(Bloomberg) — Sustaera Inc., a startup that sucks planet-warming carbon dioxide out of the air, raised $10 million from a Series A funding round led by climate funds backed by Bill Gates and billionaire investor Jeremy Grantham.
The company, based in North Carolina, uses a cheap and easily available alkali-based material to absorb CO₂. Unlike other carbon-capture businesses, its process doesn’t require heat from fossil fuel sources and can run entirely on renewable electricity. Payments system provider Stripe Inc. has signed on as its first customer.
Sustaera is trying to solve one of the biggest hurdles in carbon removal: scaling the technology which remains expensive and challenging to deploy. The company’s machine is built in a modular fashion, with single units that can be put together “like Lego blocks,” according to Chief Executive Officer Shantanu Agarwal.
It also “leverages existing systems, existing supply chains, existing manufacturing, rather than creating everything from scratch,” Agarwal said. “That’s very important when you’re trying to tackle something like carbon capture which needs to be done at scale.”
In September, the world’s largest carbon-removal plant, which can remove 4,000 tons of CO₂ a year, started operating in Iceland. Individuals can pay Climeworks AG up to $1,200 per ton of CO₂ for offsets from the Iceland facility. Bulk purchases, such as those made by Gates himself, can cost closer to $600 per ton.
Stripe has signed up to purchase carbon captured by Sustaera’s first machine, set to be completed in 2023 and remove 10 tons of CO₂ a day, at $700 a ton. The firm is looking at sites for its machines in Florida, Texas, California, Wyoming, North Dakota, as well as Spain and Oman.
It was the use of existing supply chains and the ease of scalability which attracted Gates’ Breakthrough Energy Ventures, according to Carmichael Roberts, who co-leads the fund’s investment committee. “This is the type of solution we look for, designed to scale quickly and provide a viable economic negative emission pathway,” he said in a statement.
Sustaera plans to build a unit in 2027 that can remove 1 million tons a year, requiring about 100 acres of land. The company should then be able to target a capture price of $78 per ton, Agarwal said.
He acknowledged that direct air capture is a long way from reaching the levels needed to suck enough carbon from the air to make a meaningful difference in cooling the planet. “It needs patient capital and informed, intelligent capital,” Agarwal said.
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