Company Note: Climeworks, Mine The Eir
Company
Climeworks
Climeworks is a Swiss company specializing in direct air capture (DAC) technology, which removes carbon dioxide (CO2) directly from the ambient air. Founded in 2009, Climeworks has established itself as a pioneer in the carbon capture industry.
Product
Direct Air Capture (DAC) Systems
Climeworks' core product is its Direct Air Capture (DAC) systems, which use specialized filters or "collectors" made of solid sorbents to capture CO2 molecules from the air. These collectors are contained in large facilities that continuously draw in ambient air using fans. Once the sorbents are saturated with CO2, the gas is released by heating the collectors, allowing for concentrated CO2 capture.
The captured CO2 can then be stored underground (carbon capture and storage) or utilized for various applications, such as producing renewable synthetic fuels, carbonating beverages, or enhancing crop yields through greenhouse enrichment.
Market
Carbon Capture and Utilization
The market for carbon capture technologies is growing rapidly as governments, industries, and organizations worldwide recognize the urgent need to address climate change and reduce greenhouse gas emissions.
Climeworks' DAC systems cater to the following market segments
Carbon Capture and Storage (CCS)
Climeworks' technology can be used to capture CO2 for permanent underground storage, contributing to negative emissions and mitigating the effects of climate change.
Carbon Capture and Utilization (CCU)
The captured CO2 can be utilized as a feedstock for various industrial processes, such as producing renewable fuels, enhancing crop yields, or carbonating beverages.
Technology Licensing
Climeworks may explore licensing opportunities for its proprietary DAC technology to other companies or organizations interested in implementing carbon capture solutions.
Competition
Other DAC Technology Providers
While Climeworks is a pioneer in the DAC space, several other companies are also developing and commercializing direct air capture technologies.
Some notable competitors include
1) Carbon Engineering (Canada)
2) Global Thermostat (US)
3) Carbonic (Finland)
4) Carbon Cure (Canada)
5) Prometheus Fuels (US)
As the carbon capture market continues to expand, competition is expected to intensify, with companies vying to develop more efficient and cost-effective DAC solutions.
Unique Capabilities
Scalable and Modular DAC Systems
One of Climeworks' unique capabilities is its modular and scalable approach to DAC systems. The company's DAC facilities can be constructed in a modular fashion, allowing for easy expansion and adaptation to different project sizes and requirements. This scalability enables Climeworks to cater to a wide range of clients, from small-scale pilot projects to large-scale industrial deployments.
Additionally, Climeworks has developed proprietary sorbent materials and regeneration processes optimized for efficient CO2 capture and release, contributing to the overall performance and cost-effectiveness of its DAC systems.
When to Use DAC Technology
Direct air capture technology is particularly relevant in the following scenarios:
Hard-to-Abate Sectors
Industries with inherently high emissions or hard-to-decarbonize processes, such as aviation, cement production, or steel manufacturing, can benefit from DAC technology to offset their residual emissions.
Negative Emissions
DAC systems can contribute to achieving negative emissions by permanently storing the captured CO2 underground, helping to remove excess CO2 from the atmosphere.
Carbon Utilization
Industries seeking to produce renewable fuels, chemicals, or other products from CO2 can utilize DAC technology as a source of concentrated CO2 feedstock.
Localized CO2 Removal
DAC systems can be deployed in urban areas or near CO2 emission hotspots to capture and remove localized CO2 concentrations, improving air quality and contributing to carbon mitigation efforts.
Vendor Considerations
Technology vendors that should consider investing in or partnering with carbon capture companies like Climeworks include:
Energy Companies
Oil and gas companies, utilities, and renewable energy providers seeking to decarbonize their operations and offset emissions.
Industrial Manufacturers
Companies in sectors like cement, steel, chemicals, and aviation that have significant emissions and require carbon capture solutions.
Technology Companies
Firms specializing in innovative technologies, materials, or processes that could enhance or complement carbon capture systems.
Investment Firms
Venture capital firms, private equity firms, and institutional investors seeking opportunities in the rapidly growing carbon capture and utilization market.
Reasons for Investing in Carbon Capture
Vendors may be motivated to invest in carbon capture deals for various reasons:
Compliance with Emissions Regulations
Carbon capture technologies can help companies comply with increasingly stringent emissions regulations and avoid penalties or fines.
Environmental, Social, and Governance (ESG) Goals
Investing in carbon capture aligns with companies' ESG commitments and demonstrates their commitment to sustainability and environmental stewardship.
Long-term Competitiveness:
Companies that adopt carbon capture technologies early may gain a competitive advantage in their respective industries as carbon emissions become increasingly regulated and scrutinized.
Diversification and Innovation
For technology companies, investing in carbon capture represents an opportunity to diversify their portfolio and drive innovation in an emerging and potentially lucrative market.
