An entirely new format! Carbon Removal Newsroom is now a panel show. We are finding our cadence now, and new episodes should come out weekly, biweekly, monthly—we will see—with panelists from the world of carbon removal to give listeners the latest in carbon removal news.
This week's news: Stripe has announced its first negative emissions purchases! Climeworks, Project Vesta, CarbonCure, and Charm Industrial were selected after a rather interesting and open-source vetting process. The panelists discuss issues of permanence, the tradeoffs between various industrial, ecological, and hybrid approaches to carbon removal, and what this means for the sector as a whole.
This week's panelists:
Noah Deich, Founder and Executive Director of Carbon180
Tito Jankowski, Cofounder of Negative and the AirMiners virtual community
Aldyen Donnelly, Cofounder and Director of Carbon Economics at Nori
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Full Transcript
Ross Kenyon: Hello and welcome to Carbon Removal Newsroom. I am Ross Kenyon, Lead Strategist with the Nori Carbon Removal Marketplace. We are radically reformatting the show. This is the first one in the Carbon Removal Newsroom reboot. So rather than me finding stories ad hoc and chasing down guests, I am now envisioning this as a sort of panelist show where a collection of voices from within the carbon removal industry come together to discuss the latest news from within the sector. So this should be fun. It’s our first try. This is an experiment. You’re hearing it.
We have not rehearsed this. This is just us giving it a go. So I’m very excited to introduce our panelists. Today I have with me Noah Deich, founder and executive director of Carbon 180. Hey, Noah.
Noah Deich: Hey, Ross. Thanks for having us.
Ross Kenyon: Yeah, it’s my pleasure. Thanks for taking the risk on this little experiment. Let’s see how it goes. And Tito Jankowski, co-founder of Negative, which is a startup making jewelry using captured CO2 and host of the Air Miners Online community. Hey, Tito. What’s up? What’s up? Yeah. And Aldyen Donnelly, who is one of my co-founders at NORI and the director of carbon economics there. Hey, Aldyen.
Aldyen Donnelly: Hey, happy to be here.
Ross Kenyon: Yeah, I’m happy that all of you were able to make this work. This should be fun. Well, we have one really big story, which has dominated carbon removal, which is Stripe has announced its first negative emissions purchases. So Noah, would you mind introducing the topic and what’s been happening there?
Noah Deich: Yeah, of course. So the backstory here is Stripe is a tech company. They have a climate program and have been offsetting their emissions associated with operations for a couple of years now, as far as I understand. But last year they announced that they were going to do something new, which is not just offset all of their emissions, but start to think about how they could clean up some of their past emissions Using negative emission services, essentially. And the exciting thing about this story last week was that it went from a concept that Stripe published on their blog that they were going to do this to the reveal of the first projects that Stripe has purchased in this effort to buy negative emission services.
And they’ve done a handful of really cool things. One is at a high level, they’ve been really transparent. They said exactly what projects they bought. They said how much they were acquiring and what the price point was for some of the projects. And they also explained their reasoning behind why they made some of these selections. And I think this is a really important precedent for a number of reasons because we started to see companies not just set net zero goals and talk about carbon removal as a component of basically the net part of that zero emission target.
But we’ve also heard from companies that are much bigger than Stripe like Microsoft make announcements that they’re going to not just go net zero. But clean up their entire cumulative carbon footprint from all of their historical emissions by mid-century. And they’re going to use the net negative emission technologies to get them there, at least on the historical piece. And so this is a really interesting first mover in the field to try and reconceptualize how we can think about offsets that are carbon negative. And really break the offset paradigm in many cases because what they’re doing is not a conventional offset in any way.
It is very much a novel approach to acquiring negative emission services as part of a broader climate portfolio.
Ross Kenyon: You guys are feeling shy, huh?
Tito Jankowski: Nailed it.
Ross Kenyon: All right, what’s the next topic? No one so exhaustively covered it. One thing that struck me in this was the focus on permanence and the types of solutions that were offered. Did that surprise any of you?
Tito Jankowski: Yeah, I think they did a great job of kind of Walking a line between things that are kind of super out there and really beginning and projects that are kind of up and running and need a boost. And I think like Noah said, in terms of setting a precedent, it’s really sets a great precedent. In particular, I like how they’ve open sourced so much of what they’ve done, including all the applications for not just the four companies that were selected, but actually all the companies that were a part of that finalist process.
So to me, it sets a precedent that whether you’re an up and coming company that doesn’t have much of a track record or you do, either way, you need to be able to share and broadcast what you’re doing in an open source way. I think that’s going to help whether these future funds, say next year, go to early stage companies or later stage companies. All that information is going to be more open source and more distributed, which just helps everybody.
