CDR startups are under pressure from numerous sources including current economic downturns, criticisms from the United Nations about carbon removal methods, and problems within the carbon offset market. Despite these challenges, significant investments continue to flow into the industry. This is largely due to the perception among investors that CDR plays a crucial role in reaching the goal of net-zero emissions.
In this episode our business panel analyze the impacts of three recent significant announcements from CDR startups.
Charm Industrial has secured a $100 million Series B funding round to further their bio-oil pyrolysis approach.
Carbon to Sea has successfully obtained $50 million in philanthropic funding to progress their work on ocean alkalinity enhancement.
Newcomer DAC startup, Holocene, has formed a partnership with the Department of Energy to accelerate their next-generation technology from lab to market.
These developments represent new scientific research supported by philanthropy, fresh cutting-edge technology, and significant funding efforts. Radhika and the business panel unpack what these milestones mean for CDR startups.
Providing expert commentary and analysis on these developments are Na’im Merchant and Susan Su. They lend their expertise to help us understand the potential implications these headlines will have on the future of the CDR sector.
On This Episode
Na’im Merchant
Susan Su
Radhika Moolgavkar
Resources
Na’im’s Carbon Curve episode w/ panel from Carbon Unbound
Subscribe to Climate Workers Anonymous
My other show, Reversing Climate Change
Books referenced in the podcasts, at Bookshop
Full Transcript
Announcer: You’re listening to Carbon Removal Newsroom, a weekly show about current events in the world of carbon removal, from technology and innovation to policymaking and job growth, brought to you by Nori, the carbon removal marketplace.
Radhika Moolgavkar: Hello, everybody, and welcome to Carbon Removal Newsroom. Today is our business episode. So as always, we have Susan Su, who is a partner focused on climate investing at Topa Capital, and she also serves as a board member at the Carbon Business Council and a board advisor to the Environmental Voter Project. Hi, Susan. Nice to see you.
Susan Su: Hello.
Radhika Moolgavkar: And we also have Na’im Merchant in his new role as the Executive Director of Carbon Removal Canada, coming straight from Canada now. Which is a new climate initiative focused on advancing inclusive policies and innovations to scale up carbon removal in Canada. He’s also an Elemental Accelerator Policy Fellow and runs the Carbon Curve podcast and newsletter on the policies and technologies needed to grow the carbon removal market. Hi Naeem, good to see you.
Na’im Merchant: Hey everyone, good to be with you.
Radhika Moolgavkar: And I am Radhika Moolgavkar, Head of Supply and Methodology at NORI. So today we’re going to focus on a few different startups. With the current economic downturns, United Nations’ criticism of carbon removal and issues in the carbon offset market, CDR startups are facing, you know, some headwinds. Despite these, we continue to see considerable investment in the industry, as many investors perceive CDR as a vital part of the path towards achieving net zero emissions. In today’s discussion, we’ll delve into the implication of three recent notable announcements from CDR startups. These range from small-scale startups to some of the most prominent in the industry.
We aim to explore what these developments, including cutting-edge technology fresh from the lab, scientific research backed by philanthropy, and $100 million Series B funding suggest about the current opportunities and obstacles for CDR startups. So we will begin with the $100 million. In series B funding that Charm industrials received, which was led by General Catalyst. The company, if you aren’t aware, uses pyrolysis to turn the residue from cornfields into an oil, which it then injects underground. So Susan, what do you think of that investment and Charm’s ability to attract investors like General Catalyst?
Susan Su: Well, I think it’s fantastic. Congratulations to Charm. Charm is just one of the top names in the space. They’ve been at it for a really long time. And we’ll talk about a couple of different things going on here. First and foremost, I think it’s really important to note that right now the investing environment is pretty, I think it continues to be pretty bleak kind of off the tails of 2022. And yet we see this $100 million Series B coming from charm in a space that’s very challenging. And I think it just shows that no matter what’s going on kind of categorically, there are always companies and entrepreneurs that stand out just because they do.
