2023 is coming to a close, and a lot has happened in the world of CDR this year.
We’re going to take a look at the year in carbon removal to find out what’s changed in the last year- and what hasn’t.
Investment in CDR remains strong, with many big deals making headlines- but what hasn’t changed? Deployments remain small and few in number.
The traditional offset market has faced scrutiny like never before, and seen a dip in investment. What’s still the same? Corporate buyers are still seeking out the lowest quality products.
Broadly climate progress is being made, but a new emissions gap report highlights how much more work there is and how much CDR has to grow to contribute.
So join us as our business panel takes a look at what’s new in CDR, and what’s the same as it ever was.
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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: Welcome to the December 5th edition of Carbon Renewable Newsroom. 2023 is coming to a close and a lot has happened in the world of CDR this year. We’re going to take a look at the year in carbon removal to find out what’s changed in the last year and what hasn’t. Investment in CDR remains strong with many big deals making headlines, but what hasn’t changed, deployments remain small and few in number. The traditional offset market has faced scrutiny like never before and seen a dip in investment. What’s still the same? Corporate buyers are still seeking out the lowest quality products.
Broadly, climate progress is being made, but a new emissions gap report highlights how much more work there is and how much CDR has grown to contribute. So today with our usual business panel, I’m gonna take a look at CDR, what’s new in CDR and what’s the same as it ever was. So welcome, Susan Su, who is a partner focused on climate investing at Toba Capital. She also serves as a board member at the Carbon Business Council and a board advisor to the Environmental Voter Project. Hi, Susan.
Susan Su: Hello.
Radhika Moolgavkar: And also Na’im Merchant is the Executive Director of Carbon Removal Canada, a new client initiative focused on advancing inclusive policies and innovations to scale up carbon removal in Canada. He’s also an Elemental Accelerator Policy Fellow and runs the Carbon Curve podcast and newsletter on the policies and technologies needed to grow the carbon removal market. Hi, Naeem.
Na’im Merchant: Hi, everyone. Good to be with you.
Radhika Moolgavkar: And I’m Radhika Moolgavkar, Head of Supply and Methodology at Nori. So let’s just jump in into 2023 and what’s changed. I’ll start with you, Susan. How do you reconcile the robust investment into the CDR sector with the reality that deployments remain small and relatively infrequent? In your opinion, what are the key challenges preventing these investments from transitioning to larger and more numerous CDR projects on the ground?
Susan Su: Okay, so I did a tiny bit of digging on this and pulled out some numbers. Q2 of 2022, so not this year, but Q2 of last year, this is a little while back, saw around $880 million of private capital across 11 deals go into CDR. But the entire preceding year, the trailing four quarters leading up to that, so Q2 2021 up to Q1 2022, Only saw 432 million or about half. And so to me, a big reason why we’re not seeing a massive sudden uptick in supply just yet is because it takes time to build and deploy and eventually scale these In some cases, technologies, in other cases, simply projects.
But the whole pipeline is actually has been very recently robust. So I think we can look at what’s been happening in 2023, which has been a good year in terms of Frontier making a bunch of commitments, some bigger buyers, Amazon and Microsoft making announcements, but all of that then has to go through the whole function machine of it’s great that there’s demand there, but supply has to ramp up to meet that demand. So I think that’s part of it. And also another part of it, if you remember back to 2022, It was sort of a situation where a lion’s share of investment really went to two very large deals.
One was Climeworks. Do you all remember Climeworks? $634 million. And the other one was a company called Carbon Clean, which was $150 million. And so both of those companies are doing pretty advanced technological carbon removal, which again, it’s wonderful to see R&D and even early deployment dollars in there. But what we really need to see is project finance before we start seeing a dramatic scaling up of what these companies can deliver. At the lower end of the price and in some cases perceived quality spectrum, we have tonnes of We have avoided emissions.
