WORKWEEK

Catalysts fall in the category of things not that many people think about but that are inextricable from the fabric of society. 

Catalysts facilitate chemical reactions by lowering the activation energy required for a particular reaction or allowing reactions to occur under less specific conditions. 

Examples of industrial processes enabled by catalysts include platinum, palladium, and rhodium catalysts used in catalytic converters to help convert nitrogen oxides (NOx) and carbon monoxide in car exhaust into less harmful substances. Those are precious metals; both my parents’ cars had catalytic converters stolen from them during the pandemic, as converters were going for four figures on black markets. Other catalysts help produce chemicals (like synthetic fertilizers), fuels, pharmaceuticals, and more. 

Clean catalysts

As batteries demand more transition metals like cobalt and manganese (and others named above), there’s increasing interest in finding ways to phase these metals out of use for catalysts. Catalysts are no small part of rare earth metal consumption (as visualized below); for energy transition purposes, synthesizing and identifying catalysts that depend less on rare earth and other metals would free up more capacity to make EVs and battery energy storage systems.

Making cleaner catalysts, or at least ones that don’t compete with the inputs for other ‘clean’ technologies, is the name of the game for Cascade Biocatalysts, which announced a $2.6M pre-seed round this week, led by Ten VC. Specifically, the company sees a future where biological enzymes replace the need for expensive and high-demand materials to catalyze industrial reactions. 

Cascade Biocatalysts won’t (at least at first) identify or develop enzymes for reaction catalysis. Instead, they’re developing a patent-pending platform, Body Armor for Enzymes™, to improve enzyme performance to facilitate more cost-effective and sustainable chemical reactions. Their mission is “to move nature’s catalysts, enzymes, from the cell into the factory.” 

Enzymes are already in use in industrial applications. One example is lipases, a class of enzymes that catalyze the hydrolysis of fats and oils into fatty acids and glycerol. Lipases are highly versatile; they enhance the shelf life of baked goods and help produce low-fat and fat-free products. Lipases also break down triglycerides into fatty acids and glycerol, essential work for biodiesel production.

While there’s a significant opportunity to use enzymes to drive more efficient industrial reactions, as with many nascent technologies, enzymes often don’t compete on cost with traditional catalysts. One challenge is the durability of enzymes under industrial conditions: Things like high heat in industrial operating conditions can damage enzymes, raising costs. That’s where the value of a product intended to safeguard enzymes comes in. If, like most common catalysts, you can make enzymes last for more reaction cycles, costs come down. 

Cascade claims it has tested its technology on more than a dozen enzymes with a 100% success rate at increasing enzyme stability across applications, including CO2 capture and wastewater treatment. Some of these tests included paying customers, which is a good sign, though the tests are still on a lab scale. James Weltz, one of the company’s co-founders, invented the technology during his PhD research in enzyme immobilization.

Making enzymes work better also comes with fossil fuel and emissions reduction potential. Enzymes often offer a highly specific ability to target particular molecular bonds, making them prime candidates to help achieve higher product yields. If Cascade Biocatalysts can make enzymes more resilient to otherwise adverse operating conditions, they should help unlock industrial efficiency and, thereby, emissions reductions. For context, most intensive industrial catalytic reactions are powered by fossil fuels, generating three gigatons of greenhouse gas emissions annually.

The net-net

The chemicals industry isn’t just an epicenter of emissions; it’s also a $5T market. It’s ripe for more climate tech companies to disrupt.

Still, for several reasons, relatively fewer companies have emerged to take on the challenge. For one, it requires considerable, specialized expertise. And, as we’ve discussed, the cost competitiveness and flexibility of fossil fuels make it a challenging area to compete. 

I asked co-founder Alex Rosay to speak to the challenge and opportunity. Here’s how he framed it:

The chemicals industry produces the molecules found in nearly every manufactured good, mostly from oil, and in energy-inefficient ways because it is cheap and easy. But all around us, millions of different molecules are made from renewable feedstocks at ambient temperatures through biology for free. Think about all the colors you see on a hike, how trees grow from CO2. or the range of flavors and aromas from food. Nature is the world’s greatest chemical manufacturer and we have a lot to learn from it.

What I’d add (and end on) is that when investors and strategists look for business ‘moats,’ i.e., defensible differentiation, sometimes simply answering “we’re doing really hard things,” offers a clean, Occam’s razor-esque answer.