Portfolio Perspectives – Scaling Svante
March 23, 2021
In our new Portfolio Perspectives series, I will be sharing how we scale our investments to deliver carbon dioxide and methane emission reduction.
Pratima Rangarajan, CEO of OGCI Climate Investments.
In the race to reverse climate change, we are running out of time.
Global temperatures are expected to soon pass the UN threshold for “dangerous warming”. The reason for this is carbon dioxide and methane emissions. There’s too much of both these carbon molecules in our atmosphere, and the amount is predicted to increase for years to come.
Unless we choose to do something about it.
My focus for this post is the true nature of the problem we face. That problem is not – as is sometimes supposed – a lack of technology or an absence of human ingenuity. It is a problem of scale. We need to scale the existing and new technologies fast, and that means we need investment and support from the companies who best understand it.
That’s where our model fits in, and where the support of our members – the oil and gas companies who founded OGCI Climate Investments – is crucial.
Their investment is part of the story, of course, but it’s only the beginning. They understand the nature of the problem we face. They are investors, but they are also advisors, helping to guide new technology on its path to maturity. What’s more, once the technology is ready, they are its users and its customers. They provide a path to achieving scale.
One of our investments that has recently shown what the path to scale looks like is Svante, a company that captures carbon dioxide emissions directly from industrial sources, at half the cost of its competitors. Last week, Svante closed a $100 M funding round, with investment from Temasek, Chart Industries, Carbon Direct, Suncor Energy, DK Innovations, Export Development Canada (EDC) and existing investors OGCI Climate Investments, BDC Cleantech Practice, Chevron Technology Ventures, The Roda Group and Chrysalix Venture Capital, reflecting strong on-going support for the company, including its market strategy and recent progress.
Svante’s story is a triumph of collaboration.
We first invested in the company in 2018 to fund a 30 tonnes per day demonstration plant with Husky Energy. Experts from Climate Investments and several of our members recently worked with Svante’s scientists and engineers to review and refine their approach to scaling the technology.
“We have the technology to reduce the cost of capture – now we need to commercialize it and create a marketplace for CO2,” says Claude Letourneau, President and CEO of Svante.
When Svante began to scale, they turned to the OGCI members as early adopters.
In the US, Chevron is working with Svante on a project to capture 10,000 tonnes of carbon dioxide each year at one of its oil fields. “Chevron is pleased to continue our investment in Svante, and we welcome OGCI’s Climate Investments’ continued support to help advance the development of this low-carbon technology,” said Barbara Burger, VP, Innovation and President of Technology Ventures at Chevron. “Carbon capture, utilization, and storage, or CCUS, is essential to achieving a lower-carbon future. Our Svante technology trial in partnership with the Department of Energy in Central California is a critical step in scaling the technology.”
Occidental and Total are also working with Svante, alongside the US Government and LafargeHolcim to capture some 2 million tonnes of carbon dioxide at a cement plant in Colorado. Richard Jackson, President, Operations, U.S. Onshore Resources and Carbon Management at Occidental, calls the partnership “a powerful example of how cross-industry collaboration can accelerate the transition to a low-carbon world”.
Meanwhile, Saudi Aramco is working with Svante to pilot-test a new generation of adsorbents for CO2 capture. The novel Metal Organic Framework materials developed through a collaboration between Aramco and the King Abdullah University of Science and Technology showed promising performance during the initial development stages. A one-tonne per day CO2 pilot-test is being contemplated to demonstrate the stability and performance of the carbon capture system using the new adsorbent.
Without a collaborative model, scaling a technology like Svante could take decades. We hope to achieve it in a matter of years so Svante can deliver real carbon dioxide reduction.
And while time is short in the fight against climate change, if we can reach scale at this speed, it’s a fight we can win.