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With all the attention and investment going towards CDR these days, we’ve been wondering recently if it really is still at the frontier of climate action.
What’s at the absolute bleeding edge? Today, I’ll explore that question with two guests from some of the industry’s most influential organizations: Nikki Batchelor, of XPRIZE Carbon Removal and Jack Andreasen from Breakthrough Energy.
Nikki currently serves as the Executive Director of the $100M XPRIZE Carbon Removal, one of the most significant efforts to date aimed at accelerating the development and scaling of carbon removal technologies. Her work focuses on identifying and nurturing innovative approaches to carbon dioxide removal (CDR) that can contribute to global climate goals.
Jack is famed for his work on climate policy, particularly in the context of carbon removal and clean energy innovation. He’s currently carbon management policy manager at Breakthrough Energy is a pan-solution organization dedicated to helping humanity avoid climate disaster through everything from policy advocacy to venture investing to philanthropy, and it’s famously founded by Bill Gates.
They’re behind the scenes on a lot of climate intervention, and they’re backing both the thinkers and the doers.
Nikki and Jack will be our expert commentators on the latest and greatest CDR headlines, and then we’ll talk a little bit more about the topic du jour: “Is CDR still at the frontier of climate”?
Episode Links
Xprize Carbon Removal
Breakthrough Energy
DOE DAC Prize
CDR FYI report
Catona Climate Announcement
Project Mammoth
1.5 + Oxy’s Stratos facility
Heirloom
Timestamps
00:00 Introduction: Is CDR Frontier
02:20 Introducing the Guests:
05:20 DOE’s DAC Pilot Prize
08:46 The State of DAC Technology
17:06 Challenges in the Land Category
20:17 The Scarcity Mindset in CDR
30:10 AI and CDR: A New Frontier?
36:41 The Frontier of CDR: Current Innovations and Challenges
42:35 Enabling Technologies for CDR
52:18 Rapid Fire Questions
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For more about the show and more information about episodes, visit Climate on the Edge.
Supported by emrgnce – innovative minds exploring climate’s next frontier.
Full Episode Transcript:
Climate on the edge is all about frontier interventions, which we’ve so far defined as a good amount of carbon removal and a good amount of everything else, ranging from solar radiation modification. To crazy interventions like glacier towing, ocean seeding, a price on carbon, and more.
But today to kick us off, we’re going to take a deeper look at the present and future of carbon removal. So I have a challenge. That I want to pose to our guests today and then I’ll introduce the guests in a minute, but I want to pose this challenge to our guests and to everybody listening. We’re five decades in to the first carbon capture and storage concepts.
The first ones were proposed in the early seventies and have been going ever since. And we’re 10, 15 years into carbon removal as A standalone industry, albeit nascent and small. So my challenge question for our guests and for everybody listening today is, can we really consider CDR as a frontier technology anymore or a frontier concept, a frontier space?
We have been wondering over here at the podcast with all the attention and investment and big companies like BP and Mitsubishi and Shell getting involved in CDR. We’ve been wondering if it’s really still at the frontier of climate action and climate intervention. And if so, within it, what is at the absolute bleeding edge?
Today, I’m super excited to get to explore that question with two guests from two of the industry’s most influential organizations. We’re joined by the most insidery of insiders within CDR, Nikki Batchelor of XPRIZE Carbon Removal and Jack Andreessen from Breakthrough Energy. Nikki currently serves as the executive director of the 100 million XPRIZE carbon removal competition funded by Elon Musk and the Musk Foundation.
This competition is one of the most significant efforts to date in all of history aimed at accelerating the development and scaling of carbon removal tech. Her work focuses on identifying and nurturing innovative approaches to carbon removal that can contribute to global climate goals. Now, before joining XPRIZE, Nikki was also working on work that intersected technology, social impact, environmental sustainability.
So she brings us really broad perspective on how tech driven and really just innovation driven solutions. Can address complex challenges X prize and Nikki’s role specifically as it’s ed is a fascinating vantage point within the space and player within the space because they literally see everything before anybody else does.
I once had somebody in the DOE to tell me if you dangle non dilutive funding out. You will get to see everything that’s out there. So XPRIZE is a great example of that. Now Jack, our counterpart Jack, is famed for his work on climate policy, particularly in the context of carbon removal and clean energy innovation.
He’s been involved with the World Research Sources Institute focused on U. S. Climate policy and carbon management, and his expertise lies in understanding the policy landscape, the regulatory framework surrounding CDR, and how government policies can either accelerate or hold back the deployment of climate tech.
