CTC #94 - Back in action
Low-carbon building company Nexii returns from bankruptcy
Welcome to this week’s issue of Climate Tech Canada, where we break down the latest in climate tech.
I hope you enjoyed the long weekend and got some time to recharge. Or maybe learn more than you ever wanted about the Yen carry 😬
This week, we’re unpacking Nexii’s long journey from unicorn status to bankruptcy and now to a second life. The sustainable building company is back in action with new owners, an improved product, and more cautious growth ambitions.
On the international front, Canada and Germany continue to build out the transatlantic green hydrogen market, putting up $600 million to help overcome green premiums and kickstart demand.
In more climate tech news, UgoWork closed $51 million in financing to electrify logistics operations, Lion Electric lays off more workers, BYD eyes Canada expansion, SBTi doubts carbon credits, and more.
Also, you may have noticed we have our first sponsor ever! Shout out to the great folks at Green Economy Law for their support.
Let’s get into it!
TECH
A second chance
Guess who’s back, back again? Nexii’s back, tell a friend.
What happened: Nexii is getting another lease on life after the sustainable building materials company declared bankruptcy earlier this year. The company sold for $500K to a Dallas firm that’s now looking to relaunch the company as Nexiican and NEXII in the US.
Background: Nexii develops precision-manufactured panel systems for buildings with a third of the carbon footprint compared to traditional concrete walls. Their system also speeds up construction timelines and Nexii counted Walmart, Starbucks and Chase Bank as customers.
The company grew rapidly, raising more than $125 million and was valued $2 billion in 2022.
Scaling challenges: Nexii took on high overhead to fuel growth but struggled to optimize their product and get it profitable. A failed deal to license their technology to a US manufacturer added more strain, leaving them on the hook to deliver committed projects.
Then, as Nexii worked on re-engineering the product to be more competitive and hit their first positive margin in 2023, they were unable to secure more funding to stay afloat.
Earlier this summer Nexii went through two rounds of layoffs, shut down facilities and cut costs before ultimately declaring bankruptcy.
What’s next: The revamped company is back on its feet with an $8 million investment from its new owners, ready to capitalize on the redesigned product and a more modest growth strategy driven by customer demand.
SPONSORED BY GREEN ECONOMY LAW
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This week's issue is sponsored by Green Economy Law, a boutique Toronto-based law firm providing general and specialized legal services for startups and non-profit organizations in climate tech and other green economy sectors.
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CLIMATE CAPITAL
🔋 UgoWork closed $51 million in Series C funding led by Fonds de solidarité FTQ. The raise includes $26.25 million in equity and a $25 million credit facility from Desjardins. UgoWork enables logistics operators to electrify their fleets through lithium-ion batteries for material handling vehicles like forklifts and a companion Energy-as-a-Service platform. UgoWork plans to use the funding for global expansion, product development and expanding production.
💰️ Amplify Capital received part of a $25 million investment for its Fund III from the federal government’s Venture Capital Catalyst Initiative.
MILESTONES & PRODUCT
⚡️ Polara, a fleet electrification services company, acquired Hydro-Québec subsidiary Cléo, a smart charging management platform.
✅ EverWind Fuels secured approval for the last of three wind farms that will power the company’s green hydrogen and ammonia project in Nova Scotia. EverWind plans to produce 1 million tonnes of green hydrogen per year for export to Germany.
⛽️ Arizona-based Nikola opened the first commercial hydrogen refuelling station for heavy-duty transport in Ontario. The station operates under Nikola’s hydrogen services brand, Hyla, and Nikola dealer ITD Energy.
🚌 Lion Electric will lay off 300 workers to cut costs and slow financial losses. Losses jumped 63% in Q2 compared to the year before and the already company laid off 220 workers earlier this year. Facing slower-than-expected demand for electric trucks they plan to ramp down production and explore new battery pack product lines.
