Exclusive: Shell Backs Plan To Scale Direct Air Capture Project

Carbon removal startup Avnos has landed $17 million in project finance from Shell and Mitsubishi Corporation to build a "commercial demonstration" plant, the company first told Axios.

Why it matters: Avnos says its approach pulling CO2 and water from the atmosphere requires far less energy than other direct air capture methods, and produces lots of usable water.

The money to climb rungs on the scaling ladder comes despite a tough funding landscape for early-stage climate tech hardware.

Driving the news: Avnos is going ahead with Project Cedar, a plant that it estimates can remove 3,000 tons of CO2 and produce 6,000 tons of clean water annually.

>> In Other News: Shell, Mitsubishi Invest $17M In Hybrid Direct Air Capture Startup

It has not disclosed a site but intends to have it online by the end of 2026.

State of play: Instead of employing traditional DAC methods that need heat to remove trapped CO2 from sorbents, Avnos says its "moisture swing" process uses water to isolate carbon.

It can then be used for underground sequestration or other roles, like embedding in building materials or as inputs for sustainable aviation fuels.

The big picture: The volumes of CO2 that DAC companies are sucking up remain minuscule compared to global emissions.

But right now it's about learning curves and cutting costs.

Avnos CEO Will Kain tells Axios the new project "puts us on our pathway" to far more scale — plants in the 50,000–100,000 tons per year range — with removal costs under $250/ton.

"Then, we've got really good line of sight to getting to that less than $100 per ton of CO2 target," he said.

Catch up quick: LA-based Avnos last year raised a $36 million Series A round led by NextEra Energy Resources, joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management.

It's nearly done building a 450-ton-per-year demonstration unit in New Jersey supported by the Office of Naval Research, Kain said.

And a Department of Energy (DOE)-backed pilot project in California has been a testbed since 2023.

Total funding is now over $100 million with Thursday's announcement, Avnos said.

What we're watching: Kain says the AI boom is among multiple markets for Avnos tech, as data center owners are looking to offset CO2 and need water for cooling.

"We have a couple of features of our technology that integrate really well and interact really well with data center operations," he said.