This week, we’re joined by four of the teams that won the Carbon Removal Xprize Milestone award.
On April 22nd, Xprize announced the 15 winners of the second round of their competition for carbon removal solutions. Each of these teams was been awarded $1 million to help them compete for the grand prize of $50 million, or 3 $30 million runner-up slots, which will be awarded three years from now.
The grand prize winner may not be one of the 15 Milestone awardees, but these teams are a step ahead of the competition and have already demonstrated an ability to impress the Xprize judges.
Of the 15 teams, six are building DAC solutions, three are sequestering CO2 from seawater, three are producing biochar, one is growing algae (stay tuned for more on that), one is utilizing enhanced weathering, and one encourages tree-planting.
In the first segment, we spoke with:
Steve Oldham, CEO of Captura, which is building plants that will extract co2 from ocean water and…
Hans de Neve, CEO of Carbyon which is developing a novel machine design for a DAC system with a small footprint.
In the second segment, we heard from two other Milestone-award winners:
Jason Vallis, VP of External Relations Planetary which aims to use direct ocean capture to remove co2, reverse ocean acidification, and create renewable fuels and…
Dave Hazlebeck, Founder & CEO Global Algae which uses algae farming to capture co2 and make products like polymers and displace farming operations, leading to the regrowth of rainforests.
Joining Radhika to talk with these teams are Na’im Merchant and Susan Su.You’ll learn about the CDR approaches these teams are using, what they are working on right now, how the $1 million prize will help them advance towards their goals, and what they think they need to do to win the grand prize in a few years.
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: [music] Hello, everybody, and welcome to a special edition of Carbon Removal Newsroom, the XPRIZE edition. We have two of these today. My first is with our guest, Steve Oldman, who is CEO of Captura. Steve, so thankful for you coming. How are you today?
Steve Oldham: Good, thank you.
Radhika Moolgavkar: Good. And then we have Hans de, I forgot to ask you how to say your name before it started, so I’ll let you say it.
Hans de Neve: De Neve.
Radhika Moolgavkar: De Neve, CEO of Carbion. I hope I said that too, right?
Hans de Neve: Perfect.
Radhika Moolgavkar: Good. Thanks for joining us today. And then finally, I have Na’im Merchant, who many of you have heard before, and he’s a consultant who works with NGOs and startups on scaling up carbon removal and writes the Carbon Curve newsletter, which he just dropped a new one, I believe, yesterday or today. So go check that out. How are you doing, Naeem?
Na’im Merchant: I’m doing well. Thanks for having me on.
Radhika Moolgavkar: And then, as always, I’m Radhika Moolgavkar, Head of Supply and Methodology at NORI. So we are super excited to have some XPRIZE winners on the show today. For all of those of you who don’t know, what I’m sure you all do, on April 22 XPRIZE announced the 15 winners of their second round of competition for carbon removal solutions. Each of these teams have been awarded $1 million to help them compete for the grand prize of 50 million or $330 million runner-up spots awarded about three years from now. So the grand prize winner may not be one of these 15 milestone awardees, but these teams are sure stepping up the competition and have already demonstrated some pretty impressive technology to impress the judges.
Of the 15 teams, six are building DAC solutions, three are sequestering carbon dioxide from seawater, three are producing biochar, one is growing algae, we’ll be doing more on that later, and one is utilizing enhanced weathering, and one encourages tree planting. So today, in our first episode, we’re going to talk to Captura and Carbion. So Steve, let’s start with you. I think most of our listeners will recognize you as the former CEO of Carbon Engineering. So you spent a lot of time obviously in the DAC field and now you’re kind of moved over to Oceans.
So curious just what your journey was to Oceans and then also a bit of an overview about Captura.
Steve Oldham: Yeah, thank you. So yeah, I could answer that question in very long form, but I’ll try and be brief. So yeah, I think the first thing I’d say is there’s a dramatic change between when I started at carbon engineering at the start of 2018 and now. At the start of 2018, there was almost no recognition of the need for carbon removal. Direct tech capture, for example, was perceived as wildly too expensive, not relevant. And unfortunately, because that’s the right way to say it, unfortunately, carbon removal has become more and more critical.
And so carbon engineering, I hope I was able to advocate for and drive direct air capture as an effective tool in the fight against climate change. And I think we now have lots of different companies coming in with new technologies, there’s funding available, and that’s all fantastic. What attracted me to the ocean side though is the fundamental challenge of removing CO2 from the atmosphere is it’s so thinly dispersed. You need to touch a lot of air to be able to capture a meaningful quantity of CO2. So in the field of direct air capture, you have to build something that touches a lot of air and inherently that’s going to cost money or require a lot of physical space.
So Captura’s approach is, well, wait a minute, the thing that touches the air more than anything else is the ocean. It’s available, it’s enormous, and it’s free. So Captura’s approach is, let’s use the ocean in a non-harmful way to pull CO2 out of the air because the ocean is already a very effective absorber of CO2. About 30% of all the CO2 that we’ve released into the atmosphere has been absorbed into the ocean. And the chemistry is pretty straightforward. If you pull CO2 out of the ocean in the right way, the ocean will then pull the commensurate amount of CO2 out of the air.
So that’s what really attracted me. Here is a way in which you can eliminate a fair amount of the cost associated with touching lots of air by utilizing the ocean.
Radhika Moolgavkar: Cool. Thank you so much, Steve. And then Hans, I’d love if you would maybe give us an overview of Carbion’s approach and what excited you about it as compared to other DAC concepts.
Hans de Neve: Yeah, the approach of Carbion is actually reusing A technology that we were developing for solar panels because I’m a material physicist myself and I was working in the area of solar panels and there we use or we make use of techniques to put very thin atomic layer thin layers actually on certain substrates. And this actually brought me on the idea to reuse that technology that we use for solar panels and for microelectronics purposes. But to use that on a porous medium and in order to speed up the process, because if you have a very thin layer, an atomic thin layer, let’s say you don’t have any It’s not a slow diffusion process anymore.
So you can actually speed up the process of extracting CO2 from air. And that has been the origin back in 2017, I think that when the idea came about. Like what Steve was saying that in those days, nobody really acknowledged the need for capturing CO2, especially not CO2 from air because flue gas capturing has been around for quite a while. But capturing it from air indeed was deemed as too expensive and will always stay expensive. But I think now we see the onset of new technologies. That really proved that this could be a feasible approach, either through the oceans or directly through the air.
We use a technology filtering directly from the air, so we need to displace huge amounts of air and bringing that air in contact with the fast sorbent that we developed. And we don’t know whether this approach, of course, will prevail, but we think there is a fair chance that in this way we can indeed lower the costs and bring those costs down to a level Which is deemed economical or to do it in an economical viable way, let’s say. So that’s our approach to this problem. So we were founded in 2019.
And so, well, we’re still building up towards a prototype. So it’s still in the development phase. Let’s say we’re a young team, 12 people. So it’s still very, very premature, but we have a strong belief. So that’s who we are.
Radhika Moolgavkar: Well, thank you both for that overview. What strikes me that you both said and commented was how just five years ago, right, carbon CDR technologies were, you know, maybe at best mocked, at worst, you know, accused of being a moral hazard, but still there’s this explosion all of a sudden within a very quick period of time. So I’m curious How that happens and how you think now that there’s even more interest in the CDR world, it’ll accelerate that development of technologies. I’ll start with you, Hans, move over to you, Steve, and then would also love your perspective, Naeem.
Hans de Neve: Yes, I think people start to realize that it’s just not sufficient to stop emitting CO2 in the atmosphere. We will also at least partly undo while we’ve been emitting the past 150 years. And then there is no escape for capturing CO2 from oceans or from the atmosphere. So points towards capturing will not be sufficient. And I think people have started to realize that IPCC has now mentioned it, the IAEA has mentioned it. So gradually you see that these things are becoming more visible on everybody’s radar screen. It’s a gradual process, right?
And this takes some time for people, also politicians and other people to start realizing that we will simply need this. There is no way around this. And it’s frustrating, of course, that it is taken till now, actually, for things to become more Clear to many people and to a critical mass of people that this will be needed. But now we’re reaching this moment finally. And I think this is a very good thing, of course, for every company working on these technologies, because that means more money will become available. At the XPRIZE through Elon Musk, of course, is a very nice demonstration of that.
And this will only accelerate in time. But unfortunately, indeed, it has taken till now, let’s say, for a critical mass of people to start realizing there is no way around this.