NEWS
Making a clean hydrogen market
What happened: Canada and Germany are putting up $600M to help kickstart demand for Canadian-made green hydrogen. The capital will close the gap between the cost of production and what buyers are willing to pay. It’s known as a double-sided auction, where producers bid to supply clean hydrogen. That supply is then auctioned to buyers, with the $600M pot covering the difference.
The two countries have been working on building the transatlantic hydrogen market for several years through the Canada–Germany Hydrogen Alliance.
Why it matters: Green hydrogen can help decarbonize heavy industry like steelmaking because of its ability to generate high temperatures; transportation fuel in aviation and medium- to heavy-duty trucking; and as a way to store excess energy from renewables.
Green hydrogen is also a key part of many countries’ decarbonization plans: Germany expects 95-130TWh of hydrogen by 2030, with 50-70% covered by imports, while Canada is planning for 50% of energy to come from hydrogen by 2050, cutting emissions by up to 190 MT.
Making a market: Despite this carbon-cutting potential, the hydrogen market is slow to come together. According to Bloomberg, clean hydrogen production could grow 30x by 2030, but just 12% of announced production capacity has found a buyer.
The $600 million is aimed at spurring the demand side of that equation. Reducing the green premium could unlock more demand, creating a clear path to offtake agreements. This can de-risk financing for clean hydrogen projects and help producers drive down costs through scale and experience.
What’s next: It’s a positive sign for an emerging clean hydrogen economy in Atlantic Canada, with several production hubs powered by wind and solar in the works.
IN THE NEWS
🚙 BYD eyes Canada expansion: The Chinese carmaker is planning to come to Canada despite potential tariff hikes on Chinese-made vehicles. The US introduced 100% tariffs and Canada could follow suit. BYD already sells electric buses and trucks in Canada but would get into the passenger vehicle game with retail sales and rideshare partnerships. Industry stakeholders want tariffs to protect North America’s emerging EV industry, while others argue more competition could drive down prices and accelerate EV adoption.
📉 Uncertainty for renewables: More than 50 wind and solar projects have been cancelled after Alberta introduced a seven month pause on renewable development. That’s almost half the projects that were in the development queue at the time. But it’s not just the pause - new restrictions on development are still being finalized, creating uncertainty for the industry and slowing down new projects.
⛔️ Delayed net-zero progress: Several oil sands companies delayed publishing their environmental reports because of new anti-greenwashing rules. The industry says the new rules are too ambiguous to make any statements. More clarity around claims about the potential future impact of new technology like carbon capture would be helpful, but otherwise the rules essentially amount to “have a clear, credible plan backed by science.
BIG PICTURE
A Brazilian oceanographer is now responsible for navigating the future of deep sea mining
U.S. permitting reform took a step forward but opens the door to more fossil fuels
Uber will team up with BYD to put 100,000 EVs on the road
Air New Zealand pushed its net-zero targets to 2050 because of a shortage of new planes and sustainable aviation fuels
A new report from SBTi suggests carbon credits could be “ineffective” in delivering their intended outcomes, while carbon market council ICVCM rejected renewable energy credits
Aussie energy giant Woodside Energy is buying a Texas-based low carbon ammonia plant for $2.35 billion, anticipating a surge in demand
Samsung showed off a solid state battery with a 900+ mile range and charge in just 9 minutes
COMMUNITY
📅 Everything Electric: Organized by Fully Charged, Everything Electric is a global event series focused on promoting EVs, renewable energy, and sustainable tech, designed to inspire people to #StopBurningStuff. Vancouver, Sep 6-8th.
💡 CleanBC Medium- and Heavy-Duty Public Charger Program: The program aims to increase the number of public fast charging stations throughout B.C. for medium- and heavy-duty (MHD) electric vehicles with grants up to $200K per charger. Apply now.
💻️ Flash Forest is hiring a Marketing Manager to to drive brand growth, revenue generation, and help scale reforestation. Apply here.
Check out the Job Board for more postings.
Thanks for reading,
Justin