Arbor, a California-based carbon removal startup, has landed a $41 million offtake agreement from the Frontier coalition, in one of the advanced market commitment’s largest such deals to date. The contract will help fund Arbor’s first commercial-scale facility in Louisiana, which is expected to come online in 2028 and to remove 116,000 tons of carbon dioxide in two years.
The deal comes at a moment when the wider carbon removal industry remains in its infancy, but is gaining momentum. Most major deliveries remain years away, and despite an acceleration in promises to purchase from key buyers, only about 2.5% of tons sold have actually been delivered.
In the U.S., the landscape for CDR startups has been complicated by policy uncertainty since the start of the second Trump administration. For buyers and investors, that means that carbon removal approaches that can generate additional economic value beyond credits alone have an additional appeal.
“Carbon removal technologies that have co-benefits broadly, and certainly co-products [that can be sold] are really poised for scale and are pretty resilient to political shifts,” said Hannah Bebbington, head of deployment at advanced market commitment Frontier. “If you have diversified revenue opportunities, you are more insulated from market risk.”
That dynamic is present in the agreement Frontier signed with Arbor, Bebbington said.
Arbor’s system is a next-generation approach to bioenergy with carbon capture and storage, or BECCS. The company converts waste biomass from timber plantation thinnings into synthetic gas: a mixture of carbon monoxide and hydrogen. That gas is then burned in a furnace with pure oxygen, producing water and a high-pressure form of carbon dioxide. That CO2 spins a turbine to generate electricity, before being captured and stored underground. For every ton of carbon dioxide Arbor’s system removes, the company states that it also creates up to 1,000 kilowatt-hours of clean electricity.
And that dual use means that the startup is well-positioned to target the booming data center market, Bebbington explained.
“We need to remove gigatons of CO2 from the atmosphere and we need a lot more clean electricity to meet the pace of AI’s development,” she said. “As we are thinking about carbon removal demand and where our electricity generation is going to come from, and how we are going to ensure that we are powering this [AI] boom as cleanly and efficiently as possible, Arbor really fits the bill.”
In addition to generating electricity, Arbor’s process also produces water as a byproduct, which the company plans to sell for things like data center cooling.
Carbon removal reality check
But that’s all still a few years away.
Despite the potential for immense demand from the data center industry, Arbor is still in the midst of the tech development and testing required to be ready for commercial deployment. The offtake agreement with Frontier won’t begin until 2028, when the startup’s Louisiana site is set to come online.
Over the next several years Arbor will have to meet technical milestones outlined in its agreement with Frontier, “such that we ensure they are deploying and developing at speed and at the performance spec that we expect,” she added. Those milestones “bend” toward carbon removal performance and efficiency, but Frontier also wants to see that the end-to-end system, including power production, can meet uptime and production targets.
And if all goes as planned, the $41 million offtake agreement — one of Frontier’s largest single offtake agreements to date — should help Arbor also secure other forms of funding, Bebbington said.
The startup is far from Frontier’s only portfolio company hoping that co-benefits will help “pull them to market,” she explained, and not even the only one targeting data centers. That’s in part because those added products mean companies can raise capital more easily, and can potentially deploy and scale more quickly because they’re more insulated from risk. Bebbington pointed to 280 Earth, which operates direct air capture facilities that provide cooling and waste heat offtake for data centers.
“We think this is a really compelling part of any carbon removal story,” Bebbington added. That said, Frontier is clear-eyed about the challenges ahead, and the fact that even pitches that appeal to data centers won’t necessarily pull the sector up to its targets.
“We knew 2025 was going to be a year of bumpy deliveries,” she explained. “We are seeing the delays and bumpiness that we expected from being in a new market…we knew forecasts were going to be wrong, that’s why Frontier exists.”
Not all of the technologies in Frontiers’ portfolio are going to work, she added — not even all of those with data center targets.
“This is the decade where we are investing in the category to make sure that we know what works and what doesn’t work, so that in the 2030s and 2040s we can double down on what we do think can scale,” Bebbington said. “We’re going to see some real success stories, and some real failure stories, and that’s absolutely to be expected.”
