One Twin Cities company is developing a reactor to remove carbon dioxide from the air and convert it into a charcoal-like substance. Another is developing technology to change renewable ammonia to a combustion fuel for engines.

Both eventually hope to help make Minnesota carbon free — and make money in the process.

The companies, Carba and Aza Power Systems, are receiving seed funding through a new statewide initiative to develop their technologies, a critical step energy stakeholders believe will increase Minnesota's economic competitiveness.

The initiative, Minnesota Energy Alley, is designed to produce more companies that drive Minnesota's transition into a clean-energy economy. It's similar to Medical Alley, based in Golden Valley, which formed four decades ago to drive innovation in the state's medical device and health technology industry.

Minnesota Energy Alley is jointly operated by Minneapolis-based nonprofit Clean Energy Economy Minnesota and Minneapolis-based Grid Catalyst, a company that offers training and development to energy based startups, according to a news release. The initiative was founded with a $3 million, one-time grant from the Minnesota Department of Commerce.

"These are the types of investments that help support Minnesota's Climate Action Framework and that will strengthen Minnesota now and as we transition to a clean energy future," Minnesota Commerce Commissioner Grace Arnold said in a statement.

Minnesota's Climate Action Framework plan set a vision to make Minnesota a net zero-emission state by 2050, including reducing emissions by 50% by 2030.

Officials are hoping the initiative will also spur job creation. As of 2023, about 60,000 Minnesotans worked in clean energy and energy efficiency, according to CEEM's 2023 Clean Jobs Midwest-MN report. The energy sector accounts for 2.1% of statewide jobs and grew 50% faster than all other sectors of Minnesota's economy over the past year, the organizations stated.

A portion of the money — $850,000 — will go toward seed grants to Carba, Aza Power Systems and four other startups selected for Grid Catalyst's inaugural Demonstration Cohort, an accelerator program where early stage companies across the nation can demonstrate the effectiveness of their inventions in Minnesota.

Carba was the 2023 winner of the MN Cup, Minnesota's statewide innovation competition. Carba's reactor removes carbon dioxide from the air and buries the solid carbon beneath the earth's surface to reverse the effects of coal mining. The company's goal is to remove 1 billion tons of carbon dioxide from the air by 2035.

Carba is being matched with the city of St. Paul to test the effectiveness of its reactor. "We believe our process can help the city advance its climate action goals, and we are excited to begin exploring what's possible with their team," Carba chief executive Andrew Jones said.

Aza Power Systems will test its technology at the Center for Microgrid Research at the University of St. Thomas.

"The range of innovative technologies being developed by this inaugural cohort of startup companies, together with their local partners, is poised to significantly accelerate progress towards net zero across our economy," said Gregg Mast, executive director of CEEM. "We look forward to the positive impact these projects will have in growing jobs and elevating Minnesota's energy innovation ecosystem."