Context 

Our client has developed a strong innovation activity to fuel its transformation. In this context, our client asked us to explore market demand for a new offering in dismantling and extracting valuable components from lithium-ion batteries.

Mission

We carried out a study to define the go-to-market strategy:

  • Map of the second-life battery value chain, from manufacturing to end-of-life
  • Segmentation of second-life component buyers
  • Real-world applications of second-life components
  • Interviews with 8 potential customers on interest and technical needs
  • List of existing technical standards for selling second-life battery cells
  • Review of the EU battery regulation compliance
  • Recommendations on the go-to-market strategy and prioritization of potential customers to address first

Key figures

27
Key players identified

4
Target customer groups

8
Interviews conducted

1
Go-to-market strategy defined

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Context 

In view of the declining potential of its historical Oil & gas business, our client investigated several diversification opportunities in adjacent markets, consistent with its know-how and energy transition roadmap.

In this context, the Innovation department wanted to evaluate the potential for diversification in the field of Carbon Capture Utilization and Storage (CCUS) and to identify innovative partners with whom to create a complementary business.

Mission

We carried out a deep dive study divided into three steps:

  • A market study to paint a complete picture of all the megatrends (new business models, technologies, use cases)
  • A startup landscape to identify the innovative players driving CCUS forward worldwide
  • A startup scoring to establish recommendations on the most relevant options for collaboration (R&D agreement, commercial partnership, investment, acquisition, etc.)

Key figures

433
Startups sourced in Europe, US & Israel

41
Startups assessed & ranked

5
Partnerships

123Fab #99

1 topic, 2 key figures, 3 startups to draw inspiration from

People generally link global warming with carbon dioxide (CO2) but, as the Intergovernmental Panel on Climate Change (IPCC) explains, 30% of the increase in global temperature since pre-industrial levels is due to higher methane (CH4) concentrations in the atmosphere. This is because methane is extremely more effective at trapping heat.

Where does methane come from?

The IEA has estimated that 40% of methane comes from natural sources (wetlands, biomass burning…), and the remaining 60% from human activities (agriculture, oil & gas production, waste). The two pathways to methane production are:

  • Gas leaks – methane is the main component of natural gas. Thus, it can leak from pipelines and drilling.
  • Decomposition of organic matter – when organic matter is in oxygen-free environments, particular microbes called methanogens take the lead in breaking down the organisms. This process, called methanogenesis, leads to the creation of methane.

According to McKinsey, five industries could reduce global annual methane emissions by 20% by 2030 and 46% by 2050. Those are agriculture, oil and gas, coal mining, solid-waste management, and wastewater management.

What about methane capture from the air?

Methane is 200 times less abundant in the atmosphere than CO2 — a scarcity that makes removing it a technical challenge. Capturing methane would require processing a lot of air, which could require an extremely large amount of energy. And unlike CO2, which can be captured both physically and chemically in a variety of solvents and porous solids, methane is completely non-polar and interacts very weakly with most materials. However, researchers claim to have found a promising solution. A class of crystalline materials, called zeolites, capable of soaking up the gas. Regardless of this solution, the difficulty of capturing methane from the air is the reason why most technologies focus on oxidizing the greenhouse gas rather than “hooking” it out.

Startups are developing innovations to curb methane emissions

For the decomposition of organic matter:

  • in the gut of ruminants (like cows and cattle) – Australian startup Rumin8 and Swedish startup Volta Greentech are fighting this issue by developing seaweed-based nutritional supplements that inhibit methane production.
  • on landfills and wastewater – US startup LoCi Controls bolsters the methane capture process using solar-powered devices.
  • on wetlands – UK methane capture startup bluemethane has developed a technology to capture methane from water, enabling to mitigate the methane production from rice cultivation.

For gas leaks:

  • oil & gas production – UK startup Kuva Systems uses short-wave infrared cameras to autonomously monitor and alert oil and gas companies about methane leaks. Whereas US startup BioSqueeze has developed a biomineralization technology that seals miniscule leakage pathways in oil and gas wells.
  • melting permafrost – the trapped organic matter in the frozen seafloors or shallow seas is emitted when they thaw. US startup Blue Dot Change is investigating whether releasing ion particles into the exhaust steam of ship vessels crossing the ocean can accelerate the destruction of methane.

