In 2015, during the COP 21, the international community committed to carbon neutrality by 2050 to limit global warming. However, seven years later, the 2022 IPCC report delivers alarming, especially when it comes to the industrial sector. Indeed, the sector is still responsible for 20% of greenhouse gas emissions in France, and 26% worldwide.

Industrial decarbonization can be achieved through government investments, but also through action from corporates and entrepreneurial initiatives. For example, in their roadmap, French industrials have committed to massive investments in order to reduce emissions by 28% in 2030 compared to 2015. This represents a reduction of 18.5 MtCO. To achieve their goals, industrial players can rely on the startup ecosystem. Indeed, startups offer solutions to help reduce energy consumption, use cleaner materials and energy, and capture and reuse carbon emissions.

In this article, we present several solutions offered by the startup ecosystem to help these companies achieve industrial decarbonization.

1. Reducing energy consumption

In 2019, the industrial sector accounted for 42% of final electricity consumption, 38% of natural gas and 7% of oil. Furthermore, although the transportation sector is the biggest oil consumer, the industrial sector ranks second in many countries, such as the United States. Meanwhile, on average, the French industry consumes the equivalent of 35 million tonnes of oil per year. In order to help the industrial sector meet its CO2 emission reduction objectives, startups are now working on reducing the consumption of new energy. Two approaches can be considered: reusing energy or reducing the energy used.

Many industrial operations use energy that is not fully recovered, such as high heat processes in the petrochemical industry, where the heat used to transform the material is not recovered at the end of the process. However, in France, 16% of industrial fuel consumption is released in the form of waste heat, which can be reused. Startups such as Water Horizon have been working on technologies to recover the waste heat, store it and redistribute it, or reinject it into the electricity grid. This is also what Hevatech does with its Turbosol solution. According to Hevatech, this allows for a reduction of up to 95% of CO2 emissions for the consumer.

Other startups develop platforms that allow industrial companies to monitor their energy consumption and help them reduce it. One example is the startup PureControl. Thanks to the creation of a digital twin, the startup analyses performance drifts, identifies ways to save energy and understand the various influencing factors in order to regulate the energy system in real time.

2. Using cleaner energy and materials

Nevertheless, reducing energy consumption is not enough to achieve industrial decarbonization. Many startups are focusing on raw materials and the use of more sustainable materials and energy to enact progress.

In fact, certain sectors such as the heavy industry are interested in using green energy but are faced with supply constraints. Indeed, green energy is fluctuating and unpredictable (due to meteorological conditions), whereas these industries require a continuous supply of electricity. They therefore have to rely on highly available fossil fuels.

To overcome this challenge, startups such as Antora are working on green energy storage technologies. Their solution recovers excess solar/wind energy into heat carbon blocks. The thermal energy is then stored and can be converted into electricity on demand. The energy remains in the carbon block as heat, stored without any loss.

Besides the industrial sector, industries such as construction and textiles also use materials that generate significant CO2 emissions. This is the case for concrete made out of limestone that is heated at 1,450 degrees, or certain materials whose extraction is particularly polluting. Among them are iron, chromium and aluminium. It is therefore essential to find alternatives to these materials. For instance, CH-Bioforce has developed a new process to transform biomass into three materials that can be used to replace petroleum and/or food-based materials for textiles, packaging, cosmetics and other products.

3. Capturing existing emissions to reuse them

Various technologies help reduce CO2 emissions. However, once the CO2 has been emitted, there is still a way to reduce its damaging impact on climate through CO2 capture and recovery technologies.

There are several technologies aimed at capturing CO2 emissions that have become a part of industrial decarbonization efforts. The first means of recovery consists in creating a virtuous circle by storing the captured CO2 underground to transform it back into hydrocarbons in the long term. This is what Terracoh (ranked in the top 30% of startups by Early Metrics) and See02 are working on. Their technology breaks down greenhouse gases into various fuels to produce electricity, heat, oxygen and energy.

Other solutions use CO2 to make materials such as cement or aggregate. For example, Blue Planet (ranked in the top 30% of startups rated by Early Metrics) combines recovered carbon dioxide with calcium from waste to create a synthetic limestone aggregate for construction. Other startups are working on different materials, such as Lanzatech, which develops a wide range of products based on recycled CO2: from perfume to laundry detergent, to textiles.

Some startups are working on capturing and storing CO2 without the goal of reusing it but rather to reduce atmospheric pollution. For example, Carbfix captures CO2 either by dissolving it in water from power plants or directly in the atmosphere by capturing it in the air and then dissolving it in water. The carbonaceous water is then injected into the subsoil where it reacts with the rock to solidify and be stored.

A long road ahead…

The startup ecosystem offers many solutions to reduce the industrial sector’s impact on the environment. Nevertheless, these solutions all have their limits. As such, industrial companies must develop a comprehensive sustainability strategy that addresses all stages of production to ensure real change.

Today, investment funds are actively participating in the emergence of these new technologies. According to Climate Tech VC, climate tech startups raised around $40bn in 2021. A large portion of these investments were in the energy sector. Furthermore, the United States, which is one of the world’s largest carbon emitters, has seen a growth in investments. In 2021, $6.8 billion were invested in Greentech in the US, a record for the sector. Access to these types of investments and the popularisation of partnerships between startups and large industrial groups will allow the sector to continue its momentum towards more sustainable practices.

Article written by Sacha Cherif, VC Analyst at Early Metrics and translated by Mahaut Chappot de la Chanonie.