CTC #54 - Early stage climate tech at risk as Feds suspend SDTC funding

Hey there,

Welcome to another issue of Climate Tech Canada, I hope you had a great thanksgiving weekend!

In case you missed it, we put out a deep dive this past weekend into the state of climate venture funding in Canada for H1/23. You can check that out below 👇

I’m working on a piece exploring the dual crises of housing and climate change, and the massive opportunity to build smarter, faster, and more sustainably. I’d love to know what burning questions you have on the topic or areas you’d like us to dig into. Let me know in the comments or hit reply.

This week in Canadian climate tech:

• Catalytic funding takes a hit as the feds suspend SDTC funding

• Qube Technologies lands Series B for always-on emissions monitoring

• Svante expands its carbon capture business to Asia and the Middle East

Let’s go!

💰 Funding

🛰️ Qube Technologies (Calgary, AB) secured an undisclosed amount in Series B funding from Riverbend Energy Group for its continuous emissions monitoring technology. Qube offers field sensors that continuously monitor for emissions leaks, using data to infer leak location, type and quantity. The continuous monitoring helps operators react quickly and not just at the time of inspection. 

⚡ HaiLa Technologies (Montreal, QC) raised $14M in funding from existing investors and a new strategic investor Murata Electronics for its energy-efficient radio communications for IoT devices. HaiLa’s hyper energy-efficient RF communications allows IoT devices to operate with a single battery for the product’s life.

💸 The51’s Food and AgTech Fund (Calgary, AB) received a $5M investment from inclusive growth stream of the fed’s Venture Capital Catalyst Initiative. The initiative is focused on advancing diversity, equity and inclusion in the VC ecosystem by backing diverse fund managers and underrepresented entrepreneurs. The Food and AgTech fund is investing in diverse founders working on food and agtech.

🧪 FuelPositive (Waterloo, ON) received a $1.9M funding commitment from Agriculture and Agri-Food Canada to support its green ammonia demonstration project. FuelPositive is developing a decentralized, modular system that can produce green ammonia fertilizer on farms.

📈 Milestones

💨 B.C. carbon removal startup Svante is bringing it's carbon capture technology to the world in a new partnership with Samsung Engineering. The pair will jointly deliver carbon capture, utilization, and storage (CCUS) projects for hard-to-decarbonize industries in Asia and the Middle East. They’ll also collaborate on improving and modularizing Svante’s carbon capture plants. 

🚢 Halifax’s Glas Ocean secured a contract from the U.S.’s DARPA to develop and demonstrate its analytics platform that helps vessel operators optimize performance & routes while reducing emissions. 

🔋 Quebec-based EVLO will supply energy developer SolarBank with its EVLOFLEX battery energy storage systems for three energy storage projects in Ontario, boosting grid reliability.

🎥 Carbon management platform Carbonhound was selected to pitch at this year’s Elevate Festival, a tech and innovation event in Toronto. Check out their 3 minute pitch here.

🏭 Universal Matter will join Greentown Labs’ Go Make 2023 incubator to develop its sustainable graphene technology. Greentown bills itself as the “largest climatetech incubator in North America”.

🗞️ In the news

✋ SDTC activity paused after investigation: Innovation, Science and Economic Development Canada (ISED) suspended new funding activity at Sustainable Development Technology (SDTC) after a third-party investigation found conflicts of interest and governance issues in the agency. SDTC is a key player in Canada’s climate tech ecosystem, providing catalytic funding to pre-commercial ventures.

Issues in the audit include providing funding beyond the agency’s scope (e.g. for commercialization projects), issues with COVID relief payments, and gaps in internal processes like HR.

The pause in funding is risky because venture and debt funding have become harder to secure, while climate capital is heading south. It’ll be critical for the agency to right the ship asap so that companies counting on this source of funding don’t run out of runway.

⚡️ Backing Indigenous-led renewables: Players across the energy industry are advocating for a national loan-guarantee program to support crucial net-zero energy projects and secure meaningful equity investments for Indigenous communities. 

The feds would loan money to First Nations to then invest in major projects, assuming the risk if the nation defaults on the loan. These backstops can help Indigenous communities secure loans with more feasible interest rates, and deliver greater returns for their communities. Indigenous groups were partners or beneficiaries in ~20% of Canada’s current electricity projects, most of which are renewable. 

The proposed approach matters because it could help bring Indigenous communities into major projects as partners earlier and advance reconciliation efforts through greater economic self-determination. 

🔄 Atlantic Loop no more: Nova Scotia abandoned plans for the Atlantic Loop, a major infrastructure project that would have imported renewable energy from Quebec and Labrador. Nova Scotia currently generates 60% of its energy using fossil fuels, and needs to switch to clean energy by 2030. 

The Atlantic Loop was once the federal government’s “top regional priority”, but the cost grew from $3B to $9B in three years. Instead, the province plans to build out more local wind and solar generation and import power from Labrador to meet demand.

In other news:

• Nova Scotia approved the first new exploration permit for offshore oil in years. The only active project in the provinces is currently being decomissioned. 

• Nova Scotia also announced a partnership with the feds to invest in nature conservation alongside the Mi’kmaq of Nova Scotia

• The feds announced $12.5M for youth environmental literacy projects, with funding coming from the Environmental Damages fund.

• Canada’s agri-food sector set up a new alliance to achieve net-zero by 2050. The group will focus on climate-smart agriculture and a national biogas network.

• Manitoba has a new NDP government - look out for investments in EVs, carbon pricing, and enhanced nature conservation. 

• Sweden’s H2 Green Steel is exploring a $6B green steel project in Quebec, drawn by access to the province’s low-carbon hydroelectric energy.

• Vancouver-based Lithium Americas is in talks with the U.S. Department of Energy for a $1B loan to develop North America’s largest lithium project in Nevada

☕️ Here & there

A few of my favourite long-reads to help you sound smart this week

• Canada needs to get serious on climate tech incentives. Here’s what it needs to deliver by end of year.

• B.C.’s Centre for Innovation and Clean Energy makes the case for non-dilutive funding to help climate tech startups take bigger risks

• Home insurers want a climate risk rating system for your home

• The battle brewing over vast mineral wealth in Ontario’s Ring of Fire

📌 Jobs

Featured postings from Canadian companies building climate solutions, featuring roles across Design, Project Management, Software Development, Human Resources and more.

➡️ Hiring? List your posting here.

That’s all for this week. If you’re enjoying the newsletter, share this week’s issue with a friend to help support our work!

Justin