🌍 An ocean and atmosphere of CO2 removal #82CommentShareCommentShare

Happy Monday!

A DOE RFI and subsequent flurry of institutions’ reports are redefining the edge of the map of carbon dioxide removal and expanding investment in Direct Air Capture and Ocean-based Removal. To kick off a series of choppy puns, the waters aren’t quite warm and are likely best for government and catalytic capital. Once the chop subsides, VCs will then set sail on the hunt for high-growth investable treasure. We highlight the technical pathways and are excited to see much more coverage of and companies in this area in the future.

We also announce three new climate funds, another $175m in alternative proteins, and a $500m debt investment in a US co’s Indian solar factory to gird against China’s industrial dominance.

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A sea of carbon removal opportunity

Novel carbon removal technologies continue to make waves. Last week the DOE joined the surge, with a request for information (RFI) on “deployment-ready” technologies to reduce and remove atmospheric CO2. Think of the RFI as the DOE’s equivalent of a VC’s blog post thesis on a new exploratory sector, a precursor to eventually investing in and (in the DOE’s case) building large-scale carbon removal projects.

Right on cue, a flurry of reports from research institutions highlighting the next frontier of carbon removal. Whereas institutions previously focused on land-based removal (soil and forestry) and point-source capture, their eyes are on two new prizes: (1) Direct Air Capture and (2) Ocean-based CDR.

💨 DAC - Capturing CO2 directly out of ambient air is prohibitively expensive (who’s willing to pay $500+/ ton?). But Third Derivative’s brief ambitiously predicts tech improvements over the next decade will reduce the cost of DAC by a factor of 5-10x, right in the money for the $50/ton 45Q credit. How do we get there?

Air contactors: Massive CO2 sucking fans don’t come cheap (Carbon Engineering’s air contactor costs $200-400m for a 1 Mt/yr plant)! New innovations like passive air contactors that rely on wind & natural airflow and computational optimization are bringing down capex and opex.

Solvents and sorbents: Liquid solvents and solid sorbents can capture CO2, but require large amounts of energy to regenerate the material with a temperature and/or pressure swing. Novel sorbents like metal-organic frameworks and zeolites can solve for higher capacity and selectivity to reduce energy needs.

Regeneration: Energy costs dominate DAC’s opex. A number of innovators are leveraging electrochemistry to unlock better energy efficiency for CO2 capture and regeneration.

*Third Derivative maps select innovators driving down DAC’s cost curve to the prized $50/ton mark.*

🌊 Ocean-based CDR - The ocean covers 70% of Earth’s surface and has absorbed ~40% of CO2 emissions since the beginning of the industrial era. Compared to soil and trees, oceans have so far been the carbon removal underdog. The National Academies of Sciences, Engineering, and Medicine and the Aspen Institute both published reports on the 6 ocean-based CDR approaches of this overlooked asset:

Nutrient fertilization: Adding nutrients like iron, nitrogen, and phosphorus to the ocean to increase photosynthesis by phytoplankton and their uptake of CO2.

Artificial upwelling and downwelling: Using the vertical movement of water to transfer organic carbon between the surface and the deep ocean.

Seaweed cultivation: Large-scale farming of seaweed to capture CO2 and sequester it by pumping or sinking the biomass.

Ocean alkalinity enhancement: Enhanced weathering of rocks which can sequester CO2 and counteract ocean acidification.

Electrochemical approaches: Using various seawater electrochemical approaches to extract CO2.

Recovery of marine ecosystems: Restore coastal blue carbon systems including mangroves, salt marshes, seagrasses, and marine biomass.

Despite its scale and potential, ocean-based CDR is in the early innings - as more of an R&D or catalytic capital effort versus a venture-investable ripe opportunity. Ocean scientists have sounded the call for $2.5b in blue CDR R&D funding over the next decade. The Aspen Institute suggests responsible ocean-based CDR research considerations before taking the geoengineering plunge:

🐳 Upsides (1) more available space and less competition for human uses than on land, (2) fulfills high-quality permanent storage standards, (3) co-benefits of ocean acidification mitigation and food & biofuel production

🐋 Downsides (1) poorly understood environmental impacts, (2) inadequate governance and uncertain jurisdiction, (3) difficulty of operations in unforgiving conditions, (4) challenging verification of rate of carbon removal and permanence of storage

Deals of the Week (12/6-12/12)

🌱 The EVERY Company (fka Clara Foods), a San Francisco, CA-based producer of alternative proteins through precision fermentation technology, raised $175m in Series C funding from McWin, Rage Capital, Temasek, Wheatsheaf Group, SOSV, TO Ventures, and Prosus Ventures.

⛏️ Petra, a San Francisco, CA-based tunnel-boring robotics startup for laying utility cables underground increasing grid resiliency, raised $30m in Series A funding from DCVC, ACME Capital, Congruent Ventures, 8VC, Real Ventures, Elementum Ventures, and Mac Venture Capital.

⛵ Candela, a Sweden-based electric boat startup, raised $27m in funding from EQT Ventures.

⚡ Hyme, a Denmark-based startup developing technology to store energy in molten salt, raised $12m in funding from Heartland A/S.

🍎 Spoiler Alert, a Boston, MA-based food waste platform, raised $11m in Series A funding from Collaborative Fund, Valley Oak Investments, Spring Point Partners, Maersk Growth, and Acre Venture Partners.

⚡ Logical Buildings, a Livingston, NJ-based smart building and virtual power plant software and solutions provider, raised $10m in funding from Keyframe Capital and Castleton Commodities International.