We have lots and lots of biochar when it comes to actual removal. We have lots of forestry when it comes to actual removal. And even those though, because they’re the land-based removals, takes There’s a whole permitting, there’s a whole project setup process. So it’s not like you can just switch a light switch on and then the whole room lights up. It’s more like we need to set up an entire grid before the lights can come on. So I liken it a little bit to that. The last thing that I will say is that The IRA, which was huge for incentivizing the buy side, it dramatically increased the price of the 45Q tax credits up to $60 per tonne up from $35.
And for direct air capture as high as $180, that’s quite a lot. That only turned on, I mean, it’s been a year and three months, I guess, since the IRA, but then like it’s policy. So it takes like a whole bunch of time to implement and then the market has to respond to it. So I just think we are, I think we’re right. We’re in a fine place, actually, when it comes to delivering supply. I’m not concerned about that at all, especially because a lot of the dollars that we have seen, venture dollars have gone towards Whether it’s direct or capture or some other type of technology-driven carbon removal, which again, think about the technology cycle.
It has to be de-risked from a science, engineering, early deployment, and eventually scale deployment perspective. So there’s like a lot of steps in there. And then the last thing I’ll say is that it is currently, as far as I know, free or in some places, almost free to pollute. And it’s very hard to compete with free.
Radhika Moolgavkar: One thing that you touched on, Susan, is the whole capital financing piece. And I am curious if you have any opinion or thoughts on where we are in our current development cycle as a CDR industry in the path to getting to capital financing, right? I mean, I think that is sort of the holy grail for a lot of suppliers. But to your point, the tech’s not ready. The policy’s not there. The permitting is difficult. So where do you think we are as an industry and how do you think that’ll evolve in the next few years?
Susan Su: It’s so hard, right? It’s like the ultimate chicken or egg, but it’s like a multifactorial chicken or egg problem because in order for project financiers to get involved, they have to be able to underwrite something to many years into the future. And that means that demand has to be baked in a certain reliable way. But also, and I feel like we are just like a broken record on this podcast in some ways, but here we are coming back to protocols and MRB. I mean, that’s a really important piece of it.
And so everything has to kind of co-evolve, which I think it is. I think we are going the right direction. And there’s just an enormous number of companies, investors, Getting involved in CDR in one way, shape or form. And it just takes a little bit more than a year for that all to percolate. But I do think, you know, and I’ve said this on previous podcast episodes, but uncertainty is the enemy of liquidity and liquidity is a friend to project finance. So we need to, you know, the enemy of my enemy of my friend kind of thing.
We need to Just increase certainty across the board, which is why Frontier is really powerful, but also having better MRV tools is really powerful, and also protocols that everybody can agree on is really powerful. So maybe we’ll talk a little bit about that later.
Radhika Moolgavkar: All right, Naeem, so I want to bring you into the conversation as somebody who has launched a whole new, you know, group in Canada helping that country become CDR leader. What do you hope to see in 2024 in terms of deployment, both across the CDR industry and in Canada specifically?
Na’im Merchant: Well, I, I guess I’d like to just see more projects deployed and I probably will get to that. That’s going to be my broken record for this episode is just like, how do we build more of this? And one of the questions that comes to me and when I think about this is, is project financing. This still feels like a black box to get some of those projects ready. I mean, I think that it makes sense for so many of these technology based carbon removal companies to be seeking venture funding from the stage that they’re at, but you know, they’re going to need to graduate to project financing to grow.
And it sounds like what’s really exciting to me is kind of some of the points that Susan made around the need for protocols and reducing uncertainty and creating kind of more liquid markets for this, like that hopefully brings our project financing, but I’m wondering like, what else are we missing? So this is more of a question than anything else, probably back to Susan, because she has such great insights on this stuff, but like, what is it going to take? To get project financing online for carbon removal deployment at a larger scale for the companies that are ready for it.
