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In this Q&A with e-Estonia, UP Catalyst CTO Dr Sebastian Pohlmann discusses how the company transforms captured CO₂ into advanced carbon materials like graphite, carbon nanotubes, and carbon black. He outlines the key breakthroughs that made this possible and the challenges ahead as UP Catalyst moves toward full-scale commercialisation.
UP Catalyst is producing advanced carbon materials, including graphite, carbon nanotubes, and carbon black, from industrial carbon dioxide (CO₂). What were the key engineering or process breakthroughs that made this possible, and what challenges remain before full commercialisation?
Our core technology, Molten Salt Electrochemical Transformation (MSCC-ET), has its origins in NASA research, where it was initially developed to produce oxygen on the surface of Mars. The process produced carbon as a side product, something NASA wasn’t focused on at the time. At UP Catalyst, we’ve inverted that idea and we focus on the carbon instead, converting captured CO₂ into high-performance graphite, carbon nanotubes, and carbon black.
The key breakthrough lies in adapting and optimising this electrochemical process to run efficiently at moderate temperatures and to yield high-quality materials. We’ve already validated the material performance through independent third-party tests, showing that our CO₂-derived graphite and nanotubes perform on par with, and in some parameters surpass, their fossil-derived counterparts.
The remaining challenge now is scaling up: transitioning from batch to continuous production. This final step is essential for commercial readiness, as it will enable stable, large-scale manufacturing and cost competitiveness.
Your “low-temperature, short process (18–24 h)” approach is presented as more sustainable and cost-effective than conventional routes. How do you currently benchmark your energy use, emissions, and costs against traditional graphite and carbon black production?
We benchmark our process on several fronts. Through our membership in the European Carbon and Graphite Association (ECGA), we access reliable data on energy use and production efficiency across the industry. In parallel, we monitor analytical tools that track EV battery raw material prices, particularly for Chinese graphite, to compare our production costs with conventional carbon materials. Based on these benchmarks and our internal scale-up data, we already see that our process can deliver cost-competitive materials at a large scale.
Beyond benchmarking, we place strong emphasis on transparency and independent validation. Our Life Cycle Assessment (LCA), conducted by the Research Institutes of Sweden (RISE) and peer-reviewed by Bureau Veritas, confirmed that our production process already achieves a climate-neutral footprint. As we’ve since scaled up and further improved our process, we’re now commissioning a new LCA to verify a carbon-negative footprint, meaning that we store more CO₂ in our carbon materials than we emit during production.
Supply chain security is a key topic in the EU’s industrial strategy. How does UP Catalyst’s CO₂-to-carbon approach alter the dependence on imported natural or synthetic graphite, especially in battery supply chains?
We’ve been selected as a Strategic Project under the EU’s Critical Raw Materials Act (CRMA) precisely because our technology has the potential to reduce Europe’s dependence on imported graphite, a recognition that highlights the strategic importance of our technology at the EU level.
Our CO₂-to-carbon technology enables clean, local production of graphite and other carbon materials anywhere that CO₂ emissions and renewable electricity are available. Unlike conventional production, we don’t rely on fossil feedstocks, open-pit mining, or toxic chemical processes. This allows us to establish facilities close to industrial emitters or energy sources, decentralising production, shortening supply chains, and strengthening Europe’s raw material resilience.
We are already planning our first commercial-scale factory, which is expected to be fully operational by 2030–2031.
UP Catalyst’s applications span energy storage, coatings, concrete additives, and composites. Which of these market verticals do you anticipate will reach scale first, and what is your roadmap for entering or dominating those markets?
Energy storage is currently the most active and mature market for our materials, as both graphite and carbon nanotubes are already used at a commercial scale in lithium-ion batteries and related technologies. However, the European battery industry is going through a challenging period, and much will depend on how upcoming EU industrial policies support local manufacturing competitiveness.
Coatings and composites are particularly attractive next opportunities. In paints and coatings, for example, carbon black is widely used as a pigment, and we already have a Memorandum of Understanding with Teknos to explore sustainable, CO₂-based alternatives to fossil-derived carbon black.
We also see strong future potential in the construction materials sector. Research at the laboratory scale has shown promising results for using carbon nanotubes in concrete to enhance strength and durability. Given that the cement and concrete sector accounts for around 8% of global CO₂ emissions, the pressure for decarbonisation is growing rapidly, and we believe this market will soon begin adopting more sustainable carbon additives at scale.
Estonia is known for digital innovation and a forward-leaning regulatory environment. What policies, incentives, or ecosystem changes would most accelerate cleantech scale-ups like yours locally? How is UP Catalyst planning to engage with public and private actors in Estonia and the EU?
We actively engage in policy discussions through several industry organisations. Within the European Carbon and Graphite Association (ECGA), we advocate for local sourcing of graphite to strengthen Europe’s strategic autonomy. Through CO₂ Value Europe, we work to expand incentives for CO₂ capture and utilisation, especially when these solutions are on par with or more efficient than fossil-based alternatives. In the Global Battery Alliance, we support the establishment of a carbon footprint threshold for batteries, meaning that batteries exceeding a certain emissions level would no longer be eligible for sale in the EU market.
The acceleration of cleantech scale-ups must start with effective and consistent policy frameworks. Developing new technologies is only one side of the challenge — the other is motivating existing industries to modernise decades-old processes and invest in solutions they have never tried before. Unfortunately, current policies sometimes create unintended barriers. For example, if we use CO₂ emissions from an industrial emitter covered by the EU Emissions Trading System (ETS) to produce graphite, that emitter, and ultimately we as the offtaker, still need to pay the carbon tax.
Meanwhile, conventional graphite producers using petroleum coke pay no additional Carbon costs, creating an uneven playing field for cleantech innovators. We hope to see Estonia and the EU build stronger CCUS (Carbon Capture, Utilisation, and Storage) ecosystems that support both emitters and utilisation technologies like ours, enabling a cleaner industry, new business models, and ultimately, a real climate impact.