And Charm is a really great example of that. So Peter Reinhart, who’s one of the co-founders and the CEO of Charm, is obviously a really successful serial entrepreneur. He has longstanding, positive, strong, pre-existing relationships with investors. I’m sure a general catalyst and beyond at every single venture fund from his work building segment into a massive business. And I think Charm also is a company that has just said what they’re going to do. Done what they said they were going to do and done it sort of on the timeline they said that they were going to do it.
And that’s really not easy for a company that’s trying to really pioneer a novel way to remove carbon. I remember hearing about Charm years ago, several years ago, and what they thought they could do in terms of scale and pricing. And now it looks like they actually have line of sight to that. And I think that’s just The hallmark of a seasoned entrepreneur that doesn’t say things that he doesn’t believe aren’t going to come true. There’s a lot of planning behind the direction of this company and how it’s executed. And I think the excellence just sort of speaks for itself.
I will also say there’s another factor going for them, which is that I believe that many generalist investors today, especially at these kind of later early stage or even into growth stages, Are looking for their carbon investment. And if they look across the landscape at what that carbon investment is going to be. Charm is clearly a standout brand. Peter is clearly a standout entrepreneur. And so it makes a lot of sense that a lot of that attention and those investment dollars are going to accrue to this company. I’ll say like some of the things that are really strong highlights of what they’ve been able of what they said they would do that they’ve actually done.
Are that they’ve proven that they can sequester. Sure, still at very small scale, but I believe the last number that I saw was something in the 6,000 tonne range. Now Climeworks is in the, I think 10,000 tonne range and it’s been around for a lot longer than Charm. And so not to knock on Climeworks, I think Climeworks is obviously also an incredible company, but if you’re an investor that, you know, maybe you missed the Climeworks boat and it’s quite late stage now, and you’re looking for something that’s a little bit earlier.
This is a great quote unquote product, an investment product, a deal product for you. Also, they’re already on their second facility, which is really incredible in the amount of time that Charm has been around. The fact that they’re actually going out there and building facility infrastructure is really impressive and they’re already on their second one. So there’s something under the belt there. I would caution against, I think the question was, what does this say about carbon removal and carbon removal startups? I would caution it against reading too much From this particular deal on what it says about the category, I think it says everything about the company.
Radhika Moolgavkar: Charm definitely is charmed with the right kind of pedigree. Naive, in October of 2021, Charm claimed to have delivered the largest permanent carbon removal delivery of all time of 5,000 tonnes. Maybe it’s now even increased to 6,000. Since then, they’ve obviously seen a lot of growth. So what lessons do you think People in the startup, in carbon removal startups should learn from this, especially if they don’t kind of have Peter Reinhart’s entrepreneurial background.
Na’im Merchant: Yeah, well, I would just second everything Susan said about Charm and their leadership. I think it’s a really well-run company and I think they’ve done a lot of things right early on and I think they’ve been thinking very strategically about MRV and some of the policies that are gonna need to be in place in order for them to grow. And so I’ve always been kind of impressed with how kind of ahead of the curve Peter and his team have been. So great to hear about their recent success. And I think there’s so many things that have made Charm successful and Susan covered a lot of them.
I think an additional piece is that Charm really leaned into the idea that they can start small and modular and iterate and grow and learn. And modular form factors and the approach that Charm has taken in that respect won’t make sense for everyone. But where it does, I think startups should try to lean into that. Opportunities to learn what’s working, what’s not working, make the right kind of changes where they need to, and then be able to deliver what sounds like a small amount in 5,000 or 6,000 tonnes early on, but that’s certainly more than anyone else has delivered.
And so they’ll just be able to grow on that. They’ll be able to compound that growth and they’ll be able to build on that success. And each iteration that they build, every new facility or other kind of equipment that it’s part of their process that they have to build on is going to be better and more cost effective. And so then you can kind of really see what makes this a pretty attractive investment.
