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NeoCarbon wants industrial cooling towers to join the climate battle • londonbusinessblog.com

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NeoCarbon, a Berlin-based climate tech startup taking a retrofit approach to scaling direct air capture (DAC) devices to capture CO2 emissions has secured pre-seed funding. The focus is on developing a DAC kit that can be installed (re-installed) in working cooling towers in the industrial sector – driving the pitch, lowering the cost of reducing carbon emissions.

The €1.25 million pre-seed round, led by PropTech1 and Speedinvest, will be used for the next phase of development as NeoCarbon works to convert its current lab-based proof-of-concept into a pilot prototype into a commercial facility – hopefully early next year. So it will use the pre-seed funds for that, including expanding its engineering team to get an MVP in shape for an initial pilot in the coming months.

The initial focus is on retrofitting DAC to smaller industrial cooling towers – rather than the giant towers you might see at a power plant. (Or indeed the very small units you might find in a shopping center or office building.) Although it says it hopes, in the longer term, to develop technology for really large towers as well. But it states that even smaller industrial towers handle a lot of air and can therefore capture meaningful amounts of CO2 – and, well, the climate crisis won’t wait for big projects to kick in, so the philosophy is to start smaller and scale faster.

“Our sweet spot in the next, say, 2-3 years will be 1-10 megawatts of cooling power,” said co-founder and CTO Silvain Toromanoff, speaking to londonbusinessblog.com via Zoom. “And those are already in the thousands of tons of catch potential per year.”

“We did a very early proof of concept (POC) at the beginning, in February,” he continues. “Today we are finalizing our very first, what we call, MVP, so it’s still very small scale. But the POC was very low budget and more like quantitative. Now, basically this week, we are finalizing the prototype MVP, which will provide more qualitative results.

“We haven’t started measuring and testing it yet, but it’s actually in the final stages of actually making it work.”

While DAC sounds great in theory – using chemicals to literally suck problematic emissions out of the air! – human activity generates massive amounts of CO2 (NeoCarbon quotes the relevant statistic as 51 billion tons per year), so you would need an awful lot of DAC to make a dent in the climate crisis.

But a major barrier to scaling DAC is implementation costs.

NeoCarbon’s tactic to reduce the cost of DAC 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 you don’t have to build a whole new building for CO2 capture. (Although you should be sure that your technology can adapt to different installation conditions.)

That’s why it claims it can cut the cost of DAC by up to 10x – making DAC “mass market ready” as the word puts it.

CO2 goes down the chimney

Another consideration with direct air capture is: what do you do with the captured CO2?

If you do something that just makes it go back into the atmosphere, you’re slowing emissions, at best, rather than reducing them. It’s not going to make it if you claim to have a technology to help the climate crisis.

In the short term, NeoCarbon says its approach to this problem is to focus on locations where captured CO2 can be reused by the industrial facility itself — such as vertical farms (which use CO2 to feed plants), or carbonated drink makers (which produce the liquid effervescent equipment).

This is another reason why it has been decided to retrofit industrial cooling towers – as they can be placed near a business need for CO2 – allowing the carbon dioxide to be usefully recycled as a feedstock into commercial processes. (In addition, it argues that beyond climate considerations, there could be broader business benefits, such as strengthening supply chain resilience and lowering production costs, as CO2 has faced a number of shortages and price spikes in recent years.)

However, this circularity only makes it possible to create CO2-neutral processes. So, in the longer term, Toromanoff says it plans to partner with facilities that would plug captured CO2 into permanent carbon storage facilities (or rather pipes) so that actual sequestration (also known as carbon capture and storage) can take place — enabling the possibility of DAC dangles play a role in reducing climate heating emissions. (“We already have a few LOIs (letters of intent) and discussions about storage partnerships — let’s say early 2024 for the first projects,” Toromanoff notes.)

