Climate Tech Canada #10
Week of April 25, 2022
Hey there,
Welcome to another issue! It’s been a busy few weeks in climate tech with over half a billion dollars in funding in the last three weeks alone! This momentum has made me reflect a lot on the value of seeing real solutions coming to life (and not only fixating on how bad the problem is).
There’s no better antidote to climate pessimism than seeing people taking action and putting real money behind climate solutions, so let’s get into some reasons to be optimistic!
In this issue: the story behind Hydrostor, funding for low-carbon concrete and energy storage, a new climate tech fund in Montreal, XPRIZE winners and, in a sign of things to come, the first sighting of “kWh” next to the price of gas.
Longreads
A few longer pieces for your “to read” list this weekend:
Water + Air + Rock: Investors place big bets on Hydrostor’s energy-storage technology
Fresh off of $340M in funding, Hydrostor is poised for significant growth to solve one of the most important problems for renewable energy - long-duration storage. This article touches on Hydrostor’s origins on the Bruce Peninsula, why Goldman Sachs is a big believer, and long-duration storage’s role in the energy transition.
Foreign buyers are eyeing Canada’s cleantech firms. Should we worry?
David Paterson of MaRS explores the dynamics of foreign and home-grown funding for Canadian climate tech companies. A few key takeaways:
While funding pilot projects makes for great press releases, governments also need to do the hard work of adapting regulations to support real-world, commercial deployment.
Scaling companies are hungry for cash, and have struggled to find it in Canada. But while US investors write bigger cheques, they also want more equity.
Acquisitions aren’t a bad thing: they free up talent and capital that can feed the next generation of startups (see the Shopify mafia), and as more companies make successful exits, investor confidence grows, funds return more money, and the appetite for bigger, riskier bets can go up.
Funding and growth
CarbiCrete (Montreal, QC) has secured $22.9M in funding for their Series A round, with more to be announced in the coming weeks. The funding will allow CarbiCrete to hire, expand product offerings, and further commercialization efforts.
CarbiCrete produces carbon-negative concrete by replacing cement typically used in concrete production with industrial by-products and cures it with CO2. This process sequesters carbon in the concrete, which CarbiCrete has quantified as removing 150kg of CO2 for every tonne of concrete produced. Traditional concrete is produced by binding aggregates (rock, sand, etc) with cement, which produces approximately 1 ton of CO2 for every ton of cement produced.
Carbon Upcycling (Calgary, AB) closed $6M in financing for its low-carbon cement and concrete additives. Carbon Upcycling recycles existing feedstocks like fly ash and steel slag, reducing the carbon footprint of their products by 30%.
e-Zinc (Toronto, ON) has raised over $31M in Series A funding. e-Zinc has developed a long-duration energy storage solution by storing energy in zinc metal. Long-duration energy storage is key to scaling renewable energy, and e-Zinc’s solution offers some distinct advantages compared to other solutions. They state that their solution is 80% less expensive than lithium-ion systems, is made using an abundant material that is recyclable, and can be deployed more easily and flexibly.
Enerkem (Montreal, QC) closed a $255M financing round to accelerate adoption of their technology and the development of new projects in Spain and Portugal. Enerkem’s technology converts non-recyclable municipal waste into fuels and chemicals like ethanol and methanol. These fuels can replace fossil fuel-based products and diverts waste from landfills where it otherwise might be incinerated or emit methane.
Hydrostor (Toronto, ON) secured $31.4M in funding from the Canada Pension Plan Investment Board (CPPIB) to drive further growth of its compressed air energy storage facilities. This funding comes just three months after a $315M investment from Goldman Sachs.
Arc Clean Energy (Saint John, NB) secured $30M in Series A financing which will allow them to deploy their first commercial, grid-scale reactor in New Brunswick. Arc provides advanced small modular reactor (aSMR) technology, which is more modular, flexible, and easier to maintain than traditional reactors. Arc’s funding comes shortly after four provinces, including N.B., committed to expanding the small modular reactor industry.
Sollum (Montreal, QC) received $2.5M in funding from SDTC for projects to demonstrate the effectiveness of their dynamic LED grow light solutions. “By dynamically recreating and modulating the full spectrum of the Sun's natural light, and by automatically compensating for changes in the ambient light spectrum and intensity, Sollum's LED light fixtures contribute to optimizing plant growth conditions and greenhouse energy efficiency.”