Jack often provides insights into the intersections between climate tech policy and market mechanisms, and he’s. Got a really great twitter. So anybody who’s out there we will drop that into the show notes. He’s currently the carbon management policy manager at Breakthrough Energy, which is a pan solution organization, in case you’ve never heard of Breakthrough.
It’s pretty famous because it was founded by Bill Gates. And it’s dedicated to helping humanity avoid climate disaster through everything from policy advocacy to venture investing to philanthropy. They are behind the scenes on a lot of climate intervention and they’re backing both the researchers, the thinkers, and also the doers, those who are implementing.
And we are super excited to have both Nikki and Jack here today. They’re going to be Our expert commentators on the latest and greatest CDR headlines to warm us up. And then we’re going to talk a little bit more about is CDR really still at the frontier of climate? Hello, Nikki and Jack. Thanks for having us.
Yeah. Thanks for having me on. Awesome. So our first headline for both of you, the DOE just announced another DAC pilot prize called the American made commercial direct air capture pilot prize. And it’s granting up to 52 and a half million in cash awards of up to 12 million per award, which is a pretty big chunk on a per award basis for DAC companies capable of capturing at least 500 tons of CO2 annually.
Nikki, I want to start with you. First of all, what do you think of this news? Yeah, I mean, it’s great news. I’ll start with that. I think that it fills a really important missing gap in the portfolio of DOE programs where we’re supporting this kind of missing middle of the companies that are trying to build First of a kind demonstrations and prove the models and aren’t quite ready for the big DAC hubs.
And so I think that this is really welcome news for a lot of people in the DAC space. You can also see that DOE is really building out a portfolio of how all the things come together. And I think that that is what we need to see. That’s how prizes can help bring everything together.
Because it’s not just one piece, not just one program, but you need to attack the full chain at the same time and think about the program as a platform. Given your extensive experience with prizes, what else do you think needs to go into that portfolio? Yeah, we’ve really been thinking a lot about this at XPRIZE since we have launched the competition, you know, that’s the main piece of work that we do, but the competition itself is kind of a mechanism that’s accelerating the technology development, but if you’re not thinking about the market development at the same time, those technologies have nowhere to go, so we need to be collectively as an industry thinking about How are we pushing from multiple angles simultaneously, both to accelerate supply, but also build demand.
And, you know, I think there’s a bit of a, , integrated loop that’s happening there as suppliers are getting more sophisticated, the demand side is starting to see, okay, maybe We really can start scaling these solutions, but there are so many startups now that are out there, there’s a finite amount of resources available.
So I think there’s definitely a lot of competition about where all of that money can go. And so I think, having more programs out there that are both trying to, , build the buyer base and mobilize that next wave of buyers so that we can. Drive the growth of these companies to be able to have bankable contracts.
Now, like, all of that needs to be happening simultaneously. So we don’t directly push all of that from the express side. We more support the efforts that others are doing in this space. But I think you can see what the way that. DOE is building out all their programs. They have the voluntary purchase prize, which is really trying to push the demand side, and then they have a lot of different options for project developers themselves to be accelerating their work and get access to critical resources.
Yeah. And I really like how you, broke down between technology versus market development. And actually even within that bifurcation, there’s like more kind of subcategories there’s early stage R and D there’s kind of deployment and scale, and then within market development, there’s a whole bunch there, Jack.
I want to turn to you. Can you give us your just quick soundbite on the state of DAC technology development today, right now, Q4, going into Q4, 2024. And then I’d love to hear your thoughts on where you think government funding is the best utilized across that entire spectrum, whether that’s within the technology development bucket that Nikki outlined or whether it’s like across both.
I mean, they are, , the Department of Energy is involved A little bit everywhere. But where do you think they’re resources are best utilized? And where are they not going that you think they should be? Yeah, I think you know, well, the state of DAC right now both in the United States and globally is the largest facility that is, you know, sort of turned on and actually removing carbon at the moment is a 40, 000 ton a year facility that Climeworks put together called Project Mammoth that was debuted earlier this year.
And then you’ve got a smattering of relatively small projects Project Bantam. Which they said could do up to 5, 000 tons a year by a company called Heimdall was just christened in Oklahoma. You’ve got the, the project in Tracy, California by Heirloom and then you’ve got a number of smaller sort of you know, 100 to 500 ton a year facilities all over the U.