💧 Epic Cleantec, a San Francisco, CA-based onsite water reuse firm, raised $9.4m in funding from the family office of Dr. Kathy Fields and Dr. Garry Rayant, J-Ventures, J-Impact, and others.

☔ The Demex Group, a Washington DC-based climate risk startup, raised $9m in Series A funding from Anthemis Group, Blue Bear Capital, QBE Ventures, IA Capital Group.

⚡ Enspired, an Austria-based grid flexibility platform, raised $8.5m in Series A funding from Emerald Technology Ventures and 360 Capital.

⚡ Exponent Energy, an India-based developer of fast-charging battery technology, raised $5m in funding from YourNest VC, 3one4 Capital, AdvantEdge VC, and Motherson Group.

♻️ Dispatch Goods, a San Francisco, CA-based reusable food container marketplace aiming to reduce plastic in food delivery, raised $3.7m in Seed funding from Congruent Ventures, Bread and Butter Ventures, Precursor Ventures, Incite Ventures, MCJ Collective, and Berkeley SkyDeck.

⚡ Grid Edge, a Birmingham, UK-based building energy efficiency platform, raised $2.3m in funding from BP Ventures, Goldacre, and Aston University.

🏠 1Komma5, a Germany-based startup making the products and infrastructure necessary for carbon neutral homes, raised an undisclosed amount of funding from Porsche Ventures.

Exits & New Funds:

Tomorrow.io, a Boston-based local weather forecasting platform, is going public via a merger with SPAC Pine Technology Acquisition Corp, valuing the company at $1.2b.

EV fleet charging provider Amply Power was acquired by BP.

Solar EV company Sono Motors announced the closing of its IPO.

Climate tech VC firm VoLo Earth Ventures announced it has surpassed its original $50m target in commitments, and will now be capped at $100m and could close early in the new year.

Climactic announces a new early-stage venture capital firm, focused on startup solutions to enterprise climate challenges.

MCJ Collective announced the opening of its Opportunity Fund.

In the News

Flexing his executive power of the purse, Biden set in motion a slew of procurement goals to make the federal government carbon neutral by 2050. Most notable: 100% zero-emissions vehicle procurement, 100% carbon-free electricity use around the clock, and even 100% federal building net zero emissions. To kick off the action, Biden also greenlit the US’ second major offshore wind project.

Paradoxically, the Biden Administration has permitted more oil & gas leases per year on federal lands than in any of the Trump Administration’s first 3 years. The US is tracking to become the liquefied natural gas (LNG) global export king by 2022, surpassing #1 Qatar and #2 Australia.

US International Development Finance Corporation (DFC) announced $500m in debt financing for First Solar's major thin-film module factory in India - DFC’s largest debt transaction ever. The deal supports US geopolitical strategy, to put “American taxpayer money behind a bid to weaken China’s dominance of the solar industry’s supply chain."

Carbon removal technologies may become economically viable sooner than projected. A combination of stricter carbon market caps, increased coal burning, and higher heating and energy demands is making it pricier than ever to pollute in Europe, on track to break triple digits (€100/ton carbon) for the first time ever.

Nebraska Public Power District voted to decarbonize their electric system, becoming the first red state to commit their public utilities to net zero by 2050. Wind production is slowly displacing coal-powered electricity.

A decade ago, you’d have to increase decimals by 3 points to see EVs' contributions to global car sales (0.002%). This year, electric vehicles made up 10% of global new car sales! To get ahead of the anticipated 22m EVs soon to hit US roads, the new National Electric Highway Coalition coordinates the largest alliance of electric cos to bring fast chargers along all major US highways.

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Grimes is the zero-carbon energy hero that California never asked for.

Must read. Bloomberg roasts MSCI in a deeply investigated report on ESG ratings and their (non) impact - not on environmental performance, but environmental regulations’ risk to profits. “Almost 90% of the stocks in the S&P 500 have wound up in ESG funds built with MSCI’s ratings. What does sustainable mean if it applies to almost every company in a representative sample of the U.S. economy?”

Watch this massive robotic arm install a solar farm hands-free.

Keep the good vids rolling and watch Pique Media’s latest micro-doc on Remora. Then read our popular feature with CEO Paul Gross.

Meet 92 women leading climate tech startups around the world.

From a new mammoth report on the State of European Tech in 2021, “planet positive” and “deeptech” rank as the top two most promising sectors for EU VC investment.

Earth is getting a Black Box. A steel vault in a remote part of Australia will record the planet’s warming weather patterns should humanity be destroyed by climate change.

Need juice? This moped charges in just 90 seconds.

BBB will be the largest injection of federal investment in energy R&D ever.

LA consumers move first. 59% of Los Angelenos say their next car will be electric. Meanwhile extreme climate events already affect LA citizens’ day-to-day lives.

The best climate change photos of 2021. I’m not crying, you’re crying.

Opportunities & Events:

️💡 Low Carbon Business Action Canada Challenges: Apply by Dec 17th to 18 different sustainability pilot programs between EU SMEs and Canadian partners.

💡 gener8tor Sustainability Accelerator: Apply by Jan 2nd to be one of five sustainability and climate tech startups that will receive $100k investment alongside access to a national network of investors, corporate partners and mentors through this three-month program starting in February 2022.

💡 The Greenhouse: Apply by Jan 14th to this 12-month innovation programme for climate positive, early-stage startups which offers access to business coaching, masterclasses, free workspace in central London, and up to £20,000 in equity-free grant funding. Join a Q&A session to find out more.

💡 DoE EnergyTech University Prize: Apply by Jan 31st for a shot at $250,000 of cash prizes from the new Dept of Energy’s Office of Technology Transitions EnergyTech University Prize, a business plan competition for post-secondary students.