NeoCarbon, a Berlin-based climate technology startup that uses a retrofit approach to scale Direct Air Capture (DAC) devices to absorb CO2 emissions, has won pre-funding. His focus is on developing a DAC kit that can be installed (retrofitted) in operational cooling towers in the industrial sector – this is how his step works, reducing the cost of reducing carbon emissions.
The €1.25 million pre-launch round, which was co-led by PropTech1 and Speedinvest, will be used for the next phase of development as NeoCarbon works to turn its current lab-based proof of concept into a pilot prototype in commercial facility — hopefully early next year. So it will use the pre-launch funds to do so, including expanding its engineering team, to get the MVP in shape for a first pilot in the coming months.
His initial focus is on retrofitting DACs to smaller industrial cooling towers — instead of the giant towers you might see in a power plant. (Or the really small units you might find in a shopping mall or office building.) Although it does say it hopes, in the longer term, to develop the technology for really big towers as well. But he argues that even smaller industrial towers handle a lot of air and can therefore capture significant amounts of CO2 – and, well, the climate crisis isn’t going to hang around and wait for huge projects to start, so his philosophy is to start with more -small for faster scaling.
“Our sweet spot in the next, say, 2-3 years, will be 1-10 megawatts of cooling power,” said co-founder and CTO Sylvain Toromanov, speaking to TechCrunch via Zoom. “And they’re already in the thousands of tons of capture potential a year.”
“We did a very early proof of concept (POC) in the early days, in February,” he continues. “Now today we’re finalizing our first, as we call it, MVP — so it’s still very small. But the POC was very low budget and rather quantitative. We are now finalizing, mainly this week, the MVP prototype, which will have better quality results.
“We haven’t started measurements and testing with it yet, but it’s basically in the final stages of getting it up and running.”
Although the DAC sounds great in theory – it uses chemicals to literally suck problematic emissions out of the air! — human activity generates huge amounts of CO2 (NeoCarbon cites the relevant statistic as 51 billion tons per year), so you’d need an awful lot of DAC to make a dent in the climate crisis.
But one big barrier to DAC scaling is the cost of implementation.
NeoCarbon’s tactic for reducing DAC costs is to focus on repurposing existing industrial infrastructure that already has the right conditions to suck carbon out of the air – after all, cooling towers are designed to have a lot of air flowing through them – which means that an entirely new building does not have to be built to capture CO2. (Although you should be sure that your technique can adapt to different installation conditions.)
Therefore, it claims it will be able to reduce the cost of DACs by up to 10 times – making the DAC “ready for the mass market”, as its presentation says.
CO2 goes through the chimney
Another consideration with direct air capture is what do you do with the captured CO2?
If you do something that just releases it back into the atmosphere, you are — at best — slowing down rather than reducing emissions. Which won’t help if you claim to have the technology to help the climate crisis.
In the short term, NeoCarbon says its approach to this problem is to focus on places where captured CO2 can be repurposed by the industrial facility itself – such as vertical farms (which use CO2 to power plants) or soda makers (which they use liquid fizzing stuff).
This is another reason why industrial cooling tower retrofits are being considered—as they can be located close to business CO2 needs—allowing the carbon dioxide to be usefully fed back into commercial processes as feedstock. (Also, as well as climate considerations, he argues there could be wider benefits for business, such as strengthening supply chain resilience and reducing production costs as CO2 faces some scarcity and spikes prices in recent years.)
However, this circularity will only allow the creation of carbon neutral processes. So, in the longer term, Toromanoff says he plans to partner with facilities that will incorporate (or rather pipe) captured CO2 into permanent carbon storage facilities so that actual sequestration can take place ( aka carbon capture and storage) – thereby limiting the ability of DAC to play its part in reducing climate warming emissions. (“We already have several LOIs (letters of intent) and discussions around storage partnerships — say early 2024 for the first projects,” Toromanov notes about this.)
Again, it’s betting that carbon capture infrastructure is most likely to be built in places that have the kinds of industrial cooling towers it’s targeting – as industries like manufacturing and agriculture face increasing pressure to deal with large carbon footprints .