S. Sort of like a very much a pilot scale. And so with that, , you’ve sort of got an interesting bifurcation right now in direct air capture outside of the Climeworks facility, you have a lot of 100 to say 5, 000 ton a year facilities, and then you have what Occidental Petroleum, 1. 5 low carbon ventures is planning for the Stratos facility up to a million tons a year.
And then you’ve got in west texas and then you’ve got the DAC hubs the first two Recipients of the largest DAC hubs award project cypress, which is heirloom and climb works in louisiana and then the south texas DAC hub with oxy low carbon ventures in kingsville county texas and and those are both slotted to to have capacity at least to do up to a million tons a year and so you see Companies that are really early on relatively early on in the technological development, you see some some companies like heirloom knox and climax or that are scaling.
And I think in order to meet to meet this the growing need for larger and larger DAC facilities, regardless of the sort of size of the DAC facility, what we really need is is demand. For a moment, we’ll set aside. We always need R and D dollars, especially for relatively early technologies that are just sort of being developed right now.
This sort of like up to 12 million award size for for commercial direct air capture facilities. And the DUI is put out as is an outstanding program. The purchase prize pilot that they put out for all forms of CDR is another great example. Of a program with relatively small dollar amounts that can spur a lot of these technologies forward, but regardless of the size, there has to be a demand for director capture.
You’ve got Folks like Microsoft and Frontier Stripe Climate that are really pushing forward on the industry by offering relatively large offtake contracts. And these sort of demand side mechanisms can give technologies, whatever the size of it, whether it’s a thousand tons a year or a million ton a year facilities, the sort of bankable contracts that then they can get.
rates to go ahead and build and bank notes to go ahead and build more facilities. So quickly whether it’s large or small we’re gonna need quite a bit of demand to make this work. Yeah, for sure. And you brought up so many things in there, Jack, we’re not, I’m, I’m going to resist the temptation to ask you so many follow up questions.
Instead. We’re actually, because we have so many things to talk about today.
And I want to hear from each of you on our core question of , , cDR is true frontier. So I want to go to our second headline. Speaking of methodologies cdr.
fyi, which is an awesome CDR tracker, if people don’t know that site, but if you know about CDR for sure, you definitely do. They recently released their durable CDR market update report. And it had a lot of interesting takeaways. One of which was that BEX is still the dominant technology , and it actually accounts for over 90 percent of all active CDR transition transactions that was across Q2 of this year.
So, I guess, like, Kind of as a philosophical question for you to be thinking about right now, does that mean that, we have this winner at the head of the pack? Should we just throw all of our chips behind that one and just like really get it to scale? Or should we be continuing to push the envelope on R and D and new methods, even if they May really never get to be come a front runner.
And I know it’s like, Oh, of course we need to do both at the same time. We need to walk into gum, but let’s get into the details of that a little bit. So specifically Jack, given the dominance of BEX in current transactions, do you think that that’s the right thing to do? Do you think that there’s a risk of over investment in one technology?
Do you think that there is a trade off between that and Exploration and investment of nascent approaches. Or do you think that the trade off doesn’t exist?
Yeah, well, I am a big yes. And sort of person in as it relates to all these things. And I think that in discrete, Instances there are potentially sort of like if we put our resources here, we’re not putting it here sort of discussions. But at the end of the day, the future is is a policy choice.
And just 10 years ago, seven years ago, five years ago, director capture the most. Supported technology by policy. I basically no support publicly. At least in the United States. And now it is, the most well supported that was all driven through policy efforts. So I would say you know, there is always a risk of overinvestment in any technology.
And I think when you look at the The needs for climate in terms of How much CDR we may need by 2050. It’s a,, the multi gigaton scale, several gigatons a year leading up to, and especially in some of the more extreme cases, potentially up to 10. And there’s no one technology that can do that.
Whether it’s backs or DAC or enhanced rock weathering or ocean, no one single technology can provide all of those removals. And, and we shouldn’t think about it this way, right? We should think about where is BEX most suited to provide the most efficient removals. European the, the Europeans have, have definitely been focused on, on BEX like technology, whether it’s with the, the Oersted facilities that have been going in.
You have Drax in the UK and I think , BEX generally gets to a point that is going to come up over and over again with biomass, which is sustainability of supply of the biomass. Where is your biomass coming from? Where are you getting it? Can you trace the sort of provenance of that biomass to ensure that , you’re not cutting old growth forests or things that we know are detrimental to the climate.
