rethink sustainability

    Using tech to tackle toxic air: how Swiss scale-up Daphne Technology is purifying pollutants

    Using tech to tackle toxic air: how Swiss scale-up Daphne Technology is purifying pollutants

    Realism is needed alongside idealism when it comes to the energy transition. That’s the view of Daphne Technology, a Swiss scale-up developing deep-tech climate solutions that are helping decarbonise some of the world’s dirtiest industries.

    It’s a mission that has been on the mind of Daphne’s founder and CEO, Mario Michan, since he was 18 years old working as a third mate on ships for the Colombian Navy. Part of his duties involved making sure his vessel complied with pollution protocols, and these rules and requirements were something he carried on thinking about when he went to study for a PhD in physics and an MBA at INSEAD in Paris.

    Daphne emerged as a spin-off from his time as a Research Scientist at the Swiss Federal Institute of Technology in Lausanne (EPFL). Its philosophy is one of present-day problem-solving. Shipping and other heavy industries are not yet able to end their reliance on fossil fuels: they may not be able to do so for decades. Rather than disowning and disparaging them, Daphne has decided to help them. Minimising the environmental impact of these industries makes the most sense for everyone, Mario told us in a recent interview.


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    Daphne is helping companies accelerate their journey towards net zero. Could you describe exactly what Daphne does?

    We are developing breakthrough technological solutions that reduce the impact air pollution has on human health, the environment and the global economy. They do this by removing toxic pollutants such as methane and sulphur oxides from the exhaust gases created in industrial processes.

    Read also: How satellite imagery helps track methane leaks

    We have clients in energy-intensive industries such as shipping, where it can be very hard to reduce greenhouse gas emissions. Our patent-protected technology is enabling them to do so in line with strict environmental regulations. Our solutions are modular and scalable to fit whatever needs our clients have. We are also adapting solutions we’ve designed for the shipping sector so they will soon be available for onshore industries.

     

    How did Daphne Technology come into being, and what motivated you to set up the company?

    Daphne became active as a start-up in 2018 and in 2020 it secured funding from investors as well as support from the EU's Horizon 2020 programme. The idea for the company had its origins in my time in the Colombian Navy, but the central technological idea only emerged when I was working as a scientist at CERN in 2015. More developments came when I went on to study at EPFL and conceptualised a purification process that converts pollutants in exhaust gases into something harmless. The team at Daphne went on to invent several technologies that make up our products today.

    Air pollution is something I don’t think the world takes seriously enough. Everyone is talking about carbon dioxide, but methane has only really just started being discussed, even though it has a far higher global warming potential than CO2. If you saw someone pouring oil into a lake today, you would be shocked. We’re not yet really thinking that way with air pollution, because we’re only considering carbon dioxide and not doing enough about methane, nitrous oxides and other pollutants. That’s why I wanted to start a company like Daphne.

    If you saw someone pouring oil into a lake today, you would be shocked. We’re not yet really thinking that way with air pollution, because we’re only considering carbon dioxide and not doing enough about methane

    Thankfully, things are starting to change: the International Convention for the Prevention of Pollution from Ships (MARPOL) is getting stricter. Our SlipPure™ system is helping shipping companies future-proof their engines so they can comply with these rules. It strips methane out of exhaust gases. The atmosphere takes an average of twelve-and-a-half years to oxidise methane into CO2, but our technology can do it instantaneously. It’s harder to capture methane than CO2 from the atmosphere, because there’s a lot less of it. However, there’s a major opportunity if we start targeting point sources of emissions such as natural gas transmission and compression, power generation, shipping and mining operations.

    Read also: Tomorrow’s mine: the case for investing in an urgent mining revolution

    Daphne also helps companies improve their measuring and tracing of greenhouse gases and other toxic emissions. Is it not better just to work on eradicating them?

    No company can start its journey towards improved sustainability without having an exact baseline to measure itself against. Our PureMetrics™ software solution provides precise readings of greenhouse gas emissions such as carbon dioxide and methane in real time. It has the highest accuracy on the market and can be used with maritime and land-based combustion engines.