Grin Technologies (Vancouver, BC) received $348k in funding from CleanBC’s ARC program to scale up production and manufacturing of their-bike hub motor. Grin designs unique components for e-bikes and other light EVs
Lorama Group (Mississauga, ON) received $2M in funding from FedDev Ontario to purchase manufacturing equipment, and drive further commercialization and scaling. Lorama produces renewable, bio-based additives for paints, coatings and adhesives.
Cycle Capital (Montreal, QC) launched a new $244.5M cleantech fund in partnership with Demeter, a European investment platform. The new fund, called the Circular Innovation Fund, will focus on growth-stage companies creating circular, sustainable solutions.
Growth
In more good news for concrete, CarbonCure secured a $38M purchase agreement for carbon credits for its CO2 capture via mineralization. The agreement provides funding for CarbonCure to continue scaling.
Xebec signed a massive $145.4M deal with SCS Carbon Removal to supply large-scale carbon capture and sequestration equipment.
Mississauga’s Next Hydrogen joined a coalition of hydrogen companies putting forward a proposal to become one of four clean hydrogen hubs being established through the US Infrastructure Investment and Jobs Act.
Toronto-based Zygg is expanding its subscription e-bike service to Vancouver after operating in Toronto since 2020. See them on Dragon’s Den.
BluWave-ai is partnering with Hydro Ottawa on a three-year project to use AI to manage EV charging during peak demand periods. The project will help drivers save money from charging, while reducing demand on the grid.
GreenPower signed a deal to provide 1,500 GreenPower Star cab and chassis units for Workhorse’s line of EV cargo vans.
Karbon Brewing is partnering with Trent University to research and develop low-carbon brewing technologies.
FuelPositive launched the first demonstration projects for its green ammonia production systems in Winnipeg. The system provides carbon-free ammonia for use in fertilizer, reducing carbon footprints and increasing resiliency to supply chains issues.
Winnipeg’s NFI won a contract with the TTC to provide up to 565 hybrid-electric buses.
Here & there
Shopify forms the Frontier Fund with partners Stripe, Meta, Alphabet and McKinsey. The fund provides $925M in advanced market commitments for carbon capture. (By some estimates, this move expanded the total carbon removal market ~400-600% in 1 year),
Apple purchased its first “dark blue aluminum” Quebec-based ELYSIS, a joint venture by Apple, Alcoa, Rio Tinto and the federal and Quebec governments.
Earth Day Canada is employing a different funding model to develop and deploy its own charging network using community bonds.
“Should we focus on carbon removal or reducing emissions?” Why this zero-sum framing is unhelpful
In the news
The Ontario government issues its revised plan for emissions reductions. The province is on track to reduce emissions from 2005 levels by 30% by 2030, though most of the reductions appear to be driven by federal regulation or momentum from prior governments.
Ontario also released its Low-Carbon Hydrogen Strategy which comes a few weeks after B.C. launched its Hydrogen Office.
B.C. also announced its new Mass Timber Action Plan to support the mass-timber industry in the province and fund new developments.
In a world first, Quebec has banned oil and gas exploration! And Newfoundland lifted its moratorium on onshore wind developments.
Nova Scotia and the federal government announced changes to regulations around offshore renewables. The move aims to create a predictable and streamlined regulatory environment for renewables to promote investor confidence.
Climate-conscious shareholders have been making waves with some of Canada’s largest companies. Shareholders raised climate concerns at Scotiabank’s AGM, noting the bank’s $14B in fossil fuel investments in 2021 alone. Enbridge will also face a resolution from shareholders to adopt science-based net-zero targets.
Opportunities
🗓 Circular City Week is happening May 2-8 in New York and online. The week-long event is an opportunity to hear from companies, organizations and local champions who are working on circular solutions around the world. Canadian cities will be showcasing their work in the “Exploring Circularity in Canadian Communities” session.
🗓 Foresight Canada is hosting a reverse pitch night on May 18th. The session will unpack some of the major challenges to be solved in the energy industry. Register here
Fun Stuff
First time I’ve seen Kilowatt hour on the price sign at a gas station - I hope we see more of this soon!
Check out “The Climate Game” to put yourself in the shoes of decision-makers as you try to reach net-zero. It’s interesting to see how different bets play out and the various assumptions that go into the game’s model (e.g. are EVs a major lever? What’s “too radical”?)
That’s all for this week. As always, thanks for reading and if you’re enjoying the newsletter, considering forwarding to a friend!
Justin