A methane tax just like carbon taxes

Norway was one of the first countries to introduce a carbon tax in 1991. Aside from carbon, the harmful gases regulated by the tax also include methane. All Oil & Gas operators on the country’s continental shelf are now required to report all methane emissions from their activities. As a result, studies show that the country has succeeded to consistently maintain low methane emissions. Canada is proposing to require companies to inspect their infrastructure monthly, fixing the leaks they find as part of efforts to reduce the sector’s methane emissions by 75% by 2030 (compared with 2012). Although the EU is among 150 signatories to the Global Methane Pledge – an agreement to cut emissions of methane by 30% – EU energy chief warned early March that the EU was lagging in the race to curb methane emissions. Since the proposals on methane in 2021, they have been watered down.

In short, methane will be critical to solving the net-zero equation. The good news is that mature technologies are at hand. From feed additives for cattle to new rice-farming techniques, to advanced approaches for oil and gas leak detection and landgas methane capture. Where costs are prohibitive, there is a need for coordinated action to create the infrastructure and fiscal conditions that would support further action. Finally, across the board, there is a need for more monitoring and implementation.

2 Key Figures

Budget of $60-110 billion annually up to 2030

Full deployment of the methane abatement measures would cost an estimated $150-$220 billion annually by 2040 and $230-$340 billion annually by 2050.

 

< 100 funded companies

Tracxn

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Kayrros, BioSqueeze and Rumin8.

Kayyros

French-based startup founded in 2016 which is a developer of an energy analytics platform for traders, investors, operators and governments. Kayrros powers part of the Global Methane Tracker.

Read more

BioSqueeze

US-based startup founded in 2021 that has developed a biomineralization technology that seals miniscule leakage pathways in oil and gas wells.

Read more

Rumin8

Australian-based startup founded in 2021 which is a manufacturer of seaweed-based nutritional supplements for livestock that inhibit methane production. The startup is backed by Bill Gates’ fund Breakthrough Energy Ventures.

Read more

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Among the numerous decarbonization solutions under development, three major carbon capture applications stand out today: industrial point source carbon capture, direct air capture (DAC) and bioenergy with carbon capture. Although industrial point source carbon capture appears to be the main focus for most decarbonization roadmaps thanks to increasingly mature and cost-effective technologies driving greater deployment across industrial sites, several challenges must be addressed before it can reach sufficient scale, including policy and regulatory support, access to funding, public acceptance and further cost improvement.

Carbon Capture-as-a-Service (CCaaS) is a business model that is gaining ground in part to circumvent the huge CAPEX hurdles encountered in these type of infrastructure projects. By opting for a one-stop shop solution that handles the entire value chain, hard-to-abate industries can pay to capture their CO2 emissions on a per-ton basis, while other specialized actors take on the risk (and potential financial reward) of managing the full value chain from capture to utilization or storage.

In January, Aster Fab moderated a panel featuring Tim Cowan (VP Corporate Development at Carbon Clean), Silvia Gentilucci (Technology Onshore Planning at SAIPEM) and Michael Evans (CEO of Cambridge Carbon Capture) to discuss the strengths and prospects of the CCaaS business model.

Takeaways from the discussion included:

CCUS adoption must increase 120-fold by 2050 for countries to meet their net-zero commitments

According to the latest Global Carbon Budget published in November 2022, if emissions are not reduced through decarbonization technologies such as Carbon Capture Utilization and Storage (CCUS), the world will have exhausted its 1.5°C carbon budget – the cumulative amount of CO2 emissions permitted over a period of time to keep within the 1.5°C threshold – in nine years. Indeed, the equation highlighted is quite simple: there are about 380Gt of CO₂-equivalent emissions left in the 1.5°C budget, and right now we use just over 40Gt of it each year.

As such, CCUS is recognized as a necessary piece of the decarbonization jigsaw, but the adoption isn’t moving fast enough. According to a McKinsey analysis, CCUS adoption must increase 120-fold by 2050 for countries to achieve their net-zero reduction goals, reaching at least 4.2 gigatons per annum (GTPA) of CO₂ captured.

The scale of the challenge to achieve net zero is so huge that we need all the best ideas. For hard-to-abate industry executives in the audience, you’re probably looking at energy efficiency as well as alternative fuels. But you’ll still have CO₂ in your process. That’s why we believe carbon capture is a necessary piece of the decarbonization puzzle and CycloneCC, our fully modular technology, will make carbon capture simple, afforable, and scalable.

VP Corporate Development at Carbon Clean

Carbon Capture-as-a-Service (CCaaS): shifting capital cost to service providers, thereby allowing emitters to focus on their primary activities

In 2021, Decarb Connect conducted a benchmarking survey of industry attitudes towards CCUS that revealed that 65% of executives working in hard-to-abate industries see CCUS as ‘critical’ or ‘important’ for reaching their 2030/2050 goals. It also reveals that 41% are favorable to as CCaaS model, while 59% prefer a mix of funded and owned CCUS. In other words, no executive opted for the traditional model of owning and operating the infrastructure themselves.

