Cleantech Startups Seek to Scrub Dirty Industries, Not Kill Them Off
Startup Liquid Light’s technique of turning waste CO2 into chemicals is intriguing to anyone who cares about reducing greenhouse gases. But when it comes to selling the technology to potential customers, lowering emissions is mostly just an afterthought.
The Monmouth, NJ-based company on Thursday said it raised $15 million in a Series B round from existing investors VantagePoint Capital Partners, BP Ventures, Chrysalix Energy Venture Capital, and Osage University Partners. New investors are Sustainable Conversion Ventures and an undisclosed company.
With the money, Liquid Light plans to build a pilot-scale facility for converting carbon dioxide—a waste byproduct from burning fossil fuels—into ethylene glycol, a common chemical used in plastic bottles and other products. The goal is to have a commercial-scale chemical production facility using its process running in three to five years, CEO Kyle Teamey says.
The science behind Liquid Light was originally conceived by Princeton scientist Andrew Borcarsly as a way to lower carbon dioxide levels by using it as a feedstock for chemicals. The process works by feeding CO2 gas and a source of hydrogen, such as water, into an electrochemical cell. A catalyst and the flow of current convert the CO2 into a two-carbon compound. Then in a second step, other catalysts drive reactions to form ethylene glycol.
The chemical reactions are fueled by electricity. That means producing ethylene glycol or similar chemicals with a low-carbon electricity source, such as solar or nuclear, could be carbon neutral or carbon negative.
If this sort of process worked at large scale, it could greatly reduce the emissions from a large, polluting industry—petrochemicals. But the main reason the company has gotten investor interest is because its process is cheaper than conventional methods for making ethylene glycol. The lower carbon footprint is a nice add-on.
“Economic benefits are always the most important piece when people make decisions around buying,” says Teamey. “That’s what makes CO2 interesting as a feedstock. It’s very inexpensive so you have potential cost advantages and you’re consuming a pollutant so you get environmental benefits as well.”
Liquid Light’s strategy reflects a shift among some cleantech startups and investors. Instead of replacing dirty, fossil fuel industries with renewable energy and other green technologies, the goal is make dirty industries cleaner.
Various technologies can help. Earlier this week, Fremont, CA-based GlassPoint raised $53 million to build concentrating solar power systems that produce steam to extract oil from wells in Oman.
Hayward, CA-based Alphabet Energy has designed thermoelectric generators that produce electricity from low-grade heat. The first markets it’s targeting are in heavy industries, such as mining and oil and gas. One of its investors is Calgary-based driller Encana.
Also in the area of CO2 abatement is Austin, TX-based Skyonic, which raised $12.5 million in May to build a plant that converts the carbon dioxide emissions from a cement plant in San Antonio into baking soda and other chemicals. Among its investors is oil company ConocoPhilips and Canadian oil pipeline company Enbridge.
To a large extent, these cleantech companies are following the money: big, dirty industries have the money not only to buy products that reduce costs and save energy, but also the means to invest in technology startups. “I have noticed that a lot of Silicon Valley money for cleantech is no longer there but at the time there have been other sources, such as strategic investors and family offices,” Alphabet Energy CEO Matthew Scullin told me earlier this year.
The focus on cleaning up dirty industries marks a fundamental shift in cleantech, says Wal van Lierop, CEO and co founder of Chrysalix Energy Venture Capital. A decade ago, investors and entrepreneurs expected their customers to pay a premium for a green product. “That has actually evolved,” he says. “We now have seen in past decade the maturing of technologies where they can bring cost reductions, energy savings, and improvement of environmental footprint to large industries that are in transition.”
For the entrepreneur, developing technology to make heavy industries less polluting may be less glamorous than, say, inventing a radically better solar cell. But if the goal is to reduce emissions, these industries have one big advantage: the financial heft to make these clean technologies scale.