Innovation, pilots, scalability and financing in CCUS were the key topics discussed during the joint session of the CCUS and Financing the energy transition Focus Groups, part of the ERC event MATCHING ENERGY SUPPLY AND DEMAND on 4 June. The agenda included presentations from TNO and InnovationQuarter, and a panel discussion with the start-ups Skytree, GAFT and Pure Carbon Blue as well as Polestar Capital and Deloitte.

The joint Focus Group session was opened by CCUS Focus Group Lead Brigitte Jacobs. Next, Tara van Abkoude, Business Developer at TNO, presented what is happening at the Field Lab Industrial Electrification (FLIE) in Rotterdam. FLIE is a joint initiative of Deltalinqs, Port of Rotterdam, InnovationQuarter, FME and TNO aimed at demonstrating and accelerating P2X technologies. FLIE’s scope is the interplay between green electrons and green molecules with the aim of offering safe and scalable industrial electrification. FLIE performs feasibility studies, pilot projects and builds ecosystems for technologies in TRLs 4-6 (lab scale – pilot plant). Its main development areas are hydrogen, heat decarbonisation and storage, and carbon technology. Human capital is a focus across the three development areas.

InnovationQuarter works in FLIE focusing on carbon capture. Melle Sijbrandij is a Business Developer at InnovationQuarter and asked participants to show green cards or red cards expressing agreement or disagreement with three statements:
  1. There is no point in applying CCU technologies if they do not lead to net CO2 reductions.
  2. Applying CO2 capture to industrial point sources that use fossil feedstocks causes a lock-in of the established fossil industry and limits the transition to a net zero carbon economy.
  3. Synthetic fuels are best produced at a location where cheap hydrogen is available because it is much easier to get CO2 where the hydrogen is cheap than to ship the hydrogen towards the CO2.
In addition to expressing agreement or disagreement, attendees commented that:
  1. CCU technologies require a lot of energy to capture and convert carbon and during this process, carbon is released. When applying CCU technologies the overall level of CO2 must not increase. It is important to distinguish biogenic carbon and fossil carbon.
  2. If policies are badly designed there could be a lock-in effect. But more importantly carbon capture is necessary because we do not have the luxury to wait for other technologies and there will be residual emissions that require carbon removal.
  1. Hydrogen production and carbon capture are not always located in the same places. In case hydrogen is abundant, a carbon capture company could decide to provide on-site capture solutions.

Following the round of statements, Michiel Engelaar, Director Sustainable Finance, Deloitte, and Financing the Energy Transition Focus Group Lead, moderated a panel discussion on different financing options for CCUS. On the panel were:
  • Anneke Vromen, CFO, GAFT, a startup that converts captured carbon into SAF.
  • Marc Goedkoop, CEO, Pure Carbon Blue, a startup that captures carbon from water.
  • Daan van Kassel, Fund Director, Polestar Capital, which focuses on funding projects with TRLs 6-9.
  • Ot Messemaker, Strategic Development Manager, Skytree, a startup that captures on site atmospheric CO2.
  • Corjan Visser, Director Public Funding, Deloitte, who focuses on public grants and incentives.
The most common external funding and financing sources are Grants and Incentives, Equity and Debt. Michiel asked the startups what their approach has been to attract funding. GAFT has been working with an investment banker to attract funding, especially as there is a constant need for cash to maintain operations. GAFT, as well as Skytree, also applied for a subsidy. “It is best”, GAFT CFO Vromen remarked, “when applying for funding, if your lead investor is also a user of your product or falls within your value chain.” Pure Carbon Blue has relied on family capital and entrepreneurial funding. Pure Carbon Blue CEO Goedkoop believes that patience (compared to funds with strict deadlines) is important as well as driving this through your network.

Next Michiel asked the funding experts about the most significant hurdles for parties to invest. “If a proposal comes from a consortium of parties rather than from one, it is more likely to get financing.” said Daan van Kassel of Polestar Capital. He said it also important to “speak the same language” and understand what the financiers’ requirements are in terms of inputs. Ideally, you want to have a consortium and establish a positive environment to prevent wasting time and resources on many cycles of negotiations.

According to Corjan Visser of Deloitte the largest pitfall for companies is chasing a subsidy that is not aligned with their ambition, which wastes time and resources. Companies should ask themselves: how will this subsidy contribute to our 5–10-year roadmap? Ideally, this roadmap does not only consist of cash grants and incentives, but also tax incentives. “Tax incentives are more easily accessible for smaller companies, compared to subsidies”, said Visser. He also pointed out that it is easier to obtain funding at the national level than at EU level.

The panel was also asked to comment on green flags in a financing journey. Van Kassel of Polestar Capital looks for diverse teams, a good balance of commercial and technical expertise, good balance of entrepreneurship with experience, and the right equity investors. GAFT CFO Vromen added that it is also important to optimise the selection of different investors and to maintain relationships not only during the funding process, but afterwards as well. Goedkoop shared that Pure Carbon Blue decided to focus on progress in the present and accept mistakes rather than waiting for perfection.

The slides used by the speakers and panellists contain more details and are available on the ERC website.

The presentations from this joint session can be found on the ERC website
  1. Login and head to FORUM
  2. Select EVENTS
  4. Select the folder Presentations CCUS & Financing the Energy Transition
  5. Note that there is a single file for all presentations
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