Deep Sky sells first carbon removal credits to RBC, Microsoft

Carbon-removal startup Deep Sky Corp. said on Wednesday it has sold the first carbon credits from its Alberta demonstration centre to Royal Bank of Canada RY-T and Microsoft Corp. MSFT-Q in a deal aimed at supporting its strategy to test several direct-air-capture technologies.
Deep Sky said the transaction covers the capture of 10,000 tonnes of carbon dioxide from the atmosphere over 10 years. Under the deal, RBC and Microsoft have the option to buy an additional one million tonnes from Deep Sky’s future commercial projects, the company said in a statement.
It did not provide a dollar figure for the sale of credits.
Deep Sky, founded by Hopper Inc. chief executive officer Fred Lalonde, will initially test eight different direct-air-capture units at a time from vendors at its complex under construction in Innisfail, Alta., an hour’s drive north of Calgary. Such plants pull carbon dioxide from the atmosphere, rather than from smokestacks at industrial sites.
The company plans to install the units through the end of next year, with the first ones starting up by March. They include technology from Airhive, Avnos Inc., Phlair, Greenlyte Carbon Technologies GmbH, Mission Zero Technologies, NEG8 Carbon, Skyrenu Technologies Inc. and Skytree. The company said it will make its selection based on a host of criteria, including low energy intensity, simplicity and scalability.
The site is designed to be able to capture up to 30,000 tonnes of carbon dioxide over 10 years, with the gas stored in a well north of Edmonton, Deep Sky has said.
The project is not without risk. The carbon-removal sector is still in its infancy and just a few small-scale plants currently operate worldwide. To be effective, direct air capture will have to expand on a massive scale, and that will depend on an active market for carbon credits.
Deep Sky CEO Damien Steel said the sales of credits to RBC and Microsoft are expected to attract other investors, as well as suppliers and customers, to the project.
For the bank, the deal represents the first purchase of direct-air-capture credits by its RBC Capital Markets Environmental Markets Solutions Group, said Sarah Thompson, RBC Capital Markets’ global head of sustainable finance.
In August, Deep Sky announced it was also conducting prefeasibility studies at two industrial centres in Quebec, at Bécancour and Thetford Mines, to determine if the geology is suitable for large-scale underground carbon storage.