So, more generally, his strategy for driving DAC uptake is to focus on matching needs that he believes will foster the right conditions for scaling the technology – and thus scaling the utility of DAC as a mitigation measure of climate – as well as growing a technology licensing business around it.
The target customers for licensing its DAC cooling tower technology – which is the part it wants to focus on as a business, along with large-scale adoption of the technology – could be cooling tower manufacturers themselves. After all, they have a very built-in infrastructure, but they are not a modern industry, so they likely lack the kind of product innovation that would allow them to develop such services in-house to differentiate what is otherwise a fairly standard industry component. that they sell (so working with a startup is one way to bridge this destructive gap).
“We’re looking industry by industry so we can tailor our product to one or a limited set of industries at first and then expand. And then, of course, we’re also in touch with all the major global cooling tower players,” says Toromanoff, discussing NeoCarbon’s go-to-market plans. “We are currently developing a memorandum of understanding with at least one of them, which means we can have a joint development of our product with their cooling towers specifically
“One thing that was brought up is the idea that we can focus on the capture technology and they can focus on the connectivity part – which is not the core of IP or the hard part, it’s more difficult in the sense that there lots of variety, but technically it’s just connecting the pieces together.
“In the long run, we don’t want to have to deal with all of this on our own because — for example — [for] international scaling, we don’t want to have a maintenance fleet, especially when cooling tower manufacturers already have that,” he adds. “We can use [existing maintenance contract relationships they have with their customers] so they will also do the support of our product. And of course that means that in turn they will have some kind of exclusive license to use our product in a certain geography and time frame.
It’s still early days for the startup, which was only founded in January, but the climate crisis isn’t looming, so NeoCarbon’s founders are keen to act as quickly as possible to scale their prototype into tested and proven hardware that makes adding CO2 -capture facility to cooling tower matter of plug and play.
They were inspired to take a retooling approach to drive DAC uptake by another climate technology start-up – based in the US Noah Laboratories — but claim to have a slightly different focus (ie on industrial rather than commercial buildings). Also, of course, they’re building in Europe (not the US), so they’ll be focusing on the 300,000 or so cooling towers they’ve identified where their technology can be most rapidly upgraded across the region.
What is the biggest challenge to successfully scaling their technology? Toromanov says that one of the “most critical” elements is to ensure that they can retrofit their DAC devices without negatively affecting the cooling function (or indeed creating other problems for industrial processes).
“It’s one of those things that’s non-negotiable because we wouldn’t be able to do it otherwise, so there’s a couple of ways we’re looking at it. It might also be something we need to work out with iterations, but basically… if you add something on top of the cooling tower, it creates a bit more resistance to the airflow, but at the same time we’re also consuming some of the heat so the idea is, that these two things [balance out]he suggests. “Basically, the tower would indeed be less efficient, but it would also have to do less work.”
The startup’s origin story involves its two scientist co-founders meeting at a co-founder matchmaking event hosted by Antler Construction Company in Berlin – after both had quit their jobs and were looking for start-up ideas where they could quickly make an impact on the climate. (NeoCarbon’s other founder is CEO Rene Haas, who was stuck on a delayed train for most of our Zoom chat.)
It was also at Antler – which is another participant in NeoCarbon’s pre-launch raise, along with some unnamed angels – that the two were brainstorming ideas when they came across what Noya Labs was doing with DAC retrofits and saw an opportunity to do something similar in Europe (and for Europe’s industrial infrastructure) which they believe also offers the best chance for them to use their existing start-up, implementation and scaling experience and skills for the climate-critical task of rapidly scaling up DAC uptake.
“The best case scenario is that it will be operational by the end of the first quarter of next year,” Toromanov says of the upcoming pilot project, adding: “We have a very strong incentive to act as quickly as possible [because of the climate crisis]. That’s why it’s called a pilot — because we’re not pretending it’s going to be a final product, so we’re looking for a partner who would be willing to take a little risk.”