Radhika Moolgavkar: Well, I’ll just say one thing that I think about a lot, which is not related to the business part of it, but it’s like the policy piece of it. I mean, there is not, in my opinion... Enough known and well understood definitions that could be produced through standards. But when you have 20 standards, which is the right one, I think sometimes we need to look to other government agencies to help produce a floor potentially. And I also think the other thing that, you know, Susan, you were talking to, and then I’ll turn it over to you, is uncertainty.
And I think there’s a ton of uncertainty also around the permitting regimes, the Acceptance within communities, social communities, all of that I think bakes into the difficulty around project financing, which to the, you know, multifactorial analysis, you have uncertainty of the tech, you have uncertainty of the permitting regime, you have uncertainty of the social acceptance, and it just, you know, builds and builds and builds. So there’s a lot that can be worked on for sure. Susan?
Susan Su: I agree with you that there’s a role for regulators to set At least a floor, if not maybe help define where the walls should be of our carbon removal house. It’s just really hard to know where we are. I mean, it’s hard to orient yourself in space when there isn’t anybody helping to at least minimally geolocate you. And I completely agree with your point, Radhika. I also think that on the buy side, and we’re starting to see this over this year, but there’s It’s like, let’s take something that people really understand quite well, which is, you know, organic certification.
If organic certification could include everything from, oh, in some cases there are GMOs to in other cases there’s glyphosate, but it’s only applied in this certain way or whatever it is like. Then how would people, what would happen to consumers as well? Consumers trust and perception around organic, so that’s the buy side. And what would happen on the production side? Like where would farmers or producers incentives be to go through The more onerous certification process, if others going through a less onerous certification process could slap the same sticker on their loaf of bread or what have you.
And I think that’s a little bit where, you know, I just come back to, we need somebody to set the floor, but as well define where the walls should be, you know, like, and that’s not something that an actor within private industry can credibly do because, I mean, for obvious reasons, right? And I’m not sure I don’t work on this. I’m not on the regulatory side. I’m not sure. And I do wonder if it’s being worked on. Imagine that it is. But it’s really complex because we’re also now talking about global cohesion on something with a very tight timeline.
And that’s already happening. There’s already all kinds of claims out there.
Radhika Moolgavkar: And it doesn’t have the kind of like urgent human health Yeah, I was just in DC two weeks ago talking to some of the regulatory folks and some are super aware and some are less aware, you know, and I think And the hard thing about CDR is the vastness of the industry and the various agencies it touches all from, you know, the CFTC all the way to the USDA, EPA, Forestry. I mean, Forestry is part of USDA, but you get my point. It is a difficult proposition and herding cats a little bit on top of it’s not their top priority, right?
Because they’ve got budgets to pass and they’ve got wars in other parts of the world. And there’s a lot going on there that they are all trying to keep track of. But I want to pivot back to business because we’re a little bit in the regulatory space, which is my favorite, I have to admit. But back to business. A recent Bloomberg investigation, Susan, found that while 2023 saw a dip in corporate offset purchases, buyers still flock to the lowest quality and cheapest product. What drives this preference despite the growing awareness and criticism of such practices?
And do you have any thoughts on how CDR separates itself from that type of offset?
Susan Su: I mean, I think everybody knows what’s driving the preference. It’s that earnings, first of all. It’s cost lines. And at the end of the day, there’s no cost to criticism. You know, there’s no cost to growing awareness. There’s really no cost to looking bad. If you look at the companies that are highlighted in the Bloomberg investigation, which I hope we include in the show notes because everybody should read it. It’s brief and it’s so good and it names names. But if you look at the names that are named, most of those companies, if not all of them, operate in pretty much oligopolistic industries where standards and services offered are Pretty regulated and are similar across providers.
