Chinese emissions agency taps Picarro’s GHG analyzers

Sunnyvale, Calif.-based Picarro said it scored a deal to supply its greenhouse-gas analyzers to the Chinese entity responsible for monitoring and measuring the country’s emissions.

The new deal with the China Meteorological Administration is one of the largest deals for Picarro to-date, and it more than doubles the number of Picarro analyzers used by the CMA.

In addition, it shows the technology is getting traction beyond the scientific community, CEO Mike Woelk told the Cleantech Group.

“It’s moving now from science to regulatory compliance,” Woelk said.

Woelk declined to share the value of the deal or the number of systems involved, but the company said the deal will dramatically expand the size and scope of the CMA’s GHG monitoring network. The deal is significant for Picarro because of the CMA’s global reputation as a well-funded, highly advanced agency, Woelk said (see China to tax polluted air and water?).

“It’s a big accolade,” he said. “Other countries around world are going to look and see what the Chinese are doing they’re going to follow suit.”

Picarro is a spinoff from Stanford University, which licensed the cavity ring down spectroscopy technology to the startup. The company has since filed nine additional patents on the technology, which uses laser beams to detect changes in wavelength signals in the air, thus determining the concentrations of greenhouse gases.

Woelk said the system provides accurate measurements of emissions, unlike traditional practices of estimating emissions based on energy and fuel consumption. Woelk said adoption of technology such as Picarro’s is necessary if countries plan to create credible cap-and-trade or carbon tax markets (see A Copenhagen call to action).

“How else can you monetize everything that goes into the atmosphere? You’re not going to do it by estimating—that’s a fool’s game,” Woelk said. “To reduce emissions 20 percent in 10 years, you will only be able to do this with any sense of credibility with really good data, and that’s where we come in.”

Picarro has sold its systems to scientists in 43 countries, Woelk said. The company is hopeful the deal with the CMA could translate into more sales in the regulatory markets, but the bigger opportunity is the private sector, Woelk said.

“There are tens of thousands of greenhouse gas sources in the world that will be regulated. What’s great for us is that the same instrument suitable for measuring the atmosphere of a mountaintop or a forest is the same instrument that some guy in a factory can use to measure emissions coming from that factory,” Woelk said. “From a business standpoint that’s huge. It’s a one-size fits all platform.”

Picarro’s 58-pound system costs $50,000, amounting to $10,000 for each year of operation. Woelk said the pricetag is higher than some competitors’ but ends up being lower thanks to the operating costs.

Potential competitors include LI-COR Biosciences, Agilent Technologies and Thermo Scientific. The Scripps Institute of Oceanography in San Diego is developing technology similar to a weather program that monitors emissions and tracks them to their source (see Forget what you know about carbon emissions).

Picarro says its turn-key systems have an advantage against competitors because they offer extremely precise measurements without requiring much maintenance.

Conditions such as temperature changes and atmospheric pressure can cause drift in the lasers, requiring re-calibration of the instruments several times a day. That maintenance can be expensive—Woelk estimated that one competing system’s annual operating cost was $56,000.

Picarro says its customers have reported the ability to wait anywhere from 60 days to six months between calibrations, resulting in an estimated annual operation cost of about $2,000 per system.

“A lot of our intellectual property, a lot of our patents are around that. We have extremely precise laser control and temperature control in our device,” he said.

Picarro has raised $22 million from Benchmark Capital, Greylock Partners, SkyMoon Ventures, Staenberg Ventures and Weston Presidio Capital.

Woelk said the company is rapidly hiring new employees, including scientists, physicists, engineers, sales reps, and technical service people.