Steve Oldham: So for me, I think a lot of people perceive the climate problem as an emissions problem. And it’s not. It’s not an emissions problem. It’s a total accumulation problem. Every day we make it worse with more emissions, but there’s yesterday and the day before and all the way back to 1850 or whenever it may have been when we started burning coal. So when you have a total accumulation problem, you need to address it in two ways. You need to cut down on your current emissions to stop making the problem worse, stop digging the hole.
And then secondly, you need to deal with what you’ve already done. So I think there is finally, I don’t think it’s there in all quarters yet, but I think there’s growing recognition that this is a total accumulation problem. As to what’s led to the change, I think there have been a number of companies, entities, individuals who’ve worked to show that carbon removal can be cost effective. It’s not cost effective for every single emission in the world. There are way cheaper ways to eliminate many, many emissions. But for a lot of emissions, and for yesterday’s emissions, because fuel cells, electric cars, solar panels, don’t deal with yesterday, it can be very cost effective.
At Carbon Engineering, we made a conscious choice to publicize our costs and our method to reset the thinking, because everybody perceived it was over $1,000 a tonne. We had to reset the thinking, and that’s what Carbon Engineering chose to do. And now the great news is people are more aware of this. So more brilliant minds are coming to this problem. And the more brilliant minds, the more companies, the more good solutions. I think Hans is quite correct. There will be some solutions that don’t pan out. I’m not suggesting Hans won’t pan out.
But in general, there’ll be some that don’t work, that don’t scale, that don’t have the economics. But there’ll be some really, really good ideas. And we need every tool In the climate toolbox to fight against climate change.
Radhika Moolgavkar: What are you thinking?
Na’im Merchant: I agree with everything that’s been said so far, and not to add too much here. But to build on what was already said, I think there’s also a growing contingent that looks at this problem as a justice issue. That the countries and economies that have made the biggest impact on climate change through the cumulative emissions of CO2 and other greenhouse gases have the responsibility to remove it from the atmosphere, and I think that’s newer way of looking at this problem relative to some the other ways of looking at it, but I think it’s a growing perspective and one that I certainly agree with, and I think that’s another area where carbon removal has an important role to play, and I think more and more people are seeing that.
Radhika Moolgavkar: So you said maybe right into what I wanted to talk about next actually Naeem. So thanks for that beautiful introduction. I wanted to ask both Steve and Hans a little bit about the moral hazard question, but not so much like is in terms of that allows people to admit more, but more in terms of, I think for the ocean specifically. So Steve, this is directed towards you. There’s a big concern about unintended consequences to the ocean biosphere, to the ecology of the ocean. And so how do you at CAPTUR think about that and how do you address that?
And then Hans, on the DAC side, at least in the US, there’s a lot of concern about the building and permitting of these units in areas of where historically marginalized or people who have historically been impacted by the oil and gas industry will be And there’s a big trust gap. So how do you overcome or how do you guys think about that trust gap? So Steve, I’ll start with you. Hans, I’ll go to you. And then Naeem, I’ll come back to you to get kind of a more broad overview, I think.
So please, Steve.
Steve Oldham: So we treat ocean health extremely seriously. Our product uses only ocean water and renewable electricity. We have no absorbents, no byproducts. Ocean water in renewable energy Causes our chemical reactions and the products of our system is CO2 as a stream of gas and decarbonized ocean water. That decarbonized ocean water causes an extraction of CO2 from the atmosphere within a relatively soon time period. And consequently, the ocean water is returned back to its current state. And we all know that one of the impacts of climate change is acidification of the ocean.
So our process actually helps with that by deacidifying. And then the natural process means that the CO2 is absorbed back into the ocean, but at the end of the day, the ocean water remains the same way. We’ll be working part of the advantage of the funds that we got from XPRIZE is we’ll be working with the ocean health bodies to ensure that everybody agrees with that and that there is no ocean health issue associated with that process.
Radhika Moolgavkar: Hans, how about on the DAC side? How are you guys thinking about some of these issues?
Hans de Neve: Yeah, I think on the DAC side, I mean, we need to consider indeed the, yeah, the physical locations of these devices. And I think there can be a not in my backyard feeling, but some of the things that we start to realize is that the footprint of this technology does not to be, the physical footprint does not have to be that large. And for the sake of the XPRIX, for example, we made some calculation that An extraction site of say 1 million tonne a year would not have to be bigger than a football field.
So in a way, the physical size of these systems do not have to be huge or disrupting in any way. Having said that, of course, I mean, it will need to have some location, of course, and you mentioned people or locations, areas where oil extraction has taken place and where pollution has taken place. There is also an opportunity there in the sense that all these empty oil and gas fields, they represent a major reservoir, of course, for putting the CO2 back from where it originally came from, obviously, because in a way, extracting it from the air and putting it underground in empty oil and gas reservoirs is kind of putting it back where it came from.
And this economical activity, because we’re talking here about an economical activity, of course, can also Help to boost activity in those regions and help to restore some of the damage that was caused to these regions and to these populations. So I think if we do it in the right way, this can turn out to be a very beneficial thing also for those regions that have suffered from exploitation of fossil oil and gas. And at least that has been I mean, for us, it’s more than simply developing a technology, also in the way you apply it and how local communities can benefit from it, I think will be key in how we want to run our business.
Radhika Moolgavkar: And then Naeem, just from an overall CDR perspective, when you think about, and I’m not tying out the moral hazard again of more missions, but more the moral hazard of the new technologies and the potential negative impacts, how do you balance that or how do you think about that generically?
Na’im Merchant: Well, I think we just need to accelerate the amount of research we do into what you know potential harms can can result and. I think that both of these companies have given us some pretty thoughtful answers around these potential challenges, but ultimately I can’t think of a more impactful way that philanthropies, academia, and governments can get involved in carbon removal than advancing some of our need for greater basic science and research around impact of carbon removal via oceans. Or some of the energy land use implications of direct air capture and other technological CDR solutions.
The sooner we do research on these issues, understand some of the challenges a little bit better, and know how they have You know, societal implications and implications on communities. I think that’s really critical to making sure that then companies like Captura and Carbion can can scale up quickly. The sooner we start answering these questions and do that front end research. And not to say that we don’t understand a lot of the science here, we do, in many cases, but what’s that kind of cross section with the social sciences? And how do we kind of incorporate that element of research to these kind of questions around location and siting, that’s really underfunded.
And the sooner we do that research and the sooner we get some clear answers around the implications of siting DAC or other types of carbon removal technologies on communities that are nearby, on ecosystems and so on, You know, that really positions a carbon removal field to scale up more quickly. But that’s a big gap right now, and I think we don’t know enough about it. So it’s great to hear these companies take it seriously and build on the science and research that we already have. But I think there’s still a gap, and we need to fill that quickly through, like I said, philanthropy, academia, and government to work out those questions for us.
Radhika Moolgavkar: So Steve, one more question kind of related to this. I think one of the big challenges that I’ve heard when I talk to people in the ocean space particularly is the MRV around it and how the development of the monitoring reporting verification piece is maybe not as sophisticated as it is in other types of CDR. So how are you at Captura thinking about that? I’ve heard that there’s some working groups going on and other things. How are you approaching that? Question around the MRV piece.
Steve Oldham: Yeah, I mean, there’s a whole variety of different ways of carbon removal and many have the MRV challenge. Direct Air Capture done in the way that I imagine Hans and certainly carbon engineering are doing it. You get a stream of gas, so it’s easy to measure that. Capture’s technology also produces a stream of gas, CO2, so you can measure that. And then the question that comes is, okay, we took that CO2 out of the ocean. How do we know the ocean then pulled it out of the air? So the chemistry of that is really pretty straightforward and very clear.
As long as your ocean water is at the shallow aspect of the ocean. If our decarbonized ocean water was injected deep into the ocean, we wouldn’t get that effect. So, you know, we position our plants where ocean currents are such that our decarbonized ocean water at the back of the plant will sit on the surface and will automatically produce that effect. So there is education to be done here, but Capturro’s technology kind of falls a little bit in between. We do produce a stream of CO2. You can measure exactly how much CO2 we took out of the ocean.
And we can then point to an enormous body of scientific work around the point that The ocean and the atmosphere exchange CO2 according to chemical changes. So it’s education for us to demonstrate that to people. And again, that’s the thing that we’ll be looking to do over the next 12 months.