Again, it’s betting that carbon sequestration infrastructure is most likely to be built in sites with the kind of industrial cooling towers it’s targeting — as industries like manufacturing and agriculture face increasing pressures to tackle large carbon footprints.

So, more broadly, its strategy is to drive DAC adoption, to cater to a needs alignment that it believes will create the right conditions for scaling the technology – and thus the utility of DAC to scale up as a measure against climate change – as well as to grow a technology licensing business around it.

The target customers for licensing its DAC cooling tower technology — that’s the part it wants to focus on as a company, along with scaling its technology — could eventually be cooling tower manufacturers themselves. After all, they have a lot of infrastructure built, but are not a modern industry, so they are likely to lack the kind of product innovation that would allow them to develop such services in-house to differentiate what is otherwise a pretty standard industrial part they sell (so working with a startup is a way to bridge that disruptive gap).

“We’re going industry by industry, so we can initially tailor our product to one or a limited number of industries and then expand. And of course we have also been in contact with all the biggest global players in the production of cooling towers,” says Toromanof, who discusses NeoCarbon’s market plans. “We are currently developing an MOU with at least one of them, with the opportunity to specifically develop our product along with their cooling towers

“One thing that’s been put forward is the idea that we can focus on the recording technology and they can focus on the connecting part – which isn’t the core of the IP or the hard part, it’s just harder in the meaning there’s a lot of variety, but technically it’s just connecting the pieces together.”

“In the long run, we don’t want to do all this ourselves because – for example – [for] international scale, we don’t want to have a maintenance fleet, especially when cooling tower manufacturers already have one,” he adds. “We could benefit from” [existing maintenance contract relationships they have with their customers] so they would also do the maintenance for our product. And that means, of course, that for their part, they would have some sort of exclusive license to use our product in a particular geography and time frame.”

It’s still early days for the startup, which was only launched in January, but the climate crisis is not going to end, so the NeoCarbon founders want to go as fast as possible to scale up their prototype to tested and proven hardware that adds a CO2 emissions possible. – capture facility to a cooling tower a matter of ‘plug and play’.

They were inspired to take a retrofit approach to boost the uptake of DAC by another climate tech startup – US-based Noya Labs – but claim they have a bit of a different focus (i.e. on industrial rather than from commercial buildings). Plus, of course, they’re building in Europe (not the US), so they’ll focus on the 300,000 or so cooling towers they’ve identified where their technology can be built in the fastest in the region.

What is the biggest challenge in successfully scaling their technology? Toromanoff says one of the “most critical” elements is enabling them to retrofit their DAC devices without negatively affecting cooling function (or even creating other problems for industrial processes).

“That’s one of the things that we can’t negotiate because otherwise we couldn’t do this, so there are a few ways we look at this. It could also be something that we have to develop with iterations, but actually… if you add something on top of the cooling tower it creates a little more resistance to the airflow but at the same time we also consume some of the heat so the idea is that those two things [balance out],” he suggests. “In principle, the tower would indeed be less efficient, but it would also have to do less work.”

The startup’s origin story includes the meeting of the two co-founders of scientists at a co-founder matching event hosted by the business builder Antler in Berlin – after they both quit their jobs and floated startup ideas where they could make a climate impact. could have quickly. (The other founder of NeoCarbon is CEO René Haas, who was stuck in a delayed train for most of our Zoom chat.)

It was also at Antler – another participant in NeoCarbon’s pre-seed raise, along with some unnamed angels – where the pair were brainstorming ideas when they found out what Noya Labs was doing with the retrofit of DAC and a saw an opportunity to do something similar in Europe (and for European industrial infrastructure), which they also believed offered the best opportunity for them to leverage their existing startup experience and skills, in execution and scaling up, for the climate-necessary task to rapidly expand the use of DAC.

“The best-case scenario is to have it up and running by the end of the first quarter next year,” Toromanoff says of the upcoming pilot, 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 a finished product, so we’re also looking for a partner who’s willing to take a little bit of a risk.”

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