VC Virescent Ventures seeks to raise ~$200 million for new fund to amplify private sector investment in Aussie climate change tech opportunities
Plant nutrition company RLF AgTech integrates principles of plant science with advanced chemistry and manufacturing techniques
Emerging mineral processing technology company Zeotech is exploring using zeolites to address landfill methane challenges
Climate change is the defining crisis of our time and it is happening even more quickly than we feared, according to the United Nations (UN).
The UN says the impacts of climate change are being felt globally from glaciers melting faster than ever causing sea levels to rise, increasing the frequency and severity of natural disasters, threatening food and water security along with international peace as competition for resources, such as land, fuel and water intensifies.
Meanwhile, the World Health Organisation says between 2030 and 2050, climate change is expected to cause ~250,000 additional deaths per year, from undernutrition, malaria, diarrhoea and heat stress alone.
As the world looks for solutions to climate change emerging and critical technologies have come into focus. Australia’s climate tech VC Virescent Ventures says its specialist portfolio is more than $260 million, having backed 33 innovative climate tech businesses and funds/incubators.
Virescent was established by the Australian Government-owned green bank Clean Energy Finance Corporation (CEFC) in 2022 to manage its specialist early stage climate tech portfolio (initially comprising the Clean Energy Innovation Fund Fund I).
The CEFC has a minority shareholding in Virescent, with its CEO Ian Learmonth a non-executive director and investment committee member.
With the support of the CEFC, Virescent is looking to raise a new fund (Fund II) aiming for ~$200 million to significantly amplify private sector investment in Australian climate tech opportunities over the next five years.
The new fund will follow an investment strategy centred around Virescent’s four key themes including:
Clean energy transition
Food and agriculture
Circular economy and industry
Mobility and smart cities
Virescent believes the burgeoning Australian climate tech industry is one of the most attractive sectors for investors to achieve outsized returns and portfolio alpha.
Managing partner Kristin Vaughan says the VC is particularly excited to work towards doubling the size of this portfolio with the support of additional local and global institutional and private investors into its upcoming Fund II.
“The valuations within our current portfolio remain resilient, with portfolio companies continuing to grow and outperform through difficult market conditions,” Vaughan says.
“This validates our investment strategy and belief that climate tech VC is a commercially attractive alternative investment.”
Learmonth says the climate tech sector has enormous potential to accelerate the transition to net zero.
“With no single solution to the complex challenge of economy-wide decarbonisation, the diverse range of sectors covered by CEFC climate tech investments will be critical in our race to net zero,” he says.
“Homegrown innovators can also help Australia capitalise on the sustainable economy of the future.”
While Virescent is focused on the private sector investment in climate change technologies, there are also companies doing their part on the ASX to tackle the problem. Here are some we’ve noticed.
RLF AgTech (ASX:RLF)
The tech-driven plant nutrition company integrates the principles of plant science with advanced chemistry and manufacturing techniques to produce plant nutrition solutions tailored for the commercial agriculture industry.
RLF’s Plant Proton Delivery Technology (PPDT) allows farmers to cultivate crops with enhanced yields, improved quality, and increased nutritional value, while bolstering the plants’ capacity to store and reduce atmospheric carbon.
A notable addition to the company’s portfolio is RLF Carbon, providing exposure to carbon credit generation and creating additional core revenue streams.
The company has secured process patents for soil carbon generation, positioning itself as a leader in the emerging field and plays a pivotal role in the carbon value chain by connecting farmers, emitters, and project financiers.
With the safeguard mechanism for Australia’s largest emitters expected to boost demand for Australian Carbon Credit Units (ACCUs) to offset emissions, RLF is poised to benefit from robust price scenarios and significant opportunities for RLF Carbon.
The company last year formed a strategic carbon alliance with the Commonwealth Bank (ASX:CBA) to fund a large-scale soil carbon pilot program, facilitating collaboration to expand ACCU generation in the future at scale.
CEO Ken Hancock says the company sees an opportunity RLF carbon to particularly help the grain industry in Australia to reduce input emissions from the likes of fertilisers as well as generate ACCUs.
“When it comes to things like fertiliser nitrous oxide is one of the big gases that comes of nitrogen, which is the biggest nutrient,” Hancock says.
“Nitrous oxide is about 300 times more potent to the atmosphere than carbon dioxide so growers can reduce their fertiliser rate when using our product and have a direct impact on emissions.”
Hancock says its PPDT is designed to not only increase growth above the ground but also below the ground.
“Nearly half the plant is below ground and the challenge is to generate what we call recalcitrant carbon, which doesn’t oxide the atmosphere,” he says.
“When generated at depth in the soil we increase yield of the crop at the same time, sequest more CO2 from the atmosphere and store it for the long term in the soil.”
Hancock says the growers can then measure the recalcitrant carbon to monetise through the ACCU. Furthermore, he says RLF’s technology increases organic matter in the soil, which in turn improves its quality.
“That organic matter is like a sponge in the soil where it can absorb more water, hold more nutrients, facilitate more microbial activity and healthier soil leading to better productivity,” he says.
Zeotech (ASX:ZEO)
The emerging mineral processing technology company, is actively exploring the application of zeolites, manufactured porous mineral frameworks primarily composed of aluminium, silicon, and oxygen, to address landfill methane challenges.