And then outside of X, you know, there’s There’s all sorts of other biomass approaches. You have bio oil injection, you have biomass burial, right? So finding the best use cases for biomass in an individual area could be very different depending on where you are, maybe in one sector in Northern Europe, it’s great for power and heat, maybe in other sectors in the Southern United States, the most effective use is, is to bury it just for, for the carbon content.
I think when investors look at these things Of course, I’m always going to say you should look at the policy first. What are the policy headwinds associated with your particular type of CDR technology? And next you should look at, you know, where, where are you out in the world or where are these investments likely to come to fruition in the world?
Beck’s is a much different conversation in the United States than even in Europe. And when you look at tech technology, you have to weigh all of those things. Yeah, thanks, Jack. That’s a that’s a great way of thinking about it. I mean, the way I would respond to investors myself being one is take a portfolio approach.
And I think investors can really understand that, right? There’s like a right solution for a right problem. And it’s really about understanding what those sub problems are. And I would even challenge myself on the original question of should we be throwing our weight behind an incumbent technology or continue to invest in R& D?
Well, both because there’s actually tons of envelope pushing even with index, right? It’s not one specific way that it’s done. Like there are so many crazy technologies and also just business model innovation kind of execution innovation, even within biomass,
So Nikki, I want to go to you now. 25 percent of the X prize finalists are in , what you guys call the land category. What do you think their obstacles are that companies are facing in this category?
Like what does that whole suite of challenges look like yeah, I mean, I first would double down on the portfolio approach. That is definitely how we have approached it for all of the, the XPRIZE from beginning to coming out with our 20 finalists. We had a pretty broad array of technologies represented in that final cohort because we wanted to see real demonstrations be built for all of All of the different pathways and to be kind of encouraging the data collection at this stage that a lot of these companies are at.
So, you know, I think Jack laid out a lot of the challenges that are relevant here. I mean, we’re really talking about a lot of different components related to biomass, you know, where. Where we’re going to run into global limiters, what type of biomass is available and what location, what is the best use of that biomass in each of those locations.
So I think that, you know, that is really at the core of this debate because. Essentially a lot of the carbon removal scaling conversations turn into trade off conversations around should we do this or should we do that with the same set of resources and so that itself is supportive of the portfolio approach because all of the different carbon removal pathways and even within the pathway specific project types have different pros and cons that Together, collectively kind of balance each other out.
But if we were to triple down on only one of them, we run into the serious issues of scaling any of those things from a kiloton to a gigaton, in which case you might not see that you’re really having a problem at a small scale pilot. But
when you start talking about Gigaton level carbon removal. It is massive and it is going to require so many resources.
So we need to think about the constraints that we’re putting into the system by, you know, picking winners that are too specific and overlapping with each other. You know, we only have so much global energy, global biomass, water, all of the different things that go into making carbon removal work.
And so I think, , when we’re talking about.
Land solutions. I feel like we’ve, we’ve raised some of , those points, , you have biomass and then all of the land associated with generating that biomass and depending on where it’s coming, like what else it could be used for. And if you’re going to start running into food production or incentivizing deforestation by having people get paid for forest residuals, or maybe the crop residuals have different types of land.
Yeah. Fibers and all all the makeups are different, and so they require different types of pyrolysis and and the whole formation of what that system should be is very location and material dependent sometimes. And so we need to create a system that has flexibility and balance globally. If I may jump in here with the VC perspective, I feel like we have somewhat of a kind of small pie mentality when it comes to this topic.
And when I take a step back and I asked myself why I think it’s really driven by true scarcity. Actually I talked to founders, CDR company founders project developers, and people kind of like to shit talk others a little bit, especially if they’re, , for sure in like different methodologies, but sometimes even within their same, , vertical and the reason why we as humans get driven to behave like that is because we sense that there’s a lot of competition for like little goods at the end of the rainbow.
And so that’s true on like very much on the demand side scarcity. There’s a little bit of like fundraising scarcity happening there. Now there’s all of this non dilutive non scarcity. It seems like the prizes are just. Abundant, but then the there’s this. Massive whittling from that stage down to like how you get the next really big capital in and then how you get the buyers in at like the very bottom of the funnel if we want to think about it like that.
And I don’t know, what do you guys think about that? Like, how do we solve that? How do we start to kind of blow this whole thing wide open and cure a little bit of that scarcity mindset on those other two levels where it’s really having an impact on how we develop and how we do things? Yeah, I mean, I think I have a lot of reactions to what you just said, but I’m sure Jack does too.
