Deep Sky, a Montreal-headquartered carbon capture startup, plans to apply lessons from its founders’ backgrounds in rapid software scale-up for an ambitious goal to remove carbon from the atmosphere and oceans at an industrial scale.
Its co-founder and chairman is Frederic Lalonde, the CEO of travel company Hopper. In an interview with SustainableBiz, Lalonde said the genesis for Deep Sky arose from guilt he feels about carbon emissions from the travel industry.
“I thought we were awesome and we were reversing climate change and we started really digging into the sheer scope and magnitude and the problem,” he said about its tree planting program. Instead, “We’ve arrived at the conclusion that we’re going to have to remove all of our historic CO2 (carbon dioxide) emissions.”
Deep Sky’s goal is to remove megatons of carbon dioxide with a network of direct air capture (DAC) and direct ocean capture (DOC) projects across Canada that can store the greenhouse gas in rock or aquifers for millennia as part of a rapidly ballooning carbon removal credits market.
It announced its first technology provider partnership with Pasadena, Calif.-based startup Captura Corp. on a DOC pilot in Eastern Quebec. Deep Sky has already secured fundraising that Lalonde hopes is the start of a much grander mission.
Deep Sky’s ambitions
Lalonde says the depth of experience in Deep Sky’s team makes its ambition possible. He points to how Hopper grew from two to 2,000 employees and became valued at $10 billion under his leadership. Lalonde also touted Laurence Tosi, a former CFO at Blackstone Group and Airbnb, who is a Deep Sky co-founder and a partner at WestCap Group.
“What we’re good at,” he said of the founders, “is scaling quickly.” The carbon capture industry needs the speed and scale-up of a company like Tesla and an industrial-scale approach is necessary, he added.
Lalonde observed Canada is an ideal country for carbon capture due to excess green power in Ontario and Quebec, geology that provides abundant capacity for storing captured carbon, and its access to capital. Lalonde believes Canada is the best fiscal environment for carbon capture because the country’s funding programs surpass those of the U.S.
Its planned project, named Deep Sky One, will consist of a DOC facility on the north shore of the St. Lawrence River and a DAC system in a former industrial site. The target is to capture 250,000 tons of carbon dioxide per year in a facility Lalonde expects to cost between $300 million to $500 million.
It would then sell carbon removal credits, which Lalonde said is becoming one of the fastest-growing industries he has witnessed.
Deep Sky raised $10 million from Brightspark Ventures and the Québec government and is currently closing a Series A funding round between $50 million to $70 million.
“I’ve been blown away at the amount of support we’ve been able to gather considering we haven’t built anything yet,” Lalonde said.
Deep Sky is now working with Captura to build a pilot project in Eastern Quebec by 2024 that will capture 100 tons of carbon dioxide per year.
The Captura partnership
Captura is a DOC startup that spun out of research from two California Institute of Technology professors in August 2021. Captura CEO Steve Oldham, a Canadian who previously led Squamish, B.C.-based DAC company Carbon Engineering, said the company’s philosophy is the necessity of supporting affordable carbon removal at a large scale.
Unlike its more well-known sibling DAC, DOC draws out carbon dioxide from the ocean, the world’s largest natural carbon sink. DOC is easier than DAC, Oldham said, because carbon dioxide is 150-times more concentrated in water than in the air.
Captura’s process starts by taking in water into a facility, where a small portion is put through a step called electrodialysis that uses renewable electricity and membranes to separate ocean water molecules and rearrange them into an acid and an alkali. The acid is added to the larger pool of ocean water where it reacts with the stored carbon, which is then released and captured. As the carbon dioxide-depleted water is returned to the ocean, alkali is added to neutralize the acidity so it can continue to capture carbon.
Captura met with Deep Sky as it was assessing the best carbon removal technologies for Canada, Oldham recounted. Oldham was impressed by Deep Sky’s passion, credibility and business plan.
Lalonde described Captura’s method as “exceptionally clean” and energy efficient, which caught his eye as he explored university labs around the world for prospective technology to support.
The pilot is intended to demonstrate the technology, create additional interest and have people realize its economic potential. Then the intent is to build DOC plants in Canada with Deep Sky as the owner and operator.
Where Deep Sky hopes to go next
The importance of the moment has Lalonde saying building carbon capture at scale will be humanity’s largest economic endeavour to date, and will require the effort and speed put into building power plants, stadiums and bridges.
Despite the daunting task of reversing a warming climate that he says will require a $10-trillion carbon capture industry, Lalonde is optimistic about a solution that will arrive sooner than expected. He hopes Deep Sky will be among many Canadian companies in the sector.
He said Deep Sky will “probably” be closing on sites and buying land through the summer, and has more partnerships in the wings.