🌍 CarbonCapture seeks greener (energy) pastures #213

Happy Monday!

Giddy up — we’re going carbon cowboy this week with a deep dive into CarbonCapture’s decision to suspend its planned DAC facility, Project Bison, amid competition for clean energy from data centers.

In deals, $542m across three new funds, plus $87m for lithium ion cells, and $82m for battery components.

In other news, the UK had its most successful renewable energy auction yet, and is planning to close its last coal plant a year early. Plus, the US powers ahead with $7bn for rural electrification.

And we’re still gearing up for New York Climate Week — will we see you at any events? We’ve got a whole host in our CTVC X NYCW Event Tracker.

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Bye for now, Bison

Last week, direct air capture (DAC) startup CarbonCapture announced that it was scrubbing plans to build its DAC mega facility in Wyoming, Project Bison, due to insufficient access to carbon-free energy. Amidst a power struggle for clean energy with other industries, such as data centers and cryptocurrency miners, the company said it was pulling the plug on its Cowboy State location and seeking greener (energy) pastures elsewhere.

*CarbonCapture’s modular DAC technology. Image via CarbonCapture.*

What happened?

Project Bison is supposed to be CarbonCapture’s first commercial-scale project that removes 5m tons of carbon dioxide annually by 2030 — which would dwarf the biggest currently operational DAC facility, Climeworks’ “Mammoth” plant in Iceland, which removes 36,000 tons/year.

CarbonCapture makes modular units, the size of a standard shipping container, that can capture and remove CO2 from the atmosphere. Still, powering the technology requires massive amounts of clean energy to have a positive carbon impact. In Iceland, Climeworks can use the country’s high supply of geothermal energy and leverage large basalt deposits for carbon storage.

This cancellation shows that scaling up DAC in the US is much harder, due to its still immature value chain. And with rising power demand from energy-hungry data centers and AI, it’s a (net) zero sum game — without sufficient clean energy, the benefits of much-needed carbon removal are negligible.

Why it matters

Direct air capture is increasingly important in achieving global decarbonization goals, because it removes CO2 directly from the atmosphere and stores it permanently, helping to offset hard-to-abate emissions. But it faces the all-too-common challenges in early-stage climate tech — it’s expensive and technically difficult, so costs will only come down with scale. Plus, CarbonCapture, and many other DAC startups, are building their FOAKs, and facing all of the financing and project management challenges that come with it.

Despite this, CarbonCapture has attracted significant investor interest, offtaker buy-in, and federal support: it raised an $80m Series A this March, and around the same time, signed an offtake agreement with Microsoft for its carbon removal credits (terms were not disclosed).

Meanwhile, a coalition including CarbonCapture received a $12.5m DOE award last year for engineering studies for the project, which would have helped establish a DAC hub in Wyoming. Republican Governor Mark Gordon has been pushing for carbon management there, and last year, the state granted three difficult-to-obtain permits to project partner, Frontier, to inject CO2 into suitable wells for storage. This has helped attract other startups like Tallgrass, set to build a commercial-scale CO2 sequestration hub in Eastern Wyoming, and Spiritus, planning a DAC and sequestration site in Central Wyoming.

Despite the momentum, Project Bison’s cancellation points to a new wrench in the early climate tech works: the complicating energy landscape. Without one of the most fundamental inputs for direct air capture — clean energy — carbon capture and other similar tech can’t make the energy math pencil, and projects are dead on arrival.

Key takeaways

Deployment goes beyond project plans. It’s also about the infrastructure. Without a complete value chain, from power to permitting, from transportation to tax credits, projects can’t get off the ground. Project Bison experienced this firsthand. This might mean future projects seek more flexible government funding that can be transferred if relocation is necessary.
The offtake give-and-take. Because DAC offtake is still usually advanced market commitments from corporate buyers, offtakers may begin to shift some priorities, if they can’t get deliveries. Buyers may scrutinize project plans more closely, particularly regarding energy sourcing, and build more flexibility and diligence into contracts.
DAC isn’t our only tool in the carbon management toolbox. Other technologies could prove more viable in the short term than DAC, like point-source capture from a localized, industrial site. Logically, point-source beats DAC in economic efficiency with lower capture costs from higher CO2 concentrations. And while some VCs have been historically wary of it because it prolongs fossil fuel-intensive assets, more projects have been announced as of late.
It’s not all doom and gloom. In August, startup Heimdal’s Project Bantam went online in Oklahoma. Now the largest US-based DAC facility, Bantam uses passive limestone carbonation to remove a capacity of 5,000 tons of CO2 a year. The EPA also proposed new first-of-a-kind permits to allow Occidental Petroleum’s planned Texas DAC facility, “Stratos,” to capture 500,000 tons of CO2 a year, last week. With these comparative plants, it’s also possible that Project Bison’s stated capacity numbers were overly ambitious.

