What Running Tide's demise means for carbon removal's future

This time last year, the outlook for Running Tide appeared promising.

Last summer, the marine carbon removal startup was touting delivery of nearly 22,000 tons of carbon dioxide removal for some of the voluntary market’s biggest players, including Microsoft and Shopify. It had received a first-of-a-kind permit from the Icelandic government, and said it had removed “more CO2 than any organization on the planet.”

Running Tide’s approach to removal involved sinking thousands of tons of wood in the Atlantic, 200 miles off the coast of Iceland, to depths of more than 1,000 meters. The strategy? Try to move carbon dioxide out of the fast carbon cycle — the province of plants, humans, and the atmosphere — and into the slow (deep sea storage and rocks). 

The company’s March 2024 progress report suggested that everything was moving along swimmingly. Its research deployment was on schedule, and its macroalgae growth experiments were promising. 

But just three months later, Running Tide laid off all staff in both Iceland and its Maine home, and CEO Marty Odlin announced that the company was shutting down.

“We are unable to secure the right kind of financing to continue our work with the urgency it requires,” Odlin wrote on LinkedIn. “Carbon removal is not a technological challenge or a science problem. It is a cost of capital and logistics problem….There simply isn’t the demand needed to support large scale carbon removal.”

Problems with the voluntary carbon offset market — everything from worthless offset credits to outright fraud, plus the fact that it is voluntary — are at the center of conversations around how to scale CDR. But while that’s a problem for the CDR industry more broadly, many in the industry aren’t convinced that the market structure alone pulled Running Tide down.

Wil Burns, a Northwestern University environmental policy professor who sat on Running Tide’s initial independent advisory committee, said there is likely enough demand in the voluntary market to account for the “very modest” amounts of removal the company was able to offer. The true problem, in Burns’ view, was that the industry in general was “extremely skeptical” of Running Tide’s approach to monitoring, reporting, and verification. And that’s not something a different market structure would have fixed, he said.

“Even if there were government mandates…that companies had to purchase CO2 removal,” Burns said, “I’m not sure that a company like Running Tide that just hasn’t proved its sequestration would end up privileged in that kind of market.”

Burns isn’t alone in that view. The claim of transferring carbon dioxide between the short and long cycles, said climate economist Danny Cullenward, is a “vast oversimplification that substantially overstates the net climate benefits when you apply that to ocean-based processes.”

Running Tide wasn’t just using that framing as a metaphor to explain its work outside the scientific community, Cullenward said, but at one point was advocating to be credited based on that framing.

“That’s a pretty big red flag for me,” he added. “I can tell you, on that claim, they were way out over their skis.”

The Running Tide pitch

Like many startups, Running Tide’s approach to carbon removal had several iterations, and research into multiple methods was still underway when the company shuttered.

Ultimately, the company hoped to take a three-part track: sequestering carbon by sinking seaweed into the deep ocean, storing fixed carbon via biomass sinking, and increasing alkalinity. These three things could be achieved at once, Running Tide predicted, by covering wooden buoys (made with wood from forest trimming in Canada) in kelp spores and limestone powder, and tracking their fate in the open ocean via proprietary sensors. The buoys would float for weeks or months while the kelp grew, pulling carbon dioxide from the atmosphere and top layers of the ocean, before sinking into the deep sea and pulling the carbon with them.

Both seaweed and biomass sinking are what’s known as “open system” approaches to carbon removal — where the carbon is stored through natural processes, which can make measurement and verification extremely tricky and imprecise. How to best conduct and measure seaweed sinking, and how effective it may ultimately be, is the subject of millions of dollars in federal funding and research, including from the Advanced Research Projects Agency–Energy.

Among ocean scientists, there’s general consensus that seaweed-based approaches have many benefits, but that questions about measurement and its impact on cost are still outstanding. 

Steven Davis, a professor at Stanford’s school of sustainability, said it’s understood that ocean modeling will be necessary to do measurement, reporting, and verification (MRV) for carbon removal. But he’s “concerned that to do this kind of MRV right could greatly increase the costs of marine CDR,” he said. Davis’ own research has indicated that the costs of seaweed-based CDR are likely to be quite high.

ARPA-E program director Simon Freeman said researchers funded by his agency are still performing the “due diligence we thought was necessary in the industry to quantify how effective and safe carbon capture using seaweed might be.”

But so far it is clear that biological methods are “ultimately more scalable” than non-biological forms of ocean removal such as alkalinity enhancement, Freeman said: “You’re relying upon naturally occurring mechanisms that self-replicate…so logistically, at that gigaton scale, biological methods are better.” 

One of the researchers working with ARPA-E funding is David Siegel, a professor of marine science at UC Santa Barbara’s Earth Research Institute, who is developing techniques to measure the actual impact of pathways like seaweed sinking. Seaweed grows quickly, and requires limited nutrients per gram of carbon it sequesters, he explained, but scaling that removal pathway is “still a hypothetical.”

“The problem is, to do a gigaton of CO2 equivalent through growing, you’ve got to grow at least a million square kilometers of farms,” he said. “That’s not going to be cheap.”

For both biomass and seaweed sinking, verification protocols are still in early stages, said Burns, who is on a committee working to create standards for ocean storage of biomass.

“I don’t know if we’ll ever get to a point where we can really accurately measure alkalinity enhancement or biomass storage,” Burns said. The “discerning purchasers,” he added, felt it was too early for Running Tide to be selling credits.

The funding conundrum

Running Tide’s first customer, back in 2019, was Shopify. At that time, Running Tide was seeking funding for a pilot that would “grow mass amounts of sea kelp, then sink it to sequester its carbon.” 

(Shopify didn’t respond to multiple requests for comment for this story; Microsoft, the company’s other most high-profile buyer, declined to comment.)

In September 2022, Running Tide raised a $54 million Series B from investors including Lowercarbon Capital. By that time, the goal was no longer to grow kelp and sink it, senior VP Jordan Breighner wrote in a March blog post, but rather to build an “integrated ocean operating system” combining hardware, software, and logistics. 

From an investment perspective, moving away from seaweed and towards biomass sinking may have made things harder for Running Tide, said Robert Höglund, carbon removal advisor and founder of CDR.fyi, a platform for tracking durable carbon removal projects. 

“Biomass sinking is a bit more controversial,” he said. “It’s tricky when there’s not consensus around how well the method works.”

The traditional funding model of the tech world — getting a high valuation and raising lots of private capital quickly — may not be well-suited for an industry like carbon removal, where there’s still a lot of uncertainty and ongoing research, Höglund said. Valuations are based on the expectation of scaling quickly, he added, not on another 10 years of lab research.