Canadian Biochar Producer Raises $38 Million
Airex Energy has raised $38 million in a Series B funding round led by Cycle Capital to speed up the company’s plans to expand its production of low-carbon products, biocoal and biochar, made from biomass.
Airex Energy is a Canadian-based company that develops and delivers decarbonization solutions that can significantly cut greenhouse gas emissions.
The $38 Million Round
The financing round also includes existing investors Investissement Québec, Desjardins-Innovatech and Export Development Canada and welcomes a new investor, Fonds de solidarité FTQ.
The 7-year-old company will use the $38 million proceeds from the fundraising to increase capacity at its commercial-scale Bécancour biocoal plant.
Thanks to this fundraising, Airex Energy will be fast-tracking its innovations and growth initiatives. And that includes a Quebec biochar project with its partnership with Suez Group.
As part of the deal, Airex will also continue with its aim to build 350,000 tonnes a year of biochar production capacity by 2035. The project cost is around $40 million.
The first phase will be a 30,000 tonne facility in Quebec, with help from Suez and a local biomass company. The goal is to largely boost biochar production in Europe and North America by 2035.
Other initiatives include the conclusion of agreements in Quebec’s biocarbon and Asia’s biocoal sectors.
Michael Gagnon, Airex CEO remarked on the round:
“We are proud to count on the support of recognized local investors. Their backing is a wonderful acknowledgment of our shared sustainable development ambitions, as well as a sign of confidence…Thanks to our one-of-a-kind technology, we are poised to become a leader in the area of innovative and environmentally friendly decarbonization solutions both inside and outside Canada.”
Airex Energy Patented Tech
Andrée-Lise Méthot, Founder and Managing Partner of Cycle Capital also commented:
“From the outset, we have been convinced of decarbonization’s potential, particularly in polluting industries, as well as of Airex’s patented technology…As we get ready to launch the large-scale commercialization of biochar and biocoal, we look forward to contributing to Airex’s growth…”
Cycle Capital is a Montreal-based climate tech investment fund that focuses on investments for reducing carbon while contributing to the transition to a low-carbon economy.
Airex patented technology is called CarbonFX. It transforms biomass into high-value-added eco-friendly products such as biochar, biocoal and biocarbon.
The process called torrefaction involves heating the organic material without using oxygen to remove moisture and volatile organic compounds (VOCs). It is done at lower temperatures, 250°C to 300°C to make the solid biofuel. Applying higher temperatures, the process produces more porous biochar.
By injecting gasses into the Airex reactor, the particles only spend 3 seconds in the reactor, 600x shorter than others, whose process needs 30 minutes for torrefaction.
The green industrial products of Airex offer different applications that contribute to the fight against climate change.
Since 2016, the firm is running the first and only industrial production plant in Canada that specializes in biocoal.
Decarbonizing Businesses with Biochar and Biocoal
Currently, the primary material used by Airex Energy comes from sawmill residues or recycled wood shavings, but other sources are also possible. The company has conducted tests to work with compost that has no commercial value.
For instance, residual matter from municipalities. Agricultural wastes from the production of corn, sugar cane or palm oil can also be a primary material.
Biocoal is a fuel to replace coal in coal-fired power plants and thus reduce carbon emissions. It can also be used to produce energy for cement plants.
To test biocoal, a coal-fired power plant in the U.S. needs 8,000 tonnes, which is half of Airex annual production capacity. And since there won’t be enough biomass, the company can’t replace all coal, only 3% to 5%.
On the other hand, biochar is also a very potent material that can slash emissions. Plus, it can help increase soil fertility or restore contaminated soils.
Producing biochar doesn’t release the carbon contained in the residual materials as CO2. Rather, it binds it stably in the biochar and thus prevents CO2 from entering the atmosphere. Carbon can also be sequestered when it is used in building materials and carbon-negative concrete.
This makes the production of biochar one of the Negative Emission Technologies (NET) urgently needed for the climate.
The huge benefit of biochar is that one tonne can sequester 2.5 to 3.2 tonnes of CO2 equivalent. For Airex Energy, that means they could be “in a position to have more than a million tonnes of carbon credits on the voluntary market by 2035. And that’s pretty good,” Gagnon said.
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