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Series A raise of $30 mln to fund demonstration project

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Technology can capture emissions inside kilns, boilers,

furnaces

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Potential for 'step change' in lowering costs - Shell

Ventures

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Technology has yet to be tested at scale

By Peter Henderson and Simon Jessop

SAN FRANCISCO/LONDON, Sept 5 (Reuters) - European oil

majors Shell and Eni have led an early stage

funding round for climate technology start-up Mantel Capture,

which aims to use molten salts to capture carbon dioxide

emissions at refineries, factories and other industrial sites.

Capturing carbon where it is produced, or "point source"

capture, allows polluters to reduce emissions and retain

existing, expensive infrastructure, although it has been

criticized by some environmentalists for perpetuating emissions.

Boston-based Mantel aims to pull 95% of the carbon out of

smokestack emissions using the molten salts, a process that it

says is unusually cost-effective because it takes advantage of

the extremely hot environments inside industrial furnaces and

boilers, requiring much less additional energy than rival

capture methods.

"This is a technology that could radically change the energy

industry, but there is still risk to what we're doing," Mantel

CEO Cameron Halliday said in an interview.

The $30 million raised in the Series A round will allow Mantel

to build a demonstration project at a paper mill that can

capture 1,800 metric tons of emissions a year, around 10 times

more than the half a ton a day captured in a laboratory

setting.

At a scale of hundreds of thousands to millions of tons,

Mantel could theoretically capture carbon at about $30 to $50 a

ton, making it economically viable in many countries offering

either incentives for carbon capture or taxing emissions, and

far below competing systems, Halliday said.

"I feel very confident that those numbers are going to win

that market, and that means that's going to be lowest cost

provision of abatement in a number of heavy industrial sectors,"

said Michael Kearney of Engine Ventures, an early investor that

is also part of this funding round.

Co-led by the innovation units of the two oil companies,

Series A investors also include BP's bp Ventures, New

Climate Ventures, Hartree, Arosa Ventures, Vale Ventures, and

MCJ Collective.

The investment by Shell follows its decision to row back on its

near-term climate targets amid uncertainty about the pace of the

energy transition and pressure from investors to improve

returns.

Shell will watch pilot efforts before going too far down the

road on potential uses for itself, said Hector MacQuarrie,

principal at Shell Ventures, but he added the technology could

make carbon capture much more achievable for hard-to-abate

industries.

"If it's successful, if they're able to deploy in the field,

this has the potential to generate a step change" in carbon

capture costs, he said.