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Fred Lalonde, founder and CEO of Hopper, at their company offices in Montreal in October 2018. Mr. Lalonde has turned his focus to carbon capture.Dario Ayala/The Globe and Mail

Fred Lalonde built online travel agency Hopper Inc. into one of Canada’s largest technology companies by using artificial intelligence to predict the best times to buy airline tickets. To offset emissions from the flights booked, Hopper sponsored a reforestation program that has planted 25 million trees.

“I thought we were doing great,” helping the planet, the chief executive officer of the Montreal company said in an interview. “But I realized as we were doing it that I didn’t understand climate change.”

That was four years ago, and it set him on a new journey. Mr. Lalonde is now determined to turn Canada into a global centre for sucking carbon dioxide from the sky and oceans and stuffing it underground.

His new startup, Deep Sky Corp., is aiming to build vast carbon-removal and sequestration operations in Quebec, Ontario and possibly Alberta, assembling technology already on the market from such vendors as Mission Zero, Carbyon and Equatic. The plan isn’t to capture carbon at source as it’s emitted, but to target CO2 already produced from past industrial activity.

Deep Sky would take advantage of Canada’s vast lands, renewable power and favourable geology to create what he calls cities to save civilization. Revenue and financing would come from selling carbon credits in a market where demand outpaces supply.

“We looked at the geographical, geological and energy profile and realized Canada is one of the only places where you could actually scale removal,” Mr. Lalonde said. “It’s as if Canada was created to do this.”

Mr. Lalonde has assembled a crew of familiar faces. His co-founders are ex-Hopper chief technology officer Joost Ouwerkerk, who will take the same role at Deep Sky, and Laurence Tosi, former chief financial officer of Airbnb and The BlackStone Group, a Hopper investor and director.

Deep Sky has raised $10-million from two Hopper investors, the Quebec government and Brightspark Ventures. Hopper president Dakota Smith sits on Deep Sky’s board.

“I think a lot of these big problems will be solved by people” like Mr. Lalonde who aren’t climate experts but bring innovative savvy to the space, said Brightspark partner Sophie Forest, a director of both Hopper and Deep Sky. It’s also key to build Deep Sky as a profit-seeking business, she said. “If you don’t put economics around it, it’s not going to happen.”

The carbon-removal sector is in its infancy. As of 2022, only 18 direct air-capture plants operated worldwide, all small ventures. Direct air capture is the quiet cousin of carbon capture and sequestration (CCS), in which emissions are captured at source and injected underground.

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Deep Sky has raised $10-million from two Hopper investors, the Quebec government and Brightspark Ventures.Deep Sky Corp.

CCS has hogged the emissions-reduction limelight, drawing much of the available subsidies and investment dollars. There were 35 commercial CCS facilities operating in 2022, according to Paris-based energy watchdog the International Energy Agency, with total annual capture capacity of almost 45 megatonnes. Another 300 projects are in the works.

Direct air capture is slowly ramping up – but must scale up quickly to capture almost 60 megatonnes a year by 2030 for the world to meet net-zero targets by 2050, the IEA said last year. A 1-megatonne plant is under development in the United States and several projects were announced in 2021, in Britain, Chile, Iceland and Norway. The Musk Foundation has also offered a $100-million prize for identifying ways to remove CO2 from the atmosphere or oceans.

Canada is among the regions that has taken an early lead in supporting direct-air-capture research and development. For example, the University of Calgary and Avatar Innovations launched a carbon-removal accelerator in 2021.

Deep Sky aims to move quickly. The company is trying to raise $50-million with a goal of selecting a site and building a pilot project next year. Renderings on its website show rings of white fan towers in the forest that would draw in air, capture and compress the carbon, and push it underground. Mr. Ouwerkerk is building software that would manage the operation and facilitate carbon-credit trading.

Mr. Lalonde estimated that he’s invested about $1-million personally and countless hours in Deep Sky’s startup. He insisted it has not been a distraction from Hopper, and that he remains fully engaged as CEO of a company whose revenues now top US$500-million. Deep Sky is a separate entity and Mr. Lalonde doesn’t have a chief-level title nor plans to run it; that would be left to a yet-to-be-hired CEO.

“Just to be absolutely clear: I work at Hopper,” Mr. Lalonde said. “I’m not going anywhere. This isn’t about my next thing, it’s just something I was working on and realized we had to do.”

Ms. Forest also said the new venture would not distract Mr. Lalonde from Hopper. “Fred is super involved in Hopper, he’s working all the time.”

There is much left to figure out including whether an operation could scale up into a massive, financially viable carbon-sucking system. “The whole business needs to be proven,” Mr. Lalonde said. ”There’s enormous uncertainty around operational costs and energy requirements.”

The sector faces challenges. What Deep Sky endeavours to do is energy-intensive. Unlike other emission-reduction technologies such as electric vehicles, its only real value is removing carbon; there is little to sell to recoup the huge costs other than offset credits.

“When you only have that incentive, is there big value there?” said Sara Hastings-Simon, an assistant professor at the University of Calgary who specializes in the energy transition. “It could well be the answer” to add value later “for specific areas where it would be really expensive or hard” to cut emissions and reach net-zero goals.

Nonetheless, Mr. Lalonde is keen to get going: “I wish we had started this 50 years sooner. This will be hard, painful and costly. I hope it teaches us as a species to never again dump our trash for generations into the atmosphere.”

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