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Airex Energy completes $38M funding for Que. biochar project

IMAGE: Airex's proprietary CarbonFX technology
Airex's proprietary CarbonFX technology. (Courtesy Airex Energy Inc.)

Carbon tech company Airex Energy Inc. has completed a $38-million Series B funding round to aid in its planned Quebec biochar project with SUEZ Group, conclude agreements for biocarbon and biocoal, and continue improvements on its proprietary technology.

Laval, Que.-based Airex’s CarbonFX technology can transform sawmill by-products, logging residues and forestland biomass into biocoal, biochar and biocarbon using pyrolysis – heating organic feedstocks in an oxygen-limited atmosphere.

The funding was led by Montreal-based cleantech venture capital firm Cycle Capital Management Inc., and existing investors include Investissement Québec, Desjardins-Innovatech and Export Development Canada. FTQ Fonds de solidarité joined this most recent round.

“The $38 million that was for the capital raise was for the first project in the biochar business. The project has been chosen with two partners, one of them being SUEZ, and the other one I cannot mention,” Airex’s CEO Michel Gagnon told SustainableBiz. He did however state the other party is a feedstock supplier.

"The objective is to build a 30,000 tonne capacity production (facility) and to start the operation by end of Q1 2024. This project will be built in three phases of 10,000 tonnes.”

The phases are planned to be complete by 2026.

About Airex Energy

Airex was founded in 2014 and has an existing 15,000-tonne capacity plant in Becancour, Que. to produce biocoal.

Biochar is a residue from burning biomass that can sequester carbon. Biocoal is a carbon-neutral fuel that can replace regular coal in industrial processes like in power plants. The company states biocoal can reduce greenhouse gas emissions by up to 90 per cent compared to the emissions from coal. Biocarbon can be used to produce green steel and other metals, and can also be an ingredient in concrete.

Airex’s process removes moisture and volatile organic compounds. Called torrefaction, it is carried out at 250 C to 300 C to produce solid biofuel. At higher temperatures, it produces biochar. According to the company, one tonne of biochar can sequester 2.5 to 3.2 tonnes of equivalent carbon dioxide.

“Our technology is (a) very efficient, very clean product. We've been running the core facility since 2016,” Gagnon said.

Its fully automated Becancour facility is continuously supplied with hardwood and softwood sawdust from two silos. It is run with only the supervision of two operators in shifts.

The company frequently tests its technology at the Becancour location, which produces material in small batches anywhere from 500 to 1,500 tonnes for customers. So Gagnon sees it eventually turning into into a development centre for the company.

The project being undertaken with the SUEZ Group, with an estimated cost of $40 million, is part of an earlier agreement in 2021 with the French company to build 350,000 tonnes a year of biochar production capacity by 2035. Europe and North America are the target markets.

“It was quite natural to build this new project in Quebec because we're closer to that market. So we know the feedstock suppliers, we know the area, most of the equipment is designed and built in the Quebec system,” Gagnon said. “So it's easier and faster.”

Airex’s future projects

Airex has already begun working on its second SUEZ Group project, which will likely be in France.

“We already have a MOU (memorandum of understanding) in place with a local feedstock supplier as well. So this is how we want to build up this partnership again,” Gagnon said. “When you look (at) 30,000 out of 250,000, that means we need to secure a project and build and launch it every year.”

He also mentioned looking at other sites in Quebec to set up biocarbon production.

The conclusion of agreements for biocarbon and biocoal are with a “large Japanese company,” although Gagnon did not get into specifics as to whether it is for the product or use of the technology itself.

“When you look at the biocoal, it's large volumes. If you go in Asia, it's not a natural market for us,” he said. “So we prefer to be a small partner, if there's to be a partnership, and just to supply our equipment.”

Airex is hoping to progress on the integration of agricultural feedstock with the technology. He explained there have been many successful tests, but the focus is on incorporating a large-scale volume.

In a statement, FTQ’s president said the funding was part of its goal of holding $12 billion in sustainable development assets.

“The next round of financing will be a bit more international. So already we have some discussions in place and we will tackle the international market on the next funding,” Gagnon said.

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