As engineered carbon dioxide removal technologies mature and attract investor interest, rigorous due diligence counts more than ever.
This was the key message from Stephen Harrison, Managing Director of the consultancy sbh4 GmbH and seasoned buy-side advisor, during his talk at gasworld’s recent European CO2 Summit in Rotterdam.
Harrison, who has supported investment decisions across carbon capture, e-fuels and hydrogen sectors, noted the gap between polished investor pitches and the reality of backing a project with millions or even billions of dollars.
“You listened to D-CRBN, you listened to Oxylum, and I’m sure you believe their stories,” he said, referring to earlier presenters at the event. “But a 30-minute pitch presentation typically isn’t good enough for a bank or an investor to put $5m on the table for a start-up, or $2bn to $5bn for a large-scale project. They’re going to want to scratch beneath the surface [and perform due diligence].”
Harrison’s presentation walked the audience through the process of evaluating whether a carbon capture or CO2-derived technology is truly bankable. The process includes a comprehensive review of feedstock availability, cost structures, technology readiness levels (TRLs), and financials, but also digs into less tangible factors such as team dynamics, transparency, and execution risk.
“I’m not just looking at the technology,” he said. “I want to know about the people behind it. What motivates them? Do they have industry experience? Can they work as a harmonious team?”
Stephen Harrison of sbh4 Consulting speaking at the European CO2 Summit in Rotterdam ©gasworld
One of the most underrated aspects of due diligence, according to Harrison, is assessing how transparent a company is about both its successes and its setbacks.
“Honesty is different to transparency. Honesty is the bare minimum. What I also want from you is: tell me what happened. Did you pivot? Did you overcome a failure? That’s the kind of transparency [potential investors] value.”
Harrison was careful to clarify that due diligence is not an audit, nor is it a guarantee of investment. “It’s just one input into the evaluation,” he said. “It doesn’t result in a binary ‘yes’ or ‘no.’ Instead, it feeds into the negotiation of the terms, valuation, and return expectations.”
He also highlighted the use of objective frameworks to assess technology maturity, including TRLs and manufacturing readiness levels, but warned that even these tools cannot fully eliminate subjectivity.
“Bankable projects often fall into a grey zone,” he said. “One advisor might say yes, another might say no. It’s always case-specific, and there’s no one-size-fits-all answer.”
Substance over slides
For early-stage innovators and carbon capture start-ups seeking investment, Harrison’s advice was both practical and blunt.
“Don’t just send me your pitch deck,” he said. “If you’ve got ten fantastic slides and no substance behind them, it won’t get you past the first meeting. What I want is the next level of detail.”
He encouraged companies to minimise “techno-exaggeration” and to clearly articulate what sets their solution apart from others in the market. “I want to know what you do that is specifically different,” he said. “If you can’t tell me that, it raises red flags.”
Drawing a parallel with the role of a journalist, Harrison said due diligence requires relentless curiosity and a mindset of verification.
“It’s a bit like professional journalism,” he said. “Assume nothing. The mindset is the same. You’re constantly piecing together discrete bits of information to form a clear picture.”
With the voluntary carbon market evolving and durable carbon removal credits gaining traction, due diligence may be more critical than ever, not just for avoiding poor investments, but for identifying technologies truly capable of delivering on climate promises.
“Six months after putting money on the table, you don’t want to find out what you’ve invested in is worth zero,” he warned. “Due diligence helps reduce that risk.”