Radhika Moolgavkar: And then final question before I move on to kind of the what Steve was alluding to, kind of how these companies are going to apply their price naive. So you obviously are Pretty deeply involved in the CDR space. So what did you think overall of the different milestone winners this time and kind of what set them apart from the 60 finalists? And I didn’t realize this, but the thousand plus applicants, which I think is a nice number to see.
Na’im Merchant: Yeah, it is. Yeah. I mean, when the XPRIZE competition was announced, I was really excited about the potential impact of this. And, you know, I’m glad it’s kind of lived up to expectations. I recently wrote an article on the Carbon Curve about innovative ways to finance carbon removal and innovation prizes like this are one of them. I think we need competitions like this every year. I’m not on the selection committee for this prize, so I don’t know what’s happening under the hood, but what I can say is that those First crop of 1000 applications were essentially carbon removal ideas that just about anyone could really submit.
But that next cut off of those 60 companies, they had really good, you know, viable solutions that theoretically could work and have an impact. I think what sets this group of 15 companies apart is a high degree of execution potential. They have a good chance to each remove at least 1,000 cumulative tonnes of CO2 by the end of the competition, which is a key requirement to win the grand prize of $50 million. You know, and that’s not only because of the kind of potential, you know, efficacy of these solutions, but, you know, these 15 companies have extremely high caliber management teams, you know, affiliations with institutions, you know, like, you know, MIT or Caltech or my alma mater at the University of British Columbia.
They’ve partnered with sequestration companies to figure out the tricky question around sequestration. So companies like CarbFix or 4401, and, you know, and they have a roadmap towards operating a full carbon removal project. You know, the grand prize requires that companies operate a full carbon removal project at scale of at least 1000 tonnes per year. And that’s really hard to do right now. Not a lot of companies are actually doing that. And so these teams were selected because I think they were uniquely positioned to execute and deliver. Not to say that the other 45 were not, but I think these 15 particularly kind of rose to the top for that particular reason.
Radhika Moolgavkar: Yeah, it’s very exciting stuff. So Hans, we’d love to kind of learn a little bit more about what your company is going to use this million dollar prize to accomplish and kind of the scale of the current operation and maybe the largest two challenges your team is working to figure out.
Hans de Neve: Yeah, I think for us, the main next challenge is to build a prototype of this technology and so far we’ve been testing the basics of the material. Now it’s time to build a machine on that can capture outside air and get the CO2 out in a thermal process so it’s the So the price money from the XPRIZE is very welcome now to expand our team. We’re still a very small team at 10, 12 people right now. So there will be some additional mechanical engineers that come on board. So the money will be mainly used this year.
And I think that’s what we’re going to do this year to finance, to build a first prototype that should deliver the proof point of, or the final proof point I would say of our ideas. We were able to present some proof points that make it, let’s say feasible that we could build this 1000 tonne machine, but there is still a huge amount of work that will need to happen this year Next year for us to achieve that goal. I think it’s a really nice goal because it puts, of course, it’s like a man on the moon target.
So everybody is tuned into that and knows that’s where we want to be, no matter how challenging, let’s say it is. And the money, the prize money is really extremely welcome for us to be able to scale up our team and finance the building of that prototype. So it’s the perfect moment, I would say.
Radhika Moolgavkar: And Steve sort of same question for you, what is the state current state of at capture and how do you want to use the $1 million to accelerate your program?
Steve Oldham: Yeah, I’m happy to answer that, but just before I do, I do want to comment on and sort of give some kudos to the structuring of this XPRIZE. The problem with the concept of prizes is you appoint a winner and in doing so you also appoint a bunch of losers. And as I said earlier on, we don’t need losers here. We need all the good ideas. So I think the idea of giving milestone awards to a number of companies, for small companies applying for a prize like this is expensive. It’s a use of key people on the team.
So rewarding that with early stage money, I remember when I started at Carbon Engineering, the only money we could get was from our own pockets. So being able to get some money from the XPRIZE I think is great, and the fact that they have these 15 milestones and then multiple prizes at the end, I think it’s really well structured. So I just wanted to give kudos to the XPRIZE team for really thinking about how best to incentivize and reward people trying to come into this area. With respect to capture us plans, we have our first two systems which we plan to put into the water this year, the first will be in.
Newport beach in California, the Caltech facility there and then we’re hoping to work with a leading desalination plant to apply our technology on shore. And by doing so, we’ll learn a lot. We’ll learn about real world ocean water. We’ll learn about those types of things. We do have a fully working lab demo and we import seawater every day into the lab to allow us to work with that. But putting them in the water, I think will make a big difference. And then for us, the key thing is the route that we want to take to get to at least a thousand tonnes.
To be honest, I’d much rather go larger. A desalination plant onshore has an output of brine. It’s a great opportunity for us to link in with that. And that should allow us to capture about 10,000 tonnes per year if we can find a desalination partner who’s interested in helping us and participating with us. So that’s a big challenge for us. And then the last thing is just scaling up. We now need to bring good people in, more good people. We have great people already. But we want to bring people in who are motivated by the climate space and who can help us build at scale.
So yes, it’s an exciting time and it’s all about growth. And the real thing that the Milestone Award allows us to do is just go faster. And that’s good because the world doesn’t have time to wait.
Radhika Moolgavkar: Yeah, and Steve, it strikes me that you’re one of the few people probably in the world that has actually worked for two carbon, you know, CDR companies and actually basically launched two. So I’m curious what the lessons you learned from carbon engineering you’re applying as you grow Captura out in this early stage.
Steve Oldham: It’s a great question. Carbon engineering had different challenges. The nature of carbon engineering’s technology is it’s designed for large scale to get the cost down. So that means the first of a kind plant is expensive and raising the funding for that is a challenge. Also, the level of awareness of carbon removal at the time was very low. So what carbon engineering did was we worked closely with Occidental, who’ve been a tremendous partner for carbon engineering because we needed a really big company to help us. Sorry, I shouldn’t say, I’m not carbon insuring anymore.
The company needed somebody like an oxy to really help them get to the stage of deployment that they needed to be. At Captura, we don’t have quite the same problem. Our capital costs are much lower because we don’t need to build air contact us. What I’m hoping to do is work with multiple different parties that are interested in building our technology. We’d like to license our technology to partners in many, many different areas, geographies and sectors so that they can work with us. I do think partnership is really important. There’s a lot of good technical ideas, but as we all know, many, many good technical ideas don’t get to large scale deployment.
And I think a lot of companies in this sector will need the support of larger companies and the financial sector to get to deployment. And what I hope is the visibility of things like the XPRIZE encourages larger companies thinking about what their business needs to look like in the world of climate change. And seizing opportunities in this sector with companies like ours and Carbillon and others to get to deployment quick. So I think those are my lessons learned. Work with partners and try and get more people engaged in this field.
It allows faster deployment.
Radhika Moolgavkar: Thanks, Steve. Yeah, I think partnership is obviously key to making all this successful. And it’s partnership between companies and government and, you know, Research institutions to names earlier point. So one last question kind of about the state of current things for you Hans is I think your website refers to a rotating drum, which will allow you to have your process have lower energy consumption, which as most of our listeners I’m sure are aware is one of the critiques of DAC is the amount of energy that it needs. So can you tell us a little bit more about that and how you as a company are thinking about high energy use of DAC as you work to scale?
Hans de Neve: Yeah, I think the energy use has been a concern, of course, for many years with respect to direct air capture. I think thermodynamics allow the energy consumption to be pretty low, as low as 250 kilowatt hour per tonne. But in reality, of course, it’s 10 times more or 20 times more, let’s say, depending on the process that you use. So a lot is about looking at the limits of what physics and chemistry allows to approach to get closer to that thermodynamic limit, let’s say, of capturing CO2 from air. And there’s quite some tricks, of course, that you can use for that purpose.
And one of the tricks, for example, that we’re using indeed with the rotating drum, what you get is actually that the time that we use to heat up the drum is actually quite short. And that means that when you do that, most of the energy goes into releasing of the CO2 and is not going to releasing any collateral material, for example. And because in most processes you have, let’s say, a chemical active substance, which is really the one that binds CO2. But that chemical substance is on a kind of carrier material, which has a certain mass.
Now, the bigger the mass of that carrier material, the worse your energy budget becomes. Because typically when you’re heating up the material to release the CO2, you’re also heating up the carrier material. And that’s kind of... Yeah, waste energy that you get into the system. And so the whole trick is to avoid as much as you can to heat up the carrier material. And one of the tricks, for example, is to shorten the time and to work with very short causes of heat and to concentrate that heat or that energy mostly into releasing the CO2 from the chemical molecule, which is binding the CO2.
