clean, consistent energy, has secured $41 million worth of offtake agreements. This move highlights Arbor’s growing role in addressing the dual demands of sustainable power and industrial-scale carbon capture, especially as tech giants and hyperscale companies expand their energy needs.

A Major Milestone in Arbor’s Commercial Journey

The new contracts cover the removal of 116,000 tons of CO₂ between 2028 and 2030. These agreements, facilitated by the Frontier Climate Consortium, mark the largest such commitment Arbor has landed so far. The deals are pivotal to financing and constructing the company’s first full-scale commercial facility, to be built near Lake Charles, Louisiana. This phase of development is crucial for the three-year-old startup as it shifts from pilot to industrial operations. Buyers in this round include high-profile names like Stripe, Google, Shopify, McKinsey, Autodesk, and H&M, building on the foundation laid by an earlier, smaller deal with Microsoft.

"Demand for carbon-free energy is just accelerating at rates that are completely unprecedented, and we have a pretty unique technology stack that can deliver 24/7, carbon-free energy that is cheap and firm," said CEO Brad Hartwig.

A Novel Approach to BECCS Technology

Arbor operates in the bioenergy with carbon capture and storage (BECCS) space, but with a significant technological twist. Unlike traditional BECCS systems, which often face efficiency limitations, Arbor claims 99% capture efficiency, leveraging innovations that redefine how carbon removal can be done at scale. The process begins by gasifying biomass sourced from forest management activities. That gas is then combusted in a specially designed furnace using pure oxygen, a method known as oxy-combustion. This results in the generation of water and supercritical CO₂, which is used to drive a turbine and produce electricity.

Integrated Design for Cost-Efficient Scaling

What sets Arbor apart is its highly compact and modular system architecture. The turbine, rated at 18 MW, is about the size of a car engine, dramatically smaller than traditional infrastructure, making it easier and more economical to deploy at various scales. Because the system inherently eliminates emissions through its oxy-combustion setup, it avoids the need for separate CO₂ capture units, streamlining operations and reducing both capital and operating costs.

"We've gotten a lot of interest from a whole host of folks, from hyperscalers to regulated utilities looking to develop projects for matching supply with load for data centres," Hartwig said.

Water Reuse and Multi-Functional Output

Beyond CO₂ removal and electricity generation, Arbor’s system also creates usable water as a byproduct. This water can serve dual purposes, such as supporting irrigation or cooling data centers, a compelling value proposition in regions where both freshwater and energy are increasingly under strain.

Future Prospects and Flexibility of the Platform

Although Arbor’s system is optimized for carbon removal through biomass use, the same technology is compatible with natural gas. While using fossil gas doesn’t contribute to net CO₂ removal, it still enables clean power production with captured emissions. This hybrid capability could be useful for bridging toward a net-zero future without locking into one energy source. Moreover, as the company scales production and improves operational efficiency, it anticipates eventually bringing costs below $100 per ton of CO₂ removed.

AI-Driven Demand Accelerates Deployment

The accelerating demand for energy from artificial intelligence and data infrastructure is a major enabler for emerging clean technologies like Arbor’s. As these industries seek sustainable and reliable energy sources, they are helping push novel carbon removal systems from prototype to deployment, navigating the so-called “valley of death” that many climate innovations fail to cross. Arbor is positioning itself at the intersection of this demand, offering a solution that addresses both carbon impact and the need for dependable power in a rapidly digitizing world.