Digital rendering of a Deep Sky Corp. pilot facility in Innisfail, Alta where the Montreal-based startup will test direct air capture technologies before proceeding to build giant decarbonization operations across Canada, according to its long-term plans.Supplied
A carbon-reduction startup created by one of Canada’s most successful technology entrepreneurs has unveiled its first three projects to capture climate-warming greenhouse gas from the air and oceans and store it underground.
Deep Sky Corp., founded by Hopper Inc. chief executive officer Fred Lalonde, said it will test up to 14 different direct air capture (DAC) units at a time from early-stage vendors at a complex in Innisfail, Alta., an hour’s drive north of Calgary. DAC units pull carbon dioxide from the atmosphere, rather than from smokestacks at industrial sites.
Deep Sky has begun building what it calls the world’s first carbon removal innovation and commercialization centre in the town’s industrial park, and will install the first eight pilot plants from September through the end of 2025 from providers Airhive, Avnos Inc., Phlair, Greenlyte Carbon Technologies GmbH, Mission Zero Technologies, NEG8 Carbon, Skyrenu Technologies and Skytree.
The site, set to be operational by March, will be able to capture up 30,000 tonnes of carbon dioxide over 10 years, with the gas stored in a well north of Edmonton, Deep Sky said.
The pilot project is an environmental beauty contest to determine which units work most cost-effectively and energy-efficiently on renewable electricity in Canada’s extreme climate. “The concept and idea is it’s a plug and play standardized centre,” said Phil De Luna, Deep Sky’s chief carbon scientist. “As soon as we know that a pilot works or doesn’t, we rip it out and put a new one in.”
Deep Sky’s longer-term plan is to build vastly larger campuses composed of bigger versions of the units that prove to be the most efficient. “For the first time globally someone is going to put state of the art DAC units side by side and run and test and compare them and track everything,” Deep Sky CEO Damien Steel said.
Deep Sky is also conducting prefeasibility studies in two industrial centres in Quebec to determine if the geology is suitable for large-scale underground carbon storage.
A $3-million study in Bécancour, east of Montreal, is focused on land surrounding a 70-square-kilometre industrial park. Field teams have placed 18,000 acoustic detectors to measure vibrations three kilometres deep and create a 3-D ultrasound map of the geology. The study should yield results in early 2025, and Deep Sky hopes to drill up to 20 wells to store carbon dioxide in saline aquifers. The company is also conducting studies in Thétford Mines to see if the underground geology can support a process in which carbon dioxide is converted into stone.
Deep Sky has moved quickly since Mr. Lalonde incorporated it 23 months ago after deciding he wanted to do more than planting trees to offset the impact of his online travel agency. It has raised $75-millllion from Brightspark Ventures, the Quebec government, Whitecap Venture Partners, BDC Capital, Bank of Montreal and Ontario Municipal Employees Retirement System.
It has also recruited a team, including Mr. Steel, ex-head of venture capital for OMERS, former Hopper chief technology officer Joost Ouwerkerk, and industry specialists including Mr. De Luna, professor of materials science and engineering at the University of Toronto; Greg Maidment, who previously oversaw one of Canada’s only operational underground carbon storage facilities; and Catalina Sánchez-Roa, former climate and sustainability consultant with Boston Consulting Group.
But Deep Sky faces steep odds. The carbon removal sector is still young and just a few small-scale DAC plants operate worldwide. There is no certainty the technologies Deep Sky is testing and which are now built by hand can work as larger units, or that suppliers can manufacture them efficiently at scale. “The biggest challenge Deep Sky faces is imposing its pace on the rest of the industry where maybe the sense of urgency is not necessarily there,” Brightspark managing partner Sophie Forest said.
Climate experts caution DAC can’t be used as an excuse to slow efforts to decarbonize heavy industries. However, Mr. Steel said “we are past the point of picking and choosing; we need to do everything. Carbon removal is not the answer to the world’s climate problems. But it is absolutely part of the answer.”
The International Energy Agency in 2022 said its net-zero scenario would require an average of 32 large-scale plants to be built every year through 2050, a mammoth task that would require private and public support. It also pointed out that DAC-based carbon removal credits are currently limited to voluntary carbon markets, which have come under scrutiny following instances in which offsets have been deemed to be of poor quality or limited effectiveness.
There is demand for DAC-based offsets, though. Occidental Petroleum Corp. last year acquired B.C. DAC startup Carbon Engineering Ltd. for US$1.1-billion and has sold credits to Airbus SE, Shopify Inc., Bank of Montreal and others as it builds projects in Texas. Swiss-based Climeworks AG, which operates a demonstration DAC plant in Iceland, has also secured several big-name corporate backers.
Deep Sky must convince infrastructure giants to build commercial-scale complexes, each of which could cost $1-billion, and which Mr. Steel hopes will be largely funded by governments, export credit agencies, philanthropists and lenders. The company depends on continued government green spending initiatives, which are far from guaranteed if political winds shift.
Deep Sky has already had to change its plans to build its test facility in Quebec after the province moved more slowly than Alberta in adopting a carbon capture, utilization and storage investment tax credit regime established by the Ottawa. Alberta will also help the company recoup nearly half the Innisfail facility’s $50-million cost.
Mr. Steel said that location is also ideal because the industrial park is focused on energy transition and hosts a solar energy facility and waste energy plant. “They were welcoming and amazing to deal with, it felt right and the location is convenient, near storage,” he said.
Deep Sky is also looking to harness renewable energy sources at a time of growing demand from electric vehicles, data centres and other sectors. The company has suggested a long-term solution for its power needs could be small modular nuclear reactors, a technology that is also early in its development.