I think that it’s probably important to separate out like different levels. So the funnel analogy is helpful here because You know, a lot of these, these companies are startups and they’re dependent on this early stage capital to be available to them. Our data showed that of the top 100 X price companies in this last round, 75 percent of them were actively fundraising now.
And we’re not talking about like. Tiny amounts, you know, we’re talking about tens of millions, 50 million, you know, like people need a lot of capital to build these early demonstrations. And most of these are even still like pre commercial pilots. The prize asked people to do a thousand, 10 removal. That was like our goal.
So people are like hovering around there. Definitely some are way bigger, some are way under, but you know, people. Are looking out for themselves in that first, you know round of like I need to survive till next year So I can’t fault anybody for that because that is just like the basics of making it to the next stage but I don’t really think it’s in folks interest to be shit talking other similar companies because No one is going to be successful in this on their own completely.
I, I don’t believe there will be a single company in the pathways that survives. I think there will at least be several. And in many cases, there might be a lot depending on the type of pathway. And so we do need to be working collaboratively to move the industry forward. And I feel like I see a lot of that too through ecosystem efforts and all the trade associations and people trying to join efforts to, you know, advocate for different policies in different areas.
But there’s probably a lot of additional opportunity there and to be working together. That’s what I’m seeing, but I’m curious what you think, Jack. Yeah. I mean, you, Nikki definitely hit the nail on the head in terms of A reticent amount of competitive nitrous because you know All these folks who are doing these startups think that their technology is the best technology and that’s why they’re doing it That’s where they’re committing their life to it That’s why they’re spending all hours of the day trying to make these different technologies work.
And that’s great That’s a good level of competition, and pride in your work to have and we should want that and then you know, it sort of veers off as as nikki said and These there are material constraints as you get into fundraising rounds and then also funds available right now The federal government or from the relatively small amount of private demand that exists in the world.
And so you have a relatively small pot that people are fighting for. I also understand that, right? Those are just limited resources at the end of the day, unless we can pull more investors in. And CDR is,, The toughest thing to do on planet earth given that your whole pitch is for the most part outside of some of the Co benefits associated with other pathways of cdr.
Is a climate pitch, right? That’s that’s dependent on policy and regulatory regime that supports a long term revenue stream associated with these so I understand that where it becomes a little less helpful, especially in my world. Is when folks are up in dc You Arguing or, or, or as you said, shit talking one another on Capitol Hill or within policy circles because CDR needs a united front as we go forward and talk to policymakers, as we talk to congressional members, as we talk to the public about the value of these technologies in their own community.
Because although there is near term competition amongst demand for the things we previously talked about. The long term viability of CDR only works is if is if there’s long term policy and the way policy works right. As if you have a large broad coalitions all singing the same song towards towards that end.
I think another piece that is Maybe more philosophical is there’s just CDR is unique and in the sense that there’s everything from what looks like a completely industrialized machine because it is like a massive director capture facility relative to a forest conservation project, right?
Both are in the bucket of CDR, but these could not look like CDR. So, yeah. More different to, you know, the naked eye. And so there’s some of those some of those sort of visceral differences then pop up and to philosophically how people think about each one of these solutions, not just within the CDR space, but outside of it as well.
Yeah, that’s a great point, Jack, representing that united front to the one stakeholder that everybody needs to get on board on the policy side. Nikki and I were actually just in a conversation earlier today. About how there’s so much confusion, even just between like carbon offsets and actual removals.
And many people just don’t even understand that distinction, let alone. Now you’re talking about within removals. Now you’re trying to tell me that there are things as far flung and as different from one another as, you know, using machines to using trees to using far agricultural waste. Like, what are you talking?
It’s, it’s so much, Category confusion that it can lead to a lot of inaction. And that’s I think that’s what I’m hearing from you as like a potential demand dampener. But speaking of demand on and in demand expansion on our third headline. So Katona Climate, which is a climate financing organization, just announced a new forward off take agreement product specifically.
Shaped and targeted for A. I. Infrastructure companies. Their idea is to integrate the forward purchasing model directly into the very early operational and procurement processes of these companies as they build up so that they aren’t then later trying to back integrate or sell into this huge enterprise deal, but really kind of take, if I can borrow from this, the stripe approach of let’s get them when they’re little baby fledglings, and then they’ll kind of take us up with them as they grow.
And I am actually really curious, just More generally from you both on this, , what do you think of this? Is this going to be a big deal? Or is this kind of just another AI like PR angle?