Noah Deich: Yeah, and I think that’s a pretty notable difference between some of the other offset schemes and major efforts in years past where most offsets today that focus on some element of carbon sequestration are nature-based. Reforestation or forest conservation, I mean, obviously Nori is working on agricultural-based carbon removal credits. I think the fact that Stripe went the opposite direction is really interesting, not just because they’ve clearly favored the clear permanence and easy to measure and verify compared to some of the natural options, but they’re willing to pay the price premium to do that.
And if you look at the prices that they’re paying, it’s between a hundred and basically $800 a tonne CO2 to remove carbon from the atmosphere. And that is way higher than what current voluntary markets are paying, which last time I checked, we’re in the roughly $5 a tonne range for many offsets. Some companies are willing to pay 10 to 15, somewhere in there. And then even some of the big cap and trade programs like the state of California’s in the electricity sector that have offset mechanisms in there on a compliance basis, Those are only trading at the 20s of dollars per tonne level.
So it’s a really interesting shift that they’ve optimized for high price, high permanence and ability to measure and verify and really gone against the trend of where the industry has been historically.
Ross Kenyon: Yeah, we had mixed feelings on it. Obviously, we would have preferred in some ways if Nori were selected, of course. Yeah, I mean, this is not news to anyone. But also, I like these choices because they don’t get as much attention as they should. And I want people to think of carbon removal as broader than just soil. And leadership like this, I think, really does a good job of this by choosing Climeworks and Project Vesta, CarbonCure, and Charm Industrial.com. I think that focus on permanence and industrial or hybrid approaches rather than the natural solutions, especially at such high prices, too.
I think it’s good for the entire sector that such a thing is happening. Aldyen, I don’t know if you have a take on that as well as the prices that Noah’s laying out. Does that map with your experience?
Aldyen Donnelly: It’s complicated because... Noah, for example, when you said people are paying maybe in some regulated markets $20 a tonne, I would argue, in fact, in most of those markets, that’s $20 a certificate, $20 an allowance or an offset credit. But in most of those markets, the underlying environmental value of a certificate maybe ranges between 25% and 50% of a tonne. One of my concerns about the traditional offset markets is there’s not only not true price discovery, there’s price obfuscation because the market still hasn’t figured out that those certificates with a face value of one tonne have underlying values that are typically much, much less than one tonne.
So in California, I would argue if you do the arithmetic, if people are paying $20 a certificate, they’re paying closer to $60 a tonne right now. They just don’t understand that yet.
Ross Kenyon: Well, some of these prices listed are still an order of magnitude greater than that. Like those prices are still much closer to the lower end natural solutions than they are to the upper bounds of some of the direct air capture or other solutions.
Aldyen Donnelly: I think it’s important to, maybe I would draw the lines differently. And I first want to say that I congratulate both Stripe and Climeworks because I totally agree that this is in every way a step in the right direction. But in terms of sort of getting it right and getting it wrong, I for one, and maybe this is reflecting Nori bias, so I should acknowledge that. I’m not so big on that distinction between natural and man-made or Or organic and mineralized carbon solutions. I think the first thing is we’re big fans of direct air capture and we are a dedicated carbon removal marketplace and had always planned to develop a methodology and invite direct air capture projects to list their credits in our marketplace and look forward to the future in which we do that.
Oh, sorry.
Ross Kenyon: That’s okay. Stronger feelings over there.
Aldyen Donnelly: Yeah. Do I need to start over so you can cut that out?
Ross Kenyon: Sure. That’s fine. Maybe we’ll keep it. We’ll see how it sounds.
Aldyen Donnelly: Okay. When it comes to direct air capture and drawdown, I think really what matters is not so much... It’s connected, but not whether the recovered carbon is stored in an organic or mineralized outcome. It’s, yes, what are we storing? So I could be looking, we could be looking at equally wonderful direct air capture technology. I would argue probably When the CO2 that’s drawn down is being injected into some reservoir and the plan is to store it in gaseous or some combination of gaseous and liquid form, I would argue that no matter how sincere the proponents are, it’s unlikely that carbon is going to comply with any permanence expectation.
So the key is...
Noah Deich: Wait, Aldyen, why do you say that? There’s a huge body of evidence that When it is injected, it does stay down there pretty reliably. I mean, DOE has been working on this for the better part of 20 years at this point. It has really robust data at the sort of tens of millions of tonnes level.
