Carbon capture startup hit with 10-month waits for parts

  • Climeworks, which operates the world’s largest direct air capture plant, has to wait months for parts.
  • Co-founder Christoph Gebald said the industry and its suppliers need to start thinking in “ecosystems.”
  • Carbon capture promises to stop emissions from highly polluting industries like oil and gas.

Long lead times for specialized parts have slowed the adoption of carbon capture technology that can tackle emissions produced by highly polluting industries like oil and gas, according to the co-founder of Swiss startup Climeworks.

Christoph Gebald, whose startup raised $650 million in a round led by Singapore’s sovereign wealth fund GIC last month, told Insider that manufacturers supplying the industry need to switch from a per-order model to one on-demand. thousands of critical parts are manufactured in anticipation of widespread demand. .

Direct air capture refers to the process of extracting carbon directly from the atmosphere, where it can then be stored underground or used in materials such as carbon fiber. McKinsey has flagged carbon capture as a potential “necessary step”, while Elon Musk has launched a $100 million prize fund to back the best ideas in the industry trying to make the world carbon negative. instead of neutral.

Gebald said that Climeworks had faced lead times of up to 10 months for certain parts.

“At the moment, every time we order, it’s custom made,” Gebald said. “In a perfect world, they [suppliers] I would understand that this industry is going to be really big and it’s better to produce 1,000 of those pumps and have them in stock.”

The Climeworks chief executive said the industry needed to start thinking “in ecosystems,” where suppliers, project developers and investors work to set volumes and prices for parts like pumps, steel and pipe.

Zurich-based Climeworks operates out of dedicated sites, but other startups are also working on air capture systems that can be retrofitted into existing power and industrial plants.

If emissions output from existing plants remains unchanged, they could generate more than 600 billion tons of CO2 over the next 50 years, the equivalent of about 17 years of current annual global emissions, according to a report for Insider by the AI-driven intelligence platform. Appraiser.

London-based Mission Zero has built module systems to capture carbon directly from the source, before it is emitted into the atmosphere. The startup uses off-the-shelf parts to help with scalability, said co-founder and chief product officer Shiladitya Ghosh. This was a “fundamental requirement” in the design.

“Direct air capture is a Band-Aid climate solution that needed to be implemented at scale yesterday, while other critical net-zero technologies, such as renewable power generation and electric mobility, catch up to lead us into a livable future.” Ghosh said.

“For us to implement at the next best time, which is as soon as possible, it’s not worth developing custom, complex materials or equipment for direct air capture, as the manufacturing supply chains for those will also need to be built from scratch, which involves a huge waste of time, financial risks, and a bet against not being out-innovated by someone else’s solution.”

Mission Zero, which has raised £3.8m to date, faced challenges during its pilot phase. Its technology is built with high-value commodities or manufactured materials; global supply shortages of electronic and semiconductor materials and low order volumes meant that the Mission Zero order was not a priority for suppliers.

For Ghosh, the concern lies in the places to store the carbon once it is extracted.

“It’s going to be critical that the carbon sequestration ecosystem also scales up in a way that leads to direct air capture, otherwise we’re going to get nowhere,” he said.

Globally, there has been some innovation in this space as startups try to add value to captured carbon. For example, New York’s Air Company makes perfume, hand sanitizer and vodka from captured carbon, while Canadian startup CleanO2, backed by Leonardo DiCaprio’s Regeneration VC fund, uses it to make soap.

“The infrastructure around carbon capture has yet to see the same innovation and investment in Europe,” said David Frykman, an investor at Norrsken VC. London-based 44.01, Luxembourg-based LEKO Labs and Iceland’s Carbfix are some of the “very few” players using the extracted gas.

“There are very few opportunities to catch high-quality fish at reasonable prices,” added Frykman.

“There is still a risk of market timing when investing in carbon storage infrastructure, as it is so dependent on technological and commercial advancements of carbon capture technologies. Increasingly, we also see more companies initially targeting the route of selling pure CO2 as an input for multiple industries. This is a good first market as it is already mature and has built up demand.”

Seabound, backed by London-based Y Combinator, is developing technology to capture the carbon emitted by ships and store it as limestone through an onboard mineralization process. It could then be sold as a carbon-neutral building material, co-founder Alisha Fredriksson told Insider.

“We see these carbon utilization companies as critical partners in catalyzing carbon capture technology for hard-to-reduce industries, especially until we are also able to capture and store larger volumes of CO2 underground in the future,” he said.

Achieving scale and widespread adoption has so far been a catch 22: it requires more investment, but the investment requires proof of demand.

“The higher and more certain the future demand and price for these technologies, the more likely they are to receive significant funding for further innovation and scaling,” said Iain Porter, principal analyst at Trove Research, which tracks carbon markets.

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