I’m curious what you both think.
I mean, I’m happy to start. I think it’s interesting as a starting point. I think it’s an interesting concept. I can’t say I know the specifics of the mechanics of how it will work, but I think that. It’s less about, in my mind, like the connection to AI, but like, fill in the blank. What are other new mechanisms that people can come up with to help stimulate and simplify demand generation of carbon removal?
That in general is a huge win and we need like 20 new ideas like this to probably help grow the market. Like a version of this that could apply to other industries that could be replicated, adjusted. Ways that lower the friction of these transactions going through, because let’s be honest, how many companies are going to build internal teams like Microsoft has done to do all of the vetting and diligencing and deal negotiation themselves?
Nobody. Exactly. That’s not what the future looks like. So that means what do we need to bring on a thousand new buyers? In the future over the next decade in various ways that work for, , their industries, but also their business models that are easy for them to adopt. So. I think that it’s really cool to see new innovations coming out like this.
And , I think other people can run with this and try new spins. Well, I’d say Nikki, one way that it is about AI is that AI is obviously going to be the world’s next big moneymaker. So , we have an industry that’s going to be throwing off a really healthy profit margin, similar to Microsoft.
That’s going to be able to afford this. And then instead of having to come top down and back integrate into everything that they’ve built, it’s going to be right there, hopefully from the ground up, as well as it’s a really energy intensive industry. So it maps directly to where the emissions are being generated.
I think that’s the biggest thing to me is like, okay, you’ve, you’ve This is the innovation, like sure in the specific kind of structure of the agreement. There’s some stuff that’s different there, but it just seems really clever to actually cook your like hitch your wagon to the fastest horse and the one that’s actually a unicorn, \ versus.
Trying to go after I had another conversation in CDR world about, , how do we get how do we make it so that what has to change such that Rio Tinto becomes one of the world’s biggest CDR, not just carbon offsets, but CDR buyers. This is like a very different. Way to think about it, not just route, but like the opposite of route into high margin, infinite scale potential and like just at the beginning versus ultra low margin, already at scale deep incumbent.
Jack, what do you think? Yeah, , I’ll disaggregate two things. One Any way to aggregate demand for CDR and if AI is the way to do that as Nikki pointed out is great This is like a fantastic use case of something like this The more ways that we can get demand into CDR the better Now taking aside that, that it could, and, and likely will be good for CDR if this goes through and this sort of replicated it doesn’t do a whole lot for climate.
If these AI powered facilities are using, you know, keeping coal fired power plants alive in order to power and heat them. And so you need to look at what are. What is anyone who is doing large scale data center buildouts doing to make sure they procure the cleanest power and heat possible?
And that’s just a pure emissions play, right? We advocate a breakthrough whether you’re an individual, whether you’re a company, whether you’re a country, you know, the most parsimonious way to decarbonize is to reduce all that you can in your entire scope one and scope two, I’m touching scope three missions and then remove whatever you can’t out of that.
And so it’s important that as you’re doing this aggregation of CDR demand, you’re also doing everything you can to reduce in this case, you know, your power and heat costs. And then I think there are unique opportunities where, where it applies. You look at someone like two 80 earth, which is the Google doc company spin out, and they’re looking at putting their.
Solid Sorbent technology that has a low waste heat grade regeneration phase, hooking that in with some of their data centers to take the heat off of their data centers for the regeneration phase of their director capture unit. And so I think that there’s like a way that this can sort of all fit together.
Will that be true in every place at all times? No, but in the way that A. I can in aggregate C. D. R. Demand. Great. But but let’s make sure they’re doing as as I said earlier, let’s make sure they’re doing both and let’s make sure they’re aggregating C. D. R. Demand and reducing their own carbon footprint associated with power and heat is as much as possible.
Yeah, for sure. The one good thing about reducing emissions associated with power and heat is that it’s a money saver. The challenge with CDR is that it’s just always going to be a cost center. Hence why we need to find these very fat margin businesses to attach it to.
But yeah, it’ll be interesting to see how, how that space evolves and whether Microsoft’s position as the biggest CDR buyer in the world can actually get displaced by the aggregation of a lot of these smaller up and coming AI infrastructure companies. Yeah. So, and, and to your, to your point on something like Rio Tinto, I mean, that’s a case where I agree with you in that if Rio Tinto became one of the largest CDR companies on planet earth, that’d be fantastic.
