In the first part of our blog series on carbon capture technology commercialization we looked at the key ‘customer focused’ technological success factors, namely cost, environmental lifecycle, operating range, CO2 output purity, physical footprint, supply chain reliability, and operational complexity.
In this second part, we will look at the major non-technological factors to successfully scaling a technology organization to commercial realization.
Statistically speaking, over 90% of start-ups fail[i] and only 1 out of every 7 new product ideas succeed[ii]. CCUS, carbon dioxide removal (CDR) and direct air capture (DAC) technology developers are not immune to this reality, in that historically, the research & development success rate of new carbon capture processes has only been about 5%[iii]. For instance, of the twenty Advanced Research Project Agency for Energy (ARPA-E) funded CO2 capture technologies in 2010 during the prior CCUS ‘wave’, only one eventually made it to market. Naturally, a high bar to success is a part of the process of any area of breakthrough innovation, however given the urgency of the climate change challenge and the need for more commercially bankable technologies to reduce carbon emissions, the industry needs to do all it can to improve on these statistics.
So, what sets successful technology developers apart?
The Team
First and foremost, it’s about the team. The optimization and scale-up of gas processing technologies is complex, and successful developers are distinguished by having team members with real project experience. Particularly when a new process leaves a controlled laboratory environment, gas treating scale up and operations expertise can make the difference piloting success or costly development iteration. A solid team combined with a high degree of internal alignment is a must in this regard. Additionally, the ability to persevere through future external headwinds is crucial. With decade-long horizons to commercial success in the industry, teams must be prepared to creatively weather changing political winds and future uncertainty in carbon regulation and pricing.
Intellectual Property
The CCUS, CDR and DAC industry has become an extremely crowded field in the past few years. In this environment, customers will increasingly look at freedom-to-operate (FTO) risks as part of major capital investment decisions in technologies. Having an skilled and experienced patent agent with a chemical engineering background can make all the difference in protecting an organization’s innovations, successfully leveraging existing patents through divisionals and continuations, and carving out a solid FTO position.
Partnerships
Strong partnerships are crucial for pilot and demonstration projects, and can also be valuable for R&D work. This includes relationships with carbon emitter customers, major suppliers, and complementary technology developers. A proprietary solvent or sorbent-based carbon capture technology for instance will inevitably need reliable large-scale supply of these consumables to be credible with potential customers, and forging strategic joint development and deployment relationships with established manufacturers where chemistry and cost optimization can be achieved can provide a significant commercial advantage. In addition, for technology deployment through licensing, similar relationships with established engineering, procurement and construction firms can provide the opportunity to reduce investment risks for customers.
Funding
Funding is, of course, essential. Technology developers should typically expect to need well over $100 million to fully bring a new CCUS, CDR or DAC process to market. Seasoned technical and commercial talent in the industry is in short supply, giving developers with deep pockets the edge. In this regard, the more that developers can think outside-of-the-box when it comes to funding, for instance through non-dilutive development partnerships, the greater chance these companies have of success in future when venture capital on favourable terms dries up.
External Relations
Lastly, in the current sea of startups in the sector, unique messaging and product branding, combined with a credible customer-focused development program can give organizations an edge in their business development activities.
Putting the above success factors synergistically into practice will help ensure that more technologies reach the marketplace to help fulfil the promise of CCUS, CDR and DAC in reducing global carbon emissions.
CCUS Experts is an experienced resource to help ensure the success of technology commercialization programs. If you are a technology developer seeking to minimize your time to market, reduce your development risk, and maximize the success of your R&D efforts, reach out to us today at info@ccusexperts.com or by phone at +1 (905) 320-6260.
[i] Startup Genome, Failory, 2019
[ii] McKinsey, 2018
[iii] CCUS Experts analysis
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