Catalytic Capital: The Missing Link to Scaling Decarbonisation

While policymakers set ambitious climate goals and innovators develop breakthrough solutions, the critical missing piece remains capital deployment at scale.

First-of-a-Kind (FOAK) commercial projects—those that prove a technology works outside a demonstration plant or lab – face the toughest funding barriers.

This is a challenge that many of our Finalists face in their scaling journey; capital needs are massive, tech risks remain high, and investors hesitate without clear commercial proof points.

To explore practical ways that we can de-risk FOAK deployments and unlock financial pathways to scale, The Earthshot Prize and Herbert Smith Freehills brought together investors, corporates, and finance experts for a deep dive into what’s actually working to get these technologies over the line.

Earthshot Prize Finalists ATS, 44.01, and LanzaTech shared what it really takes to finance FOAK projects, what’s still missing, and how to move from demonstration to commercial scale.

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Here are some key takeaways from the discussions.

The Road Ahead: From cautious optimism to urgent execution

The message from this roundtable was clear: we don’t need perfection – we need action.

Governments, corporates, and financial institutions must work together to create the conditions for scalable decarbonisation.

Startups must position themselves for investment early on by:

• • building relationships with large institutions early, even if they can’t fund pre-revenue companies
  • securing structured financing mechanisms (e.g., creditworthy corporate offtakes / take-or-pay contracts, extended letters of intent and joint development agreements) to reduce risk and attract debt funding;
  • hiring strong CFOs with structured finance expertise to blend equity, debt, grants, and long-term structured offtake agreements;
  • providing investors with a vendor diligence pack, to help them get comfortable with technical risk; and
  • attracting patient capital, which is essential for long commercialisation timelines, provided by the organisations like Builders Vision and Prime Coalition

Investors need to adapt their risk models

• • the climate investing “hype cycle” is over; capital is harder to raise, and investors demand clear commercial viability beyond subsidies dependant business models
  • follow-on capital is no longer guaranteed, making early investments more critical
  • FOAK projects will never have perfect risk profiles—patient, flexible, long-term capital is critical for long commercialisation timelines inherent to decarbonisation technologies
  • traditional banks struggle to finance early-stage CleanTech or ClimateTech due to lack of collateral and high capex. Institutions such as the European Investment Bank provide structured financing to fill this gap, as well as technical advice
  • debt investors prioritise downside protection—offtake agreements, insurance, and creditworthy counterparties improve bankability

Corporates must play a bigger role. Industrial partnerships and corporate venture capital (CVC) involvement can accelerate deployment by:

• • committing to longer-term offtake agreements (15+ years) to finance expensive infrastructure
  • shortening procurement cycles—delays in adoption mean missed opportunities to lead!
  • integrating startups into supply chains to accelerate deployment and de-risk scale-up

Policy must provide market stability and clarity

• • governments must provide stable policy frameworks. Without clear demand signals, investment flows will stall
  • regulation should mandate demand to de-risk large-scale decarbonisation projects
  • global policy alignment is essential. Fragmented regulations hinder international scale-up