So, and I think we also at Caribbean, we have years ahead to further optimize that energy budget. But the good thing is that physics allows it, right? So it’s a matter and that’s an invitation, I think, to many people around the world to look for smarter solutions on how to limit that energy budget. Numbers have been quoted in terms of 2500 kilowatt hour per tonne and I think our estimations is that we can get it maybe to 1000 kilowatt hour per tonne. Another aspect besides the speed is also, for example, the water budget.
I mean, besides CO2, there’s a lot more water in here than there is CO2. So one of the sidecatches, let’s say, when you capture CO2 is that you’re also catching water. And when you heat up the material, of course, you heat up also all the water. So there’s a lot of energy that goes into heating of the water, which you catch as a sidecatch. The tricks also to avoid catching water. So to make your material more hydrophobic, for example, there’s just a toolbox full of tricks that people, scientists and engineers can use and which not exploit it to its full potential.
And that makes it That gives a great feeling to people that want to work on this climate challenge that we’ve not exploited the possibilities of our knowledge to the full extent. We started this conversation by saying that A few years ago, five years ago, nobody was actually supporting the idea of extracting CO2 from air because everybody believed it would always be too expensive. So there was no financing, not even at research institutes or universities. Actually, very few people were researching this. But the result is that the global knowledge in this world about all the tricks and toolboxes that we need for making that process cost-effective, it hasn’t filled enough for the last few years because there has been not enough research and not enough financing that went into that.
So in a way, we are now catching up. And that’s a good thing, of course, but for sure we have not tried the last technique and the last tool. So I’m quite optimistic with respect to the future and because we’ve really not exhausted all the means, all the technical means to make this process more cost effective.
Radhika Moolgavkar: I was just at a conference in Miami this week and I heard a VC guy say, If the physics allow you to do it, we can do it. And, you know, I think his point was kind of exactly what you were saying, Hans, that we can do it. We just haven’t yet found the way to do it. So finally, I have the same question for both Hans and Steve. I’ll start with you, Steve. What is the roadmap for Captura in the next three years to help you win the grand prize or even one of the runner-up prizes because they’re all very generous?
Can you name one or two hurdles that you think you have to overcome to get there?
Steve Oldham: I think the roadmap for Captura is, let’s say, twofold. The first part of it is working on the regulation, the public awareness, customer awareness, finance awareness. Of the potential of direct ocean capture. We’ve done a lot of work in the last few years on direct air capture. For example, the 45Q tax credit, the California LCFS eligibility has made a significant impact in bringing larger companies to the table to start thinking about how to do this. So for me, a high priority is positioning direct ocean capture the same way that direct air capture is increasingly being positioned in regulation and just awareness.
And so that’s kind of a macro answer. The micro answer with respect to where we’re at, get those first systems installed in the sea and learn from them. Team with a partner for our first larger scale plant. We believe that we could go straight to a commercial plant. And if we work with the desalination industry or the oil and gas platform industry, there’s a lot of oil and gas platforms that are Retired every year because they’re no longer economic. They are great sites to house our technology. One oil and gas platform could accommodate about a million tonnes worth of CO2 extraction.
So we’ll be looking for partners who want to work with us to bring our first system into operation. And if that first system means that we qualify for the XPRIZE criteria, great. I mean, I think the XPRIZE is a wonderful setup. So yeah, I think those are the priorities for us.
Radhika Moolgavkar: Oh yeah, those are great priorities, Steve. I always gravitate to anything that’s reusing in the same way, because I think that’s such an important concept for just general environmental health that often gets overlooked. So I love the reuse of oil and gas assets. Hans, same question for you. What’s your roadmap for the next few years to win the XPRIZE and what do you think your biggest hurdles might be?
Hans de Neve: I think that the first main milestone will be building a first prototype of the machine. It will still be a relatively small prototype, say maybe once on a year. But anyway, it will have all the elements, including the scalability elements, That would allow us then to expand it into a 1000 tonne system one year later for the XPRIZE. So the proof point which we foresee end of this year and beginning maybe of next year is kind of the major next milestone for us. And we want to build it in such a way that it’s not a major hurdle then to upscale that to 1000 tonne or even beyond the 1000 tonne.
So getting all the components together to get that demonstration end of this year, I think it’s our main next step. And I concur with Steve also on the on the sequestration part of things that we, I mean, we partner with Other organizations that deal with the sequestration of the CO2 gas that we produce, storing it in empty oil and gas fields. I think it’s a very obvious way of storing the CO2, but there are still today very few operational sites that do actively store CO2 underground in this way. And many sites are under development as we speak, but many of them will come into operations only by 2025, for example, which is just too late for the XPRIZE.
So there will also be a challenge to find the right sequestration partner that can help us in 2024 to actually store. In a permanent way, the 1000 tonne that we hope to filter from the air. So we have a challenge on our side, of course, but there’s definitely also a challenge outside there in the world to find good sequestration possibilities for the gas, the CO2 gas that we will produce. So it’s not a dumb deal, far from it, but it’s a nice challenge to work on. And I agree with Steve, it’s something that simply cannot wait.
So, yeah, sometimes you’re frustrated that things do not progress faster. You would, of course, love to get more speed in this. And the bigger attention now from the world, and also thanks to the XPRIZE, of course, helps to accelerate. And that’s for sure. But in technology, I’ve been now 30 years in technology development and things turn out always to be more difficult than you think they will. It always costs more money than you think it will. And one of the big lessons of working in technology is that you need to deal with your frustrations and never give up.
So that’s a lesson learned and we’ll need that lesson in the years to come. We can have this conversation again in 2024 when we inaugurate our systems and then hopefully I can say we did it, we managed. But between now and that moment, a lot of water will flow into the ocean.
Radhika Moolgavkar: I love that Hans, I mean that’s an overall positive message, but we all know Anytime you construct something it’s always over budget and it’s always like you pull your hair out, but you get there eventually and that’s what you know we want to keep our eye on so I’m going to end it with you name because I want to come back to maybe a higher level look so. You know this these winners have given you kind of an idea of where carbon removals as we put state of the art is.
So what. Is your hope that to see in about three years when the final XPRIZE winner is announced? And what do you think the best teams need to work on to really help the industry get to the scale that we need to get to?
Na’im Merchant: It’s a great question. And yeah, you’re absolutely right. These two companies really are state of the art. So it’s been great to kind of hear about their vision and how they’re thinking about kind of their roadmap. I think they’re going to need to figure out over the next few years a few key things. They’re going to need to be able to demonstrate how they can overcome operational and even manufacturing obstacles with getting an operational CDR project started. They’re going to need to figure out how to navigate these tricky regulatory and policy challenges that come up as they start to build towards their roadmap.
They’ll want to be able to crowd in additional funding from other funders beyond kind of this milestone award, obviously. They’ll want to be able to durably and verifiably store captured CO2 themselves or with an injection partner or however else they’re storing CO2. And importantly, they’re going to need to be able to gain some kind of acceptance from nearby local communities. They’re going to need to start showing that. I know we’re still in the early stages here, but being able to figure out these kind of challenges as the rubber hits the road is going to be really important.
And, you know, the next three years are not going to give any of these companies, I think, enough time to start getting down the cost curve in a meaningful way or anything like that. But these kind of practical Challenges of actually going from a bench scale or lab scale or early pilot scale project to something that’s more of a demonstration plan that can do a thousand tonnes of CO2 is going to be difficult. And so some of those kind of operational manufacturing, regulatory policy, community acceptance stuff, they’re going to start bumping up against some of that.
Over the next few years, and this excellent group of 15 companies are just going to need to be able to figure out how to overcome some of those hurdles. But at the end of the day, if a good portion of these 15 companies can operate full carbon removal projects, You know, at a scale of, you know, a thousand tonnes, you know, cumulatively over a few years or beyond that, you know, that’s a huge win for the sector. So this is going to be great, you know, a great opportunity for the CDR space.
And I hope that we’re taking some time over the next few years to learn from the exemplars within this 15 of what they did right and what they could have done differently and what they learned. And open source that so that more companies that are engaging in this space can learn from their experience and we can kind of keep this flywheel of experience kind of going that will, I think, benefit the CDR space over the long term. So I think this can have a really catalytic effect and I’m really excited about what the future holds for this.
