OTTAWA — Built from the wreckage of a garbage-to-energy company whose growth and collapse were once front-page news in Canada’s capital, Omni Conversion Technologies is loading up with outside validation to help make the case that this time, it’s for real.

The company’s promise is that it can take municipal garbage and turn it into environmentally friendly hydrogen fuel. Last spring, it made its first US$35-million sale, in California. In October, it added former Bank of Canada governor Stephen Poloz and prominent U.S. energy expert Daniel Kammen to its board and hired a new CEO, Jonathan Lundy.

Lundy is a former top executive at Atomic Energy of Canada who oversaw the Crown corporation’s restructuring in the mid 2010s before moving on to nuclear contractor BWXT.

He was recruited, and it wasn’t an easy pitch. “I had tepid interest for the first six weeks,” Lundy told The Logic in an interview at Omni’s offices in a west Ottawa tech park. “I was quite content with the job that I was in.”

But the more he looked at what Omni was doing, the keener he became. Until: “I absolutely wanted this, despite some of the hair on it.”

The hair is the residue of Plasco Energy Group, which went bust in 2015 after a failed attempt to commercialize plasma gasification as a waste-diversion technology.

Black-bag household garbage produces a lot of methane as it decomposes, and methane is a powerful greenhouse gas (one of which Canada has promised to emit a lot less). Some landfills collect methane and burn it for heat or electricity; Plasco would deal with garbage by running it through high-powered torches, at such temperatures that it would break down into its constituent molecules.

The main outputs would be a dark glassy slag that could be sold for some of the same purposes as gravel, and, more importantly, a gas that could be used to drive electricity-generating engines. Best of all, no trash piling up in landfills, stinking, attracting vermin, leaking leachate.

The “syngas” would be like natural gas—methane—but instead of tapping finite fossil-fuel resources, at one end of a Plasco plant you could back up a truckload of whatever unpleasantness a city produces, and relatively clean electricity would come out the other end. Plasco would make money from all directions: charging to take garbage and selling its power and even its slag.

Under longtime Ottawa tech impresario (and former Ottawa Senators owner) Rod Bryden, Plasco reached a deal with the City of Ottawa in 2006 to build a demonstration plant near the municipal landfill on the outskirts of town.

After years of experimentation, in 2011, the city and the company agreed on a $180-million, 20-year plan. Some local politicians hoped the Plasco plant would be the core of a new cleantech cluster in the capital.

Almost immediately, things began going bad.

In early 2012, a preliminary deal for a plant in Red Deer, Alta., fell apart. Late that year, Ottawa and Plasco signed their formal contract, but in 2013, Plasco missed construction and financing milestones.

Bryden left as CEO in late 2013, but planned to stay on as executive chair, then departed entirely in early 2014.​​ That summer, the company announced layoffs. In 2015, it filed for creditor protection. The company owed well over $100 million, and Lundy estimates it had spent about four times that.

The plant at the landfill was dismantled. Ottawa Mayor Jim Watson washed his hands of it.

Bryden did not. He bought the company’s remains for $1, hired back some of the core staff and went to work again.

Now, though Bryden remains chair of the board, Lundy heads the staff of about 30, up from the 13 in the “tough years” after 2015.

The revived company is backed by Peter Fraser, a principal at Toronto’s West Face Capital—which, as a company, invested in Plasco. Fraser sat on the Plasco board and is now on Omni’s.

Omni now occupies two unconnected suites on the ground floor of a basic concrete and mirrored glass building, a few hundred metres from Plasco’s old premises in Kanata.

Plasco’s underlying technology was never the problem, Lundy said. The price of natural gas rose throughout the 2000s, then collapsed at the end of the decade into what turned out not to be a temporary trough and took Plasco’s business model with it.

Though the core tech Omni sells is the same, now its output is not electricity, but hydrogen—or potentially, with various add-ons, hydrogen compounds like ammonia or methane or heavier fuels.

By one estimate, the global waste-management industry will be worth more than $900 billion by 2030; the International Energy Agency (though it acknowledges previous waves of interest that have come to little) anticipates dramatic increases in demand for hydrogen as a clean fuel.

“The size of our market is not limited by the potential of our technology, but instead by our capacity to scale,” Lundy said.

The company itself has been redesigned so it’s less of a Rube Goldberg machine. Instead of stick-building processing plants to order and operating them itself, Lundy intends that for now, Omni will sell the waste-to-hydrogen units, manufactured by contractors, and let buyers worry about the rest.

That’s where H Cycle, the California buyer, comes in. The fledgling company sifted through dozens of waste-to-energy technologies before deciding Omni’s was the one it wanted to commercialize.

“Our job is to actually go get the site and the commercial structures in place to make the project happen,” said its chief executive Robert Morgan, who previously led General Electric’s unit focused on technology for storing renewable energy. “And then to raise the extra money to build the entire plant, because you have a feedstock-handling front end, you have the Omni piece in the middle, you have gas-purification and -separation at the back end.”

The Omni technology makes up about half the cost of a full plant. For H Cycle’s first project, the cost of the Omni component is being underwritten by the Larsen Lam Climate Foundation—a project of Chris Larsen, a fintech billionaire.

He told The Logic that philanthropy can play a key role in commercializing potentially world-changing technology by assuming risk that regular venture capitalists won’t.

“This is partially because of the experience Omni went through, from the first wave of green tech investing,” Larsen said. “A lot of that was a washout. Some of it was spectacular—obviously, Tesla came out of that—but a lot of it ended badly. So a lot of the venture capital around here is sort of spooked by things that are ‘hard’ technologies. They’d rather go into software and things like that, or solar that’s already proven, or [electric vehicles].”

H Cycle hasn’t settled on a site, but is focusing on petroleum-refining districts in California, while Washington state is also possible, Morgan said.

“We are focused on markets that value the low-carbon attributes, and places it shows up as a fuel credit or incentive,” Morgan said. “For example, British Columbia, as well as Washington, Oregon, California, all have a low-carbon fuel standard—you have to meet a lower-carbon fuel formulation if you’re burning gasoline or diesel. So those markets actually appreciate the low-carbon benefits of a clean, green hydrogen molecule.”

And despite how it ended, the Ottawa experience is key, said Morgan.

“Doing it on a lab scale, a $1-million pilot project is not that interesting to investors,” he said. “But if you talk about a $100-million project, you now have capital providers interested in your work.”

Lundy said Omni is fundraising, looking for $40 million to $50 million—half to staff up, and half to build a “reference plant” in Canada that Omni would own and operate itself. He said he’s aiming to increase its sales force after years of focusing on engineering, targeting two or three new financeable projects in early 2022, ideally in Canada. Lundy added he thinks Plasco was ahead of its time; Morgan agreed.

“I think that the previous incarnation of Plasco had a very interesting theory. And there were certain market dynamics that maybe didn’t support it,” he said. 

“I think that the current market dynamics around greenhouse gas, around methane, around CO2, around decarbonizing everything we can, is a really powerful theme that governments have gotten behind and society has gotten behind. And so, I see really great opportunities for the Omni technology going forward, and we’re betting on it.”

Correction: This story has been updated to reflect that Omni is backed by Peter Fraser, a principal at Toronto’s West Face Capital, not by West Face Capital itself.