Financial Incentives
Governments and organizations may offer financial incentives, such as tax credits or subsidies, to encourage the adoption of carbon capture technologies.
Unique Bottom Line Positioning
Climeworks' unique bottom line positioning stems from its pioneering role in the DAC space and its scalable and modular approach to carbon capture. By offering a proven and adaptable solution, Climeworks can cater to a wide range of clients and projects, from small-scale pilots to large-scale industrial deployments.
Additionally, Climeworks' focus on carbon capture and utilization (CCU) positions the company to benefit from the growing demand for renewable fuels, chemicals, and other products derived from captured CO2. This approach aligns with the circular economy principles and offers potential revenue streams beyond carbon storage.
Furthermore, Climeworks' commitment to continuous innovation and improvement of its DAC technology, coupled with its partnerships and collaborations with industry leaders and research institutions, positions the company as a formidable player in the carbon capture market.
As the urgency to address climate change and reduce greenhouse gas emissions intensifies, Climeworks' direct air capture technology and its potential for scalability and versatility could provide a compelling value proposition for vendors seeking reliable and innovative carbon capture solutions.
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Special Patents
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US10882743 and US20190375633 deal with producing hydrogen from the captured CO2. Some key points:
The process involves reacting the CO2 with a reducing agent like hydrogen gas over a catalyst to produce carbon monoxide (CO) via the reverse water-gas shift reaction.
This CO is then reacted with more hydrogen (from sources like water electrolysis) over a different catalyst bed to produce additional hydrogen gas via the water-gas shift reaction.
The net result is using the captured CO2 as a feedstock to generate hydrogen fuel, with water as the only major byproduct.
Potential catalysts mentioned are transition metals like iron, nickel, cobalt etc. supported on inorganic oxides.
US10421913 and US20180086985 cover processes for producing gaseous and/or liquid hydrocarbons like methane from the captured CO2. Highlights include:
Combining the captured CO2 with hydrogen gas over catalysts to produce methane and water via the Sabatier reaction.
The hydrogen can be generated renewably, for example by electrolysis of water using renewable electricity.
Adjusting temperatures, pressures and catalysts to also produce higher hydrocarbons like ethane, propane etc.
Purifying and liquefying the hydrocarbon product streams.
So in essence, these patents outline pathways for Climeworks to take the CO2 removed from air and convert it into carbon-neutral or renewable hydrocarbon fuels and hydrogen gas using chemical reactions. This allows utilization of the captured CO2 as a feedstock for valuable products.
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Based on the technology covered in the patents mentioned, there are several industries that would potentially be interested in licensing these processes from Climeworks for converting captured CO2 into useful products:
Energy Industry
Oil and gas companies could use the hydrocarbon production processes to create renewable natural gas, synthetic fuels, etc. from captured CO2 as feedstock. This aligns with their transition towards lower-carbon energy sources. Companies like Shell, BP, ExxonMobil have expressed interest in such technologies
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Hydrogen Production
The hydrogen generation process utilizing CO2 could be of interest to hydrogen fuel companies. It allows for producing renewable hydrogen at scale using captured carbon. There are synergies with fuel cell industry for transportation, energy storage etc.
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To size the potential markets for Climeworks' processes of converting captured CO2 into hydrogen and hydrocarbons, we can look at some relevant market data:
Hydrogen Market:
Current global hydrogen market is around $120 billion annually
Projected to grow to $201 billion by 2025 at a CAGR of 5.7% (Markets&Markets)
Hydrogen from low-carbon/renewable sources is a small but rapidly growing segment, driven by decarbonization goals
Estimates suggest a potential $700 billion market for clean hydrogen by 2050 across applications like transportation, power generation, industrial processes etc.
Renewable Natural Gas (RNG) Market
Global RNG market was valued at $2.1 billion in 2021 (Navigant Research)
Projected to reach $38.1 billion by 2030, growing over 35% annually
Driven by policies supporting renewable fuel programs, carbon pricing etc.
Europe and North America currently lead RNG production and demand.
Synthetic Fuels Market
Global synthetic fuels market sized at $10.7 billion in 2020 (MarketsandMarkets)
Projected to grow to $26.8 billion by 2025 at a CAGR of 20.2%
Major demand from aviation, shipping sectors looking to reduce emissions.
While still relatively niche, the potential markets for hydrogen, RNG, synfuels produced from atmospheric CO2 are poised for substantial growth over the next decades driven by carbon reduction goals across industries. Independent estimates suggest massive potential - a $1 trillion market for gases/fuels from carbon capture by 2050.
Climeworks could carve out a notable share by being an early mover with its carbon capture utilization technology that aligns with net-zero ambitions. But competitive positioning and market penetration would likely hinge on factors like operating costs, scalability and policy support.