So, for example, airlines. Another example, telecom. Another example, there are actually several, there’s at least one, if not two, cosmetics companies on there. But even that, because it touches humans, it’s pretty regulated. And there are not infinite providers. Sure, there are if you’re like buying what have you on, you know, on Amazon or from a K-beauty shop or whatnot. But when we’re talking about the really big players, there are actually not that many of them. And they tend to own a huge share of the market. And so even if they are revealed, so to speak, to be greenwashing or what, it really, it just kind of like doesn’t matter because it is not ultimately what is going to hurt them.
It’s not right now top of mind for their consumers. None of us are going to stop flying on Delta, because Delta was greenwashing. I’m just saying Delta, for example, because it’s a well-known brand. I’m not saying Delta was. Actually, I think Delta was called out as one of the better brands in the Bloomberg report. But EasyJet or whatever airline, Air France, doesn’t matter. Because if they offer the route that we need at the price that we need, we’re going to do it. Even those of us in CDR, even those of us in climate tech.
So I think that’s part of it. And I also think that if you look at how much it would cost to actually Abate some of the emissions or negate some of the emissions that these companies are generating. It is a large sum of money. No company wants to take a hit this quarter or next quarter or any time under my tenure as CEO, because by the way, my job is only, you know, I serve at the pleasure as CEO. It doesn’t sound like this is my kingdom, right? I mean, even the most powerful CEOs in The country, Satya Nadella, Tim Cook, they serve with the pleasure and they can get yanked if their shareholders are not seeing the results that they want to see.
And so in boom times where there’s a lot of spending and companies are generating a lot of extra profits, maybe we see a preference for higher quality, but that’s not for the most part the times that we’re in right now. So I do think there are a little bit of like macro factors, but I also think forever it’s always going to come down to cost. And until we can get very, very high quality at equivalent cost to some of the lower quality avoided emissions stuff, then we’re always going to be struggling with this problem.
Radhika Moolgavkar: So Naeem, Susan took us from the low cost to the end where hopefully durable credits are also low cost. But what do you think the steps are in between to get us to Start corporate behavior changing and also start driving the type of demand that will then help with the project finance and get the flywheel really moving.
Na’im Merchant: Yeah, I mean, that’s a good question because the implications of this are that, you know, actors who are doing high quality carbon removal, long duration carbon removal are missing out on those funds, number one. Number two, that... The climate impact and carbon credits that don’t work, it’s not that someone made a bad purchase and that sucks for them. It’s that the pollution claims that they’re claiming were negated didn’t actually happen, right? So it’s not just bad from a market and consumer point of view, it’s actually really bad for the planet.
Honestly, I don’t know what we do about this because it likes for me, I just want to turn the whole thing under the bus. Like the voluntary carbon market is just garbage and you should just move on. But I can’t wave a magic wand and make that happen. I think the examples of people doing this well, like Frontier and Shopify and Microsoft and like a handful of others that are being really thoughtful about this is very much the exception and, and I wish we could find a way to brand them as differently as possible and then just let the existing system around voluntary carbon offsets and just die.
But I don’t know what we do. I’m kind of at a total loss on what we do to switch corporate behavior because as Susan rightly The incentives are around earnings and you’re accountable to your board around earnings, not whether the forestry project you supported went up in flames last year or something. No one’s going to fire you for that. And so that’s a system that we work in. And that’s why I think it’s really important and why I tend to really go on and on about the importance of government and policy and setting out what good looks like, because the incentives are If the government is buying corporate carbon offsets with public money and those do go up in flames or those are proven to be not very reliable, like there are real consequences there.
And so you have a buyer with the incentives to really To really drive demand for high quality carbon removal. And so that’s why we really are big at Carbon Removal Canada are really big proponents of, you know, government based procurement program or some things along those lines that really drive demand for carbon removal from the government. I just don’t have a lot of faith in private markets to figure this out other than a handful of really good actors that are making really smart, catalytic investments in voluntary carbon markets that are different than the dinosaur carbon markets that we know.
