How The Carbon to Value Initiative Is Creating a Robust Carbontech Ecosystem: Year 2 Outcomes
Jan 25, 2023 - By Frederic Clerc
In 2021, The New York Times asked, “Has the Carbontech Revolution Begun?” As we head into 2023 and ramp up Year 3 of the Carbontech to Value (C2V) Initiative, we think it’s safe to say it has.
The C2V Initiative, a partnership among the Urban Future Lab, Greentown Labs, and Fraunhofer USA, with the support of NYSERDA, is a first-of-its-kind collaboration that creates a robust ecosystem for the commercialization of technologies that capture and convert carbon dioxide (CO2) into valuable products and services.
Since its launch in 2020, the C2V Initiative has facilitated over 150 new connections between its 18 startup alumni, Carbontech Leadership Council (CLC) members, and our rich carbontech network. C2V Initiative startups have collectively raised over $340M in funding since they entered the program.
Before we begin Year 3, let’s take a closer look at Year 2’s progress and outcomes.
How the Carbontech Ecosystem Flourished in Year 2
2022 was an incredibly busy year for carbon removal and carbontech as a whole, with over 10 new groups or initiatives launched. For instance, the C2V Initiative became an observer in the Carbon Business Council, a business association of carbon management startups focusing on policy advocacy activities—a gap that the C2V Initiative has helped startups clearly identify. The C2V Initiative also joined the DAC Coalition, bringing together global innovators to mobilize society for direct air capture, a new industrial sector poised for growth in the light of the $3.5B DAC Hubs federal funding from the Infrastructure Bill, as well as the increased 45Q tax credits recently passed as part of the Inflation Reduction Act.
The C2V Initiative also welcomed two new CLC members: CRH, one of the world’s largest building materials companies, and TechEnergy Ventures, the CVC of the Techint Group with international operations in steel manufacturing and energy. In total, over the last two years, 21 members from the nonprofit, government, and multinational corporate sectors have participated in the C2V Initiative.
We have built a close-knit network of more than 130 global carbontech leaders directly involved in the C2V Initiative (e.g. CLC, startups, mentors, workshop speakers, etc.), 60 ecosystem partners, and over 2,000 subscribers to our updates. In 2022 alone, we organized, spoke, and/or participated in 18 events and conferences, including a webinar showcasing “How CO2 Becomes a Trillion-Dollar Market: Insights from Carbontech leaders,” with diverse perspectives from Carbon180, XPRIZE, Air Company, and Planetary Technologies represented.
Scale & Deploy: How the C2V Initiative Accelerated its Year 2 Startups
Following in the successes of Year 1’s cohort, the C2V Initiative’s Year 2 participants were able to maintain the program’s momentum and collaborate toward tangible business outcomes. By working closely with Year 2 Cohort Champion Fluor and the Carbontech Leadership Council, the eight Year 2 startups accessed significant technical expertise to accelerate their technology roadmaps and make their innovations more attractive and de-risked in the eyes of investors and partners.
With a curriculum that catered to individual startups’ needs, the program was able to cultivate productive outcomes for the full cohort, including refined go-to-market strategies, licensing assistance, pilot developments, technological and business model revisions, risk management, customer introductions, and general strategic guidance and best practice sharing.
“The C2V Initiative was the right place at the right time for us,” said the team from Year 2 cohort member Aluminum Technologies. “It is the nexus of the carbontech world—the right combination of content and connections. Our C2V Initiative experience proved invaluable and helped illuminate our path forward.”
Here are some achievements from the Year 2 cohort through the C2V Initiative:
Aluminum Technologies identified key risk areas and developed plans to mitigate them, allowing it to refine its scale-up roadmap.
Carbon Upcycling gathered key insights on how to convert from a batch to continuous process, accessed key technical subject matter experts, and is in active discussion with some CLC members on potential investments, trials, and projects.
Carbonova validated emissions accounting and economics, de-risked its scale-up plans, and built a revised business model around input providers and offtake agreements.
ecoLocked accessed technical and risk management deep-dives and is in active discussion with some CLC members on potential pilot projects.
Full Cycle Bioplastics received guidance and expertise resulting in a new go-to-market strategy, allowing it to be more capital-light and secure its Series A lead.
Lydian identified key risks of producing sustainable aviation fuel at scale to influence its pilot design and is in active discussion with some CLC members about potential partnerships, manufacturing contracts, or investments.
Molecule Works confirmed its technology competitive advantage, set goals for its pilot unit, refined its business model, and made several strategic industry connections.
Osmoses built a roadmap to pilot, identified its beachhead market and associated value proposition, grew customer engagement to five potential pilot sites, and is in active discussions with some CLC members about potential pilot agreements and investments.
What’s next for these incredible startups? You guessed it: fundraising, grant writing, hiring, patent filing, product certification, technology scale-up, pilot projects, commercial LOIs, and more.
Check out C2V’s Year 2 Cohort Book to learn more about each company and access the showcase video recording where they talk more about program outcomes and what they need next.
Barriers to Growth: What’s Holding Up the Sector?
Throughout this past year, we hosted multiple conversations with the initiative’s Carbontech Leadership Council to identify gaps for advancing, deploying, and commercializing carbontech innovations.
Technology performance and the role of demonstration projects. Corporates with interests in carbontech can play an important role in de-risking by building and/or operating pilots and demonstration projects. Risks need to be quantified so they can be shared across the value chain, preventing the burden from falling solely on one party.
Development costs can be a major barrier to deployment. Legal, engineering, and design costs … there are a plethora of upfront expenses that accrue before anything even gets built, which can be a big obstacle for startups to overcome. Finding ways to cover these costs could accelerate project development; government support could help address this.
Startup and investor capacity building. Entrepreneurs, investors, and project developers need to gather information on what project finance needs to see for first-of-a-kind commercial plants. Venture capital and equity investments tend to dilute startups too much if they’re used for project finance, so startups should seek demonstration funding from other sources of capital. And while investors in carbontech startups tend to have technical expertise, they should also acquire project finance and development expertise to better anticipate the needs of their investment portfolios.
Community engagement. When large projects come into a community—without any outreach or preamble—it can create a lack of trust between the project developers and community. There needs to be engagement with the public and local governments prior to the start of any project.
What’s next for the C2V Initiative?
As the carbontech ecosystem continues to evolve, so does the C2V Initiative. What set out as a three-year accelerator program for a nascent industry has become an exemplar of startup-corporate collaboration for industrial decarbonization.
For Year 3, the scope will continue to progress as new areas of opportunity are presented in the industry. Year 3 will also feature deeper engagement from the Carbontech Leadership Council, bringing more diverse industry perspectives and expertise to the table as a new cohort of leading-edge startups scale their carbon-to-value solutions.
Stay tuned for the full RFP announcement and call for applications later this month!