Radhika Moolgavkar: I think it’s interesting, and I don’t know if either one of you have thoughts on this, but Charmed has not seemed to have any pushback from the local communities or governmental bodies about what they’re doing. Some of the other CDR startups have seen that. So maybe Naeem, you would be best positioned to answer this question. Why do you think that is? What have they done that allows them to do multiple Mobile units and not get the same sort of pushback we’re seeing even around pipelines and other things in the CDR industry.
Na’im Merchant: Yeah, I mean, fundamentally, their approach is pretty low infrastructure. And so you’re not going to bump up against things that, you know, things like pipelines and so on, at least at the scale that we’re talking about right now. Right. That could change some point in the future. I’m not sure. But the point is, is that with Charm’s approach, They are dealing with waste agricultural residues. People understand that. They know about that. It’s not as science fiction-y sounding as direct air capture can be at times. And then they’re injecting in existing wells, which there are a large amount of them, and we’ve been injecting into those wells for a while now.
They’re not talking about bringing online Or they weren’t required to bring online an entirely new class of wells to make their process work. And so they benefited, not to say that there’s not going to be significant infrastructure needed and massive supply chains needed for Charm’s work at scale. But at least so far, they’ve had to bump up against less of that than I think other approaches like direct air capture have. And because we’re talking about waste residues in agricultural areas or other forested areas that people kind of have a grasp of versus something like Ocean CDR, where we’re not really sure what the ecological impacts really could be for some of these approaches and that require a bit more research and attention.
They’ve been able to kind of navigate around some of those questions. And eventually, you know, they’re going to come up against some community issues. Resistance or questions or whatever the case may be, they’re not immune to that. But at least to the scale that they’ve reached so far, I think that they’ve benefited from the form factor and their approach that have allowed them to kind of navigate that a little bit easier.
Susan Su: I would agree. And I would just say it’s a classic example of charm, really understanding the principle of keeping one foot in the known and extending one foot into the unknown. So there’s a lot that they’re leaning on that’s kind of preexisting processes that are already adjacent to the industries that Naeem mentioned. And then it’s just sort of like a slight twist the biomass incineration that’s already happening in agriculture and in forestry. Oh, but it’s like a little bit of a better twist. It’s a slight twist on the Depleted well injection that’s happening for enhanced oil recovery, but it’s like even better because we’re actually sequestering the carbon back underground.
So I think they’ve done a really good job of that. And then of course, the idea of bringing the process to the place where it needs to happen, as opposed to having to bring the matter, the biomass to a centralized facility is great because it just solves a lot of people’s problems.
Radhika Moolgavkar: Yeah, I mean, I was observing during Carbon Unbound to sort of a similar thing where it seemed like the startups that were doing the best were sort of adjacent to industries that already existed. And so to your point, Susan, partially in the known, partially in the unknown, a lot less scary than what all in the unknown. But one last question about Charm for you, Susan, is they have made off-tape deals with Frontier and J. P. Morgan and Lower Carbon, Exor, Ventures, Kinovic, Thrive Capital, Eli Guild all joined the Series B deal.
So what does the portfolio of investors say to you? And what do you think about the group as a whole?
Susan Su: I mean, I think it really speaks for itself. I will say that Stripe was an investor in Charm’s seed round. And so the frontier offtake and participation completely makes sense and was foreshadowed. Way back when that round happened. Some of its other seed investors also foreshadow this current round. So it was a lot of individual GPs of important funds. For example, David Ulovich was a GP at Andreessen Horowitz, participated as an angel. Thomas McInerney, who’s a really important angel doing a lot of deep tech stuff, has also participated in the seed round.
Peter Reinhardt himself invested in the company. Lower Carbon started in at the seed. So it was like very much an inside baseball type of fundraising profile for this company from the very beginning. And I honestly wouldn’t have expected at the Series B, if they went out and did everything they said they were going to do, which they did, I wouldn’t expect anything less. I wouldn’t expect anything less than General Catalyst and Elad Gill coming in for a round like this. I mean, those companies are, I mean, not companies, I should say those investors are in some ways kind of like market makers or they’re unicorn makers, I would say.
