Estonia’s climate tech startup UP Catalyst lands €18M from EIB to turn CO₂ into graphite and tackle EU supply shortfall

UP Catalyst, a Tallinn-based climate tech startup, just secured an €18 million venture loan from the European Investment Bank (EIB). The funding will help scale its molten salt electrolysis process, which turns industrial CO₂ emissions into graphite and carbon nanotubes. These materials are used in everything from electric vehicle batteries and defense equipment to paints, polymers, and concrete.

Turning CO2 Emissions Into Sustainable Carbon Materials

What makes UP Catalyst’s approach stand out is its efficiency. The process uses significantly less energy than conventional fossil-based methods and could serve as a low-emission alternative at scale. If things go according to plan, the company says it will be able to supply up to 50% of Europe’s graphite demand gap in the coming years.

“A key pillar for us is to finance innovative net-zero technologies that can help to reduce the adverse impact on our climate and environment while strengthening Europe’s competitiveness,” said EIB Vice-President Thomas Östros. “UP Catalyst embodies this vision by pioneering carbon capture and utilization solutions that are both innovative and impactful.”

The EIB’s funding comes as part of the InvestEU initiative, which aims to support sustainable industry efforts and reduce Europe’s reliance on imported raw materials. UP Catalyst has already moved beyond the lab and into commercial production, with its products currently being validated in large-scale battery cells using GEN3alpha in 2025.

“Securing EIB’s financing is a key milestone for UP Catalyst as it directly supports the company’s strategic mission to address the growing deficit of graphite – a critical raw material in the EU, the US, Korea, and Japan,” said UP Catalyst CEO Rait Maasikas. “Working with the EIB not only validates our innovative technology and local production capabilities but also signals to the market that UP Catalyst is at the forefront of strengthening the resilience of EU industries and manufacturing in the transition to a more independent product supply chain.”

The company recently confirmed that its graphite matches the quality of fossil-based alternatives, which opens up more doors in energy storage and defense. With EIB support, UP Catalyst aims to ramp up production to 1,350 tonnes of green graphite and 270 tonnes of carbon nanotubes annually by 2027. That would require processing about 6,000 tonnes of CO₂ each year.

The startup opened a new production facility in Estonia in 2024 and launched in-house testing and validation services for its carbon materials. Its production process has one of the lowest carbon footprints for battery-grade graphite and the lowest for carbon nanotubes, according to a cradle-to-gate Life Cycle Assessment.

UP Catalyst was recently named a strategic project partner by the European Commission under the Critical Raw Materials Act (CRMA), which gives it a bigger role in the EU’s plan to secure raw materials from within its borders.

By scaling up both production and cost-efficiency, UP Catalyst is betting it can become a trusted local supplier at a time when Europe is scrambling to boost its manufacturing resilience. The EIB seems to think they’re on the right track.