Zeolites, also known as molecular sieves, exhibit versatile properties in trapping, exchanging, or releasing ions and molecules, finding applications in various industrial and environmental contexts.
Successful trials conducted in collaboration with Griffith University revealed zeolites’ efficacy in capping landfills to control emissions, displaying early methane oxidation efficiency of up to 70-80% in batch experiments.
ZEO’s zeoteCH4 product, incorporating methane-oxidizing bacteria, demonstrated practical methane abatement technology effectiveness.
Building on these trials, the company is conducting infield validation at Cleanaway Waste Management’s landfill, using products made from kaolin and a coal combustion by-product.
These products exhibited constant high oxidation rates over three months, surpassing 70%, showcasing their potential as effective host sites for methanotroph communities during field validation, with optimizsd configurations exceeding 90% oxidation rates.
Parkway Corporate (ASX:PWN)
The industrial water treatment technology company is on mission to improve mining sustainability. PWN managing director Bahay Ozcakmak says there’s a growing expectation of improved sustainable and responsible mining practices that minimise harm to the environment and society.
“Minimising the environmental impacts of mining are crucial because they can lead to long-term damage to ecosystems, water resources, air quality, and biodiversity,” he says.
PWN has two key divisions, Parkway Process Solutions (PPS) and Parkway Process Technologies (PPT).
Whilst PPS provides conventional water treatment solutions, Ozcakmak says the company (through PPT) is particularly focused on processing concentrated or complex wastewater containing heavy metals or reagents such as acids, which have been traditionally difficult to process.
Last year PWN unveiled its master plan, dedicated to creating innovative solutions for the complex wastewater challenges impacting the Queensland coal seam gas (CSG) sector.
CSG extraction generates substantial amounts of brine, a highly saline water, as a secondary product.
PWN’s tech reclaims fresh water from hazardous waste brines and transforms the residual salts into valuable industrial chemicals for industrial use in Queensland’s market.
PWN master plan also aligns with the Queensland Government regulations that emphasise converting waste into usable goods to minimise disposal demands.
“The earth can’t just be a dumping ground and people’s expectations have changed and we are positioning ourselves to be part of the solution, by helping companies develop sustainable solutions,” Ozcakmak says.
Roots Sustainable Agricultural Technologies (ASX:ROO)
ROO is actively advancing and commercialising solutions focusing on managing plant climates and overcoming water scarcity for irrigation.
With multiple patented technologies, the company enables the adjustment of crop root temperatures, humidity-based crop irrigation, and heating or cooling of plant substrates in various containers.
By optimising and stabilising root zone temperatures, ROO’s technology significantly enhances yields, expands growing cycle options, improves quality, and mitigates extreme heat and cold stress while substantially reducing energy consumption.
ROO’s zone cooling system was showcased at COP28 by its UAE customer, Silal Food & Technology LLC, addressing the agricultural challenges faced by the UAE and the broader Arabian Peninsula.
CEO Boaz Wachtel emphasises the growing demand for their root zone temperature optimisation products as a response to increasingly extreme and volatile weather conditions globally.
The company is seeing growing demand for its root zone temperature optimisation products as an answer for “extreme and volatile weather everywhere”.
“Our RZTO technology targets key pain points in the agriculture supply chain so that early or late planting is possible and significant energy savings are achieved by reducing the use of air/canopy cooling and heating,” Wachtel says.
Nanollose (ASX:NC6)
NC6 has gained recognition for its environmentally conscious Nullarbor fibre technology, designed to promote sustainability in the fashion industry by transforming liquid waste into rayon fiber with minimal environmental impact.
However, beyond its success in the fashion sector, NC6 is exploring additional revenue channels in the agricultural market.
The company last year introduced a dry rehydratable microbial cellulose material Biollose, the key ingredient for its horticultural products, including MicroGel for commercial microgreen production, and Jelli Grow for home user microgreen kits.
Executive chairman Dr Wayne Best says most of the products currently on the market for seed germination are mineral-based and don’t absorb much water or biodegrade with many also leaving unpleasant residues of grit.
“Biollose can be rehydrated at point of use, swelling over 100x its weight and volume, so it dramatically reduces the cost and carbon footprint of shipping and handling,” he says.
“The large amount of water Biollose absorbs when rehydrated also reduces the need for constant watering.”
He says Biollose is biobased, so 100% biodegradable, leaves no grit and is made from food ingredients so is nontoxic.
NC6 has provided supplies to the vertical farming venture Greenspace.com, established by serial entrepreneur Peter Fox, which focuses on constructing compact community-based farms situated in CBD locations, supplying live plants to adjacent hotels, restaurants, and businesses.
The vertical farming market has witnessed substantial growth, with a value of US$5.1 billion in 2022 and a projected worth of US$39.9 billion by 2032 on a global scale.
The RLF, ZEO, PWN, ROO & NC6 share price today:
At Stockhead we tell it like it is. While RLF AgTech, Zeotech, Parkway Corporate, Roots Sustainable Agricultural Technologies are Stockhead advertisers, they did not sponsor this article.
The post Why the spotlight is on tech to tackle climate change challenges and the ASX players worth watching appeared first on Stockhead.
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