Climate tech firm Heirloom secures more Japanese investment ahead of Japan's carbon market launch

Chiyoda

02/12/2025 13:00

Dec 2 (Reuters) - Climate technology company Heirloom said on Tuesday that it has received additional funding from Japanese firms as the country prepares to expand its carbon market in 2026.

The Development Bank of Japan and engineering group Chiyoda Corp 6366.T participated in the funding round, but the California-based company did not disclose the investment amount or the valuation at which it raised it.

The deal follows Heirloom's $150 million Series B funding round last year, which included Japanese investors such as Japan Airlines 9201.T, Mitsubishi Corp 8058.T and Mitsui & Co. 8031.T.

Japan's GX-ETS carbon market, launched in 2023 as a voluntary scheme, will become mandatory in 2026 and allow international carbon-removal credits, such as direct air capture, to help companies meet compliance targets.

"These investments from DBJ and Chiyoda strengthen our technical and financial foundation to build large-scale direct air capture (DAC) systems, from providing CO2 for clean fuels to enabling permanent carbon removal," said Heirloom Chief Executive Officer Shashank Samala.

In 2023, Heirloom opened the first U.S. commercial direct air capture plant in Tracy, California.

The facility captures about 1,000 metric tons annually and is part of a scale-up aimed at cutting costs from current levels of $600–$1,000 per ton toward the U.S. government's $100 target.

 (Reporting by Yagnoseni Das in Bengaluru; Editing by Vijay Kishore)

 ((Yagnoseni.Das@thomsonreuters.com;))