Aldyen Donnelly: Yeah, it’s interesting. In the late 1990s, early 2000s, I financed the first CO2 capture from a large gas processing plant in the Texas Panhandle. And the CO2 we captured and processed was injected in an enhanced oil recovery project. And I also have significant direct experience in the largest and longest operating coal-fired power plant CO2 capture and sequestration project in the world. And in both cases, if you’re injecting CO2 as a gas into a reservoir where that CO2 is connecting with moisture, you’re typically, among other things, creating pockets of methane that have to be continuously and are expensive to manage to keep that commitment that the CO2 is remaining in storage.
And I’m just arguing over the long term If that CO2, if the recovered C is converted into a solid, whether that solid is organic or mineral, you’ve got a way higher probability that it will be retained and it will be retained in a cost-effective situation.
Unknown speaker: For the... Yeah, I don’t want to... Oh, go ahead. Sorry. No, go ahead.
Noah Deich: I was just going to say, I don’t think that this is a question about whether you can store carbon for long amounts of time in... Natural systems, organic systems. But I do think that the data does show that if you’re sequestering carbon in geologic reservoirs, especially in saline formations, that you do get century to millennium scale carbon sequestration with pretty predictable Rates that you can expect in model how the supercritical fluid interacts and starts to mineralize with the surrounding rock. So I don’t know, I’m much less skeptical of that claim that one is...
That the geologic storage is less permanent. That’s a very unusual claim. I think most people would acknowledge that the geologic storage piece is actually a lot more long-lived. It’s just a lot more expensive in many cases compared to farmers changing their management practices or people conserving forests or planting trees. Doing all these nature-based practices end up having usually lower capital costs And are easier to get started and so I think that’s the real dichotomy that we see with most projects is that stripe is the only one that’s willing to go to the more expensive varieties that I think are easier to measure and verify with those well accepted standards, because everyone else is optimizing for the other thing, which is the cost piece.
What I think is super interesting is the volumes that Stripe is procuring, which is on the thousands to tens of thousands of tonnes per project. And that’s a really early, a really small initial amount. And I think the really interesting question for Stripe over the coming years will be, is that a sufficient volume that once they do the first set of projects, Is that going to start driving the technology advancement and learning curves that are required to go from $700 a tonne Climeworks offsets? Can that level of deployment cut that cost down considerably, potentially by an order of magnitude, which is where ultimately I think they’ll need to be to be able to compete with Some of the other nature-based and just broader decarbonization options.
Because at some point, it’s just going to be easier to not emit than to pay $800 a tonne to clean it up.
Tito Jankowski: That’s where I’d love to see what kind of this cohort does over the next... I forget what the terms are for the Stripe deal, but what’s the progress... I think that, like I said, Stripe has done a really good job in terms of open sourcing the applications, but kind of where does it go from here? Do these companies continue to get engagement in terms of telling that story or sharing that story more broadly? Because like Noah says, that’s That’s kind of the big story here, right? It’s not about the number of tonnes that they’re removing in this project.
Overall, it’s a million dollars of a purchase, but it’s really about what precedent it sets and what the larger implication is for the industry.
Aldyen Donnelly: I think those are really good questions, and I respect your Your feedback, Noah, but when we’re getting the answers and starting to ask, see what these projects teach us. And again, I say this only holding both Stripe and Climeworks in highest regard. Also, just following on one of the things I said, based on my experiences, it’s going to be really, really important to be tracking and getting a sense of How much of this, of maintaining the permanence commitment, is capital cost and how much is continuing operating costs? Because as I suggested earlier, I’ve been involved in two very successful projects that are meeting all of the tests everybody’s talked about.
But what’s overwhelming and why the proponents of those projects haven’t replicated them is because of the surprising significant continuing operating costs. That are associated with maintaining the permanence. And so if these are projects that are very fixed cost heavy and don’t have continuing capital costs or operating costs associated with them, that’s going to be a really, really good story. But it’s going to be important for us to see those numbers.
Noah Deich: Yeah, that’s a good point. I think my sense from these projects is they’re actually not going to be that capital intensive to do that monitoring, especially because none of them Are sort of the conventional supercritical inject CO2 into a saline well and do that. So Climeworks is really interesting because they’re working with carb fix on a basalt formation that mineralizes the CO2 on the order of years to decades. Whereas that CO2 and its saline formation takes hundreds to thousands of years to Really start to have a significant mineralization.
Aldyen Donnelly: I agree. That’s really exciting. That’s really exciting, that move on Climework.
