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BFD Expert Voices - Climate Deals

BFD Expert Voices

Carbon accounting startups are wading into the tricky waters of Scope 3 emissions measurement with the hope of standing out from the crowded market, Megan reports.

Why it matters: Competition is heating up for lucrative enterprise emissions-tracking contracts among the Big Four, Big Tech and venture-backed startups to help prepare for the proposed new SEC disclosure rules. 

Driving the news: Watershed, a carbon-accounting startup backed by Sequoia Capital and Kleiner Perkins, said Tuesday it was adding supply-chain-emissions tracking to its suite of enterprise software products.

The company says it is using a combination of public and private data from suppliers to estimate the emissions footprint of the larger supply chain.

Context: Driving the demand is the SEC's proposed disclosure rules that include requirements for reporting Scope 1 and 2 emissions starting in FY 2023 and Scope 3 emissions in FY 2024, should the rules be adopted as currently drafted.

Quick take: Adding a Scope 3 measurement tool is one way for startups to solidify their market penetration because it pressures suppliers to use the same software providers as their customers instead of operating with a slapdash approach of different measurement standards and tools.

Zoom in: Carbon180, which works on carbon removal policies, released a new carbon removal framework Tuesday, first shared with Axios Generate.

Carbon180 hopes the framework will jump-start policy discussion around ways to measure, report and verify carbon removal project effectiveness.

Lacking standardization is especially tricky in measuring Scope 3 emissions as many companies utilize similar suppliers but may count their vendors' emissions differently.

1 big thing: Carbon accounting startups see green

Illustration of a carbon molecule, US currency and geometric shapes

Amp Robotics, based in Denver, this morning announced that it closed a $91 million Series C financing round for its waste-sorting machines, Alan writes.

Why it's the BFD: Recycling sorting is labor-intensive and expensive — which means the vast majority of recyclable waste ends up in landfills. Amp says its robots make the process not just viable but lucrative. 

Details: Congruent Ventures and Wellington Management led the Series C. It had an initial close in July.

The round brought a $571 million post-money valuation, per Pitchbook. A lead investor tells Alan that the figure is "relatively accurate." 

State of play: Major companies such as PepsiCo and Coca-Cola have so far struggled to fulfill ambitious recycling pledges. 

Just 5% of plastic in the U.S. is recycled. Worldwide, it's barely 9%.

Sorting at recycling facilities is typically done by hand, which is expensive. Even then, the process inevitably allows mistakes that cause impurities. 

"There’s going to be a massive rotation toward trying to find high-quality recycled content," Abe Yokell, co-founder and managing partner at Congruent Ventures, tells Alan. "Amp is right in the middle of that."

What they're doing: Amp has built robots that use AI to quickly sort a broad array of waste.

By replacing human labor, a sorting facility's costs drop as much as 50% or even 70%, the company's founder says.

The robots also produce more accurate waste streams — commodities that can then be sold for higher prices.

Of note: Amp has two main revenue streams: selling/leasing its robots, and selling the sorted waste as commodities. 

The company is focused on consumer recycling. But its technology also works for construction debris, electronic waste and other markets.

What's next: Amp has deployed about 275 of its robots. It runs three production facilities, in the Denver, Atlanta and Cleveland areas.

2. The BFD: Robots, AI and trash-sorting hell

Illustration of three robot arms in the shape of a recycling symbol.

Nearly 4,000 companies have made pledges to reduce their emissions, but many lack the skilled workers needed to meet those goals, Microsoft president Brad Smith tells Axios' Ina Fried.

Why it matters: From Scope 3 emissions to carbon accounting, companies need to hire big time to make their businesses more resilient and sustainable.

It's an imperative that runs counter to the broader market downturn and hiring slowdown.

What he said: "It’s understandable that businesses will feel pressure to cut back in certain areas, but the world cannot afford to wait for faster action to reduce carbon emissions," Smith said. 

"This needs to be a business imperative if we’re going to act with the speed that is required."

3. Climate upskilling  

Photo collage of Brad smith and an image of data

Brad Smith. Photo Illustration: Sarah Grillo/Axios. Photo: Cody Glenn/Sportsfile for Web Summit via Getty Images

👀 Your COP27 primer: Next week's climate meeting in Egypt will likely feature intense clashes between industrialized nations and developing countries over climate-damage costs, Axios' Andrew Freedman writes in Generate. 

COP27 is being billed as the "implementation summit," where pledges will be turned into actions. 

But the inability to move forward on a financing mechanism for what the UN calls "loss and damage" might make for a failed summit.  