And it makes a lot of sense, but I would almost also venture to say that as long as they didn’t screw anything up really royally, a lot of this company’s fortune was sort of baked in at a very, very early stage. And that’s not in any way to diminish anything they’ve done since then because it’s still monumental to, you know, requires moving some mountains to be able to execute against some of those early plans. But I will also say that You know, for XYZ carbon removal company, and there are so many wonderful ones out there that are out there that are early stage that are maybe at the R&D stages or that are coming out of a lab.
Let this be a lesson to you that relationships, brand and connections matter just as much, if not more than technology and even than execution. Not that you can’t be a Non-excellent on technology, not that you can slack on execution, but that you need those other things as well, if not just as much, or if not even more.
Radhika Moolgavkar: I chuckle because I talk to a lot of supplier startups in my job and It is amazing the range of skills when it comes to the business and the branding and the relationship building that you see out there right now. It is really kind of like the Wild West from that perspective. I want to now pivot to a different type of funding model, which is Carbon2Sea. The former CTO of Meta has announced that his co-founded nonprofit Additional Ventures has launched the Carbon2Sea initiative A $50 million project dedicated to advancing ocean alkalinity enhancement through research, regulatory framework development, and increased scientific funding to the field.
So Carbon2See has received funding from philanthropic organizations. And Susan, how should these kinds of organizations be looking to aid the carbon removal field? What can they do that an investor in a VC cannot?
Susan Su: Well, philanthropic funding is absolutely critical in this particular category. And before I get into any specific thoughts on this, I will just go ahead, if anybody is, your ears are perked at this, go ahead and check out Prime Coalition and any of their resources that they have on their website that are incredible educational resources on how different types of philanthropic funding can work for climate businesses. Okay, so with that said, I tend to think about it as philanthropic funding is sort of like, think of it as the super early friends and family or angel investor that can back something when it’s too risky, even for venture.
Venture is a high risk asset class and it’s designed to be, but there are some risks on, for example, science and technology that even venture is not willing or not able to take because of its fiduciary relationship with LPs, for example. Now, philanthropy can take much bigger risks with capital because it is typically looking for a 0x to maybe a best case 1x return on capital. Now, remember, philanthropy is about giving money away. If you give a dollar to A. A shelter, a soup kitchen, an animal nonprofit, whatever it is, you’re not expecting that dollar to come back to you in the way that you do when you invest a dollar into an index fund.
And so that’s what I mean by the 0x. And in some cases, a 1x, if you’re using some of the tools such as program related investments or recoverable grants, which again, Prime Coalition, just everybody remember Prime Coalition has incredible resourcing for you to learn more about those tools. So I think just because of that, because of this kind of very flexible return profile, no one can negotiate. No one can beat zero. No one can beat free. And the fact that philanthropy is okay, is down with a zero X return on any money that’s given away, makes it incredibly useful and really kind of Critical in filling this gap that sort of no other type of financing can really get to except for maybe some certain types of government research grants.
So again, they’re free of those financial constraints and requirements that other types of investors such as myself, a VC, would be subject to. And it’s a category of financing that I really hope And the one caveat that I’ll list here is that while it can be tempting to think, well, I’ll just put some philanthropic dollars here instead of a 0x, maybe I’ll get a 1 or a 1. 5x. This is a great trick. To bypass the tax man or woman and be able to feel like I’m doing something good and sort of like not have all my philanthropy dollars go to zero.
I think we have to be really, really critical with ourselves and perform very honest assessments of additionality. Of impact. And what I mean by additionality is additionality of that capital. Are you really filling a gap that private capital wouldn’t otherwise fill? And then is the impact really there? And when I’m talking about impact, I’m talking about sustainability and climate impact. Or is this something that maybe isn’t as good as it looks on the outset? So I think all of those pieces are really important. But overall, I really hope to see more things like the Carbon to See initiative happening all over the carbon removal and really climate tech space.
Radhika Moolgavkar: So Naeem, what do you What do you see as the state of OAE commercialization? What kind of progress are startups making in this field? Where do you see the next year or so going?