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Here are some other major companies and technology vendors competing in the direct air capture (DAC) or "mining the air" space for CO2 removal:
1) Carbon Engineering (Canada)
2) Global Thermostat (US)
3) Carbonic (Finland)
4) Carbon Cure (Canada)
5) Prometheus Fuels (US)
6) Svante (Canada)
7) Verdox (Netherlands)
8) Takasoft (Israel)
9) Soletair (Finland)
10) Noya (Canada)
11) assive Air Capture Systems (UK)
12) Skytree (Netherlands)
13) C-Cure (Netherlands)
14) CarbonCure Technologies (Canada)
15) Carbon8 Systems (UK)
Most of these companies are startups or new ventures focused specifically on developing and commercializing direct air capture technologies and systems. A few are spin-outs from academic research.
The approaches vary - some use liquid sorbents, others solid adsorbents. Regeneration techniques include temperature/pressure swing, moisture swing, pH swing etc. Some integrate the captured CO2 into products like concrete, fuels etc.
While Climeworks was one of the earliest movers, this space has seen a lot of innovation and new entrants in recent years as carbon removal gains more attention and investment for climate action. Intense competition and a race to drive down DAC costs can be expected going forward.
However, Climeworks likely still has an early-mover advantage with operational experience and expanding project deployments globally compared to most of its rivals who are at earlier commercialization stages. But maintaining its edge will require continued technology improvements.
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Here are some of the major venture capital firms and investors that have backed Climeworks:
1) Lowercarbon Capital
2) Swiss Entrepreneurs Fund
3) ECCO Investment
4) VisVires New Protein Capital
5) Entrepreneur Partners
6) Sam Altman
7) Stripe Climate Fund
8) Marc Benioff (Salesforce founder)
9) Chris Sacca (Lowercarbon Capital founder)
10) Shopify
11) Incentive Technology Group
12) John Doerr (Kleiner Perkins)
13) IPGL Environmental
14) Grantham Environmental Trust
15) Starbucks
16) Microsoft Climate Innovation Fund
Climeworks has raised over $650 million in funding to date from a mix of strategic corporate investors, venture capital firms, family offices, and individual billionaire tech entrepreneurs interested in supporting carbon removal technologies.
Some of the lead investment rounds included the $650 million Series F raise in 2022 led by Lowercarbon Capital, the $650 million Series D led by John Doerr, and earlier rounds from investors like Swiss Entrepreneurs Fund and Zurich Cantonal Bank.
The backing from prominent Silicon Valley VC funds and billionaires like Sam Altman, Marc Benioff, John Doerr highlights the belief in Climeworks' direct air capture potential. Corporate investors like Microsoft, Stripe also support the company's scale-up plans.
With over $1 billion in total funding raised so far, Climeworks is one of the best capitalized startups in the carbon removal technology space currently.
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Appendix:
Climeworks Funding Sources
Lowercarbon Capital
Location: San Francisco, CA
Fund: Lowercarbon Capital Fund I
Executive: Chris Sacca (Founder & Managing Partner)
Swiss Entrepreneurs Fund
Location: Zurich, Switzerland
Fund: Swiss Entrepreneurs Fund III
Executive: Michael Sidlers (Managing Partner)
ECCO Investment
Location: Geneva, Switzerland
Fund: N/A (Single Family Office)
Executive: Basile Clovis Kaufmann (President)
VisVires New Protein Capital
Location: Singapore
Fund: VisVires New Protein Fund
Executive: Matthieu Vermersch (Founder & General Partner)
Entrepreneur Partners
Location: Zurich, Switzerland
Fund: N/A (VC Firm)
Executive: Benedikt Goldkamp (Co-Founder & Managing Director)
Sam Altman
Location: San Francisco, CA
Fund: N/A (Personal Investment)
Stripe Climate Fund
Location: San Francisco, CA
Fund: Stripe Climate Fund
Executive: Nan Ransohoff (Head of Climate)
Marc Benioff
Location: San Francisco, CA
Fund: N/A (Personal Investment)
Shopify
Location: Ottawa, Canada
Fund: Shopify Sustainability Fund
Executive: Stacy Karabinas (Director of Sustainability)
Incentive Technology Group
Location: Bellevue, WA
Fund: N/A (Corporate Investor)
Executive: Steve Jarvis (Co-CEO)
John Doerr
Location: Woodside, CA
Fund: N/A (Personal Investment)
IPGL Environmental
Location: Dubai, UAE
Fund: N/A (Corporate Investor)
Executive: Ayman Amdidu (CEO)
Grantham Environmental Trust
Location: Godalming, UK
Trust: N/A (Charitable Trust)
Executive: Lukas Kummer (Managing Director)
Starbucks
Location: Seattle, WA
Fund: N/A (Corporate Investor)
Executive: Michael Kobori (Chief Sustainability Officer)
Microsoft Climate Innovation Fund
Location: Redmond, WA
Fund: Microsoft Climate Innovation Fund
Executive: Brandon Middaugh (Director)
