Unleashing the power of DAC
Could emerging DAC technologies offer large opportunities for early investors?
Hi, deep tech community! We’re excited to introduce the first edition of Deepsense Insights, the newsletter that brings you the latest on deep tech venture opportunities.
Today we’re diving into the realm of Direct Air Capture (DAC), where we explore the incredible technology that's shaping the future of climate mitigation. We'll take a closer look at the existing DAC landscape and dive into some exciting emerging approaches that are set to revolutionize the game. 🚀
💨 Current DAC: Removing CO2 in Style
Direct Air Capture is all about capturing CO2 from the atmosphere and storing it permanently, paving the way for a greener future. With over $1 billion invested, several companies have stepped up to the plate, operating at an impressive kiloton CO2 per year scale. The existing DAC technologies primarily rely on absorption mechanisms, using either caustic liquids (think Carbon Engineering) or solid sorbents (cue Climeworks and Global Thermostat) with a penchant for CO2. These sorbents can be regenerated by raising their temperature, allowing for reuse in the CO2 capture process. While the cost estimates range from $200 to $600 per tonne of CO2, a significant portion is attributed to the heat required for sorbent regeneration.
🌟 Opportunities: Emerging DAC Approaches
There's a wave of emerging DAC technologies on the horizon promising to shake things up. One such example is electric-swing absorption (ESA) by the brilliant minds at Verdox. By employing a carrier molecule like quinone, CO2 is absorbed when the solid electrode carries a negative charge and released when a positive charge is applied. With arrays of stacked electrodes, this modular approach makes the technology highly scalable, eliminating the need for major system redesigns as it expands.
Meanwhile, CO2CirculAir, another innovative startup, is taking an electrically driven approach to DAC. They utilize the same absorbent as Carbon Engineering but with a passive twist. Rather than using fans and high surface area contactors, they soak a membrane in potassium hydroxide, which captures CO2. The CO2-rich product is then regenerated using electrodialysis. This electrical method boasts faster start-up and shut-down times, making it capable of stabilizing the electric grid by mopping up excess electricity generated by intermittent renewables. Mission Zero also employs a similar approach.
Heirloom introduced a fascinating DAC method using solid sorbents like calcium or magnesium hydroxide. With slow CO2 absorption over weeks, this passive approach anticipates significant cost reductions (below $200 per tonne of CO2). Another startup, Sustaera, uses similar sorbent materials but adds an electrifying twist by regenerating them with electricity instead of heat. And if that's not radical enough, Carbon Collect takes CO2 absorption to a new level with its moisture-swing approach on solid tiles.
🚧 Road to Mass Deployment: How Close Are We?
While these emerging DAC solutions hold tremendous potential, it's important to note that their technology readiness levels currently range from 1 to 5. In other words, they are still in the early stages of development and require further research and development before they can be deployed at scale.
⚠️ Navigating Risks on the Path to Success
As with any product development and commercialization journey, there are risks to consider. The capital costs associated with bringing these technologies to market can be substantial, and patience may be required before a return on investment is realized. Regulatory and policy risks, such as uncertainties surrounding carbon pricing policies, also need to be navigated. Additionally, increased competition among emerging DAC companies and the potential entry of established players like ExxonMobil and Chevron may create challenges in terms of funding and market share.
💡 A Bright Future Beckons
The question remains: Can we achieve significant improvements to current DAC technologies? Well, DAC, like any separation process, is bound by the laws of thermodynamics and other real-world limitations. Generally, the concentration of CO2 in the air is only 0.04%, which means costs tend to be substantial. However, exceptions to Sherwood's plot, such as the remarkable uranium separation from seawater, give us hope. It's conceivable that some of these emerging DAC approaches could achieve costs lower than $200 per tonne of CO2, presenting excellent opportunities. But before we jump in headfirst, rigorous techno-economic and life cycle assessments are necessary to demonstrate the economic and environmental viability of these emerging DAC methods.
🛎️ Players in the Emerging DAC Technologies Market
Verdox 🇺🇸
Develops electric-swing absorption (ESA) using a modular approach that makes the technology highly scalable and eliminates the need to redesign systems for larger applications.
Founded: 2019
Amount raised to date: $100.3MM
Last round: Series A, February 2022
Investors: Breakthrough Energy Ventures (BEV), Prelude Ventures, Lowercarbon Capital, PRIME Coalition and Norsk Hydro ASA
CO2CirculAir 🇳🇱
Develops an electrical approach which uses a membrane soaked in potassium hydroxide instead of using fans to blow air through a high surface area contactor.
Founded: 2020
Amount raised to date: £3MM
Last round: Grant, July 2022
Investors: UK Department for Business, Energy and Industrial Strategy
Mission Zero 🇬🇧
Uses a similar approach to CO2CirculAir.
Founded: 2020
Amount raised to date: $9.2MM
Last round: Seed, May 2022
Investors: Breakthrough Energy Ventures (BEV), Deep Science Ventures, Anglo American and UK Department for Business, Energy and Industrial Strategy
Heirloom 🇺🇸
Uses solid sorbents such as calcium or magnesium hydroxide which remove CO2 from air passively.
Founded: 2020
Amount raised to date: $54.3MM
Last round: Series A, March 2022
Investors: Ahren Innovation Capital, Breakthrough Energy Ventures (BEV), Microsoft Climate Innovation Fund, Lowercarbon Capital, Time Ventures, Seven Seven Six, AENU, Grantham Environmental Trust, Breyer Capital, Carbon Removal Partners, GS Futures, Hawktail, Moxxie Ventures, Plug & Play, Quantum Energy Partners, Tin Shed Ventures, Incite Ventures, MCJ Collective, Yes VC and XPRIZE
Sustaera 🇺🇸
Uses similar sorbent materials to Heirloom, but the regeneration is done with electricity, rather than heat.
Founded: 2021
Amount raised to date: $11MM
Last round: Series A, December 2021
Investors: Breakthrough Energy Ventures (BEV), Grantham Environmental Trust and XPRIZE
Carbon Collect 🇮🇪
Absorbs CO2 on solids tiles and regenerates them using a novel moisture-swing approach.
Founded: 2016
Amount raised to date: €17MM
Last round: Later Stage VC, February 2022
Investors: Porticus, Enterprise Ireland, U.S. Department of Energy, Klaus Lackner, Caroline Keeling and Development Bank of Southern Africa
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That's a wrap for this edition of Deepsense Insights. Keep an eye out for our next issue, where we'll uncover even more groundbreaking technologies that are reshaping our future. 🌌
Disclaimer: The information provided in this newsletter is for general informational purposes only and should not be considered as investment advice. We do not assume any liability for the accuracy or consequences of relying on the information presented.