Noah Deich: And same with Project Vesta. That’s a rapid mineralization and carbon cure. The really interesting one to me is the charm industrial folks, which is doing something that seems incredibly counterintuitive, which is to make oil and then bury it. And they’re not even capturing the CO2 associated with combusting the oil. They’re just not combusting the oil at all and injecting the oil back underground, essentially reversing the process of oil extraction in as literal a way as possible. And that’s something that I think is the entire community has never thought about that as a Logical place to go.
But I think at the time that they made this announcement, we were seeing negative oil prices in Texas. And obviously those have recovered, but still are in the $30 barrel range as of, I think, this recording. So it’s one of those just very bizarre processes, but One that emerges when you start to say, okay, how do we really optimize negative emissions, not how do we optimize energy production and then taking a waste from that energy production and turning it into carbon removal, essentially. And I think that’s a really good example of what’s happening in the whole biomass industry today, which 10, 20 years ago, people thought, let’s make energy with biomass.
And now I think people are increasingly pivoting to how do we make carbon removal with biomass? And in some cases, skipping the energy piece entirely, which is really novel in my mind.
Ross Kenyon: I have a question about Stripe’s approach, which may betray my ignorance, but I guess we’ll have to see. But normally when I see corporate social responsibility commitments, they will list out their emissions and really lead with that in many cases. But I find that isn’t the way that Stripe has chosen to present this information. They seem to have a budget, the $1 million that they intend to spend in the year. And then they wanted to spend it in the most efficacious way to spend that money to help assist the carbon removal industry to grow rather than focusing on just negating their emissions or going beyond that.
Is that actually what happened? Is that something that is new?
Noah Deich: I mean, I’ve certainly never seen a company do that before. And I think it all comes from the fact that when people started doing their carbon offsetting a couple of decades ago, it was an accounting function where people thought they were going to get regulated. And so in their risk management on the financial side, they started offsetting their emissions and tried to do so in a really low cost way. And that was one of the main drivers for why we saw this huge push towards offsets. And I think Stripe is right in saying they don’t see regulation on the horizon.
They also feel comfortable that they’re already offsetting all of their emissions. And what they see, I imagine, is this big gap between paying these low-cost offsets to get to Zero emissions today, but paying hundreds of dollars a tonne to get negative emissions. How do they actually go the opposite direction in the future at a reasonable price point? It’s all about buying down the costs of those offsets and doing so is not a investment play. It is a demand play. And so what they’re doing is they’re saying we’re going to flip the paradigm on its head and not buy Basically buy as many credits as we can with a fixed revenue stream instead of fix our volume and then pay whatever price it costs at the going market rate.
Ross Kenyon: That makes sense to me. Is that pretty unusual for what you’ve seen in your career, Aldyen?
Aldyen Donnelly: Yes, but again, Nori’s approach is started down the same path of reasoning, but we developed a different strategy. So one Nori carbon removal tonne, an NRT, represents an incremental tonne drawn out of the atmosphere and retained for a minimum of 10 years. So our approach to permanence has always been that if you want the equivalent of permanence, You buy 10 Nori removal tonnes in RTs, not just one. And we had a lot of different reasons for doing that. But I think that in terms of their strategy and Nori’s, Climeworks and Nori, we’re starting from the same position that we need to be working.
I think we’ve taken different strategies to get to the equivalent of permanence. And strangely enough, if you look at what Nori’s NRTs are trading for today, if 10 Nori NRTs are equivalent to 100 years of permanence, the actual price that is being earned in both markets is comparable right now.
Noah Deich: Well, and then there’s a third strategy altogether, one that I think Tito’s company is doing as well as Climeworks on some of their other business offerings, which is to not participate in the offset And think about how do you provide a product or service directly that is itself a pathway to carbon removal. So the announcement that we talked about as a group here is the Climeworks one on how they’re trying to make carbon neutral jet fuel with direct air capture. Thinking about how that can Displace the fossil based jet fuel in the future, but also be used as a way to drive down the cost of their technology so that they can then use that same technology, not just to make an inherently carbon neutral fuel, but also a carbon negative storage approach at some point in the future.
And I think that’s another really interesting angle that a lot of companies are thinking about is the Utilization directly in their supply chain as opposed to doing something that is an offset outside of their supply chain context. I mean, I guess it’s tougher for Stripe because they’re a tech company. They are not providing hardware or physical services that they can very readily make or use out of carbon removing products. But, you know, maybe they could. And I think, Tito, you could talk a little bit about The work that you’re doing, I guess people would not expect that you could make jewelry or even any of the other products that are on your roadmap with CO2, but the list is very long and I think opens a lot of doors for companies interested in getting into this space.
