Heavy industries are among the biggest sources of CO₂ emissions worldwide. Industries like cement, power generation, pharmaceuticals, and steel can’t easily eliminate these emissions because carbon is released as part of their core production processes.
While carbon capture technologies do exist, many of them require a lot of extra energy to operate. For example, in post-combustion carbon capture systems, CO₂ is first captured using amine-based solvents such as monoethanolamine (MEA). The solvent must then be heated to release the captured CO₂ for storage. This heating step consumes significant energy and can lead to additional emissions. Extra energy is also needed to compress and transport the captured CO₂ to storage sites. This is known as an “energy penalty.”
As a result, part of the environmental benefit is offset by the extra energy used in the process. This inefficiency, combined with high operational costs and lack of on-site utilization, has slowed large-scale adoption. This is especially true in emerging economies where cost sensitivity is high.
TraceXero addresses this gap by installing modular reactors directly at industrial chimneys to capture emissions at the source. Using a patented solvent enhanced with zeolite, the system absorbs CO₂, SOx, and NOx and decomposes CO₂ at relatively low temperatures (60–80°C) without requiring high external energy input.
To better understand how they are doing it, we spoke to Kushal Rathore, CEO of TraceXero. This article contains notable highlights from our entire conversation.
This interview is part of our exclusive Scouted By GreyB series. Here, we speak with the founders of innovative startups to understand how their solutions address critical industry challenges and help ensure compliance with industry and government regulations. (Know more about startups scouted by GreyB!)
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“Carbon emission was a liability and is a liability as of now. Like, how to turn it into a business model? That was the actual part which we need to find out.”
Kushal Rathore is the founder and CEO of TraceXero, an Indian climate-tech startup established in 2022. He leads the company’s mission to convert industrial carbon emissions into commercially valuable materials such as graphite and graphene. Under his leadership, TraceXero has completed industrial trials and is progressing toward pilot deployments across India’s hard-to-abate sectors.
A New Model for Industrial Decarbonization: 95% Absorption, 95% Graphitic Carbon
TraceXero has developed an on-site carbon capture and conversion system designed for direct integration with industrial exhaust streams. Its modular reactor captures emissions and converts CO₂ into high-purity (up to 95%) graphitic carbon and graphene at the source.
By transforming emissions into marketable materials rather than transporting them for storage, the company strengthens the economic case for adoption. With pilot deployments underway, TraceXero positions carbon capture not only as an environmental solution but also as a material production opportunity.
How would you describe TraceXero’s core technology and its impact?
Kushal: At TraceXero, we focus on solving climate change from the industrial front. Industries are among the largest contributors to global emissions, and while fuel switching and efficiency improvements help, there hasn’t been a direct endpoint solution that industries can install at their chimneys to reduce emissions immediately.
Our technology attaches directly to the stack. The flue gas enters our containerized reactor, which contains our patented solvent. This solvent absorbs CO₂ along with other harmful gases like SOx and NOx. Instead of stopping at absorption, we decompose the CO₂ into carbon and oxygen inside our system. What makes us different is that we don’t just capture carbon, we convert it into valuable byproducts like graphite and graphene right at the industrial site.
Many carbon capture technologies face the “energy penalty” problem. How do you overcome that?
Kushal: Energy intensity is one of the biggest barriers in scaling carbon capture. Traditional systems absorb CO₂, then use additional energy to release or transport it for storage. That process adds emissions and cost.
Our approach is different. We decompose CO₂ at temperatures between 60 and 80 degrees Celsius using our solvent enhanced with zeolite. This significantly reduces the energy barrier. We don’t transport CO₂ elsewhere; we decompose it directly on-site. That removes a major energy-consuming step.
For example, to produce one ton of graphite, we need five tons of CO₂. While there are still emissions associated with energy sourced from the grid, these can be reduced further by integrating renewable energy. The key point is that our process minimizes additional energy input compared to conventional systems.
What was the breakthrough that allowed you to convert CO₂ into graphite and graphene efficiently?
Kushal: Decomposing CO₂ typically requires very high energy. That’s the fundamental challenge in the industry. The breakthrough came from our patented solvent system. We use an amine-based solvent enhanced with zeolite, which acts as a catalyst and reduces the energy required for decomposition.
When we tested the output material, we found that the graphite produced was 95% graphitic in nature. If you compare that with mined graphite, which is often 55–60% graphitic before further purification, we realized we were producing a high-value material directly from flue gas.
That’s when our business model evolved. Graphite is already valuable, but when we successfully converted it into graphene for applications in coatings and semiconductors, the economics became much stronger. Instead of storing CO₂, we’re creating materials used in energy storage and advanced industries.
What stage is TraceXero currently at in terms of deployment and scale?
Kushal: We recently completed a 15-day industrial trial at Sun Pharmaceuticals in Punjab. Following the successful trial, we signed an MoU for a one-year pilot deployment. This pilot will remove 50 kilograms of CO₂ per day, producing around 7 to 8 kilograms of graphite daily.
From that graphite, we expect to produce 1 to 2 kilograms of graphene per day. Our fabrication is underway, and the pilot should be operational soon. We are also engaging with multiple other industries to initiate similar pilots.
In terms of efficiency, we achieved 93% absorption efficiency during trials in a biomass-based boiler setup. In controlled demonstrations with 99.9% CO₂ input, we reduced output levels to 0.01%. Industrial conditions vary, but we consistently operate in the 70–95% efficiency range depending on the environment.
What technical challenges are you currently working to solve?
Kushal: One emerging challenge is logistics. The graphite and graphene we produce are nanomaterials, often under 100 nanometers in size. Handling and transporting such materials safely and efficiently is something we’re actively studying.
There’s also the broader systems-level challenge: transportation adds emissions. If we’re serious about climate impact, we need to ensure that logistics don’t offset our gains. These are solvable problems, but they require thoughtful scaling strategies.
How supportive is the regulatory environment in India for carbon capture technologies?
Kushal: When we started in 2022, regulations were not very strict. But in 2025, the Indian government issued notifications requiring hundreds of industries to adopt carbon capture technologies. There is a growing push toward structured emission reductions.
India has also launched the Indian Carbon Market (ICM), and verification frameworks are emerging. We are working with institutions like NCCBM and MNIT for validation. International standards like Gold Standard and Verra also play a role. The ecosystem is evolving, and that’s encouraging.
As a deeptech founder in a competitive startup ecosystem, what keeps you motivated?
Kushal: From day one, we knew carbon emissions were a liability. The question was: how do we make industries care financially? Because industries won’t pay just to reduce emissions.
When we discovered we could convert CO₂ into graphite and then graphene, that changed everything. It wasn’t just about reducing emissions anymore; it became a viable business model. We could offer carbon credits and generate revenue from advanced materials.
Seeing tangible results, like producing high-purity graphite from flue gas, keeps us motivated. We’re not just building technology; we’re creating a model where climate action and profitability align.
Meet our Interviewer – Shabaz Khan, Marketing Manager at GreyB
Shabaz Khan, Marketing Manager
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