Broadly speaking, we need the government to set a high bar that corporate actors need to match, but the government needs to set a high bar first. And so I’ve kind of just like given up on the existing kind of carbon markets that exist right now and focus my attention on and praising the actors that do, you know, the right things around appropriate use of carbon removal, focusing mostly on emission cuts, focusing on long duration credits that are actually, you know, verifiable or Or supporting more emerging carbon removal methods, but doing so with their eyes wide open around that and paying a higher cost for it.
There’s some good actors out there, but the vast majority of actors around the voluntary carbon markets, it’s just, I try to ignore it now. I just don’t know what to do. And I just focus on what can government do? What can we do around policy to design what good looks like? And maybe that’s what it’s going to take to shift behavior. But as far as this Bloomberg investigation goes, There doesn’t seem to be much of a change in corporate behavior around carbon markets.
Radhika Moolgavkar: That’s not the most uplifting answer, but I appreciate your honesty, Naeem. I don’t think probably anyone on this call disagrees that some of these legacy VCMs and legacy actors could be reformed for sure.
Na’im Merchant: Well, what I’m hearing on this, when I hear people talk about it, That have an interest in the voluntary carbon markets as they exist is kind of like, oh, there were a few bad actors and some of those projects didn’t really deserve the beating they got in the media or whatever the case is. And maybe that’s true, but they’re really trying to hold on to a model that’s just not working. Like this is just a systemic issue. We’re thinking about avoidance-based carbon offsets and nature-based solutions the entirely wrong way. And we just need to move on from it.
Radhika Moolgavkar: All right. So I have to ask you what you think of Amazon’s recent announcement that they are purchasing or creating their own sort of branded, is it called Abacus? Have you heard of this where they’re creating their own Abacus standard under the VERA protocol for afforestation and reforestation?
Na’im Merchant: I don’t know anything about that. I generally try to stay away from the news on it. It makes me too upset. But I promise to be more uplifting for the rest of the call. There’s a lot to be excited about looking ahead to 2024 and all of that. But this is just a subject that you just can’t get me to have a positive take on.
Radhika Moolgavkar: Hey, fair. I’m glad to get your honest opinion. So, all right, let’s move on to something that, you know, is positive in the sense that The UN Environment Program’s Emission Gap Report was released and it found that there actually has been progress since 2015 in reducing emissions, but this world is still far off track. So Susan, kind of curious, what were your takeaways from this report and how it might impact VC and other types of funding?
Susan Su: Well, the report really had, it was very long, but it had a couple of big takeaways as far as I saw. One was actually that, of course, emissions are continuing to grow. And in recent years, a lot of that has actually been driven by coal, the growth of coal replacing gas, which is the opposite of what’s supposed to be happening. Not that gas is our friend, but coal is really not our friend. And so even as renewables deployment, especially solar, has been increasing very rapidly, coal is just like so bad that if we continue to open coal plants, which we are doing all day long, every day, all year long in many places around the world, not just in emerging economies, but in many places around the world, then We are still going to be increasing our emissions.
So that’s number one, which is the coal problem and how Russia’s war in Ukraine really contributed to that in many different ways by The report is now fully embracing and saying we need CDR, but kind of like the Theme song of this podcast that we need better CDR and that we need to reduce the risks in order to increase certainty and all the things that we always say. So nothing super novel there, but it’s great that they carved out a special shout out for CDR, which I think is important for getting kind of global stakeholder attention on these seemingly intractable problems.
I share Naeem’s sentiment. And I think we need more thinkers on it. We need this to be part of the conversation at every single climate discussion, as opposed to still debating whether or not CDR is worth debating. So that’s good. I think that’s a good thing is that there’s an inclusion and embrace of CDR, but also an acknowledgement of the risks that it still faces, obviously around how do we equitably manage all that land use? How do we guarantee certainty and quality? How do we ensure technological and especially economic feasibility?