Thus, the CCaaS business model appears to be a promising way to accelerate the adoption of carbon capture technology for industrial players:

  • No required upfront capital expenditure
  • Duty to contract with each player of the value chain is delegated

“At Carbon Clean, we use our leading technology to capture CO₂. and will work with partners to provide the other crucial elements of the value chain: compression, transportation, sequestration or utilization. Our mission is to work with industrial partners to offer an end-to-end handling of our customers’ CO₂.” Tim Cowan, VP Corporate Development at Carbon Clean.

Scaling the CCUS industry will require action by governments and investors

Tax credits, direct subsidies and price support mechanisms are beginning to encourage investment in CCUS. The US, for example, has a 45Q-tax credit that provides a fixed payment per ton of carbon dioxide sequestered or used. The IRA (Inflation Reduction Act) has increased the amount of the credit from $50 to $85 a ton for sequestered industrial or power emission, and from $50 to $180 a ton for emissions captured from the atmosphere and sequestered.  In other words, they provide a direct revenue stream immediately improving the investment case for low-carbon technologies, such as CCUS. What the IRA calls tax credits, the EU calls State Aid. Yet, the panelists affirm that while the EU led the whole decarbonization movement for 30 years, the EU is now behind in terms of policy.

It is going to be very challenging for CCUS as it currently stands to make the whole thing stack up. I don’t think the carbon tax will be the viable way forward in the long-term. We need other incentives, as the US are currently doing with the IRA. Many innovative policies are starting to come out of the US and this will encourage innovative companies to set up operations there, giving the US a competitive advantage over the UK and EU in what will become a significant new industry.

CEO of Cambridge Carbon Capture

There is a need to scale the whole carbon capture value chain

Another element is the uneven distribution of storage sites across Europe. Often illustrated as the ‘chicken and egg’ paradox, there is a need to scale the value chain as a whole, including storage infrastructure. Indeed, a carbon capture plant will not start operating until the captured CO₂ can be transported and then either permanently stored or used.  Similarly, no large-scale carbon storage project will be financed without clear commitments regarding the origin and volume of CO2 to be stored, as it determines the financial viability of the overall project.

In Italy, there are plans to build infrastructure using depleted reservoirs in the Adriatic Sea for local storage of CO₂. Without adequate transportation and storage infrastructure, industry will not be able to adopt carbon capture technologies.

Technology Onshore Planning at SAIPEM

Norway’s Longship project, which is sponsored by the Norwegian government, aims to solve this problem by supporting the whole value chain from carbon capture to transportation and storage. Captured emissions will be transported by tankship and stored deep underground using Northern Light’s open-access CO₂ transport and storage infrastructure.

Garnering public support

Finally, speakers also emphasized that addressing public concerns around the safety of these technologies will be paramount. Communicating that carbon capture is safe, effective and a needed method of climate change mitigation, can help bring people on-board and ensure that projects overcome development hurdles. “I think honesty in the media about the situation would be a true incentive. If the public understood how urgent the situation is, and understood more about the technology, there would be a lot more action”. Michaels Evans, CEO of Cambridge Carbon Capture

Context 

Our client was the M&A department of a leading nuclear company.

Until now, the department had always taken majority stakes in established companies. However, an interesting opportunity for a minority investment in an innovative start-up was presented to them by a Business Unit of the group.

Aster Fab’s mission was to assist the department in evaluating the opportunity and then in structuring the investment proposal.

Mission

  • Valuation of the startup using five different methods (comparable company analysis, precedent transactions, DCF analysis, R&D headcount, replacement cost value)
  • Creation of a business plan in coordination with the Head of Business Unit to identify the business potential of such a partnership
  • Structuring the investment proposal by drafting the letter of intent setting out the terms, governance, management package, performance criteria, etc
  • Assistance, coordination and negotiation with all stakeholders throughout the process
  • Support in the preparation of separate documents for the governance bodies

Key figures

3.4 M€
contribution

was the conclusion of the business plan exercise

50%
of the financing needs

the challenge of the business plan enabled to halve the financing needs announced by the founders

Context 

Our client has long been a leading manufacturer of machinery for the construction, agricultural and logistics sectors.

More specifically, in recent years, the group has been developing electric machinery. Within the framework of this strategic orientation, our client has a double challenge: to invest in innovative technologies and to develop its electric vehicle business in order to present a competitive offer that meets the market’s needs.