Na’im Merchant: Well, OAE commercialization is still really early, and I think there’s still questions that need to be answered around monitoring, measuring, reporting, and verification, around community acceptance, around ecological impact. So I’m really excited about OAE, but as Susan mentioned, You know, we’re talking about really early ventures and so strategic philanthropic funding, like the type we’ve just seen here makes a lot of sense at this stage. Um, and I think startups are making progress in terms of getting small pilots off of the ground and we’re seeing, um, you know, universities like Dalhousie university in Eastern Canada got a lot of money, but $150 million to better understand ocean systems and ocean kind of carbon removal methods in particular.
And so together, you know, with partnerships with universities and with companies that are involved in this space, together doing some important, I think, foundational research and funding like this helps enable that. But I think, you know, we’re... We’re far from kind of seeing the sort of success that we’re seeing with groups like Charm, for example, in this space because it’s so early. And as Susan alluded to earlier, just a little too risky for a lot of venture funders to pile on board. So it seems like this is a really strategic use of funding to really advance the OAE field.
And I’m excited about what they can do about it.
Radhika Moolgavkar: So Susan, after sort of hearing what Naeem was saying about the readiness and your own observations about the readiness of OAE, how do investors think about this technology and when are investors going to be ready to jump in? What kind of outcomes do you think OAE needs to show in order to get to the next round of funding?
Susan Su: Well, I think the first thing is that you have to believe the markets are there as a very baseline to all of this. I think that is something we’ve kind of touched on across many different episodes of the podcast. And it’s sort of like at this point, not something we need to spend a ton of time on. We know that the markets are there and that’s why there are so many companies and so many investors already involved. But I do want to call that out as a very first kind of step zero.
And then from there, it’s all about does the technology work? What’s the price and how scalable is it? It’s really, I always say, the work that we do as investors is so simple compared to the work that builders do. It’s really just these kind of core fundamental questions that we ask over and over again of every single business, no matter what technology it is bringing into the world. Is there a market for it? Does it actually work? How much does it cost? And how big does it get? There might be some other questions around how unique is it?
What is the product differentiation? And is there, and where does it lie, a competitive moat around this particular type of product? But I think even before we get into those questions, especially with something as early as ocean alkalinity enhancement, we just want to know, does the technology actually work? Is there a line of sight to pricing that Fits with what the market has already demonstrated and has already expressed it’s willing to pay? And can this actually scale to any sort of size that could meet the demand that’s already out there?
So I think those are just really the fundamental questions. When it comes to something so early in its scientific, Research and development. I think one of the most important things to understand on the technology side is how feasible is it? Does the technology itself not just scale to markets, but does it scale from an implementation or from like a deployment standpoint beyond an experiment, beyond the lab bench, beyond the first pilot? There are a lot of things that can prevent scalability. In terms of unit economics and business model, but there are also things that can sort of hinder scalability just purely from a technical standpoint.
So it’s really important to understand both of those before and I think for there to be more common education and more of a common understanding around how all those questions apply to OAE before a lot of investors are going to start getting confident around this space.
Radhika Moolgavkar: So Naeem, final question to you. You’ve obviously talked a lot and written about the importance of diverse funding. And so what are you seeing kind of out there? Are we seeing more diverse funding mechanisms coming online? You’re obviously starting a new nonprofit in Canada. What does it look like up there? What are you seeing from a funding perspective?
Na’im Merchant: I think we still need to see, you know, a more diverse range of funding options, especially better targeted for different CDR methods that are further along or models that, you know, are trying to solve different problems. Not everyone’s trying to build a new technology, but they’re trying to develop the field or the ecosystem or an MRV tool or some of these other pieces. There’s an entire ecosystem that needs to be built beyond what we traditionally think of as a kind of carbon removal startup. So we do need to see more philanthropic funding, more government research funding and other forms of Non-dilutive funding that encourage that kind of research development and deployment of CDR methods and other technologies and other solutions that are going to support this entire new industry that we’re trying to build here.
