TechEnergy Ventures has invested in Svante, a start-up that has developed technology to make it more efficient to capture carbon in hard-to-abate industries. The growth potential is immense at a time when the world is seeking to cut emissions.
A little over a year ago, Larry Fink, boss of the U.S.-based investment firm BlackRock, wrote in his annual letter to thousands of CEOs that the next unicorns, or start-ups worth more than $1 billion, will come from climate technology, not search engines or social media companies. “They’ll be sustainable, scalable innovators … that help the world decarbonize and make the energy transition affordable for all consumers,” he wrote.
Fink also called on incumbent companies to do their part in this by using their wealth of capital, market knowledge, and technical expertise to bring down the cost of the energy transition to net-zero carbon emissions by 2050.
The Techint Group is doing this through TechEnergy Ventures, a venture capital arm focused on accelerating the energy transition. At the end of 2022, TechEnergy invested in Svante, a Canadian company that has developed technology to capture carbon at a reduced cost from industrial and power emitters. Compared with state-of-the-art technology (formulated amines), Svante’s technology is more energy efficient, environmentally friendly, easy to install and manage, scalable, and adaptable across industries.
How does the process work?
Tomás Rauch, an investment professional at TechEnergy Ventures, says the technology is intended to capture CO2 emissions at its steel operations, something that otherwise is hard to do. Svante’s filters and rotary contactor machine (or carousel) capture and remove carbon dioxide from flue gas exiting an industrial stack. The rotary system moves through stages: the CO2 is first trapped by the proprietary solid sorbents inside the carousel while the rest of the flue gas components go through. Then it is released in a highly purified state as the sorbent is regenerated through direct low-pressure steam injection. The proprietary sorbents’ active material is a metal-organic framework (MOFs). MOFs are a crystalline porous compounds of metal ions or clusters coordinated to organic ligands to form one-, two-, or three-dimensional structures. The beauty of MOFs is that they can be engineered so that their structure becomes a tailor-made sieve for specific molecules. In addition, all this is done in a matter of minutes and with very efficient use of energy.
The use of solid sorbents is a new way of removing carbon from flue gas after years of reliance on a longer and more expensive process using amine-based solvents.
Once the CO2 is captured and separated it can be either stored underground (sequestration) or used in other applications, such as in food and beverages or in chemical compounds used in the construction, chemical, and transportation industries (SAF).
“We believe that it is a disruptive investment for the segment,” Rauch says. “Svante’s technology makes it much more efficient and simpler in terms of components versus what we have today to decarbonize hard-to-abate processes.”
Hitting the market
New technologies, of course, can take time to catch on. The good thing is that Svante has been working on its technology since 2007 and it’s just about at the commercial stage.
The Techint Group is not alone in backing Svante. The US-based oil producer Chevron, the US aviation company United Airlines, and industrial conglomerate General Electric have also put money into the start-up in their last series E round of $318 million.
This support is fueling expectations that the technology will be used to help heavy industries to do their part to halt the rise in global temperatures. These industries – aluminum, cement, chemicals, and steel, for example – are responsible for 30% of carbon emissions when calculated together with heavy-duty transport (aviation, shipping, and trucking), according to the Energy Transitions Commission, a London-based think tank.
Heavy industries have struggled to cut emissions largely because of the high cost of the process and the reluctance of the buyers of their products to pay a green premium.
Now with a lower-cost method for carbon capture on the verge of becoming available, expectations are growing that the use of these technologies can grow 150 times as more companies seek to reach net zero by 2050.
“Techint Group’s objective is to accelerate this type of development through investment and to be able to support it with all the group’s tools to scale it up,” Rauch says.
Seizing the moment
The timing is opportune. More governments are backing decarbonization. The US’s Inflation Reduction Act, for example, has increased the tax credit for carbon capture and storage, making it more economically viable. Europe is following suit. This will drive new investment into climate technology over the next 10 to 15 years as more companies seek to reduce their emissions at plants, Rauch says.
Another way to reduce emissions would be to replace fossil fuels with a clean alternative like green hydrogen or to electrify factories.
“I believe that in the short term, all the processes that can be electrified will be electrified,” Rauch says. “But it’s impossible to electrify many of the industrial processes that we have in our group because of the range of temperatures and operating conditions. That is where alternative proposals to decarbonize can help, among them Svante’s point-source capture technology. If a process cannot be electrified, how do I ensure that this process does not emit or emits as little as possible? I’m going to use a filter to grab that CO2 and store it underground or reuse it to do something. In the short term, this will be the cheapest transition solution for this type of industry. It will be disruptive for a segment that today we have no other solution to make it cleaner.”
But who will pay the cost of equipping heavy industries with carbon capture technology?
“I think there is more awareness today that we must do something,” Rauch says. “There is a global commitment that speed and urgency must be given to this. Climate change is here, and something must be done to mitigate it.”