Radhika Moolgavkar: Well, thank you, Naeem. To end on that, I think, very positive and upbeat note, we all, I think, need good news in the world today. And Hans, Steve, I am so excited to keep watching your companies grow and see how you navigate these really interesting challenges, none of which seems insurmountable. It just needs a little time and effort. You know, as you grow, we hope we can have you back on the podcast and keep hearing about what you’re doing. So Hans, Steve, Naeem, thank you so much for joining me today.
I really appreciate it and learned so much. Hello, everybody, and welcome to Carbon Removal Newsroom XPRIZE edition number two. So I’m very happy to have with me this afternoon, Jason Vallis, VP of External Relations at Planetary. Jason, welcome.
Jason Vallis: Hi there.
Radhika Moolgavkar: And then I also have Dave Hazlebeck, founder and CEO of Global Algae. Hi, Dave.
Dave Hazlebeck: Hi.
Radhika Moolgavkar: You guys are in like two extremes of the environment, cold Canada and warm California.
Jason Vallis: Yeah, well, warm Canada right now, but yes.
Radhika Moolgavkar: Oh, boy. And then we have Susan Su, who is a partner focused on climate investing at Toba Capital, and she also serves as a board member of Carbon Business Council and a board advisor to the Environmental Voter Project. So with that, we’re going to go ahead and start talking to both planetary and global algae. So planetary aims to use direct ocean capture to remove carbon dioxide, reverse ocean acidification, and create renewable fuels. While Global Algae uses algae farming to capture carbon dioxide and make products like polymers and displace farming operations leading to the regrowth of rainforests.
Very high level. So I’m going to start by letting Jason and then Dave just give a quick overview of their companies. So Jason, take it away.
Jason Vallis: Hi. Well, thank you again for having us on the show. So planetary, we convert mine waste into a form of alkalinity, which we use to enhance carbon removal in the ocean. And so we can get into the details of what all of that is, but for carbon removal, it’s an ocean-based approach. We’re founded in late 2019 by our co-founders, Mike Calland and Dr. Greg Rao, who pioneered this technology. And we’re excited to be moving from lab to sort of pilot scale activities, and we can get into all those details.
Radhika Moolgavkar: Cool. Dave, can you give us a quick overview about global algae? You’ve been around since 2013, so much longer than most CDR companies.
Dave Hazlebeck: Sure. So our company is focused on bringing algae to market for production of proteins and oils. And we’re doing this because it is so much more productive than conventional crops. We’re talking about 20 to 30 time improvement in productivity. That level of productivity changes everything in terms of land use, water use, revenue and rural rejuvenation. It really will impact a large number of areas. Part of the biggest thing is it allows you to restore the rainforests because you can generate the protein and oil, which we’re currently deforesting to produce. You actually can stop the deforestation and enable reforestation.
So that’s the main CDR aspect. One of the products that we make from the oils is the polymers, and those also act as a carbon removal because the carbon will be stored in those polymers for several hundred years.
Radhika Moolgavkar: Both really interesting technologies. So Jason, maybe you could dive into Planetary a little bit more and tell us about your use. What I find fascinating is this use of mine tailings, renewable fuels. I mean, you guys are doing a ton. So maybe give our audience a little bit of an overview.
Jason Vallis: Happy to. So as I mentioned in the intro, our approach really starts with the largest natural reservoir of carbon on the Earth’s surface, which is the oceans. The majority, 83% of all carbon that’s in communication with the atmosphere resides within the oceans. It’s about 50 times more, in fact, than what we have in the atmosphere. And I think a lot of folks will also know that the oceans have been absorbing a lot of the excess carbon that we have emitted into the atmosphere. And this is having a devastating impact. It’s actually causing the oceans to become more acidic.
And it’s not good for marine life. But over geologic time scales, the oceans would naturally equilibrate. And they would do that through what we call the slow carbon cycle, where rain lands on rocks, erodes them or weathers them, forming these alkaline carbonates and bicarbonates, which end up in the ocean and effectively trap that carbon in the ocean. So our process is accelerating that by adding alkalinity to the ocean. And it effectively captures the carbon for 100,000 years within seawater chemistry. Now, the tricky part, and this is where we get into the fuels, is that this alkalinity or this antacid for the ocean that we produce, you can buy that on the market today.
It’s commonly found in like Rolaids, for instance. However, the way that is manufactured today is very carbon intensive. So it wouldn’t make any sense from an LCA point of view, life cycle analysis point of view to actually Take a carbon intensive product and put it in the ocean for the purposes of carbon removal. It doesn’t make sense. So we’ve re-engineered the entire process of producing this antacid for the ocean to capture carbon using mine waste. And we’ve done that in a way that doesn’t emit a bunch of carbon in the process.
It’s an electrochemical approach. And the benefit of that is that you produce these byproducts. So first, we have to purify the mine waste. In the process, we’re sort of mining mine waste for metals that we don’t want to end up in the ocean. Those metals have a market value. And the electrochemical process itself produces hydrogen, which can be used as a fuel or to decarbonize mine operations. So to put that all together, I know there’s a lot that I just explained there. Ocean, largest carbon reservoir on the Earth’s surface. It’s naturally going to take up all the CO2, but it needs to be sped up.
We do that by adding alkalinity or this antacid, which we produce from mine waste. And in the process, we have these byproducts that we can sell to reduce the cost of carbon removals, being hydrogen and battery metals, which also decarbonize the mine. Did you get all that?
Radhika Moolgavkar: I mean, it is the third or fourth time I’ve heard it, so it’s sinking in more and more each time. Really quickly, I’m curious about the mine tailings piece because does that limit where you can locate your plants because you need to co-locate in your mines or that part of the LCA analysis that you’re doing?
Jason Vallis: Yeah, so there’s sort of these Goldilocks scenarios where we would deploy this technology. The great thing is the mine tailings that we’re using, and we can use several different kinds. The metallurgical process can be adapted for several different types of mine waste. They’re globally abundant. They’re found all over the world. But yes, ideally you want to be located within a certain distance of a coast. So one thing I didn’t mention in my previous explanation is we’re using permitted outfalls like wastewater treatment outfalls to add this alkalinity to the seawater. So you want to make sure that you’re not having to truck this stuff, you know, hundreds of kilometers and then using, you know, basically emitting in that process, right?
So within a 500 kilometer radius of those outfalls, and that’s where our demonstration site is today. Yeah, I think that answers your question, right?
Radhika Moolgavkar: Yeah.
Jason Vallis: And then all the renewable electricity as well as a big key ingredient to a lot of these CDR methods as well.
Radhika Moolgavkar: Yeah. So Dave, can you give us a little bit more explanation about how your process helps helps reforest the Amazon and also the types of polymers and the uses for these polymers that you are that Global Algae is developing?
Dave Hazlebeck: Sure. So in terms of reforestation, the main way it addresses that is by eating the demand for either palm oil in Southeast Asia or protein in the Amazon, which are the primary drivers for deforestation. In the Amazon, it’s either soy directly or soy that’s displacing ranching and the ranching leads to the deforestation. So when we grow algae, we’re growing those in open Shallow ponds, basically, that are moving. So we call them raceways. They look kind of like little rivers that go around in a circle. And they absorb carbon dioxide directly from the atmosphere.
And then the algae itself is about 50% oil and about 30% protein when we harvest it. And it grows very fast because you don’t have any roots. You don’t have all the leaves and other things. It’s just a single cell algae. And so it’s very, very efficient. And so as a result, we get 20 to 30 times more protein and oil per acre than you can with the most efficient conventional crops. I mentioned soy and palm just because those are the best crops we have available today to minimize our land and water use.
And so that’s why we’re using them. We need something better, though. We’ve pushed the earth to the breaking point, really, in terms of not only climate, but also deforestation with water contamination and eutrophication from conventional crops. And so we need a new solution. Soy and palm were great solutions that have got us this far, in a way. I mean, I know they’re the enemy for a lot of people, but in reality, we would have already Gone past the breaking point if we didn’t have those high productivity crops. What we need is a new solution today to take us into the future that really changes things.
And with a 20-fold improvement in productivity, that really will lead to an abundant sustainable world where we can actually not only reforest areas, you can restore some grassland areas. You can restore a lot of nature because we won’t need as much land for our food. And we’ll restore a lot of waterways because with algae we don’t have any runoff. There’s no use of pesticides, herbicides. And that runoff from agriculture is the primary cause of global water impairment. So it’ll improve water impairment both surface waters as well as Underground water because you don’t have percolations, any percolation of things down.