I also think in general, when we have that greater sense of diversity of funding, we reduce the pressure on startups to Maybe overly focused or disproportionately focused on selling carbon credits at the expense of getting kind of key questions around MRV or community impacts or ecological impacts figured out. So what it’s really about is a more fit for purpose funding model for different methods of carbon removal. Ocean CDR is one that comes to mind. And I’ll just say again, it’s really great to see this team at Additional Ventures and now Antonius at Carbon to see really super smart people who are right to focus on Ocean CDR and I think hopefully serves as a model for This is exactly the type of funding and the type of organizations that we need to see to help build out this industry.
There’s a lot of questions around how do we develop markets and how do we do market shaping correctly? How do we build out institutions and systems for measurement reporting and verification? There are different funding models outside of the traditional VC world that are better suited to support those sorts of questions and figure out those sorts of questions. And so it was really, really exciting to see a new initiative like this with some really good backing. And I think they’re going to have a huge impact as a result.
Radhika Moolgavkar: So final topic, we’re going to talk about Holocene, a new DAC startup that is partnering with the DOE It’s hiring new staff and working to use its lower energy process to move the industry forward. They are based in Knoxville, Tennessee, which I thought was a little interesting, not usual in the space, and was founded by a former Climeworks engineer, Anka Timoft. I apologize if I said your name wrong. So anyway, Susan, we’ve talked about one of the leading fundraisers in CDR as well as well-funded, you know, academic, nonprofit efforts. What are Where is this company fit in with like a really interesting scientific idea but super like bench stage kind of in its tech?
Susan Su: It’s totally what we were just talking about earlier when we were discussing the Carbon to Sea Initiative and what Naeem has been discussing with this kind of plurality of funders coming online. In addition to venture, and I feel like today’s episode is just really the perfect It’s like the rainbow pageant of carbon removal startups and their funders. We have the venture-backed model with just a cap table chock full of insiders and a CEO that knows everybody in the business. We have a philanthropic model, and now we have a DOE-backed model.
I think this effort or company or organization is exactly right where it should be, and I’m so thrilled and happy to see the Department of Energy getting involved in something like this because it has not only carbon removal implications, but because it is a more efficient, less energy-intensive approach to direct air capture. I think there’s a lot of really interesting implications for energy utilization at large. And so I just think it’s fantastic that they have the DOE buy-in. I think maybe this is a company, depending on what direction it goes in, whether it does become a company or whether it becomes a technology that kind of merges with something else.
I think this could be a really great early Waypoint on the way to becoming a private organization later on. Now, one thing that did stand out to me was that they are licensing the technology from, I believe, a actually already a government funded Research Initiative. And so I am not, I don’t know the details around that. I haven’t, you know, looked at those docs or anything like that. I don’t know what that particular licensing model implies for enterprise value creation and capture down the road. But I imagine that any potential investors would want to look very closely at that.
But I think this is a really great example of how and why and where government can be involved in this space.
Radhika Moolgavkar: So Naeem, you were just at the DAC Summit and what were some of your takeaways and what do you think very early stage companies like Holocene could have or did gather from this industry meeting?
Na’im Merchant: Yeah, I had the opportunity to go to the DAC Summit a couple of weeks ago and it was really well organized and it had something like 400 people in attendance in person, I think a few thousand online. So it was really a successful event and a number of takeaways, probably too many to count. I had also had an opportunity to interview kind of four industry leaders in the space and get into that same question around what their takeaways were and was able to publish that today on my podcast. So if folks want to take a look at that and get a little deeper on takeaways from Direct Air Capture Summit.
Be sure to check that out. But I think for me, it was great to see the conversation more evolved and elevated in that we’re getting more precise and more nuanced and more analytical in how we talk about carbon removal and DAC more specifically. The importance of environmental justice and the importance of building trust through MRV systems and other systems to support the sector are finally getting the attention that they deserve. And it was really cool to see the opportunity to deploy direct air capture around the world, getting away from kind of a US centric perspective that we’ve all kind of had with these policies that have been passed a lot of the announcements around DAC recently in the US and seeing, wow, like places like Kenya could be really interesting places to deploy direct air capture at scale.
