What’s next in climate tech: 6 trends for 2024
By Iris ten Have, Sebastian Heitmann, Yair Reem, Jonte Boysen, Fernanda Bartels
Before we reveal our focus for 2024, let’s first reflect on 2023. On the macro level, 2023 was a year of awakening; it reminded us of the urgency of our mission and the potential of collective efforts. A reassuring highlight in 2023 was the first billion-dollar acquisition of a carbon capture company: Occidental bought Carbon Engineering for $1.1B. There are at least ten other carbon capture companies, including Climeworks, Verdox, and Svante, on the right track for similar exits. We are excited to see how this will unfold in 2024!
Now looking at our year at Extantia. You might remember our article from last year, where we announced the 2023 climate tech trends. So how did we do? We were focused on six topics: bioenergy carbon capture and storage (BECCS), grid, heat, green ammonia, carbon removal, and mining & raw materials.
In reality, we invested in three of these verticals: BECCS (investment to be announced), carbon removal (Yard Stick), mining & raw materials (UP Catalyst, which addresses both CO2 valorisation and raw materials). In 2023, we published our industry insights in green ammonia as well as in mining & raw materials, while the verticals grid and heat are still work in progress. We hope you enjoyed reading these industry insights — keep an eye out as we plan to continue these articles in 2024.
Now it’s time to look ahead and discuss some exciting trends for the new year. Our focus for 2024 is shaped by the insights and aspirations of our team, distilled through a democratic voting process (yes, every single team member contributed) that reflects our core values of collaboration and innovation. This process is not just about selecting trends; it’s a commitment to invest in companies advancing these areas.
1. Concrete — addressing the emissions at the source
Recognising the significant carbon footprint of the cement industry, which accounts for approximately 2.5 Gt CO2e annually, we see immense potential in innovations aimed at reducing these emissions.
Startups should be addressing clinker production, which causes over 90% of all the emissions related to cement. The focus should be on solutions that don’t require special regulatory adjustments but can be embedded in existing processes and are price competitive compared to current materials. Think, for example, of materials that either absorb CO2 during the production process or require less energy to produce. Additionally, recycling concrete waste could be an interesting area to explore.
Companies to watch in this space: Concrete4Change, Cemvision, Ecolocked, BioZeroc, C2CA, Sonocrete, Mimicrete, B-ton, Neustark, Cemvision.
2. Open-system carbon removal and monitoring, reporting, and verification (MRV)
This trend encapsulates a set of technologies that can directly remove CO2 from the atmosphere in open systems by enhancing natural processes. Given the inability to simply measure CO2 flow through a pipeline or tree growth in a forest, these systems rely on sophisticated MRV approaches to guarantee high carbon credit quality.
Startups should aim to improve the efficiency and scalability of these processes, while building trust in the entire approach category. For example, working on cost-effective mineralisation methods as well as developing reliable and quantitative MRV methods to ensure accurate tracking of carbon removal. Companies should aim to increase the availability of low-cost measurement technologies to limit the reliance on modelling.
Companies to watch in this space: Yard Stick, Everest Carbon, Sequana, Perennial, FarmLab, Agriprove, Agreena, The Landbanking Group, Klim.
3. Grid-scale energy storage
Energy storage is crucial for balancing renewable energy supply with demand, especially in periods when solar or wind power is unavailable. Exploring solutions beyond conventional Li-ion batteries opens the door to potentially more efficient storage methods.
Startups should concentrate on developing scalable and low cost storage technologies. This could include (electro)chemical storage, thermal storage, or mechanical storage solutions. The focus should be on reducing costs, increasing energy density, improving round trip efficiencies, and ensuring the longevity of these storage solutions.
Companies to watch in this space: Elestor, Aquabattery, Hyme, LeydenJar, Rondo Energy, Kraftblock, Phelas, Cellcius, Energy Dome.
4. Enhanced bioenergy
Bioenergy stands out for its potential as a renewable baseload energy source, providing consistent power, unlike intermittent options such as wind and solar. On top of that, bioenergy is often a decentralised energy source, alleviating transmission problems. These aspects, combined with sustainable sourcing of biomass, make it a compelling solution in the energy transition. Our excitement is driven by its potential to integrate seamlessly into existing energy infrastructures, offering a sustainable and stable energy supply.
Entrepreneurs should aim to enhance sustainable bioenergy technologies. The focus should be on innovating in areas such as biomass preprocessing to unlock alternative feedstocks and maximise energy yield, efficient anaerobic digestion, efficient conversion of biogas to energy, and integration of bioenergy systems with existing grids.
Companies to watch in this space: Reverion, Vertus Energy, WASE, Antec, Methaplanet, DBG Bio Energy, BioVantage, Autarkize, BasGas, Hexas Biomass.
5. Plasma catalysis
Plasma catalysis uses plasma, an ionised gas, to enhance chemical reactions, aiming for more efficient processes under milder conditions. This tool is a platform approach to chemical reactions and has the potential to reduce the energy consumption of various processes significantly.
Entrepreneurs in the plasma catalysis space should focus on verifying the promised low energy inputs with realistic prototypes. The results should be compared to current industrial practices and the comparison should also include the energy it costs to generate plasma.
Companies to watch in this space: Cyclize, N2-Applied, Nitrocapt, Enadyne, D-CRBN, Refuel.green, Daphne Technology.
6. Direct air capture (DAC) 3.0
At Extantia, we’re generally firm believers in direct air capture (DAC): negative greenhouse gas emissions, i.e. removing CO2 from the atmosphere, is imperative to solving climate change. We have already invested in RepAir Carbon, who recently demonstrated 70% less energy input with their prototype compared to conventional DAC approaches. This year, we’re excited to scout for next generation DAC technologies.
Innovators in the DAC space should continue focusing on bringing down energy consumption. This both lowers operational expenses and increases net-negativity. Additional key breakthroughs DAC could greatly benefit from are lower production costs, longer sorbent lifetimes, higher capture rates, and more creative business models than just selling carbon credits.
Companies to watch in this space: RepAir Carbon, Carbon Atlantis, Carbyon, Ucaneo, Greenlyte Carbon Technologies, CleanCapture Tech, Parallel Carbon, Jeevan Climate Solutions.
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As we embrace the challenges and opportunities of 2024, we at Extantia are more than investors; we are partners in a journey towards a greener tomorrow. Are you an entrepreneur, innovator, scientist, or investor advancing one or more of these six topics in climate tech? Reach out to our team — we’d love to meet you!