And so that’s why it’s so important for the environment. And the climate is one aspect of it. It really, though, entails kind of restoring the whole planet, not just the climate.
Radhika Moolgavkar: It’s a very holistic ecosystem benefit package that your company is offering, it sounds like, from water cleanup. To carbon removal to reforestation really cool can you describe a little bit the polymers that you’re creating or where they’re used.
Dave Hazlebeck: Sure. So the oils that we make are kind of a combination. It’s omega-3 oils, and then there’s also the typical palmettoleic and palmitic oils. One of those oils, palmettoleic, is actually a very good feedstock for making polyurethanes and for making polyols. And polyurethanes are in lots of different products and everything from car seats to surfboards to shoes to just sandals, all kinds of consumer products. By taking CO2 from the atmosphere, growing the algae, putting that into those products. Those products, while they get recycled to the extent they should be recycled as much as we can, typically 70% of it ends up in the landfill and it all eventually ends up in a landfill, even if it’s recycled a few times.
And so that ends up being long-term storage because it takes several hundred years for that to degrade.
Radhika Moolgavkar: Interesting. So Susan, you are hearing some of the cool new technology that’s being funded through these XPRIZES. Kind of curious what your perspective is on the different milestone winners, the 15 winners, and how you think about the technology and what this maybe says about the XPRIZE and what they’re looking for.
Susan Su: Yeah, well, I think it’s incredibly impressive. I’m really happy that we’ve got Dave and Jason here today because they’re definitely among the milestone winners that are probably more interesting. I always think about it in terms of when you look at carbon removal, there are, so I’m a venture capitalist, I’m an investor, so I look at things in terms of through that lens a bit and I think there are questions around, and not every, by the way, not every carbon removal project that’s going to be meaningful to the world has to have a venture-scale business model.
I’m not saying that, but many of them are seeking venture dollars, which would imply that they are at least gunning for a venture-scale business model. I think that can sometimes put a very... Challenging set of pressures onto what’s already a really difficult endeavor, which is like literally science and magic combined into one. And so what I really like about what Jason and Dave are both doing is that you get a multi solve effect. But you also have other ways to basically generate offtake revenue besides just carbon credits. And I’ll say I’m really impressed because there are some companies out there that have raised venture dollars that don’t have the same sort of array of ways to solve problems, but also array of ways to make money.
That planetary and global algae do so I think that’s just really exciting and awesome. And, you know, different companies go about their Kind of like financing and storytelling strategy in different sequence. Some of the milestone winners have already raised venture dollars from prominent VCs and some maybe haven’t yet. And so it’s just a choice for the entrepreneur, whether you want to use The XPRIZE as a launch pad for your fundraising versus whether maybe fundraising just came at an earlier opportunity. So I think that’s also just something I would call out.
You know, something for me to even remind myself is, you know, just because somebody has raised venture dollars doesn’t mean that it’s a better solution than one of these XPRIZE winners and vice versa. And I think also, if you look at the milestone winners versus all of the other winners, I mean, sorry, the milestone winners versus all of the other entrants at this stage. So there were 60 that it was narrowed down to 15 milestone winners chosen out of those 60 and 1100 total applicants. I kind of gave you a funny funnel there, but it went from 1100 to 60 to 15.
The milestone winning is not even saying that out of all of those applicants that everybody else is bad and only these solutions are good. A lot of it has to do with where things are in the timeline and how far along some of the development cycles are for each of these. You know, accelerate for certain projects at any time, and while other projects might come up against some obstacles that might delay them. And so I think it’s all still anybody’s guess as to who’s going to win the bigger prizes that are going to be awarded down the road in several years.
But already, you know what, for investors looking at carbon removal and for anybody that’s looking to be a buyer of carbon removal, 15 is already a lot to diligence and look through. So I think what’s really helpful about these is it’s a convenient shortlist. When I look at the difference between these and some of the others that I’ve kind of checked out on a cherry picking basis, just because there are so many you have to kind of cherry pick, there is a degree of maturity and scientific rigor, but also scalability within these current milestone winners that maybe some of the others are still working on doesn’t mean they’re not going to get there.
But they are still working on it at the time, you know, within this current time window that the milestone winners were selected in.
Radhika Moolgavkar: It’s really, really good point, Susan, that this is we’re all on a timeline continuum, and these companies are further along than others. But we need, as they said in the last show, we need all the solution, every in every solution. So we’re certainly rooting for all the teams to be successful. Jason and Dave, one of the things that I talked about in the last episode, and I’m curious to get your perspective, is this idea of moral hazard. And I’m not talking about the moral hazard that is often considered, which is the, you know, carbon dioxide removal will prevent emission reduction.
I’m more thinking about the fact that you both touch waterways, and those are sort of are both kind of sacred places and also People are very concerned about the impact of technologies within the ocean or within waterways. So when asked that question, how do you respond to people who kind of question the potential negative impacts to the ocean or waterways that your different technologies have? Dave, I’ll start with you and then I’ll move to Jason.
Dave Hazlebeck: Sure. Well, first of all, just to clarify, we’re actually putting ponds on land, so it’s not touching waterways.
Radhika Moolgavkar: Okay, gotcha.
Dave Hazlebeck: And again, one of the big benefits is we’re not using the things that can contaminate the waterways. There’s no herbicides, pesticides, insecticides. There’s no runoff. These are lined ponds, so they don’t percolate down. And then there’s no runoff because even rain is captured there. So from that standpoint, I don’t think we have any Negatives for waterways, I think in general, you know, that’s been an emphasis though of the company from the beginning. We were founded to try and create, you know, improve the world and so we look at all the possible negatives and try and make sure we have answers for anything and that we, you know, design around that.
It’s actually one of the, One of the reasons why it’s taken a long time in research, as you mentioned, we started in 2013. We knew there was a lot of research problems that needed to be solved, not because algae couldn’t hit those productivity metrics. That was easy. The hard part was figuring out how to do it economically so that we can make a product that can compete with palm oil and soy directly without having any kind of subsidies or anything. And that’s really been what we focused on.
Radhika Moolgavkar: Cool. Well, thank you for the clarification. Obviously, I’m totally misunderstood, but I think I get it now, a little bit at least. Jason, how about you?
Jason Vallis: It’s a very good question. It’s something that we think a lot about. So I guess the question we normally get is about carbon removals, and is that just going to let people off the hook to keep emitting? And to that, I would say, obviously, decarbonization is job one. Anyone in I know that wasn’t your question, though, related to waterways, but I just wanted to put that out there. And one thing that’s unique to our process, which we call the accelerated carbon transition, that’s the short form, I should have probably started with that.
It’s with hydrogen and battery metals that not only are we doing carbon removal in the ocean, but we’re enabling decarbonization as well with those things because they’re going to be in high demand to get us to as low as possible emissions. But in terms of our work in the ocean, we have a whole team dedicated to that. And there’s two challenges. One is the measurement and the verification of the carbon. But alongside that, we’ve sponsored quite a bit of work with our partners at Dalhousie University, as well as at the University of Miami, looking at the impacts to marine life.
You know we know that ocean acidification so unabated pollution is having a devastating impact and there’s been research to indicate that alkalinity enhancement actually improves outcomes for things like coral reefs that become more resilient with alkalinity enhancement. But we can’t just take a couple of studies and say oh we think we know this is going to be good we have to continue to close those knowledge gaps and we’re very fortunate to be working with collaborators internationally dozens of PhDs that are answering these kinds of questions with us so yeah it’s pretty exciting time phytoplankton oysters coral reefs.
These are all things that we’re actively working with today. And the last thing I would just add is on the land side. So it is an electrochemical process. It does use fresh water. All of that, much like Dave was saying, is contained so that there’s no chance of contamination. So we actually recycle all the products within our metallurgical and electrochemical cell. And what’s left, so we start with mine waste, which is often hazardous for the communities that are living in and amongst it, especially at our demo site. And when we’re done processing those tailings, they’re actually Basically a sand, like a silicate material that’s left over.
So we’re destroying or mitigating the hazard that’s remaining in those tailings. So we think there’s a lot of really positive aspects to this from an environmental point of view besides just climate restoration and ocean restoration.
Radhika Moolgavkar: Cool. So pivoting on that, I’m curious to hear from both of you what this million dollars is going to be used for in each of your companies. What’s the immediate Roadmap for you with this million dollars. Jason, if you want to go first and then I’ll ask Dave.
