Bill Gates’ Breakthrough Energy Catalyst is awarding US$40 million to Montreal-based Deep Sky to help it test its carbon removal technology in Alberta.

Damien Steel, chief executive of Deep Sky, said the company is building a roughly $100-million pilot plant in Innisfail, Alta., about a one-hour drive north of Calgary, where it plans to test eight different technologies that remove carbon dioxide (CO2) from the air.

“Our single greatest focus, our mission, is to drive down the cost of removing CO2 from the atmosphere,” he said.

Breakthrough Energy Catalyst helps companies scale up and deploy technologies and advises the companies it grants funding and invests in.

Gates has talked about the “catastrophic” effects of greenhouse gas emissions, but he’s “optimistic” that humans can stop climate change because of his belief in innovation.

“That’s what Breakthrough Energy is all about,” he said in a video on Breakthrough Energy Catalyst’s website.

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Steel, a former executive at OMERS Ventures, said Deep Sky was founded about a year ago and is technology-agnostic. It wants to be a developer of carbon removal projects — known as direct air capture (DAC) — but is not inventing the underlying technology itself.

Since founding the company, he said his team of about 30 people studied roughly 100 different technologies that remove carbon dioxide from the air so that it can be buried and stored underground, and then picked the eight most promising technologies to install and test at the Alpha project.

Of course, such technology faces many challenges, including finding an economic framework.

Currently, Deep Sky is relying on what Steel described as the “voluntary market.” He said he expects climate change will worsen, so companies and organizations will face pressure from “stakeholders” — such as investors, communities, activists and others — to reduce their carbon emissions, leading them to voluntarily pay to remove carbon dioxide from the atmosphere.

“The results of putting more and more CO2 in the air are going to be felt more drastically over the next 10 to 15 years,” he said. “Make no mistake: stakeholders and organizations around the world, they feel and understand this problem and there is a deep desire to do something about it.”

Steel said there needs to be “a legitimate framework” so that when companies pay for DAC, they can claim credits or even trade such credits.

Microsoft Corp. and the Royal Bank of Canada have already committed to purchasing the carbon removed at Deep Sky’s Alpha project, which is scheduled to begin operations next year.

Steel said the costs of removing a tonne of CO2 from the air need to fall by about half to about US$300 per tonne, from around US$600 to US$1,000 per tonne, but most of the costs currently go toward paying for the energy needed to remove CO2, not the actual equipment.

“Energy is more than half of the operational costs,” he said. “It’s not a technology problem; it’s an energy problem. We don’t have enough energy and we need to drive up the efficiency of the power use.”

In Canada, the carbon removal sector has been led by Squamish, B.C.-based Carbon Engineering Ltd., which is also backed by Bill Gates. It has been operating a pilot plant and is also involved in a venture backed by Occidental Petroleum Corp. and others to build the world’s largest direct air capture plant in the Texas Permian Basin.

Steel said he believes DAC will become “a multi-trillion-dollar industry” during the next decade.

• Email: gfriedman@postmedia.com

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