CTC #58 - The case for Canadian carbon removal

Hey there,

Welcome to another issue of Climate Tech Canada! I mentioned last week that I was attending Carbon Removal Canada’s launch and recapped some of my takeaways below. It was also a reminder that nothing beats being in the room with smart, solution-oriented people.

This week in climate tech:

• B.C. startups snag funding for innovative seeds, waste-to-fuel, and more

• What can we learn from the failure of a high profile nuclear project?

• Feds get ready to press our fusion energy advantage

🇨🇦 Lessons for a Canadian carbon removal industry

At their launch event in Ottawa last week, Carbon Removal Canada shared their vision for a domestic carbon removal industry. They estimate that carbon removal could power $143B in GDP and over 300,000 jobs in Canada by 2050 with an industry removing hundreds of millions of tons of CO2.

As someone who’s familiar with CDR but hasn’t gone down the rabbit hole, here are my main takeaways from the event:

We’re just getting started.CDR is still a nascent industry, but we know it’s coming (because it has to) and it will be massive. Canada is well positioned to be a leader. We have skilled workers with highly transferrable experience from mining and oil & gas); land and coasts to deploy CDR projects; abundant renewable energy; and a fairly stable political culture conducive to long-term efforts compared to the U.S.

Embrace the unknown. CDR is so early, it’s impossible to predict the future, whether it’s the price of carbon, which methods will win, etc. Stacy Kauk, who leads Sustainability at Shopify and helped kickstart the Frontier fund, noted that just a few years ago enhanced rock weathering wasn’t on their radar, but it’s now one of the most promising and scalable solutions.

Don’t pick favourites.Policy needs to be technology agnostic and provide focused R&D support to a limited number of efforts. Dr. David Keith observed that there’s a Canadian tendency to spread funding around that we need to avoid. We also need to be ready to kill the ideas that don’t work, potentially through a non-political body.

Indigenous co-pilots. Projects need to engage Indigenous communities as partners and set up equity agreements. Free, prior and informed consent is tables stakes and increasingly equity agreements are becoming the norm. Sharleen Gale from the First Nations Major Projects Coalition said it well: “Roads to net zero run through Indigenous lands”.

In short, the pitch to government was: This industry is a must if we’re going to hit global climate targets. Do you want to be the one that dragged your heels and ceded the opportunity to others, or the one that stepped up?

Finally, I was reminded that working on climate change is existential and multigenerational. In closing out his keynote, Dr. David Keith said that our job today is to reduce the ignorance so that our future generations can do this at the massive scale necessary. All the debating and uncertainty is part of the process, but we need to aggressively de-risk these technologies and not kick the ball down the road. Because when it’s 2040 or 2045, our climate is going to look a whole lot different and we’ll need to move quickly.

💰 Funding

🌱 Lucent Bio (Vancouver, BC) secured $3.6M in interest-free loans from federal economic development agency PacifiCan for its innovative seed coatings. Lucent produces biodegradable and microplastic-free seed coatings that promote strong crop establishment. The funding will be used to get the technology from lab to field, including marketing and production facilities.

🌲 The B.C. Centre for Innovation and Clean Energy announced $2.6M in project funding for climate tech companies working on sustainable wood waste management and wildfire resiliency:

• Deadwood Innovations is developing a thermo-chemical method to upcycle forestry waste into commercial wood products.

• FPInnovations will commercialize electric trailers paired with existing trucks to reduce forestry trucking emissions.

• Innovatree Carbon Group will use biochar as a large-scale replacement for peat moss for tree seedling planting.

• Arbios Biotech, in partnership with Lheidli T’enneh First Nation, will convert forestry waste to sustainable aviation fuels.

🏅 Milestones & growth

🏅 Foresight 50: Accelerator Foresight published it’s annual list of the 50 “most investable” startups. The list includes Adaptis (low-carbon building design), Kanin Energy (decarbonizing industry with waste heat recovery), Novamera (precision mining), Gaia Refinery (biomass powered DAC) and more.

🏅 Deloitte Fast 50: Several climate tech startups were also named to Deloitte’s Technology Fast 50 list, which recognizes the fastest growing companies by revenue. On the list: RideCo (on-demand transit), GoBolt (low-carbon third party logistics), and Spare (on-demand transit). FalkBuilt (digitized construction) and CarboNet (wastewater treatment) also made the “Companies to watch” list.

🌴 Carbon project developer and corporate sustainability platform Invert will partner with Mexico’s The Earth Lab to protect over 100,000 hectares of forest.

💨 Deep Sky will install Equatic’s water-based carbon removal plant in Quebec. The system electrolyzes water to produce hydrogen while storing carbon.

⛏️ The Metals Company applied for U.S. government funding to build a processing plant for minerals from undersea mining.

🛰️ Emissions monitoring startup GHGSat announced three new monitoring satellites were successfully delivered into orbit by SpaceX

🐟 Future Ocean Foods launched in Halifax with a mission to support sustainable alternatives to seafood. The group is focused on increasing product trials and expanding market penetration.

🗞️ This week in climate

⚛️ NuScale, new problems: NuScale, a U.S.-based developer of small modular reactors, cancelled a high-profile project in Utah that had been in development since 2007. The project hit cost overruns (for debt & steel) and delays, almost doubling the cost per MW of energy. Utility customers balked at the increase and backed out. What can it tell us about the future for SMRs?

