Avnos raises $36M to pull CO2 — and water — from the sky

Machines that pull carbon dioxide from the sky use huge amounts of energy — all of which must come from carbon-free sources if the technology is going to play any part in fighting climate change.

To NextEra Energy Resources, this looks like a big opportunity.

On Tuesday, the subsidiary of utility giant NextEra Energy said it was investing in the CO₂-removal startup Avnos Inc., as part of a larger strategy to boost technologies that complement NextEra’s vast portfolio of wind, solar and battery-storage projects.

The Florida-based electricity supplier led a $36 million Series A funding round in Los Angeles–based Avnos. The startup is developing a “hybrid” direct air capture system that sucks both carbon and water out of the air, using a novel approach that was created at the Department of Energy’s Pacific Northwest National Lab.

“NextEra Energy Resources continues to explore new markets that have the potential to use large quantities of renewable electricity,” Rick Clark, the company’s vice president of strategy and product solutions, said in a statement. “We believe wind and solar together with Avnos’ technology could provide a viable option to abate emissions from hard-to-decarbonize sectors.”

The investment is only the latest funding infusion by private companies and public agencies alike into the nascent and contentious field of direct air capture, or DAC. Nearly three dozen DAC projects have been announced in the United States since August 2022, when Congress passed the Inflation Reduction Act. The sweeping climate law expands generous tax credits for companies that capture and permanently store CO₂.

Last August, the Biden administration announced the first two winners of a $3.5 billion competition that aims to establish four DAC hubs, a program created by 2021’s Bipartisan Infrastructure Law. The Department of Energy also awarded $100 million in grants for 19 concept and engineering studies that could pave the way for future hubs.

Avnos, for its part, said it’s participating in several of those early-stage projects as a potential technology provider, including the California DAC Hub, the Chevron-led Western Regional DAC Hub in California, and the Pelican Gulf Coast Carbon Removal study in Louisiana.

A focus on CO₂ — and H₂O

With this week’s funding, Avnos has now secured access to over $100 million in total capital since launching in early 2020. The firm’s other backers include the venture-capital arms of fossil-fuel giants Shell and ConocoPhillips, the airline JetBlue and aviation manufacturer Safran; plus the private-equity firm Rusheen Capital Management and the South Korean VC firm Envisioning Partners.

“Broadly speaking, the NextEras of the world see an opportunity to expand their operations,” Will Kain, CEO of Avnos, told Canary Media. “There’s a recognition from these very large multinational firms that direct air capture and the energy transition writ large can offer an opportunity to expand profitability and grow.”

Avnos began operating its first commercial pilot system last fall in Bakersfield, California. The $3.2 million project is primarily supported by the Department of Energy, with Avnos and Southern California Gas sharing the remaining cost. The plant has the capacity to capture about 30 metric tons of CO₂ per year — roughly equal to the emissions of driving 7 gasoline-powered cars annually — while also producing 150 metric tons of water.

This month, Avnos is also opening a laboratory in Bridgewater, New Jersey to continue testing and scaling its hybrid system. “This allows us to go faster on all fronts,” Kain said of the latest funding round.

In Bakersfield, a machine the size of a shipping container pulls in ambient air and removes the water, like a big dehumidifier. The carbon then flows over filters, called “sorbents,” that capture the gas. To release the carbon molecules and separate them out, Avnos reuses some of the water and other proprietary materials — a key distinction from other direct-air-capture systems, which more commonly use heat to free the CO₂.

For now, Kain said the company “catches and releases” carbon back into the atmosphere, since there is no good way to store it at the current site, though Avnos doesn’t plan to do this with any future operations. He declined to share any operating metrics while the pilot project is still ongoing. But in general, Avnos claims its process can reduce energy consumption by more than 50 percent compared to technologies that use heat.

Kain said Avnos is working to install more and larger-scale hybrid DAC systems over the next couple of years, including in water-constrained regions that would benefit from the startup’s H2O-producing design. “Being fully electrified and being a water producer is a real sort of feather in our cap,” he added.

Getting to gigatons of CO₂ removal

As with the emerging clean hydrogen economy, the debate around DAC tends toward two extremes: Either it’s a planetary lifeline, or it’s a perilous diversion of time and money. The reality greatly depends on the technology itself, how companies use the systems — and whether it’s prioritized over near-term emissions cuts.

Climate scientists say that phasing out fossil fuels and halting greenhouse gas emissions are the world’s most urgent priorities. Yet these actions probably aren’t sufficient to keep global warming below catastrophic levels, the U.N.’s Intergovernmental Panel on Climate Change reported. Removing CO₂ that’s already been emitted is likely “unavoidable” if the world is to achieve net-zero emissions by 2050.

Among the broad suite of emerging “carbon-dioxide removal” techniques, DAC is considered the most expensive and energy-intensive way of extracting CO₂ from the atmosphere. Around two dozen facilities have been commissioned worldwide, though nearly all of them are pilot-size or demonstration-scale. Heirloom, another California-based startup, unveiled America’s first commercial DAC plant late last year. The facility passively absorbs carbon dioxide using large trays of limestone.

Most DAC systems use giant industrial fans to draw in large amounts of air, then separate out the CO₂ using chemical solutions or filter materials. To capture just 1 metric ton of CO₂, the process can require using roughly 1 to 2 gigajoules of electricity and around 5 to 7 gigajoules of heat, according to the International Energy Agency. (For context, Americans use an estimated 284 gigajoules’ worth of energy a year per capita.)

The most climate-friendly way to make use of DAC is to power the machines with wind, solar, next-generation geothermal or other carbon-free energy sources, and then permanently sequester or utilize the captured carbon — including to make green e-fuels for cargo ships and airplanes.

However, if companies burn fossil fuels to power their operations, they risk emitting more CO₂ than they wind up capturing. The process can become even more emissions-intensive if the captured CO₂ is used to force up hard-to-reach oil reserves from older wells, flooding the world with more petroleum. Occidental Petroleum, which paid $1.1 billion for the technology firm Carbon Engineering last year, says it has big plans to pair DAC with “enhanced oil recovery.”

Critics of DAC have described direct air capture as a “smokescreen” for Big Oil companies. The technology “will do more harm than good by perpetuating the lifespan of fossil-fuel infrastructure” while also “diverting resources away from more effective and proven climate solutions,” the Center for International Environmental Law wrote in a brief ahead of the COP28 climate conference in Dubai.

But proponents of CO₂ removal say it’s crucial to invest in new technologies — as inefficient and expensive as they are today — so that they’re widely available and affordable when the world needs them in the coming decades.

“We are going to need to both radically reduce our emissions and also scale our carbon-removal capacity,” Hannah Bebbington, the strategy lead at Frontier, told Canary Media late last year. Frontier is a coalition backed by Stripe, Alphabet, Meta and other tech giants that aims to spend nearly $1 billion on permanent carbon-removal services by 2030.

In November, the group made its first bet on direct air capture. Frontier’s members agreed to pay $26.6 million to Heirloom to remove 26,900 metric tons of CO₂ by 2030 using its limestone trays. Another $20 million will go to the startup CarbonCapture to remove 45,000 metric tons of CO₂ by 2028 using the fans-and-filter approach.

“It’s not something that you can just flip on the light switch and say, ‘Now we have gigatons of carbon-removal capacity,’” Bebbington said. “We need to start the technology development today.”