Canadian climate startup Deep Sky is rapidly emerging as a leader in carbon removal after completing construction on what it calls the world's first test hub dedicated entirely to direct air capture technologies. Located in Alberta, the Alpha facility has secured contracts with eight companies from the U.S., Canada, the U.K., Germany, and the Netherlands, Reuters reports.
This surge in international demand, particularly from U.S.-based startups, follows renewed political uncertainty in the U.S. regarding federal support for climate initiatives, Reuters says. According to Deep Sky CEO Alex Petre, the shift in leadership in Washington has caused an unexpected wave of inquiries from American carbon tech developers now seeking more stable infrastructure abroad.
"The changes south of the border have actually meant that there is currently a spotlight on Canada," Petre told Reuters.
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Bill Gates' Backing Helps Deep Sky Build a First-Of-Its-Kind Carbon Capture Ecosystem
Deep Sky received a $40 million grant from Breakthrough Energy, the climate-focused investment firm founded by Bill Gates. According to Reuters, the funds were used to construct the Alpha facility, a pilot-scale site where up to 10 direct air capture companies can test, iterate, and optimize their technologies in real-world conditions.
Direct air capture differs from traditional carbon capture systems, which remove emissions directly from industrial smokestacks, Reuters says. DAC instead pulls carbon dioxide from ambient air, making it a key technology for addressing legacy emissions that are already in the atmosphere.
However, Reuters says that high costs and limited scalability have slowed widespread adoption. The largest existing DAC plant, located in Iceland, removes only 36,000 tonnes of carbon dioxide per year. The United Nations Intergovernmental Panel on Climate Change has projected that billions of tons may need to be removed annually by 2050 to meet climate goals.
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Cross-Border Climate Shift Brings Focus to Canada's Emerging Carbon Market
In the U.S., DAC development previously received strong support under the Biden administration, which committed over $1 billion in funding for new hubs in Texas and Louisiana. With President Donald Trump's return, those federal grants are now facing possible cancellation, prompting developers to explore alternatives in Canada, Reuters reports.
Deep Sky's test facility will begin capturing 3,000 tons of carbon dioxide annually starting this summer, laying the groundwork for the company's broader plan to develop a commercial-scale carbon removal operation in Canada, according to Reuters.
The energy sector's relationship with Ottawa appears to be entering a new phase. Reuters says that under former Prime Minister Justin Trudeau, oil and gas leaders often criticized federal policies for placing climate goals ahead of economic development, creating friction with provinces like Alberta.
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According to Reuters, new Prime Minister Mark Carney has signaled a more balanced approach, with his administration pledging to diversify Canada's energy export markets, particularly as trade tensions with the U.S., its largest customer, remain unresolved.
At a Calgary Chamber of Commerce event on May 23, new Natural Resources Minister Tim Hodgson delivered a message aimed squarely at Canada’s western provinces. "In the new economy we are building, Canada will no longer be defined by delay, we will be defined by delivery," Hodgson said during his first public appearance in Alberta's corporate oil capital since joining Carney's cabinet, Reuters reports.
Petre said she believes Canada has the potential to lead in both conventional and clean energy production. “There’s lots of really interesting developments (in Canada) that seem to be on the table that I think will really help us,” Petre told Reuters.
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