Tito Jankowski: Yeah, I really like how you touched on supply chain, this idea of companies making these more adjacent moves into tapping into carbon products or carbon removal that are more a fit for their industry. And just as you were saying, my thought was, well, maybe Stripe’s industry is like tech. If you look at these companies, two of them are based in Silicon Valley, Project Vesta and Charm. So in that way, potentially there’s a connection there. It’s like it’s a better fit for Stripe in a way. Though I doubt that was one of their selection criteria.
But yeah, making products out of carbon from the air is something that when we launched the negative campaign, I was really surprised to hear from people at actual direct air capture companies who would sort of say like, Oh my gosh, I didn’t know you could actually make a thing with this gas. And it’s like you would think of all the people on the planet, of course they would know about it. But it turns out it’s really, I mean, this is such a new topic, this idea Lufthansa and Climework staying together and working on making fuels very much an adjacent possible for Lufthansa because it’s part of their supply chain.
It’s a problem they need to solve. Maybe in previous carbon offset deals, it’s more just about, like you said, an accounting function rather than something that actually is a part of your supply chain.
Aldyen Donnelly: I also agree that using drawn down CO2 to make alternative fuels is a really good idea, but that’s not carbon negative, that’s carbon neutral, which is a good thing. I can’t wait till we’re seeing CO2 being drawn out of the atmosphere, mineralized and becoming the input in 3D printers and being stored in solid, useful parts and implements that are That constitute significant long-term storage on their own and which can be broken down and recycled and rebuilt into other parts sooner rather than later. So that’s a future version really of what you’re doing Tito.
But I think when we get to that point where that drawn down carbon is being made into car parts, then we’re going to be happy puppies.
Ross Kenyon: Wow. Slow down there, Neal Stephenson. Yeah, I like that vision of the future, this modular, open source, 3D printed, carbon captured world. That’s an air miner kind of vision, I think, Tito.
Tito Jankowski: Oh, yeah, totally. I mean, if you listen to Elon Musk’s announcement of their big, shiny stainless steel spaceship, one of the people in the audience asked, what is this area going to be? And I think it was a 10 year time frame. And he just totally started referring to how to pull fuels directly from the air. That was his first thing was like, you know, it’s going to be the biggest difference that’s here. So my thought is with these investments by Stripe, this deal happening with Lufthansa, these things are definitely near at hand than they potentially look at the moment.
Ross Kenyon: I think this is a good place to call it. And let’s see how people like this new panel-y kind of show. I think it went pretty well. I’m grateful that y’all were willing to give this a go. I guess let’s go through the line real quick and you can give your various plugs. If people like what you had to say and they want to keep up with you, Noah, what is the best way for them to do so?
Noah Deich: Check out carbon180.org and can subscribe to our newsletter there.
Ross Kenyon: Yeah, you’re also on Twitter quite often, yeah?
Noah Deich: Oh, yeah. You can find me at The Carbon Sync or our team at Carbon underscore 180. Cool, thank you.
Ross Kenyon: How about you, Tito?
Tito Jankowski: Yeah, I love this conversation. If you want to continue it, we’re hosting an Air Miners roundtable with three of the founders of these Stripe It’s going to be on June 3rd, so next Wednesday at noon Pacific Standard Time. And if you want to check that out, you can go to conference. airminers.org and you can sign up there. But we’re going to have Rob from Carbon Cure, Daniel from... Climeworks and Tom from Project Vesta. And maybe the others will sign on too. But yeah, if you want to find us online, negative is at gonegative.
co. You can check out what we’re doing there. But if you want to find me, I do a weekly newsletter on stuff going on in carbon. You can find that at tito.co. That’s probably the best place to find it. But yeah, hope to see you at that Air Miners event next week.
Ross Kenyon: I would personally highly recommend getting involved in the Air Miners community too. I think if you’re interested in this topic, you’ve listened to this show, you clearly are. That’s where your people are. They’re hanging out at Air Miners. So you should come find us over there and let’s make some stuff happen. And Aldyen, where can people find you on Twitter? I imagine you also want to plug Nori.
Aldyen Donnelly: [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.]
Ross Kenyon: Yeah, we’re ecumenical. We like it all. Carbon removal is just an exciting place to exist. Cool. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.] And thank you for listening. If you like the show, please rate and review us on iTunes, Apple Podcasts, Stitcher. Tell your friends. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.] If you have thoughts on this new format, I hope you enjoyed and thank you so much for listening.