So some of the big questions still outstanding, which we and all the listeners, of course, know very well, but it is good to see it codified in a report. And then finally, one takeaway that I thought was actually really interesting and I think that is something that. We often hear sort of an opposite statement on, which is, well, you know, I’m India or I’m China, I’m Brazil, I’m an XYZ emerging economy. In order for me to get to an American standard of living, which is, first of all, why is that the global standard now?
But in order for me to develop, in order for me to lift my people out of poverty, you know, you have to let us pollute. And that’s actually not really the case. And that’s really, really promising. There are so many ways that we can, nobody should be living in energy poverty. There’s so many consequences socially, on health, on many other things that we don’t need to discuss here. It should be very obvious, but- We don’t have to trade that off in order to maintain emissions equilibrium. And that’s something that’s very exciting.
And that’s not always the standard message that you hear out there. We often hear it posited as this zero sum situation, which it’s not.
Radhika Moolgavkar: All right, Naeem, last question for you in this sort of look back on 2023. As Susan mentioned there, the report included evaluations of different types of CDR methodologies. What did you notice about the way they rated the different approaches and did anything stand out in particular to you?
Na’im Merchant: Yeah, I really liked that report. I thought it was well done and I shared it with our team because I think there was just a lot to dig into there. What I did really like is how they broke down the different CDR methods and The former consultant in me loves the progress dots on each of their columns and the different colors and all of that was great on the evaluations of different methodologies. But I think what stood out to me was just that the performance metric that they used to talk about scalability and MRV and public perception against each of the different CDR methods wasn’t in terms of one method is And one other method is bad or one is high risk and one is low risk, but it framed performance in terms of progress, which is exactly how we need to be thinking about scaling CDR is, is, you know, where are there, where, where are there challenges to making progress and How do we address those challenges against all of these different metrics for each of these different CDR methods?
And how do we get then all of those different methods to, to, to green dots or as close to green dots as possible? Um, some of them will never get all the way But it’s great to kind of see this in terms of progress instead of kind of a judgment on what’s better or worse or good or bad. And especially when we’re talking about urban removal methods with the potential to store CO2 for centuries or longer. You know, we like to take, like, we want to take a technology neutral approach to this and focus on, okay, we have a scorecard with all of these different metrics around readiness for scalability and cost and, and, and MRV and some of these other pieces.
So I think that there’s just a lot, a lot of, a lot that we can learn from how they framed, you know, the different approaches, approaches to CDR and how we get to better.
Radhika Moolgavkar: All right. So let’s turn to looking forward to 2024. So obviously the year is ending with COP. So let’s start there. What are you both watching for? And do you anticipate there being announcements out of there that impact carbon removal, just generally speaking? So Naeem, I’ll start with you and then Susan, you’re on.
Na’im Merchant: Well, I’m not really sure, you know, what will be coming out relating to CDR specifically, or I don’t want to speculate on that, but what I would be watching for announcements by countries and how they intend to use CDR as part of their climate strategies, right? Like that’s what we want to do. We want to make sure that we’re getting away from this kind of hand wavy, you know, we’ll figure out what to do with all these residual emissions and maybe we’ll just plant a lot of trees approach to like, okay, what is a right sized fit for purpose carbon renewal sector look like?
And here’s where we want to drive towards. Here’s where we see carbon removal playing a role. And I think that’s what could be really powerful is that more countries actually acknowledging and integrating CDR as part of their climate plans. I think that’ll be really powerful in driving investing in CDR in those countries. So that’s something that I would really like to see. And I’d be watching for in terms of carbon remotely announcements at COP.
Radhika Moolgavkar: Susan?
Susan Su: I am a little bit or a lot disillusioned on COP. Don’t have very high expectations for the things that we see coming out of it. I also, you know, am not very strong on the policy side personally is not really what I pay attention to. I think if anything, I mean, this is not related to CDR, but I’m happy that the loss and damage fund is going to be a real thing because, you know, if you’d had asked me last year, I’m very cynical about all these things. I’m extremely cynical about nations.
