Turning CO2 into sustainable carbon materials: Why we invested in UP Catalyst

Torben and Yair with the UP Catalyst team at their headquarters in Tallinn, Estonia. Credits: Extantia.

By Yair Reem, Iris ten Have, Fernanda Bartels

Imagine transforming CO2 from an environmental issue into a valuable resource. This goes beyond merely removing the greenhouse gas for carbon credits, it’s about converting it into valuable commodities like graphite and carbon nanotubes (CNTs). Discover how UP Catalyst is revolutionising the battery industry’s supply chain, ensuring security while simultaneously reducing costs and emissions.

The problem: non-resilient supply chains and growing demand for carbon nanomaterials

Carbon nanomaterials, such as graphite and carbon nanotubes (CNTs), are critical materials in many industries, with battery manufacturing, cement, paint, and coatings being the most relevant industries. For example, a typical electric vehicle (EV) battery with a 60 kilowatt-hour (kWh) capacity contains about 52 kg of graphite for the anode, which is about 28.1% of the total mineral content of the battery. In comparison, the same battery contains only 6 kg of lithium for the cathode, accounting for 3.2% of the total mineral content. In short, once you get past the lithium hype, graphite is the most critical element in EV batteries.

The market for carbon nanomaterials is expected to experience substantial growth, primarily driven by increased demand in the battery sector. This surge is anticipated to create an estimated annual deficit of 700,000 tons by 2030. Demand within the battery sector is expected to rise irrespective of which battery technology prevails. Although graphite is typically the main carbon component of the battery anode, carbon nanotubes can be used as additives to improve the conductivity and provide the most efficient pathways for ions in the anode of a battery.

On top of that, the current demand for carbon nanomaterials is covered by more than 90% through the import of materials from Asia. For example, graphite is either mined (natural) or produced from fossil-based resources (synthetic). Most of its production and processing occurs in China and current supply chains are not resilient and a source of major concern. China’s recent announcement of graphite export curbs added urgency to the quest for local battery raw material alternatives. Building resilient supply chains for these materials is a strategic priority both for the EU and the US. Without a continuous and sustainable supply of carbon nanomaterials, the entire electrification transition could be jeopardised.

In terms of environmental footprint, producing carbon nanomaterials is an energy-intensive process which emits a lot of CO2. An example of a standard industry practice to produce CNTs from natural gas, a fossil-based resource, is chemical vapour deposition (CVD). The gas is heated until it breaks down and then sticks to a surface, building up a solid carbon material layer by layer. Such processes are typically carried out at temperatures above 800°C and on average consume 1067 kWh per kg of material produced, resulting in 390 kg CO2e per kg. Sourcing and producing these materials more sustainably is a prerequisite for the energy transition.

The solution: local, green graphite produced from CO2 emissions

Enter UP Catalyst, an Estonian startup producing sustainable carbon materials. Led by Dr. Gary Urb (CEO), Dr. Einar Karu (CTO), Karl-Gustav Tamberg (Head of Sales), and Teele Niidas (CMO), the team is redefining the conventional approach to graphite and carbon nanomaterials production by turning away from environmentally detrimental fossil fuel methods. UP Catalyst is commercialising an electrolytic process to create carbon-negative carbon nanomaterials from captured CO2 or point sources.

From CO2 to power: This solid carbon, a product of UP Catalyst, is set to conduct power in batteries. Credits: Extantia.

Normally, breaking CO2 molecules apart costs a lot of energy and therefore a lot of emissions and money. The UP Catalyst’s electrolytic process drastically reduces the energy input required and consumes captured CO2, making the carbon footprint of the process extremely low. The current production capacity is a few kilograms per day, but this is going to change soon with scaling up to commercial scale.

Graphical representation of the electrochemical transformation taking place in UP Catalyst’s reactor. CO2 is transformed into carbon nanomaterials that deposit on the cathode while oxygen is formed as a byproduct at the anode. Credits: Extantia.

By localising production, UP Catalyst ensures that their carbon nanomaterials can be produced anywhere, enhancing resilience in supply chains across Europe and the US. This approach significantly reduces dependence on imports, particularly from China, which is expected to curb its graphite exports by the end of 2023. Such innovation is vital for establishing a local supply of essential materials, aligning with the broader industrial move towards sustainability and meeting our Net Zero targets.

Another major advantage of UP Catalyst’s products is their cost-effectiveness. The process they use consumes significantly less energy, resulting in lower production costs. Over time, we anticipate these products being 30% cheaper than their fossil-fuel-based counterparts.

Combining green credentials, supply chain resilience, and cost savings, UP Catalyst is poised to be a true game-changer in the electric vehicle industry.

UP Catalyst is EPIC: how the carbon math adds up

To calculate UP Catalyst’s CO2e emissions savings using our Extantia Projected Impact Calculations (EPIC), we focussed on graphite and CNTs. With current practices, graphite emits on average 9.6 kg CO2e per kg of material. For carbon nanotubes the emissions from current manufacturing strategies are much higher, sitting on average at around 390 kg CO2e per kg of material manufactured. Assuming UP Catalyst captures 20% of the graphite and carbon nanotubes (CNTs) markets by 2050, their net impact would be around 186 Mt CO2e saved per year by 2050, meeting our investment threshold.

We are excited to share that we led a €4M seed investment round to advance UP Catalyst’s ground-breaking technology. The investment round was supported by SmartCap as well as the continued participation of existing investors Sunly, Little Green Fund, Scottish Baltic Invest and UniTartu Ventures. The funding will be used to scale up the carbon nanomaterial production capabilities: the new reactor will have a 10X capacity compared to the current setup and marks an important milestone before the construction of a full-scale industrial reactor unit. We look forward to continuing to work with the team and helping them build more resilient supply chains for carbon nanomaterials in Europe!

Want to learn more about how to create value from CO2? Check out our article on how the ‘C’ in CO2 can replace dinosaur-based carbon.