That was all really cool to hear. So there’s some really, really exciting kind of takeaways Coming out of that event. And I think all of those things are just something that a new company like Holocene and others can just keep in the back of their mind. I think they’re probably very early stage and at this kind of bench scale, this is stuff that you’re kind of thinking about down the road, but it’s just helpful to see the industry kind of evolving and getting a little more mature every single year. And that’s helpful to new companies that are starting up and they’re getting an opportunity then to learn about what they should be thinking about as they grow their business.
Radhika Moolgavkar: So Susan, you know, as a company like Coliseum grows, maybe their version 2. 0 of Jack or 3. 0, I’m not sure. But do you think there will be investor interest when they’re ready to go out for the VC funding? Or is it, you know, have the large investors already sort of jumped in and it might be too late?
Susan Su: Yes, I think it’s all going to depend on the specifics of some of the things that we talked about earlier around, well, we know the market is probably there around carbon removal. Otherwise, none of us would be here right now. But how does the technology work? Does it work? How does it scale? What is the pricing? All of those kinds of things. Let’s say those answers are positive. I absolutely think that there will be investors. I don’t think that we are At or anywhere near and certainly not past peak investment for carbon removal or for technological carbon removal or even close I think there’s a lot more to come, I think it’s still very early days and.
Just because investors have their token carbon removal. Deal doesn’t mean that it’s not going to be something that they revisit with new emerging technologies with better lessons learned and with more time. I think it’s also a very big world out there. We’ve heard about probably what fewer than certainly fewer than 50 technological carbon removal companies get kind of important major funding There are many, many, many investors in the sea and many that are still kind of watching the space, sitting on the sidelines. And so I think there will be plenty of opportunities for companies that, again, going back to the key criteria, can demonstrate that their technology actually works, that it’s price competitive, that it’s scalable, and that there’s really going to be an enterprise value creation opportunity around it.
Radhika Moolgavkar: So final question for you, Naeem, you know, as you, Holocene has the advantage of being a little bit later so they can have some lessons learned from current DAX startups. What would you tell them the major milestones they should try to prioritize to really get to a commercialization stage?
Na’im Merchant: I’d probably be telling them stuff they’re already thinking about, but, you know, I think How do you get to building out an early kind of pilot stage facility, kind of lower volume and focused on learning and improving and iterating on that I think is important. You know, figuring out what worked at bench scale that might not work in the real world as early as possible is probably a really useful thing to do. Um, also I think kind of getting really clear and specific about your differentiator is going to be important to do, uh, in what’s becoming a pretty crowded direct air capture field.
Um, this is, you know, if you look at the companies, um, listed on the direct air capture coalition website and, and other kind of, uh, industry organizations like direct air capture is, is not, I wouldn’t say it’s crowded, but it’s getting there. And, um, Or I would actually say it’s getting pretty crowded. And I think it’s important to kind of understand what your differentiator is as a new entrant in the space, given that there’s been a lot of action recently. So I think those are probably what you want to prioritize to ensure that degree of kind of successful commercialization at this stage.
The last one I point out is And this is a little further down the road for a company like Holocene, but thinking a lot about who do you kind of partner with to get subsequent projects off the ground seems like an important thing to do, especially given their model. And how do we kind of answer the question around carbon storage for direct air capture facilities and thinking about how that needs to be sorted out before we can really successfully commercialize this new approach. But ultimately, it sounds like they’re very early stage and some of the things that they need to get figured out right now is just What might not work in the real world that worked at bench scale and figuring that out quickly, I think is going to be probably job number one.
Radhika Moolgavkar: All right. Well, we’ll be following their progress as we follow most of these DAC companies’ progress. Susan, Na'im, thank you so much for your time. And I will see you guys in a month in July. And for all of our listeners, thanks for listening and hope you enjoyed the podcast.
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