    Once the system has measured the data, it converts these figures into tonnes of dry greenhouse gases, which is what UN protocols demand. This information is then encrypted and enriched using our APIs to make it usable in reporting and audit documents, both in-house and for third parties. It can also be used to meet general Monitoring, Reporting and Verification regulations in the European Union, which are becoming more important with the EU Emissions Trading System now including shipping and considering greenhouse gases other than CO2.

    No company can start its journey towards improved sustainability without having an exact baseline to measure itself against

    PureMetrics also recommends changes companies can undertake to make their operations more efficient in terms of fuel consumption and greenhouse gas emissions. This is based on forecasting tools it has, which can make liability-based recommendations showing the fines and other costs companies could face if they don’t clean up their operations.

     

    Another harmful air pollutant is sulphur oxides. These stem from the use of fuels with a high sulphur content, such as heavy fuel oil. Is there anything that can be done to reduce or remove these emissions?

    Agriculture and numerous industrial processes involving fuel combustion produce sulphur oxide emissions. This can impact not just human health but can contribute to acid rain and harm sensitive ecosystems. One way to tackle this is by removing sulphur oxide pollutants from exhaust or flue gases, and this is why we created our SulPure® system. It contributes to the circular economy, as it does not just capture sulphur oxide, but upscales it to ammonium sulphate fertiliser that can be used in agriculture.

     

    Daphne is still a very young company. What is your greatest achievement so far, and what is your vision for the next five or 10 years?

    Our work started out in the maritime sector, but our technology can also work with natural gas-fired internal combustion engines in land-based industries. This is an area of focus for us. Our work in maritime is very project-based: each ship has very different needs. But land-based is easier as you can deploy lots of identical units. This could allow us to offer scalable products without needing a series of customisations every time.

    The US Inflation Reduction Act included provisions to reduce methane emissions, so there is a massive business case for us. It means our land-based deployments could conceivably be in the thousands, whereas for marine vessels we are most likely looking in the hundreds.

    The US Inflation Reduction Act included provisions to reduce methane emissions, so there is a massive business case for us

    Another next step for us is capturing CO2 emissions. With methane, our technology accelerates atmospheric processes of oxidisation. We can’t do this with CO2 as it’s too energy intensive to try and destroy it. We have recently licensed technology from Saudi Aramco enabling us to capture carbon dioxide, and this means we can offer a more holistic emissions solution.

    In terms of achievements, coming 10th in the 100 TOP Swiss Startup Awards was really important. We’re also really proud of the recognition we’ve had from the shipping industry, including a Maritime Innovation Award and winning the inaugural Ocean Solutions Award at the Nor-Shipping Awards. Daphne was also voted the top deep-tech company in Switzerland and was honoured with the prestigious Deep-Tech/Life Science Award at the 25th edition of the Swiss Economic Award. I don’t think there’s any other company out there doing what we do.

    Read also: Building the economy of tomorrow

     

    What are the biggest challenges Daphne has faced and could face in the years ahead? Could a really rapid energy transition be bad for your business model?

    The fact that we offer interim solutions could create a risk for Daphne. We are helping industry to decarbonise, but more permanent change can sometimes happen much faster than expected. Look at the automotive industry. There was a lot of talk for a while about intermediate technologies such as ethanol or biodiesel to help with the move away from fossil fuels. Suddenly electric cars started to emerge and those interim solutions didn't scale up at all. However, all alternative fuels have several harmful emissions that need to be tackled, and we see Daphne supporting these transitions.

    I think there is also an “activist” risk: people don’t want to fund projects to decarbonise fossil fuel-based industries. But we need to fund the retrofitting of infrastructure today; we can’t just fund future technologies because they will take time to emerge. We need both to succeed in the energy transition. We need realism alongside idealism.

    People don’t want to fund projects to decarbonise fossil fuel-based industries… but we can’t just fund future technologies because they will take time to emerge

    Climate tech also faces wider issues accessing capital. This is because the way risk is traditionally assessed does not fit climate technology. Our capital needs and the timelines expected by the financial industry do not align with decarbonisation projects. Investors usually want us to generate profits far faster than is possible in this industry. We have to work on small projects to minimise risk, but this makes us too small for some types of investors. Yet if we went too big and too fast with the projects we work on, the risk profile would be too large for most investors The whole funding set-up needs to be turned upside-down. Many organisations are now realising this and are changing to help fund climate tech. I hope it can happen fast enough.

    Important information

    This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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