I think they’re similar to corporates where Everybody’s just trying to do the minimum possible to cover their butts, basically. And no one does anything altruistic, of course, because they’re not incentivized to do so. And why would we do anything we’re not incentivized to do? And so I think it was a surprise to me that actually became a thing. And so maybe as it relates to CDR, what I would say is it would be really interesting to see if there are, as I mentioned, a little bit more Specifically articulated pronouncements around how countries will, whether it’s integrated into their plans or actually support it through infrastructure investment or invite it into their landscapes.
I mean, I think there’s a really big opportunity. We’ve talked previously on this podcast about Kenya and other places trying to kind of remake themselves as carbon removal centers. And I think there’s a Great opportunity to do that and to earn a bunch of bonus points in the climate world if anybody cares about that. But it’s a growing world, I’ll say. So, you know, that’s what I would be watching for, but I’m not holding my breath.
Radhika Moolgavkar: All right. Well, Susan, next question, I’ll start with you. Is there anybody or any group’s work you’d like to give a shout out to this year that relates to CDR? And then Naeem, you’re on too.
Susan Su: Well, I mean, I’m pretty biased. I think Naeem’s been doing a really great job with Carbon Removal Canada. He did not need me to shout him out. He’s already on the podcast and gets an intro and everything. But I also would maybe just mention the Carbon Business Council. And I’m, again, biased because I am a member of their board of directors, but they have just been, I mean, every time we have an update call or I check in with the team, it’s like, They just execute like they’ve just been doing so many things and growing the membership and doing so many things for the members.
And I think that’s really exciting. It is incredible how much steam that has picked up. And I think as a canary in the coal mine, as a proxy for the broader industry, that is so exciting. If there’s any, you know, kind of indicator of where things are going in CDR, I think If an organization like the Carbon Business Council can kind of set up shop and get to the level where it’s at now, I think over a hundred member companies, a lot of activity on the policy front. That is just awesome.
It gives me hope for where we’re all headed. Raim?
Na’im Merchant: If I have to give anyone a shout out, Specifically, the one that’s top of mind for me was heirloom with the thousand tonne per year project that they launched. I mean, that’s not an easy thing to do. And I think that there’s just so much that we still need to learn about how well that process is going to work. But, but ultimately like, this is kind of what we need. We need projects of that scale in order to, to really understand like what, what works well, what’s not working well. How do we get down the cost curve?
You know, we see kind of not a lot of carbon removal deployed out there and then plants being to build mega projects. But what we really need are projects in that scale or that range that can build on kind of previous iterations and take this kind of iterative growth approach that gets us to the scale we need to get to. And so that approach that Air Loom’s been taking is really cool. I also just want to Thank Susan for the kind words around Carbon Removal Canada where we’re just getting started here.
But I would also just echo the great work by Carbon Business Council. Whenever I meet with that team, I’m just so impressed by the energy and enthusiasm that they bring to the work and the vision to just to build this space out. I think they’re just doing an awesome job in representing this space.
Radhika Moolgavkar: All right. Final question of 2023 for you both, at least from this podcast. What, if anything, surprised you about 2023 in carbon removal and what are you most looking forward to in 2024?
Susan Su: I mean, I don’t feel like anything really surprised me. I guess some important notable things were, you know, there was a lot of money that came into the space and, you know, we had all these like bad news events. None of that is surprising. Like this just kind of comes with the territory. We’re just evolving here. And I think over time, I’m not like Naeem, I’m not like I won’t read the news because it’s always bad news when it comes to carbon or like VC at voluntary carbon markets. I’m actually really interested.
I think that like all of this is sort of like, we’re just like working our stuff out, you know, like it’s bubbling up and it’s boiling off kind of. And so I’m not really surprised by that. I think it’s to be expected. Yeah. I’m always kind of pleasantly surprised actually at how much venture money continues to go into carbon removal because it’s pretty far-fetched in some ways, especially if you could just plow that money into some sort of generative AI thing or some like backend SaaS infrastructure or what have you.
