How to judge a climate-startup pivot: Spiritus's EOR turn

The decision in front of you is whether to credit a climate startup that has moved from removal to enhanced oil recovery (EOR). The first check is whether the molecule has a named, tonnage-backed buyer, not whether the founder can still tell the original climate story.

That distinction matters because removal companies often pivot when the original buyer pool shrinks. A good pivot changes the revenue source, not just the language. The work is to separate a new customer from a new slogan.

Spiritus is the case to test against because its EOR turn is the kind of pivot investors are being asked to credit. The test is the same for any removal-to-utilization move: named counterparties, tonnage, plant location, and buyer pull.

Removal buyers are thinning

Direct air capture support has narrowed. The Trump administration ended Energy Department funding for about half of the 21 direct air capture hub projects that came from the Biden administration.

Corporate demand has shifted too. Microsoft cut its carbon removal purchases by about 80% in the first half of 2026 while increasing spending on artificial intelligence.

The market for removal has two constraints: public funding and corporate procurement. Both can move faster than a startup's plan. If one side weakens, the company needs a different buyer, not a longer runway.

Those two moves do not prove that EOR is the only exit. They do show why a pivot needs a buyer with tonnage, not a slogan.

Run the LOI test before crediting the pivot

Use the same sequence for any pivot from removal to utilization, especially when the evidence is a letter of intent (LOI). Each check should produce a document, a number, or a site, not a narrative. The investor is not trying to distrust the founder; the task is to make the buyer visible before the next round.

• Name the buyer. Pass when the counterparty is identifiable by region or company type, not a vague promise of future demand. Ask for the counterparty's region, operating footprint, and the volume it expects to take. A region can be enough when the operator is not public, but the buyer must be identifiable to the investor. An answer of 'several operators' with no location fails the check. Spiritus has three signed LOIs with U.S. oil and gas operators covering the Gulf Coast, Midwest, and Rockies, with annual CO2 supply above 3 million metric tons for EOR.
• Check tonnage. Look for a volume that can support a plant's output over time, not a lifetime aspiration. Tonnage should match the plant's annual output, not a one-time target. Check how many years the supply covers and whether the volume is firm, conditional, or indicative. A large number without a schedule is a marketing figure. Spiritus estimated that the three LOI projects could enable more than 70 million incremental barrels of oil recovery.
• Locate the plant. The site should shorten transport and tie the seller to the buyer's operation. Location matters because transport costs and the buyer's site set the logistics. A plant near the buyer's operation reduces the gap between a signed intent and a running business. An undecided site makes the timeline a promise, not a plan. Spiritus plans to have a first commercial plant operating within two years at a location belonging to one of the fossil fuel operators.
• Test buyer pull. The strongest signal is the buyer's need for the molecule, not the seller's need for a story. Buyer pull means the operator needs the molecule for its own production, not because it wants to support a climate story. Consider what happens if the seller stops supplying and what the buyer's alternative is. A strong pull shows up in the buyer's operating economics. Federal studies put the technically recoverable U.S. oil that CO2 enhanced oil recovery could unlock at up to 137 billion barrels.

An LOI-backed pivot is not yet a contract. An LOI can show intent, but it still needs tonnage, location, and a buyer with operational need. The mistake is most visible when a company has a signed document but no plant site, no volume schedule, or no named operator. In that case, the document is evidence of intent, not revenue.

Credit only when the buyer is real

The rule is simple: named counterparties, tonnage, plant location, and buyer pull. The molecule has a paying buyer: credit the pivot. Only intent or mission remains: do not.

When the four checks pass, the pivot has a revenue base. When they fail, the company is still selling a mission. Do not let the founding story offset missing buyer evidence. Set the next-round decision around the buyer, tonnage, site, and operating need, and price the difference.