And, , with a company like that, you need to look at a, something like insetting, right, where they have all of these mind tailings from all over the world, a lot of bees that have the capacity to remove CO2 out of the air via XC to mineralization, right? Magnesium, iron, silicate minerals that can do this.
And if you can build out a pathway for them internally to be able to capitalize on the stuff they would. Otherwise view as a waste product. That’s a, that’s a pathway where instead of as a very low margin business having to buy removals that they, at the moment can’t afford to buy. Because the cash flows now they have this just inset within their own, within their own business.
Sure. Or maybe from capturing and combusting methane from ventilation shafts and they can, you know, create a business line off of that. The other thing is we don’t necessarily want Rio Tinto to become the biggest CDR buyer in the world, because what is that going to do?
Like as such an upstream supplier to everything else in the economy, like what does that do to everything else downstream? Like that’s actually going to make CDR more expensive. Yes. Like the metals, right. That go into everything that we do. So just an interesting thought experiment. Okay. So with all of that, I want to jump into the next segment of the podcast, which is a little bit of our, we call our deep dive, and this is where we get to get to that big question that I had at the beginning, which is given that CDR now has these huge industry players involved, like.
We were talking about Japan in an earlier conversation and how like big companies are actually lobbying the Japanese government to have CDR included because they think that they can make a buck from it. Or Jack, you were just mentioning these potential opportunities with Rio Tinto. Now we have no idea if these Rio Tinto is actually pursuing that, but we know that , BP shell Mitsubishi and others are getting involved in the space.
So do we still consider CDR to be emerging? Is there still a climate frontier here? Like actually as a very challenging question, should XPRIZE even have XPRIZE carbon removal as a category, or , , are we getting past that point in time in which, , Prizes and spurring innovation is the critical action versus now.
We’re just sort of at deployment stage. And depending on your answer, I also want to know where is the real frontier within CDR now let’s get into the details. Where’s the actual kind of bleeding edge within all of the different subcategories of CDR. Nikki, you look like you have something to say.
I do have some things to say. I think. It’s interesting to ask the question, , does this even deserve like a prize category now? I mean, I will say the space is so different in such a short amount of time. We designed the prize originally in 2018, and there were very small number of Carbon removal companies in the market at that point.
And , it didn’t end up launching until 2021 because it took a bit longer with the pandemic and everything. So even in 2021, though, our data shows that, , most of the companies in this space really came around in 2020 2021. That was like an explosion, like 2 year period for the carbon removal space when so many of the companies were founded.
I will argue with myself a little bit and say that I think we still are in the frontier in a lot of ways because many, many of the companies are removing carbon for the first time this year, still in 2024, which is crazy because we talk about the industry as if it’s been around for a long time because so many people are interested now and there’s so much buzz and momentum and People I think assume who maybe are not like really in the weeds of the state of all the projects that like tons of people are often running and it’s happening, but this is the year of building in my view from where we sit and the hundreds of applications that have been coming in through the XPRIZE.
A lot of them couldn’t make it past the first gate because they were like, Oh, we can’t actually remove any CO2 in 2024. They couldn’t even get to that first bar. And then the people who did kind of pass that first bar, they’re all racing to build the pilots for the first time this year. It’s like, yeah, they’ve done it in small, small tests.
They’ve done it in labs. They’ve done it in varying capacities, but to get to something that’s, you know, Meaningful as like a physical demonstration. , that’s like hovering around 1000 tons, whether it’s below or above, like, it doesn’t matter whatever that first version of building that pilot for them is, , this is the first time and we know how hard it is to build something the first time, all the delays, all the problems, the commissioning challenges, things that just don’t work, how you thought they were going to work.
So, the data is yet to be collected to actually show which of these first like several hundred CDR projects work and don’t work are the best and not the best. So from that perspective, I think we still kind of are in the frontier and I think it’s maybe dangerous to let other people think that we’re past it because we still need so much effort and attention in the next two to three years to get that project accomplished of like just seeing the demos be built and making sure that we’re betting on the right forces.
So I think that part is kind of my initial reaction. But on the flip side, We’re getting all of these big companies who are interested and starting to get involved. Maybe it’s not like the most out there, innovative stuff we’re talking about because people are starting to become familiar with it. And there are so many different companies trying to do it.
So it’s not like there’s some single crazy idea out there that everybody’s like, wow, this is groundbreaking at this moment, it’s . A lot of experimentation around bigger themes. And so there’s a ton of innovation happening within all of the, I would say, quote, known categories of CDR. And so maybe the frontier really lies in like trying to find the best version of all of the sub parts of the CDR systems and the new mashups and hybrids that are going to emerge in the future.
