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Deep Sky, a developer of carbon removal projects, opened North America's first direct air capture plant paired with underground storage on Friday, the startup tells Axios Pro. 

Why it matters: The Canadian site is piloting 10 carbon removal technologies.

Catch up quick: Direct air capture (DAC) removes carbon from the ambient air. 

Other DAC developers in North America, such as Heirloom, use or plan to use captured gas to make products like concrete or sustainable aviation fuel.

Driving the news: Deep Sky, based in Montreal, says its Alpha plant in Alberta is the first on the continent to store heat-trapping gases in geologic formations, a step known as sequestration.

"If you take one of these pathways where you're using [captured carbon] for a byproduct, and you want to capture 1 million tonnes per year, what do you do with it all?" CEO Alex Petre says. "There's just not enough demand for that byproduct." 

How it works: The Alpha plant will remove about 3,000 metric tons of CO2 per year, which will then be liquefied, driven 186 miles by tanker truck, and injected underground for permanent storage.

Deep Sky generates revenue by selling carbon credits tied to the carbon it removes. Microsoft and Royal Bank of Canada bought all the credits associated with Alpha.

Between the lines: Deep Sky is a project developer, deploying technologies that other carbon removal startups have developed.

The Alpha plant cost over $50 million, which Deep Sky funded with equity and grant dollars, Petre says. The startup has raised about $93 million since its launch in 2022.

Reality check: Pretty much every DAC plant, including Alpha, is a long way from profitability. The technology is expensive, and the costs far outstrip what companies are willing to pay for carbon credits.

"It'll be a little while longer before direct air capture can be profitable and have a healthy margin" Petre says. "This is still very much our goal. Our North Star is to reduce the cost of DAC."

What's next: Deep Sky has started engineering on its first two commercial sites, set to come online as early as 2027, each aiming to capture and store more than 500,000 tonnes/year of carbon.

Exclusive: Deep Sky opens North America's first DAC plant with underground storage

It's targeting 3,000 metric tons per year.

Illustration of the words CO2 behind cut out of a sky by a pair of scissors

Deep Sky, a developer of carbon removal projects, opened North America&#x27;s first direct air capture plant paired with underground storage on Friday, the startup tells Axios Pro. Why it matters: The Canadian site is piloting 10 carbon removal technologies.

Exclusive: Deep Sky opens North America's first DAC plant with underground storage

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