🌳 Wall Street bets $1.8 billion on forest offsets: A consortium led by Oak Hill Advisors, a T. Rowe subsidiary known for its corporate debt investing, has led a consortium to pay about $1.8 billion for 1.7 million acres of forest, per WSJ. 

The land span 17 states. They'll be overseen by Anew Climate, an environmental markets firm with offices in Houston and Salt Lake City. Anew plans to throttle back logging, WSJ says.

"Oak Hill and Anew say they are in no hurry to sell offsets and are content to let carbon amass on the properties while markets mature," WSJ reports. They're eyeing 10%-20% revenue from logging.

🤔 Don't call it a pullback. Or maybe do: The Business Development Bank of Canada this morning announced a $400 million climate-tech fund. It's the bank's second such fund — and $200 million smaller than the last one. 

"The firm plans to pump less money into the scene, over a longer period of time," per TechCrunch, which characterized the move as a pullback. 

The firm's managing partner said it's simply “sizing the offer to a more robust market with many more partners that we can work with.” We'll let you be the judge.

🤝 A PPA among giants: Google's parent, Alphabet, plans to buy renewable power from SoftBank-backed SB Energy, per Reuters.

The agreement is tied to Google data centers, which the company says will run on carbon-free energy by 2030. 

SB Energy is building four solar projects expected to total 1.2 GW.

4. 🌡️ Temperature check

Illustration of the sand from a sand timer filling the temperature scale on a thermometer.

• Samsara Eco, an Australian plastic recycling startup, raised $54m AUS (~$34.6m USD) in Series A funding from Breakthrough Victoria, Temasek, Assembly Climate Capital, DCVC, INP Capital and insiders Main Sequence, Woolworths Group and Clean Energy Finance Corp. https://axios.link/3NxpL8f 

• Amp, an energy management startup, raised $17.25m in Series A funding from Ecosystem Integrity Fund and Helios Climate Ventures, confirming Axios' previous reporting of the raise Monday. https://axios.link/3DRolCk 

• AiDash, a San Jose-based provider of satellite-powered operations and maintenance intelligence, received a $10m investment from SE Ventures, the venture fund backed by Schneider Electric. The capital is aimed at climate resilience for utility assets. https://axios.link/3Nvnt9D 

• Plugzio, a Canada-based EV charging provider for multifamily properties, closed a seed round led by RET Ventures. https://axios.link/3FHMoVA 

• Ecorobotix, a Swiss developer of autonomous high-precision agriculture equipment, received a loan guarantee from the Swiss Federal Office for the Environment, as well as access to preferred financing from UBS. https://axios.link/3U01E4m 

• The New Jersey Board of Public Utilities selected Jersey Central Power and Light, a FirstEnergy subsidiary, to connect the state’s offshore wind farms to the power grid. The transmission investments represent about $723m. https://axios.link/3Dy3wdG 

• Oklo, the California-based advanced nuclear energy developer, received a $6.1m cost-share project from the U.S. Department of Energy with Argonne National Laboratory, Deep Isolation and Case Western Reserve University to commercialize recycling of used nuclear fuel. https://axios.link/3NwYNhc 

• Pond Technologies, an Ontario-based cultivator of microalgae, raised $301,000 in aggregate gross proceeds from a non-brokered private placement, at a purchase price of $0.15 per common share. The company is initiating a new non-brokered private placement of up to 3.75m common shares at $0.12 each, for aggregate gross proceeds of up to $450,000. https://axios.link/3h76QF1 

• The U.S. Department of Defense selected Xendee, a California-based software provider for microgrids, to optimize microgrid designs at Naval Submarine Base Kings Bay, the USAG Bavaria and the Naval Base San Diego. https://axios.link/3TegGTf 

• Canoo, the LA-area EV developer, is opening a 320-MWh battery module factory in Pryor, Oklahoma. It’ll implement workforce training programs with the Cherokee Nation and other groups. https://axios.link/3FCX2wN 

• Zeem Solutions, an LA-area EV fleet provider, ordered 100 Class 8 battery-electric trucks from Nikola, the electric truck manufacturer based in Phoenix. https://axios.link/3U2yz8K 

• Lion Electric, the Canada-based manufacturer of electric medium- and heavy-duty vehicles, built its first zero-emission LionC school bus at its U.S. factory in Joliet, Illinois. https://axios.link/3WmImIe 

• Carbon Recycling International announced that a CO2-to-methanol plant has started production in Henan Province, China. The company says it’s the first such commercial-scale plant. https://axios.link/3zDg0Qc 

• Elemental Excelerator, with locations in Silicon Valley and Honolulu, announced its 11th cohort, comprised of 17 climate-tech companies. https://axios.link/3STAOcR 

