BrainBox AI powers up

TECH

BrainBox AI acquired by HVAC giant Trane

What happened: Montreal’s BrainBox AI was acquired by HVAC manufacturer Trane. BrainBox AI develops AI tools that allow building operators to optimize their heating, ventilation and cooling (HVAC) systems, lowering costs and emissions. 

The deal builds on a three year partnership where Trane distributed a customized version of BrainBox AI’s technology. BrainBox was raising a fund when Trane proposed the acquisition, but the company said it was not driven by fundraising or revenue challenges. 

The background: Buildings make up almost 40% of global energy-related carbon emissions, and most of that is from HVAC systems. BrainBox AI’s system uses AI to combine real-time data from building systems with external sources like weather forecasts to optimize HVAC operations. This allows building owners to use less energy and cut emissions while maintaining a comfortable environment.

BrainBox AI currently has 14,000 customers and says its solution can cut emissions by 40% and energy costs by 20%. 

Why it matters: The acquisition marks a bright spot in an otherwise quiet climate tech exit market. 

According to CTVC, climate tech exits dropped significantly from 119 in 2022 to just 60 in 2023. In Canada, we tracked just two exits in 2024: EnergyX and QD Solar. 

The slowdown in exits is raising questions about the path to liquidity for climate tech investors. Strategic acquisitions by established industry players like Trane provide an alternative path forward for climate tech companies seeking exits.

The bottom line: BrainBox AI plans to expand following the acquisition, targeting Trane's existing base of 40,000 customers while pursuing international growth. Trane also plans to keep BrainBox AI's Montreal HQ and workforce. 

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💰️ CLIMATE CAPITAL

💨 Deep Sky secured a $58 million grant from Bill Gates-backed Breakthrough Energy Catalyst to finance its Deep Sky Alpha test site in Innisfail, Alberta. The Alpha site will test carbon removal solutions from several different tech companies. 

🔋 Nouveau Monde Graphite received a $71.5 million equity investment from the Canada Growth Fund and Investissement Québec to commercialize its graphite battery materials mine and processing plant.

♻️ Universal Matter raised $28.7 million for its carbon upcycling technology. NewTech Investment led the round. Universal upcycles carbon into new graphene-based products, repurposing waste and improving the performance of materials.

🌲 CHAR Technologies landed $2.5 million from the Quebec government for a biocarbon and biofuels plant. CHAR produces bioproducts from converted wood waste, including biocarbon for steelmaking.

💰️ Realize Capital committed $32.5 million to seven impact-focused funds, including Amplify Capital, Flowing River Capital Partners, and Heartwood Trust

MILESTONES & PRODUCT

🚎 Argo launched its vertically-integrated all-electric transportation system in Bradford West Gwillimbury, Ontario. Argo, founded by ex-Tesla and Uber employees, combines EVs and smart-routing technology to provide an end-to-end transit solution.

💨 CO280 secured a $48 million offtake agreement with Frontier to deliver 224,500 tonnes of carbon removal before 2030. The removals will come from CO280’s first project, capturing waste CO2 from a pulp and paper mill.

🔌 Kiwi Charge will pilot its mobile EV charging solution with Tridel Group, a major real estate firm. Kiwi is developing a robot that can charge parked cars in condos and apartment buildings by bringing a battery to the car instead of requiring cars to plug into shared chargers.

🚌 Lion Electric entered creditor protection after failing to find a way to repay more than $411 million in loans.

💨 Carbon removal spinout CO2 Lock plans to launch a carbon capture and storage project in Northern B.C., the first project in the area.

🧪 SRTX launched an incubator for materials startups called SRTX Origins, offering tailored support like pre-purchases, manufacturing resources and collaboration. MycoFutures, which is developing a mushroom-based leather, is the first startup to join the program.

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NEWS

Clean electricity compromise

What happened: The feds released the final version of their Clean Electricity Regulations (CERs) with some key changes aimed at addressing concerns from the provinces.

The background: Many provinces have pushed back on the regulations since they were first introduced, particularly those that rely on fossil fuels. Key concerns include:

• Increased costs to expand infrastructure costs and short timelines

• Higher costs for consumers from infrastructure investments

• Risk of energy shortages during the transition, particularly in areas with high seasonal demand

According to Ontario's energy regulator, the rules would double planned energy generation and add $35 billion in costs.

On top of this, both Alberta and Saskatchewan argue that the regulations are unconstitutional. Alberta plans to challenge them in court. Saskatchewan plans to simply ignore them.

A compromise: The feds made a number of changes to try and address the provinces’ concerns and bring them on board (an unlikely outcome). Generating facilities now have double the pollution limit and plants can continue operating until they reach an annual emissions cap. Utilities can also use carbon offsets when they exceed their limits.

Plants will also be grandfathered for 25 instead of 20 years, and includes plants that start operating in 2028 instead of just 2025.

Why it matters: These regulations serve two main goals. First, they help reduce Canada's emissions. Second, they support the switch to electric power across transportation, buildings, and industry.

Provinces will invest billions in their energy systems over the coming decades. These regulations can guide that capital towards low-carbon power sources and avoid carbon lock-in.

However, the compromises will mean a muted impact: They'll avoid 181 megatonnes of carbon emissions by 2050, down from the original target of 342 MT.

The bottom line: With a federal election on the horizon, it’ll be up to the next government to decide whether these regulations - and Canada's clean electricity transition - move forward.

IN THE NEWS

🔌 Quebec will ban the sale of new gas-powered vehicles by 2035 while its EV incentive program, Roulez Vert, goes on hiatus. The incentive program ran out of funds following a surge of interest likely driven by a drop in the rebate from 7,000 to 4,000 on Jan 1st, 2025. The program could reopen if more funding is made available in the April budget.

♻️ Quebec is overhauling its recycling system to make packaging producers responsible for recycling across the province via Éco Entreprises Québec. By shifting the cost of recycling to producers, the models aims to boost recycling rates and shift how packaging is produced.

📐 The Canadian Sustainability Standards Board released its climate disclosure rules. The standards are largely aligned with international standards, but include longer timelines for Canadian companies to comply. The CSSB standards will inform federal rules for corporate climate reporting. 

🏅 Frontier bought more than 663,000 tonnes of carbon dioxide in 2024. The Shopify-backed carbon removal initiative uses advance market commitments to help grow the emerging sector, and all of the tonnes purchased have yet to be delivered.

BIG PICTURE

🏦 Batten the hatches: Morgan Stanley, Citi, and Bank of America left the Net-Zero Banking Alliance. Political pressure is growing on ESG and climate-aligned investing in the U.S. Republican politicians are pushing to “eradicate” anti-fossil fuel efforts. The exits prompted a restructuring at the Alliance.

🗽 Polluter pays: New York State adopted a “polluter pays” model for fossil fuel companies, requiring companies that are responsible for substantial GHG emissions to pay into a state fund that will pay for projects to repair or avoid future damage from climate change.

💰 Geothermal boost: Next-gen geothermal startup Fervo Energy closed US$255M in equity and loans to deploy projects across the U.S. and meet growing demand. Canada Pension Plan joined the round. Geothermal is emerging as a high-potential energy source for stable base load power, particularly for data centres.

COMMUNITY

🗓️ waterNEXT Industry Matchmaking: Foresight Canada is bringing together watertech experts and end-users to share insights and build connections around the opportunities and challenges this sector faces. Jan 15th, online.

➡️ Discover more climate events.

💻️ ReliON is hiring a Technical Support Specialist and a Marketing & Communications Manager to transform the reliability of EV charging infrastructure.

➡️ Find more open roles.