Finding Space to Innovate in a Tightly Regulated Sector

I’ve spent much of my working life developing technology on behalf of other people – solving problems, writing code, testing ideas. But I reached a point where I wanted to create something of my own. Something that could make a measurable impact on the climate crisis.

That’s what led to the founding of Nellie Technologies in 2022, and to the development of a carbon dioxide removal system that takes CO₂ out of the atmosphere and stores it for the long term.

From the outset, our work has been shaped by regulation. We operate in a sector -engineered carbon dioxide removal (CDR) – that exists largely because of government policy. Legislators in the UK, Europe and elsewhere have recognised that, even with reductions in emissions, some atmospheric carbon will still need to be removed to meet climate targets. That recognition created the beginnings of a market – but without a clear solution to service it.

So, unlike a typical start-up that develops a product and then looks for customers, we began with a defined market need and had to engineer a solution that would meet it. That process has required a great deal of innovation, not just in terms of the technology itself, but in how we built a business around it.

We’ve had to think differently about how to finance and commercialise what we do, because traditional routes to market didn’t exist. There were no templates to follow, no supply chains to tap into, and no established pricing models for the kind of carbon removal we offer. At the same time, the product itself – our carbon removal system – had to be designed to meet strict regulatory standards from day one. It isn’t enough to say it works; it has to be verified by independent certification partners, and the process must meet the criteria for carbon credits in the voluntary and, increasingly, compliance markets.

That regulatory framework gives credibility to the market and ensures environmental integrity – but it also limits the types of risks we can take. There’s a paradox here. The climate challenge demands urgency and innovation, but operating in this space requires precision, traceability and safety. We run high-temperature, high-pressure engineering systems. The team working on our pilot site can’t afford to be experimental in the conventional sense – creativity has to be grounded in safety, compliance and rigour.

So we separate the two: there’s room for research, for creative thinking and testing in our lab environment, but it must always feed into a process that meets regulatory expectations. That discipline, though sometimes frustrating, has made our technology stronger. It forces us to demonstrate impact and performance, not just intent.

Innovation also comes from the pressures of scale. As we move from voluntary carbon markets – where businesses choose to offset their residual emissions – to compliance markets, where carbon removal will be a legal requirement, the demand for what we offer is expected to grow exponentially. But as the market expands, the price per tonne of carbon removed is likely to fall. That means we have to innovate continuously, reducing the cost of removal without compromising quality.

It’s not always easy. Hardware is expensive. Supply chains are complex. And the challenges of running a young engineering company, from finance and HR and so on, are very real. But resilience comes from knowing that we’re part of something bigger. Everyone working in this space – suppliers, competitors, policymakers – shares a common goal: to remove atmospheric CO₂ and mitigate the worst effects of climate change.

We’ve built Nellie in that spirit. Our team knows we’re operating in a tightly regulated sector. But they also know that within those constraints, there’s scope for ideas, for problem-solving, and for making a difference. That’s what innovation looks like for us: not breaking rules but working creatively within them to help shape a viable, scalable and scientifically robust response to the climate emergency.

Stephen Milburn talks about this and more in the Mentera podcast episode Beyond Business as Usual: Fuelling Growth with Innovation. Listen to the podcast here.