Canadian carbon removal developer raises C$75M
Canadian carbon removal firm Deep Sky has raised a C$75 million round ($54.79 million) to fund a research facility and start planning a commercial project.
Why it matters: The emerging sector of pulling carbon dioxide from the air and oceans is seeing a dramatic increase in both private investment and government support.
Details: Montreal-based Deep Sky said the round was co-led by Brightspark Ventures and Whitecap Venture Partners.
- Canadian government-supported groups participated in the round. They include: Investissement Québec, the VC arm of the Ontario pension fund OMERS, and the Business Development Bank of Canada's Climate Tech Fund.
- Deep Sky CEO Damien Steel said in an interview: "Canada has a unique opportunity to be a global leader in carbon removal," due to its unique geology, access to low-cost clean energy, and government incentives.
Zoom in: Deep Sky is buying reactors that capture CO2 from the air and the ocean from different companies and putting them into a research facility, which Steel said would likely be in Quebec.
- The company plans to have the research facility up and running a year from now, and then Deep Sky will select the most efficient and low-cost technologies to use for a much larger commercial plant.
- "We're raising VC dollars to build an infrastructure plant. You could look at that as crazy, but I've never seen an industry with this level of tailwinds behind it," Steel says.
Big picture: Investors, oil companies and U.S. and Canadian governments have pumped money into direct air capture projects this year.
- Oil company Occidental said in August that it plans to buy DAC company Carbon Engineering for $1.1 billion. A couple months later BlackRock said it would invest $550 million into Oxy's DAC plant in West Texas.
- The Department of Energy is spending $1.2 billion to build out DAC hubs and also plans to act as a customer.
Yes, but: DAC is still at an early stage and most technologies are still removing carbon at an expensive rate.