A Firm Capturing Carbon at NYC High-Rises Tackles Canadian Gas Pipelines

CarbonQuest’s new project cutting emissions from an engine along a gas pipeline could help it scale to applications at universities, AI data centers, and factories.

Startup CarbonQuest already proved it could snatch carbon emissions from the gas-fired boilers that heat New York City high-rises. This year, it’s moving into a big new market: carbon capture for the fossil-fueled engines that generate power in remote or campus settings around the world.

Tourmaline, Canada’s largest natural gas producer, collects gas at its Banshee plant near Edson, Alberta. It uses compressors to move the gas through the pipeline network and runs gas-burning engines — akin to supersize versions of what propels a truck — to power those compressors. Now, Canary Media has learned, Tourmaline has contracted with CarbonQuest to capture carbon emissions from an engine driving its compressors, proving out a new use for the technology.

Over the next 10 months, the startup is assembling its equipment into easily transportable containers at a factory in Spokane, Washington, prior to installation at Banshee. The machinery will hook up to the engine’s exhaust stream and use a process called vacuum pressure swing absorption to pull out and collect carbon dioxide. While elsewhere, CarbonQuest’s CO2 has been turned into concrete, here it will go down an existing well for permanent sequestration underground.

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The carbon capture industry stands out among climatetech sectors for its distressing frequency of technological disappointments and outright fraud. CarbonQuest, which launched in 2019 and raised $20 million in Series A funding last year, differentiates itself from such dubious company by making humble promises and following through. Its first commercial installation has been capturing boiler emissions in a 30-story apartment building near New York City’s Lincoln Center since early 2022, and the company is now hooking up its fifth system to clean up gas heating in the metropolis.

Carbon capture, which collects carbon dioxide from smokestacks — and the related field of direct air capture, which grabs trace amounts from the air — has struggled with energy requirements: Burning too much electricity to isolate the carbon dioxide undercuts the climate case for doing so in the first place. Rather than jump to massive-scale carbon capture (with massive energy needs), CarbonQuest has chosen to hone its tech at a level that others thought was too small to bother with, said Anna Pavlova, senior vice president for strategy, market development, and sustainability.

“Our goal is to help us move faster to reducing emissions,” Pavlova said. “That’s what we’re trying to prove. And we’re trying to prove it on maybe not the gigantic scale, but the good-enough scale where results still matter.”

Compressors might not be well known outside the industry, but they play a crucial role in the pipeline network that supplies much of America’s home heating, plus 40% of U.S. power generation today. Some regions depend far more on gas: Even the climate-hawk states of New England, for instance, use gas for 55% of their electricity. There’s a tangible climate benefit in reducing emissions from infrastructure that is very much needed for the foreseeable future.

Indeed, U.S. natural gas pipelines make use of more than 5,400 compressors — all systems that CarbonQuest could theoretically slash emissions from with the tech it’s bringing to Canada.

The Alberta installation also portends impact far beyond the niche of gas pipeline compressors. With this project, CarbonQuest jumps from knowing how to decarbonize boilers to knowing how to decarbonize engines, Pavlova said. That’s crucial, she added, because “engines are in many places.”

The type of engines that run compressors serve small-scale power generation all over the place: university campuses, hospitals, industrial sites, and, increasingly, AI data centers that want to produce their own electricity behind the meter. CarbonQuest’s first boiler installation grabs about 1,000 metric tons per year. Soon, its equipment will process 1,500 metric tons per year from the compressor engine, Pavlova said.

This will mark the first time CarbonQuest is including a “metal-organic framework” absorbent — a material engineered by Captivate Technology to capture carbon more efficiently. Anything CarbonQuest can do to suck up more pollution with less energy helps make the process more scalable.

Pavlova is particularly excited to prove that this technology can work effectively at the carbon dioxide concentrations that come out of gas engines. Gas boilers typically produce exhaust that’s 8% to 10% carbon dioxide, she said, whereas the engine exhaust will be only about 5% CO2. (Larger gas turbines and coal power plants have even lower concentrations, part of why carbon capture hasn’t worked well for them.)

This is just a stepping stone, however. CarbonQuest got the project’s $4.1 million budget funded by grants from Government of Alberta and the Canadian National Gas Innovation Fund, and the equipment will be able to catch only a small portion of the compressor site’s emissions. But it will put the technology to the test in a real commercial setting, and CarbonQuest will get paid via a long-term service agreement to keep its system in good functioning order. The startup is already working to close “fully commercial” deals for gas compression engines in the U.S., Pavlova said.

To deliver on that potential, CarbonQuest needs to line up customers that care about reducing emissions and find other ways to monetize carbon capture, either through regulatory credits for sequestration or by creatively reusing the carbon itself. Neither option is particularly outlandish these days: The commodity price for carbon dioxide is quite high now, and the federal tax credit for carbon capture survived the Trump administration’s budget law. The trick has been finding people who can actually do the capturing part.