Aster Fab’s mission was to support our client in the closing of a deal with a modular battery startup. In addition, Aster Fab has been commissioned to work on other M&A deals carried out by the group.

Mission

  • Valuation of the startup using five different methods (comparable company analysis, precedent transactions, DCF analysis, R&D headcount, replacement cost value)
  • Structuring the acquisition proposal by drafting the letter of intent setting out the terms, governance, management package, performance criteria, etc
  • Assistance, coordination and negotiation with all stakeholders throughout the process until the completion of the transaction
  • Support in the preparation of separate documents for the governance bodies: Audit Comittee, Strategic Committee and Board of Directors
  • Coordination of the due diligence and the closing of the deal

Key figures

3
month

process

50%
of the valuation

deal negotiated at half the price initially expected by the founders

123Fab #95

1 topic, 2 key figures, 3 startups to draw inspiration from

Generating renewable power is vital to the world’s decarbonization efforts. But so too will be developing the energy storage systems that are required at times when the intermittency of solar and wind power prevents energy production. According to the International Energy Agency (IEA)’s Net Zero scenario, installed grid-scale battery storage capacity expands 44-fold between 2021 and 2030 to 680 GW.

Amongst the various stationary battery energy systems, lithium-ion batteries have been stealing the spotlight in recent few years due to their success in e-mobility. While they account for 90% of battery applications, even lithium iron phosphate, the most competitive type of lithium-ion battery, is beginning to look economically uncompetitive compared to emerging, alternative solutions. Last week’s announcement by BASF Stationary Energy Storage GmbH (wholly owned subsidiary of BASF SE) and G-Philos (Korea’s leader in power-to-gas technology) to intensify their cooperation on sodium-sulfur (NAS) stationary batteries is an example of this.

But what are the other alternatives in the space?

A number of companies are working on new battery chemistries based on zinc, iron and other low-cost materials. Fundraising in the startup ecosystem is a strong signal:

  • Form Energy (United States) raised $450M in October 2022 and has developed an iron-air battery
  • H2 (South Korea) raised $15M in October 2021 and has developed a vandium redox flox battery
  • EnerVenue (United States) raised $137M in September 2021 and has developed a nickel-hydrogen battery
  • Ambri (United States) raised $144M in August 2021 and has developed a high-temperature calcium-antimony battery 
  • Sila NanoTechnologies (United States) raised $600M in January 2021 and has developed a silicon battery
  • Tiamat (France) raised $4.2M in October 2018 and has developed a sodium-ion battery

Researchers are also exploring other chemistries such as aluminium-ion batteries (paper) and potassium-ion batteries (paper). Indeed, aluminium is one of the most abundant materials on earth (reducing the cost) and has demonstrated great potential for high energy density systems. Although at a more embryonic stage, the significant advantage of potassium is also its abundance.

Many of these batteries already rival lithium-ion in capabilities but are lagging in capital investiture and manufacturing infrastructure, playing catch-up with an already established sector of the industry. Thus, the European Commission has notably launched the NAIADES (sodium-ion batteries), SOLSTICE (sodium-zinc batteries) and CARBAT (calcium-ion batteries) projects to help fund the research in these spaces. Live installations are also visible. France-based startup Tiamat, developer of a sodium-ion battery, has joined forces with Plastic Omnium in the automotive industry and with Startec to extend applications to other hybrid industries such as rail and aerospace. While Schlumberger has invested and signed a collaboration agreement with EnerVenue, developer of a nickel-hydrogen battery.

In short, lithium-ion batteries will continue to dominate battery technology for stationary energy storage in the short term, driven by the EV sector. But in the long term, alternatives to lithium-ion are set to play an increasingly important role in stationary energy battery storage systems.

2 Key Figures

The stationary battery market is projected to reach $224.3 bn by 2030

The market was valued at $31.2 bn in 2021 and is projected to reach $224.3 bn by 2030, at a CAGR of 24.9%

>30 funded companies

Tracxn

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Form Energy, H2 and Tiamat.

Form Energy

US-based startup founded in 2009 that has developed an iron-air energy storage system for renewable energy storage. Claims to store energy at less than 1/10th the cost of lithium-ion battery technology.

Read more

H2

South Korea-based startup founded in 2010 that has developed a vandium redox flox battery. This month the startup begun construction of a factory with 330MWh annual manufacturing capacity in the city of Gyeryong-si, one year after the 20MWh project in California.

Read more

Tiamat

France-based startup founded in 2017 that has developed a sodium-ion battery. Partnerships include Plastic Omnium and Startec.

Read more

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