Deals of the Week (9/2-9/8)

Late-Stage / Growth

🔋 24M Technologies, a Cambridge, MA-based lithium ion cell manufacturer, raised $87m in Growth funding from Nuovo+, Asahi Kasei, Dai Nippon Printing Company (DNP), Kyocera, Lucas TVS, and other investors.

🔋 6K, a North Andover, MA-based battery components manufacturer, raised $82m in Growth funding from Anzu Partners, Energy Impact Partners, LaunchCapital, Material Impact, and Volta Energy Technologies.

🧪 Calyxia, a Bonneuil-sur-Marne, France-based biodegradable microcapsules platform, raised $35m in Series B funding from Lombard Odier, Astanor Ventures, and Bpifrance.

👕 GALY, a Boston, MA-based developing lab-grown cotton developer, raised $33m in Series B funding from Artesian VC, Breakthrough, Brinc, H&M Group, Inditex, and Unreasonable Capital.

Early-Stage

💨 Mantel, a Cambridge, MA-based molten salt-based carbon capture technology developer, raised $30m in Series A funding from Eni Next, Shell Ventures, Arosa Capital Management, Engine Ventures, BP Ventures, and other investors.

💨 Carbyon, an Eindhoven, Netherlands-based direct air capture developer, raised $17m in Series A funding from Brabantse Ontwikkelings Maatschappij, Global Cleantech Capital, Innovation Industries, Invest-NL, and Siemens Financial Services.

🌾 Switch Bioworks, a San Carlos, CA-based symbiotic microbes for fertilizer developer, raised $17m in Seed funding from Change Forces Capital, Acre Venture Partners, Ag Ventures Alliance, Anthos Capital, Astanor Ventures, and other investors.

⚡ Reonic, a Augsburg, Germany-based renewable technology sales software platform, raised $14m in Series A funding from Northzone, Point Nine, and Puzzle Ventures.

☔ Demex, a Washington D.C., DC-based climate risk insurance design platform, raised $10m in Series A funding from Congruent Ventures, Blue Bear Capital, Ellerston Capital, MetaProp, and Moxxie Ventures.

🥩 REDUCED, a Copenhagen, Denmark-based food side streams into ingredients platform, raised $7m from Novo Holdings, Einar Willumsen, Export and Investment Fund of Denmark (EIFO), and Rockstart.

🛵 Cowboy, a Brussels, Belgium-based electric bike manufacturer, raised $6m from Cypress Capital, Exor, Future Positive Capital, HCVC and Isomer Capital.

🏠 elleThermo, a Tokyo, Japan-based low-energy thermoelectric materials manufacturer, raised $3m from Keio Innovation Initiative.

🛰 Involve Space, a Lipomo, Italy-based stratospheric monitoring systems platform, raised $3m in Seed funding from Earlybird Venture Capital, Fondazione CRT, Plug and Play Ventures, TLI Space, and UniCredit Group.

🚢 Signol, a London, UK-based emissions reduction behavioral change software platform, raised $3m in Seed funding from TMV, East Innovate, MOL PLUS, and Ultranav.

🥩 Cellva Ingredients, a São Paulo, Brazil-based cellular agriculture platform, raised $2m from AirCapital, EA Angels, FUNDEPAR, ProVeg Incubator, and Rumbo Ventures.

⚡ Wattnow, a Tunis, Tunisia-based iOT energy management solutions provider, raised an undisclosed amount from 216 Capital, Lateral Frontiers, and Satgana.

Other

⚡ Bia Energy, a Bogotá, Colombia-based smart meter and retail energy platform, raised $10m in Debt funding from BBVA.

💨 CarbonX, a Paris, France-based carbon removal service marketplace, raised an undisclosed amount of Corporate Strategic funding from ENGIE New Ventures, PROfounders, and Redstone.

🚢 Photon Marine, a Portland, OR-based electric outboard motors manufacturer, raised an undisclosed amount from Ideaship.

Exits

☀️ Lumio, a Lehi, UT-based residential solar platform, filed for bankruptcy.

💨 Nori, a Seattle, WA-based carbon marketplace, announced that it has shut down.

New Funds

Aiga Capital Partners, a Jersey City, NJ-based investment firm, held a final close of its $240m inaugural fund that invests across North American sustainable infrastructure.