• SunPower, UC-Irvine, Schneider Electric and Southern California Edison announced a partnership with KB Home to provide strategy, research, technology and energy services for the homebuilder's all-electric, microgrid-connected homes near LA. https://axios.link/3DshwWl 

• Eviation Aircraft, the Washington-based electric aircraft manufacturer, says orders for its nine-seater Alice airplane have surpassed $2b. https://axios.link/3DU8dA1 

• Pyka, the Oakland-based manufacturer of autonomous electric airplanes, received what it says is the first regulatory approval to fly unmanned aerial spray missions at night with a fixed wing aircraft. https://axios.link/3TWYKgQ 

• Georgia Power is among the companies seeking federal funding for a planned six-state Southeast Hydrogen Hub. https://axios.link/3WrpMP2 

• WEC Energy Group, the Milwaukee-based electric and gas utility company, selected Certarus, a Calgary-based natural gas transportation provider, to supply hydrogen and blending equipment to the A.J. Mihm natural gas-fired power plant near Pelkie, Michigan. https://axios.link/3DsiG49 

• Tdafoq Energy, based in Riyadh, entered into a distribution and manufacturing license with India’s Delectrik Systems to exclusively sell Delectrik flow battery products in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Tdafoq will also open a manufacturing plant in Saudi Arabia. https://axios.link/3zBqI9M 

• Intertek, the U.K.-based QA provider, said that the lithium battery energy storage system developed by Powin, based in Oregon, has received UL 9540A certification, enabling the system to enter the international market. https://axios.link/3Wt9W6O 

• RPlus Energies, a Salt Lake City-based renewables developer, has started construction on its 200 MWac/240 MWdc Appaloosa Solar 1 project in Iron County, Utah. It says the project is the largest in Utah to break ground. https://axios.link/3NrznBi 

• CMS Enterprises, the Michigan-based power plant owner and operator, rebranded as NorthStar Clean Energy. It’s working closely with General Motors. https://axios.link/3zDZM9z 

• Wesleyan University in Connecticut installed a waste-heat-to-electricity system from Enviro Power, based in Hartford, in one of the school’s dormitories. https://axios.link/3h3GxQn 

5. Hot deals

• American Electric Power, the Columbus, Ohio-based utility, has hired Ann Kelly as executive vice president and CFO, effective Nov. 30. Kelly is currently vice president of finance and CFO for AmeriGas Propane. https://axios.link/3SZu5yi 

• Essential Utilities, a Pennsylvania-based holding company for utilities, appointed W. Bryan Lewis to its board of directors. Lewis is vice president and chief investment officer for United States Steel. https://axios.link/3SYuKjs 

• Climeworks, the Zurich-based direct air capture developer, hired Douglas Chan as COO and Jan Huckfeldt as chief commercial officer. The company also promoted Christoph Beuttler to chief climate policy officer. https://axios.link/3zy2LAa

• Urbint, a New York-based software provider for protecting critical infrastructure, hired Jaylene Kunze as CFO. Kunze was previously CFO at Uplight. https://axios.link/3DVVyg6 

• Tenaska, an Omaha-based energy holding company, is appointing Jerry Crouse, CEO and vice chairman, to chairman, and Chris Leitner, president of Tenaska’s strategic development and acquisitions group, to CEO. Current chairman Howard Hawks will become chairman emeritus Jan. 1. https://axios.link/3sWZOW0 

• Perch Energy, a Boston-based tech services and community solar provider, hired Ali Abbasi as chief strategy and analytics officer. Abbasi joins the company from NRG. https://axios.link/3zBZksu 

Aegis Hedging Solutions, a Texas-based fintech for commodity and environmental markets, hired Zander Capozzola as vice president of renewable fuels. Capozzola joins the company from Argus. https://axios.link/3FAhBKo 

• Brown and Caldwell, the Bay Area-based environmental engineering and construction services firm, hired Diala Dandach as senior director of program management. https://axios.link/3TTCCnN 

6. It's personnel

🐪 Happy Wednesday! Grab some of that extra candy and let’s dive in.

🔧 Megan got a flat tire on the side of the highway on the way home from the vet yesterday. An extremely large shout-out to Marcus of Riverside for saving the day quicker than AAA could answer the phone.

😴 Alan's daughter was exhausted from her big night trick-or-treating the previous evening. She fell asleep again this morning on the way to daycare.

Thanks to Mike Flaherty and Phoebe Neidl for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and recycling hard-liners.

November 02, 2022

1 big thing: Carbon accounting startups see green