And so I always think that’s like, I’m always pleasantly surprised by that. And what I’m really looking forward to for next year is actually some of these companies that we’ve talked about on this podcast that have raised money from all the VC funds that we know that have incredible founders that have been doing these pre-seed and seed rounds. I am really looking forward to hearing milestone updates from those companies. And I hope that they would reach out to me, reach out to this podcast, reach out to the world, reach out to X, whatever, and share, hey, we’re here now.
We were going to do this crazy thing and we’re actually doing it. And we’ve removed, you know, our first thousand tonnes or we’ve removed our first. There’s no amount too small, I think, actually. And or we’ve removed our first, you know, five thousand tonnes, maybe something crazy like that. That I’m really looking forward to on the early stage side, because we have heard of a lot of great things coming from whether it’s Climeworks, Heirloom, some of the bigger players. And I want to see signs that there’s early stage activity that’s actually making progress towards the goals that we set out.
Radhika Moolgavkar: All right, Naeem, final word.
Na’im Merchant: I absolutely love that. I think that’s so true. In terms of just 20 to 23 and the biggest surprise, I’ll just say that for me, I think the DOE establishing a program that A procurement prize program that enables companies to compete for the opportunity to sell carbon removal credits directly to the DOE is pretty big deal at that launch this year. And it’s a big deal because it’s a first of the kind effort where a government is effectively setting itself up as a customer for high quality carbon removal. And that’s impactful because it enables the government to set a high bar in terms of MRV and deployment standards.
And they get to do it for, frankly, it’s like a relatively small investment, right? So for me, like I look at something like that, I think that’s a very high leverage, high impact policy. And it’s the type of policy that we definitely want to see other countries adopt, including Canada. And, and, and so I, I just, I, I never thought I’d see something like that when I first started working carbon removal. And so that’s why I thought it was, it was really, I mean, it’s not exactly a procurement program, it’s a procurement prize.
And I understand there’s some nuances around that, but it is a really big deal. I think I thought that was very cool. And I just, when I first got into the space, never thought I would, I would see that so quickly in terms of something that would happen around carbon removal policy. And then what I’m looking forward to in 2024 is really similar to just And Susan’s answer is just like, I was on a panel a month ago and I said, the last thing I want to see, we’re sitting here a year from now and we’re still talking about carbon removal and the abstract.
And I think that’s kind of how I feel about What we want to do in 2024. I want to talk about carbon removal projects that are getting off the ground, that are meeting in early milestones, as Susan put it, or just becoming more real to people. When we talk to people in government about carbon removal, they’re like, where can I go look at it? In my jurisdiction, is there a plant I can see or go and visit? They’re really excited about it. They think it’s really interesting. But we got to stop talking about it in the abstract and start getting some of this stuff off the ground.
And that’s why I talk about Erwin being a company I want to shut out because they’re getting it done. And I think the more of that we see in 2024, which I think we will see, and I’m excited to be able to point to more and more projects, that’s going to be a big deal. Whenever I have conversations with policymakers, they want to know, where’s the nearest plant? Where can I go visit? What’s happening around the world? Who’s building out the largest projects right now? And so we want to start building in 2024 and companies are doing that.
And it’ll be really exciting to actually be able to point to stuff in 2024 that’s being built right now. And so that’s what I’d love to see. And that’s what I’m looking forward to in 2024.
Radhika Moolgavkar: All right. Well, thank you both for all of your insights throughout the year and have a wonderful holiday.
Announcer: And we will see you both in 2024 and hopefully both of your visions will come true and we will Thanks so much for listening to Carbon Removal Newsroom. If you like the show, the best way you can help us is by giving us a great rating and review an Apple podcast, following the show on Spotify, and by sharing the show on social media. Tell your friends and help us spread the word about what’s happening in the world of carbon removal.
