UP Catalyst secures €4M in funding to reduce Europe’s reliance on Chinese carbon materials

UP Catalyst, a pioneer in sustainable carbon material production directly from CO2 emissions, successfully closed a €4 million seed investment round to advance its ground-breaking technology.

The funding took place amidst China’s announcement of graphite export curbs that has added urgency to the quest for local battery raw material alternatives. This is particularly crucial given that Europe currently depends on graphite imports for 99% of its supply. With the funding, the company will build an industrial pilot reactor capable of processing 100 tons of CO2 annually and producing 27 tons of carbon materials, making UP Catalyst the largest provider of green graphite in the world.

The round was led by Berlin-based climate tech VC fund Extantia and supported by Estonia’s state fund SmartCap, along with the continued participation of existing investors Sunly, Little Green Fund, Scottish Baltic Invest and UniTartu Ventures. The investment will be instrumental in UP Catalyst’s quest to scale up their production capabilities. The new reactor will have a production capacity ten times larger than the current setup and marks an important milestone before the construction of a full-scale industrial reactor unit.

Potential to meet 20% of European need for raw materials

Gary Urb, CEO of UP Catalyst, expressed his excitement about the investment: “We are thrilled to have secured this funding, bringing us one step closer to empowering 4 million car batteries with graphite sourced from CO2 emissions by 2030. This carbon supply can cover approximately 20% of the EV battery market’s yearly carbon need in Europe.”

“Given the ambitious goals and expectations we have in the transportation sector’s decarbonisation with the switch to electric cars, increasingly more focus is put on the climate footprint of producing the most important component in electric cars – the batteries,” said Sille Pettai, Fund Manager and Board Member of SmartCap. “The team at UP Catalyst, among whose founders there is an imposing proportion of researchers with a PhD degree, is developing gamechanging research intensive deeptech solution, which from the one end helps to capture CO2 emitted and at the same time turns it into a sought after raw material, helping to make the global battery industry more sustainable.”

Yair Reem, Partner at Extantia, expressed his enthusiasm for the partnership by saying, “UP Catalyst is redefining the conventional approach to graphite production by turning away from environmentally detrimental fossil fuel methods. We perceive China’s export restrictions not as a barrier but as a catalyst for European green innovation. UP Catalyst stands at the forefront, ready to deliver a dependable, price-competitive and sustainable solution to address the growing global demand for battery manufacturing.”

Substantial environmental impact

The company will utilize the funds to scale up their local production of carbon materials and graphite derived from CO2 emissions, offering a sustainable alternative source of raw materials to European battery manufacturers.

With the global demand for graphite expected to outstrip supply, creating an estimated 700,000-ton annual deficit by 2030, UP Catalyst is positioned to become a transformative force in the European battery landscape. By replacing fossil-based graphite with UP Catalyst green graphite, the battery anodes will become CO2negative. This shift could contribute to avoiding 118.7 gigatons of CO2 emissions annually by the year 2030, marking a substantial environmental impact.

SmartCap Green Fund focuses on fostering investments into startups whose activities help to solve environmental problems and achieve the set climate goals. SmartCap Green Fund is financed by the European Union NextGenerationEU Recovery and Resilience Facility funds.