Cleantech start-ups attracting heavy emitters

EDMONTON—Money was on the minds of cleantech entrepreneurs at the Zero2014 conference in Edmonton in April; held to announce 24 winners who will each receive $500,000 in seed funding from the Climate Change and Emissions Management Corporation (CCEMC).

The winners—part of the CCEMC’s first round of its Grand Challenge—had the opportunity to present their technologies and reflect on the hurdles and highlights they’ve encountered so far.

“The landscape has changed dramatically in the last three or four years,” said Kyle Teamey, CEO and co-founder of Liquid Light Corp., a Monmouth, NJ-based company focused on converting carbon dioxide into usable chemicals. “The number of financial investors in [cleantech] has declined.”

Teamey recalled the excitement and ready financing in the cleantech space several years ago, but “with any new industry, or emerging industry, there are mistakes made early on.”

He likened the recent fizzle to the IT crash in the early 2000s. “We’re in a similar area right now with cleantech. There was a little bit of a bubble…But the industry as a whole is stronger from it.”

Despite the decline in financing, Liquid Light managed to tap into venture capital, but it also sought help from industry grants. The $500,000 CCEMC funding will allow it to move from the lab phase and build a pilot plant in Canada.

But the company is also drawing interest and investment from big oil and gas, such as BP.

Liquid Light’s technology will not only divert greenhouse gases from the atmosphere, but generate a cheaper, widely available and more environmental chemical feedstock to replace traditional petrochemicals.

“Essentially, all that CO₂ that’s going into the air is kind of like burning revenue. So if they can repurpose that carbon into products it’s a win win.”

Solidia Technologies Inc.—another Grand Challenge winner at Zero2014—attracted cement manufacturer Lafarge North America Inc. as a co-applicant for the grant. Cement is carbon-intensive to produce, so companies such as Lafarge are warming to the idea of cost and emissions savings.

“Solidia’s patented technology has created a new generation of cement that reduces the CO₂ footprint by approximately 70 per cent,” said Brian Leary, project manager with Solidia.

“The result…is increased efficiency and profitability…over and above the sustainability benefits.”

Down in Austin, Tex., Skyonic Corp. is taking a similar tact—approaching big oil and energy companies to help solve their emissions problems.

Skyonic captures carbon and turns it into products such as sodium bicarbonate and hydrochloric acid—providing the one-two punch of carbon diversion and a cheaper feedstock.

Cenovus, Conoco, BP and other investors are buying in, and Skyonic has plans to expand in Alberta’s energy industry.

“Having a plant in San Antonio that’s knocking 75,000 tons of carbon out of the smokestack…is a good start,” said Joe Jones, president and CEO. His company will use the CCEMC grant to grow its commercial operations.

Though big-name energy companies are supporting Skyonic, Jones is also cultivating government and quasi-government funding streams.

“The people who really come forward are the grant providers, who are looking for something other than the binary business as usual or carbon tax,” he said.

Tapping into finance is one part of the challenge. The other is convincing large, traditional enterprises in risk-averse industries to even contemplate the technology.

In that case, it’s best to go gently, said Brett Henkel, vice-president of operations with Vancouver-based Inventys Thermal Technologies Inc. of Burnaby, BC.

Inventys provides a system for enhanced oil recovery. It’s winning business from large oil and coal companies, not only because the technology improves yields, but equally important, it can be layered onto existing technology, such as heat exchangers.

“We always say we’re not re-inventing the wheel,” said Henkel. “We’re replacing the internal parts of these heat exchangers with an adsorbent…We’re using as much of the current proven technology that people are comfortable with, and costs are known for.”

Clearly, the go-to-market strategy can make or break cleantech start-ups. When they get it right though, investment tends to follow from grant providers, government agencies, and increasingly, industry emitters looking to address their carbon and cost pain points.