Jason Vallis: Sure. So I mentioned at the beginning that we’re moving. It’s a very critical phase for us because we’re moving from these lab bench scale tests to the actual site where we’re scaling up this technology. So on the metallurgical process where we simulated our process, like hundreds of kilograms of tailings, I shouldn’t say simulated because we’re using real tailings. We’re moving to the mindset we’re going to be doing like 100 tonne Version of that process at the site. And that’s very similar to what we would expect to see at sort of a commercial scale.
You’d have multiple piles of rock that we’re working on. And then same thing with the electrochemical cells. So we’re moving to a new revision. We’ve got a whole battery of tests lined up to optimize that. And so that’s really the green teamwork or the land side. And then on the blue team side, we’ve scaled from sort of beaker, where we’re doing seawater with a little bit of milligrams of alkalinity addition or antacid and measuring how much carbon we uptook. Now we’ve just concluded pool-sized addition tests at Dalhouser University in the Aquatron, which has a really cool name.
And so we’re going through those results now, which look really, really promising. And at the same time, we’re doing baseline studies. So before we can do anything in the ocean, we have to have a very, very good understanding What the condition is today. And so we’re doing that in Bedford Basin, which is just by Halifax, as well as at the side of the UK. Actually, we had some funding from the UK government. And so we’re working with a wastewater treatment plant there. So by the end of the year, guided by the science, we hope to be in a position to do some actual testing in an outfall where we can measure this in real world conditions for a limited duration.
So that’s really the immediate. And then We’re taking all day’s time here, but next year we’ll be integrating the electrochem and the larger scale metallurgical process on site. And then the final year, I say final year for XPRIZE anyways, it’s shipping out basically a kilotonne of this product to the coast and doing addition so that we can have that certified pathway for removals. Dave?
Dave Hazlebeck: So right now, we’re moving from our R&D facility, which is what we’ve been testing on for the last eight years. It’s in Kauai. It’s eight acres of algae. And we need to scale eventually to thousands of acres, but we’re doing that in two We’re going a 20 times scale up from our eight acres up to 160 acres. And so that’s what we’re working on right now is getting that facility built. That’s the facility that will be used for the for the X prizes. But more importantly, probably it’s going to be used to generate offtakes will validate the technology at the next scale.
To allow us to move to full commercial, which will be in the thousands of acres, and generate enough product in terms of oil and protein that we can get larger offtakes that we’ll need to move to the large scale. And so there’s a little bit of a chicken and egg problem right now. Algae has been around for a while, primarily in niche markets, because the cost has been so high. Food companies and Consumer companies have not really been that interested in the product. They’re interested in following the market, but they’re not going to put any effort into it because they don’t know that the supply will be there.
And so you need to be able to generate enough to do that. This will allow us to do that and really start We have partnerships with most of these companies now, but it’ll allow us those partnerships to really expand so that we can generate those markets and have offtakes ready. Our goal is to be able to build a much larger facility like a 5,000 acre facility in 2025. That wouldn’t be part of XPRIZE, but that would be the first large scale commercial facility, which then we would cookie cutter in terms of implementation around the world.
Radhika Moolgavkar: Cool. You both sound like you have really well-defined roadmaps. And so Susan, I’m kind of curious from a VC perspective, when you analyze a company like the size, you know, where they are in terms of funding and size, what are you looking for in a roadmap? What are the things that catch your eye or that you would focus on as a potential investor?
Susan Su: Well, you know, to be honest, this week is probably a different answer than what most people would have answered a month ago or two months ago. And I think it’s actually ultimately very healthy. So I would say, number one, I love that Dave was talking about about really securing the offtakes. I think there’s a misconception amongst maybe people who are like still kind of the camp of like, well, are we really ready to deal with climate change? That demand is the limiter. But actually, you know, most of us who’ve been following this for a little while and kind of seeing the trends as they stand today in 2022, we realized that supply is actually The much harder problem to solve in many cases.
And in particular, if you’re selling into large scale industry, you know, there’s a minimum threshold that you need to be able to reach before anybody will even, it’s just not worth it for folks to talk to you. They literally can’t because their supply chains are set up in such a way that minimum threshold is actually quite high. So for some very early companies that I can’t remember which one this was, and I apologize, but I saw yesterday some news about a company that had That had successfully demonstrated that their technology could capture like 10 grams of CO2 or something like that.
Like if that’s you, great, but you need to have a very, very credible both science and also engineering as a separate phase story that shows how you’re going to get that path, you’re going to build that path to that minimum threshold of supply. You know, just the ability to build is the first really big thing. And then the second thing is, and I think this is hard because it’s going to be hard to hear because not every company can implement this, but I do think that We hear a lot about modularity.
We’ve heard about direct air capture companies that are taking a novel, more modular approach. Their machines are smaller, whatever, whatever, et cetera. And we think that modularity is essentially good because of the lower implied capex. But actually, I want to highlight that there are other reasons why breaking things into smaller pieces is really helpful. And one of the reasons is because as investors, at the end of the day, no matter how early a company is, you’re essentially trying to underwrite the validity of present or future revenue. Does it make sense, the story of how this company, if it’s a private company that’s going to seek private investment, does it make sense that this company can actually sustain itself and actually grow revenue and deliver returns?
And part of that actually has to do with how much it costs them. To generate that revenue, of course, that’s the CapEx, but there’s also an OpEx component to revenue, of course, right? How much does it cost them on an ongoing basis? Not just the facility that they have to build up front, but all of the ongoing inputs. And I think one thing that companies kind of forget because maybe they don’t How a lot of like finance people around them, which is, by the way, totally fine in these earlier days, is that it can actually be really helpful to structure your project such that OPEX and CAPEX can really be separated.
And that’s what modularity can grant. If you can do smaller things and sort of make your money along the way, as opposed to have to do a really, really big thing before you can take in a single dollar. That not only helps you and also all of your other stakeholders to really de-risk the technology, but it also helps your financial stakeholders to de-risk the financing. So that they can understand, oh, I see like, okay, we can do a smaller thing here, get a drip of revenue, see how that works, and then slowly start to make that into a scalable path.
So I think it’s a little bit of a long answer and it’s kind of maybe a little bit more technical than you were looking for, but I do think really thinking through not just how good is your product, how good is your technology, but really How clever is your financing strategy? Because there are probably choices that you can make early on that still let you do the same-ish, more or less the same product, more or less implement the same technology, but maybe are a better fit for the capital markets. And so that’s where I think founders that are, you know, these brilliant entrepreneurs Genius founders such as, honestly, Dave and Jason and everybody that they work with who’ve spent their entire careers developing incredible innovation on the science side could do well to kind of like scoot up or have those conversations a little bit earlier about the relationship between what they’re doing and how they’re gonna finance it.
Because actually that should inform the shape of your offering. Because it can make the difference between something that’s a lot easier to finance versus something that’s a lot harder to finance. And then the last thing that I’ll say, Radhika, is that this is all just my perspective from the venture capital side of things. But there are a number of XPRIZE winners that are NGOs or nonprofits, a lot of applicants that were not ever meant to be or don’t intend to be for-profit projects. And I think that’s great too. I believe there will be Enormous amounts of ongoing philanthropic capital that will flood into the space.
Philanthropic capital dwarfs venture capital in the United States in terms of just total amount. And so in order to really think through your product market fit, With regards to qualifying for philanthropic capital, it’s really thinking about your story. Do you have a holistic ecosystem benefit story? The way that Dave was sort of outlining with global algae, it’s about restoration. It’s not just about GHG emissions. Do you have a story about how you’re able to change the profile of these communities, for example, by kind of alleviating some of the damage that mines have done?
The way that Jason was talking about. So I think like actually having some of those other dimensions can also kind of like put you in the running for other types of capital. And that’s something good to think about too. But the bottom line is just be thinking about how you’re going to get that financing from day one.
Radhika Moolgavkar: Susan, that was a great answer and not at all technical. Something I think about a lot from a marketplace perspective is how these financing mechanisms are needed and also how to scale more traditional financing with these newer, less proven technologies and how those two intersect. A show that I’m going to do later, just FYI. But with that, you know, one thing I was curious about, Dave, that we didn’t quite dive into, but is how are you partnering with people in the Amazon? Have you kicked off any partnerships? Is this more about just cutting off supply and then working through the reforestation piece How do you envision that working?