It’s not surprising for first-of-a-kind (FOAK) projects to be expensive, and these cost pressures are hitting all capital-intensive projects with high upfront costs like offshore wind. Effective financing and the willingness of customers to advance these types of projects is key. New Brunswick amended regulations to ensure the provincial utility will buy power from SMRs, even if there’s a price premium. The upshot - the project was key to getting NuScale’s tech to commercial readiness and the company has agreements to deploy power plants at other projects, including a project with Canada’s Prodigy Energy.

🚗 Pedal to the metal: Despite gloomy warnings from automakers, Canada’s EV sector sees no slowing down. Zero-emission vehicle (ZEV) sales hit a new record in Q3, making up 1 in 8 car sales. ZEV sales volume also increased 20%, while total volume dropped. Some other key points:

• Canadian customers aren’t impacted by U.S. electric bus and battery maker Proterra’s bankruptcy. The company’s business units have quickly found buyers.

• Parts maker Magna CEO called electrification an “irreversible trend” that’s here for the long-term while sales grew by 15% YoY despite auto strikes.

• In quarterly earnings calls, Lion Electric’s CEO said they’re seeing supply chains getting “a lot more stable”, while Winnipeg-based electric bus maker NFI said customer demand “remains at record levels”.

🏒 Skate to where the puck is going: The feds are starting to develop a strategy for nuclear fusion, pressing Canada’s advantage as the main producer of tritium, a key element in the process, and General Fusion’s role as an early leader in the space.

Ministers for Natural Resources Canada and ISED are both interested fostering the industry to “anchor the energy security and economic benefits in Canada”. Canada is part of an international working group on fusion, but has started to lag behind the UK and US on a regulatory framework. The two countries are leading a push for nuclear expansion at COP28.

In other news 

• SDTC CEO Leah Lawrence resigned due to growing criticism around how the organization handled conflicts of interest and distributed funding. The Office of the Auditor General also announced it will launch an investigation.

• SR&ED tax credits may no longer be used with below-market loans from the feds after a Tax Court of Canada ruling, impacting R&D spending.

• The feds launched a new $180M fund to support Indigenous-owned and led renewable energy projects, while Ontario added $5M to its own Indigenous energy project program.

• Five premiers published an open letter calling on PM Trudeau to exempt carbon pricing for all forms of home heating.

• The federal and Manitoba governments announced $475.6M to upgrade hydroelectric and grid infrastructure in the province.

• B.C. is getting in on the battery manufacturing game with a new lithium-ion plant from Taiwan's E-One Moli. The factory is backed by $1B in government support.

• A $4B green hydrogen plant is coming to Quebec in 2028. Built by TES Canada, the plant has the potential to reduce emissions by 800,000 tonnes per year.

• Canada’s first community-scale smart grid system launched in Sault Ste. Marie, promising to deliver energy efficiently and cut energy use by 2.7%.

• Canada’s largest copper producer is at the heart of major protests in Panama about environmental impacts, inequality and broader government opposition.

• Canadian miners are part of a venture pursuing premium prices for onshored rare earth metal production, hoping manufacturers will pay for long-term stability.

• A new “Cost of Doing Nothing (CODN)” toolbox will help cities build a business case for climate adaptation and quantify the impact of inaction.

• Heirloom opened the first direct air capture plant in the U.S. while global carbon capture utilization and storage (CCUS) is set to grow by 50% this year driven by policy and diversification into new sectors like cement and steel.

• The Biden admin has been wielding its procurement power, investing $2B for low-carbon construction at federal buildings while the Dept. of Energy committed $1.3B to buy capacity on transmission projects.

• Supply chain logistics platform Flexport launched a sustainable aviation fuel program to provide offsets and spur fuel development.

• Scientists at University of Waterloo have developed an economically viable way of capturing carbon and converting it into clean fuels using artificial leaves. The team is now exploring potential investors.

📣 What’s going on

🗓️ Ottawa Climate Tech Social: Join us for an opportunity to connect with Ottawa folks working in climate or interested in making the switch. Ottawa, Nov 16th.

🗓️ Climate Designers of Toronto & the GTA - Virtual Meet & Greet: Join this intro session with the Toronto & GTA chapter of Climate Designers to get to know fellow designers and explore directions for the chapter. Nov 28, online.

🗓️ Smart Growth Symposium: UofT’s Climate Positive Energy initiative hosts this half-day event exploring smart and clean technology solutions. Nov 21st, Toronto.

🗓️ R3 Capturing Climate Opportunity: Hosted by the New Brunswick Innovation Foundation, this event will connect the region’s climate innovators and investors. Nov 23rd, Saint John.

💡 Agricultural Methane Reduction Challenge: The program will award up to $12M to innovators developing solutions to reduce methane emissions from cattle. Apply by Feb 7, 2024.

☕️ Here & there

A roundup of my favourite picks from the week

• Will wildfires help Canada kick its oil producing habit?

• The top business schools integrating climate into their MBAs

• Can heat pumps actually work in the prairies?

• An Investment Lookbook for the circular economy

• Mapping the flows of climate finance

📌 Jobs

Featured postings from some of Canada’s most innovative companies building climate solutions. Featuring roles in Project Management, AI Engineering, Climate Data Science, BizDev and more.

➡️ Hiring? List your posting here.

That’s all for this week! Enjoying the newsletter? Share this week’s issue with a friend to help support our work.

Justin