Canada’s $75M Bet: Why Direct Air Capture Could Make It The Saudi Arabia Of Carbon Removal

As the world looks for ways to fight climate change, a Canadian company called Deep Sky is working on technology that pulls carbon dioxide (CO2) straight out of the air. The Montreal-based company is developing what’s called Direct Air Capture (DAC), which uses special reactors and air processing units to remove CO2 from the atmosphere. The captured carbon is then stored permanently underground.

In November 2023, Deep Sky raised C$75 million in Series A funding. The round included C$57.5 million in new capital and C$17.7 million from converted seed notes. Brightspark Ventures and Whitecap Venture Partners co-led the investment. Government-backed organizations also participated, including Investissement Québec, which contributed C$25 million, along with OMERS Ventures and the Business Development Bank of Canada’s Climate Tech Fund. In September 2024, National Bank of Canada and BMO added another C$2.5 million.

Deep Sky’s first planned commercial facility was for Quebec, with ongoing projects there alongside sites in Alberta and Manitoba. The province’s abundant hydroelectric power makes it a strong fit for DAC technology, which requires a lot of energy to operate. Additional sites have been identified in Alberta. The company’s long-term goal is to remove gigatons of CO2 from the atmosphere.

Quebec’s clean hydroelectric power makes it an ideal home for Deep Sky’s first commercial carbon capture facility.

To test different approaches, Deep Sky runs a research center called Deep Sky Labs. It’s partnered with several technology companies. Carbyon is supplying two Air Processing Units, each removing 50 tons of CO2 per year. Avnos is installing a Hybrid DAC unit capable of removing 450 tons annually. Skytree has deployed a modular unit for performance testing. Sustaera has signed a memorandum of understanding to explore its own modular DAC technology in Canada.

By testing multiple vendors side by side, Deep Sky can compare which technologies work best before scaling up commercially. The company plans to sell high-quality carbon credits once its facilities reach commercial scale. To support this effort, Deep Sky is also building carbon removal software dedicated to managing the sale of those credits.

Canada’s mix of clean energy, available land, and growing government support is positioning the country as a potential global leader in carbon removal. Carbyon, founded in 2019 as a spin-off from research institute TNO, uses a fast swing process that captures CO2 in minutes rather than the hours required by conventional materials. Deep Sky’s multi-vendor, research-first approach reflects a careful strategy to bring that vision closer to reality.

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