SET Ventures, an Amsterdam, Netherlands-based investment firm, held a final close of its $221m fourth fund that invests in digital solutions for the energy transition.

MCJ Collective, a Boston, MA-based investment firm, held a final close of its $81m second fund that invests in energy transition and climate resilience startups.

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In the News

The UK government had its best-funded renewables auction yet, with major boosts for its offshore wind sector, awarding Contracts for Difference (CfDs) for 131 wind, solar, and tidal projects with 10GW of capacity, as part of the Labour party’s broader push for clean energy and a reversal after last year’s auction failed to fund any offshore wind projects.

In other UK clean energy news, Britain’s last coal-fired power station, Ratcliffe-on-Soar, will shut down at the end of September, a year earlier than planned. It will be the first G7 country to end coal generation, and serve as a case study for how industrialized nations can decarbonize. Additionally, the country is pushing ahead with conventional nuclear by announcing subsidies for the proposed new nuclear plant Sizewell.

Across the pond in the US, the DOE’s Loan Programs Office announced a conditional commitment of up to $1.45bn for a loan guarantee to Qcells, a US crystalline silicon solar manufacturer, to finance a new Georgia facility to make solar cell components. This is part of the Biden administration’s push to boost critical components of the domestic solar supply chain, amid the solar tariff war with China. Biden also announced $7.3bn in funding for rural electrification, as part of its grid resilience and environmental justice initiatives.

Tech giant Meta left the Frontier group, the corporate coalition for carbon removal services, saying it wanted to source its own carbon removal deals. The decision comes after heavy scrutiny on Big Tech’s growing emissions, while Meta’s new agreement with Sage Geosystems for geothermal power indicates a shift in energy procurement strategy. Plus, a new Morgan Stanley paper predicts that data centers could be responsible for 2.5 billion tons of CO2 emissions through 2030.

Carbon marketplace Nori shut down last week, citing joint challenges of fundraising and stagnancy in the Voluntary Carbon Market space. Demand uncertainty, offtake challenges, and investor pullback have plagued the market in the last year, in part due to reports questioning the scientific validity of offsets and a broader market slowdown. While consolidation is expected, the shutdown is a negative signal for the space.

France’s new nuclear power plant, Flamanville, went online last week — and the reactor shut itself down just a day after. After a 12-year delay and 4x cost overrun, the system shut down due to safety concerns, showing how difficult nuclear power projects are to build and operate, although the plant should be back up this week.

Pop-up

The FT’s take on the fundraising challenges leading to cleantech failures.

Powering up down under: Coal generated less than half of Australia’s electricity for the first time last month.

School buses in California are going electric.

Italy’s first CCS project is now up and running and clearing the air.

New tailwinds: Fastest growing jobs in America are now in wind energy.

Fifty leaders across America who are changing the climate landscape.

Opportunities & Events

💡 Designer Fund Partnership: Apply to the Designer Fund Partnership by October 4th for an opportunity for your pre-seed to Series A climate tech startup to receive up to $1 million in funding and expert design guidance from Designer Fund.

💡 TechX Clean Energy Accelerator: Apply by October 27th for the opportunity to join this funded accelerator program for 10 innovative clean energy start-ups working on accelerating the transition to an affordable net zero energy industry.

💡 Stanford Alumni in Climate Tech (ACTs): Join the group for Stanford grads and current students, faculty, and staff interested in tackling the climate crisis through scaling climate tech to connect with other entrepreneurs, investors, corporates, policymakers, and more.

💡 The Exelon Foundation’s Climate Change Investment Initiative (2c2i): Apply by September 20th to the Exelon Foundation’s funding opportunity for climate tech startups advancing climate change solutions and adaptations in Chicago, Philadelphia, Baltimore, Washington D.C., Atlantic City, and Wilmington.

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📅 Chicago Climate Tech Week: Register to attend the Chicago Climate Tech Week from September 16-20th to network with innovators, investors, and broader ecosystem across the greater Chicago area.

📅 SightLive: Join Sightline Climate at our inaugural NYCW event on September 23rd. Participants will include investors, corporates, governments, and financial institutions focused on financing and procuring in climate tech. Attendance is limited, but reach out to [email protected] if interested.

📅 Industrial Climate Tech Summit: Register to attend the Industrial Climate Tech Summit on October 18th in Golden, Colorado to discuss how the industrial sectors can contribute to a sustainable future. Speakers include leaders from DOE LPO, Constellation, BHP, IRMA, Grantham Foundation, U.S. Department of State, Amazon, climate tech innovators, and more. Founders interested in pitching at the event should apply by 9/13.