Dave Hazlebeck: So to be clear, first, we’re not working with anyone yet. Our total focus up to now has been the R&D. Susan mentioned about the VC. There were a lot of algae companies that were VC funded about 10 years ago. All of them have either pivoted to high value products or gone out of business. And that’s because in order to make this competitive for commodities, you need needed a dozen radical innovations to get the costs down. The costs were 10 times too high, which means even small aspects of the process needed come down.
And so it’s taken, and I knew it was going to be a long R&D Hall to do that. And so I didn’t want to have an artificial timeline on that. It would make us try and scale too early, which is really what happened to most of those companies. They were on a certain timeline to generate revenue. They scaled before they got all the technology together that was needed. And so then they failed. And I wanted to make sure we really did get a solid technology base before we moved forward. And so that’s a little bit A little bit different.
But in terms of how we see this happening, once we roll it out, one of the things we’re doing actually is trying to reach out to foundations right now to partner with them so that we can work with people that are already on the ground in those areas and understand the landscape and can help us figure out the best way to go about it. We’re bringing a technical solution, a way that people can improve their standard of living, can help alleviate poverty, and at the same time, restore their environment. Thank you.
How best to implement that in areas is going to look different in different places. Indonesia is maybe a little more clear because there you’ve got 1,200 palm plantations that are all over 10,000 acres. I think about a couple hundred of those are owned by government entities. You could easily go with one of those and say, look, your palm plantation has to be replanted every 25 years anyway. A lot of those went in the early 2000s. They’re starting to roll around to where they’re going to have to redo them anyway. Instead of redoing it, how about we put algae in on 20%, let 80% go back to rainforest.
You’ll get twice as much oil and you’ll get all this protein as well that you can use to help support the aquaculture industry or feed for animal feed in Southeast Asia. And so you can see how that can work. But again, that always gets complicated when you get down to the local situation. That’s why we really want to partner with people Now, who are actually involved in these areas. And there’s one good model kind of out there now. Conservation International is trying to do shrimp farms to alleviate mangrove destruction. And so they’re going to farmers that are in mangrove areas and saying, look, if you put in this technology, we can give you higher productivity.
If you’ll let 80% of your land go back to the man or not land but 80% go back to mangroves, and just use 20% will and they actually provide the financing for that then to do that so that’s an interesting model and looking forward to seeing how that works out. It’s probably a good kind of forerunner for what we’re trying to do. It’s similar and give us some insight, but we don’t have the answers yet, but we envision having teams for every individual country, really, in terms of how it would get implemented there, because I imagine it will vary from country to country.
Radhika Moolgavkar: Yeah, I love your focus on localized solutions because I think you’re absolutely right that it’s not one size fits all even probably community to community within these countries, it will vary. So I want to pivot to next steps and hear kind of first from you, Jason, like if you guys in three years have won the grand prize for the XPRIZE, what do you think your like biggest Accomplishment will be, and what do you think are the biggest milestones you have to hit to get to that scale that you need?
Jason Vallis: That’s a big question. I mean, if we’re in the final running for the XPRIZE, which is what we intend to do, then just proving this ocean-based pathway for carbon removal is going to unlock A huge, huge potential, right? So the biggest milestone that we have to hit is, you know, we’ve shown this works in the beaker, we’re showing this works in the pool, and it’s going out and getting that sort of certified pathway to doing this in the real world. So sort of like the social license, we talked about the community aspects.
I really like Dave’s answers about how, you know, partnering with these local communities, and we’re starting that now. So I think that’s the biggest accomplishment from sort of a movement, if you will, Developing this ecosystem that’s going to unlock this huge multi gigatonne potential for carbon removal in the oceans, not just for our technology, but for all those other 1100 and a lot of those are ocean based that are vying for that kind of solution as well. From the mine site and the mine waste, I think there’s obviously a lot of technical aspects that we have to hit and we’re scaling those up incrementally on the metallurgy, integrating with electrochemistry.
But more so, again, it comes back to those community relationships. And so I’ve spent now more time at Mindsites than I thought I ever would. And every time, you know, what’s really great about my job, especially on the external relations side, is that, you know, people are excited about this. And you go and you talk to these towns, they’re very passionate about what they do. You just think, oh, they were just left with this big mess. They don’t actually see it as that often. They see that as there’s a huge potential here.
There’s other things that we can do here. And they want to be part of the solution. So in terms of the biggest accomplishment that we can make in this short amount of time for XPRIZE, other than actually achieving the XPRIZE, the 1,000 tonnes of removal, I think it’s really just showing the world that You know, we can have this kind of circular approach, use waste and scale up to gigatonnes.
Radhika Moolgavkar: Oh, and Dave, same sort of question for you. Like if in three years you’ve achieved the XPRIZE requirements, what are the biggest milestones and what are the biggest accomplishments you think you’ll have made?
Dave Hazlebeck: I don’t want to sound exactly like Jason, but it’s basically the same answer. We’re in the kind of what I had always been interested would be the toughest part. I love doing the research and development. I knew there was a lot of work to do there in time, but I figured we would get there. This step now going to the intermediate scale is the hardest one because if we can demonstrate at 160, we will then have offtakes and things to show that at the large scale, they’re going to give a great return on investment.
It will be, I think, easier to get investment in the full scale. Getting investment at this stage is still too small to compete in our final markets we want to go for. So, we actually have to produce some other products that aren’t the main ones, some nutraceuticals or other things, in order to make the economics work for this 160 acres. And so, this is kind of the most challenging step for us. And so, if we get past this step, then I think, you know, the sky’s the limit as far as where we’ll end up beyond that.
Even far bigger milestone for us than just XPRIZE is just getting to that next stage and showing we can do the, you know, the thousand tonnes of CO2, of course, but also demonstrating that the technology is economically viable and we can generate the offtakes we need to go to full scale.
Radhika Moolgavkar: Well, you know, I’m wishing you both the greatest of success and I have no doubt you will Get there, but I’m going to leave the final question to Susan, which is kind of Susan, you’ve obviously heard, we’ve heard from two really amazing companies. You gave them, I think, some fantastic advice about financing, but any other words of wisdom coming from the finance side that you would impart to them and kind of what do you hope to see in the next three years from these XPRIZE competitors?
Susan Su: Well, I guess, you know, just to echo something that we’ve talked about a little bit before, in which I think both of these companies or these projects, I should say, are It seems like everybody kind of has this in mind, but I think really having a diversified kind of business model is just extremely important. I think when I see companies that want to do all of these different things and it’s hinging on carbon credits alone, it feels like I don’t know why I’m thinking about this, but like a very, very large Christmas ornament that’s hanging on a very, very small thread.
And let’s say the ornament is made out of glass and you really don’t want it to break. It just feels like it’s not enough. And I like seeing increasingly more and more, not just in carbon removal, but also in other climate and environmental damage mitigation companies. Really this concept of waste to value or of finding ways to deliver measurable business value to customers and to stakeholders becoming more of a dominant theme. And I think that’s Awesome, because not only is it sound from a unit economics perspective and helps to de-risk sort of the financing piece, but at the end of the day, remember that just like philanthropists, investors also have to tell a story to whoever their investors are.
And it’s always a really awesome story when you can say, we’ve taken this thing that used to be a waste product, Or was actually a highly damaging waste product and found a way to run literally an alchemical process that is turning it into something that now people want. You know, Dave mentioned polyurethane at some point in this conversation. I mean, TPU is a massive, massive product. Business, like it’s used in everything from automotive to your Adidas sneakers to your fashion You know, accessories, and that’s a really, really big business. There are companies that are working on finding ways to get more TPU into the system.
Now, if you can be a supplier into that, then that makes your carbon removal efforts that much more sustainable and credible. So I think that is something that I would say for all companies that are coming forward now, like Starting to recognize that carbon credits are definitely going to be a huge part of the way that you monetize. And there is nothing wrong with that because carbon credits are going up and they are Going to have a lot of demand. But if you can layer on additional revenue streams on top of that, it helps to de-risk everything that you do.
And it’s a great story that the private sector, government funders, and philanthropists will all want to be a part of. And I always say this, but just do not forget the story value of what you’re building. So yeah, that’s what I would say.
Radhika Moolgavkar: Well, I think these two companies have amazing stories to tell. I am so looking forward to watching you both grow and see what happens with the XPRIZE and beyond. So hope to have you both on the show again. Until then, thank you so much. Have a wonderful weekend and everybody take care.
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