I don’t know. What do you think, Jack? Yeah, I think that’s a very comprehensive way to look at the whole thing. Yeah, we’re definitely still at the frontier. I mean, just to put like a gigaton in frame of what that would need and be by 2050, we’re going to need several gigatons, the Stratos West Texas facility for oxy.
Let’s say that does a million tons a year. We just need a thousand of those to get to one gigaton and we could potentially need, you know, up to 10. And so like we haven’t even built one, we need a thousand of those just to get to one gigaton. And so, yes, we are very much at the frontier. And Nikki, I think hit on the thing that I talk about most, which is CDR is at the phase right now where, yes, we need more in R and D funding to make sure some of these newer CDR pathways are being properly supported, but we need to build projects.
We need, steel in the ground, rocks on soil drones and forest, whatever, you know technology you prefer, but we need these things. We need to see how they scale. They need to work and fundamentally they need to provide returns to investors to continue to get the money to come in. So we are definitely we are at like the first frontier.
We know that some of this stuff works in very small pilots. And we need to know that it works At a large commercial scale. No, I think part of it. I’m glad you brought this up, Nikki, like the actual numbers because I feel like part of this is actually kind of a numeracy challenge where we don’t actually know what gigaton means versus just like one ton.
, there’s a felt sense that it’s the soft thing I’ve talked to people, like lawmakers, actually Who have kind of expressed this idea that, oh, well, we have CDR now, so we don’t have to do anything else because CDR will just take care of everything.
And that is, you know, going to your point, Nikki, not really knowing where things really stand. I almost feel like it’s a little bit of, An adaptation of the Dunning Kruger effect. Are you guys familiar with that cognitive bias? It’s basically like the more expert you become, the less expert you feel, and the less expert you actually are, the more like confident you feel.
So there’s this thing happening where people who know a little bit about CDR, like they know that it’s a thing, they know what the letters stand for. And, they’ve maybe read like an article or two, they just immediately assume we’re there.
But then folks like us who are like in the weeds day in and day out are like, Oh man, there’s a, Jack, of course we’re at the frontier. We’re at the first, we’re like barely even inching towards the frontier right now. So maybe it’s like a little bit in between because, , there are really big players involved.
And the thing that I would add is I feel like the real frontier is on the demand side as well. There’s development and there’s kind of supply and delivery, but we are so nascent. On demand side. We have not figured that out at all yet. 100 percent agree with that. Okay, well, I want to get to a little bit of a specific question here.
I’m curious what you both are seeing on. So we talked a lot over the course of this conversation so far about CDR pathways. But what about enabling technologies like what are some really cool or crazy or even just . Bubbling up ideas of things that you think need to happen on enabling technologies that would, for example, dramatically radically cut down the cost of DAC, or that would make BEX really transparent and clean and scalable, or that would totally change MRV for.
For nature based solutions like anything on the enabling technology side. I can think of one. I’ll volunteer just to start. I’m really interested in ways that we can just totally destroy sorbent costs for DAC. And there’s been some interesting research around. Metals and how we can potentially use generative AI to do a lot more iterative testing of metal combinations metal organic framework specifically such that we could potentially find better absorbents for direct air capture.
I don’t know what is like the absolute cutting edge on that today, or who’s actually doing kind of like real implementation of that, but that would be my example. So I, I’m curious, Jack Nikki, what do you guys volunteer here?
Yeah, I’ll, I’ll start with , the DAC realm. That’s where I spend quite a bit of my time.
I think two massive technologies Is a technology that we already have. We just need to build a lot more of it which is low cost power and heat. Now that could be from a variety of different sources. Yes, solar and wind, but also geothermal combines power and heat in a, , a single resource.
You have thermal batteries like what Antora and Rondo are doing that could provide some of the high heat associated with certain direct air capture technologies. Clean, abundant energy is going to drive down the cost of direct air capture. So regardless of what mechanism, solid sorbent, liquid solvent, what regeneration method you’re doing, temperature swing, moisture swing, electrochem, like cheap, abundant power, will do that. And then within that one thing that I get very excited about is electric kilns and electric kilns, don’t just have a. A place for the different technologies like heirloom or Heimdall that do exude the XC to mineralization to regeneration in a kiln, but also then obviously for the cement industry.
So, yeah, I think , DAC coupled to nuclear DAC coupled to geothermal DAC with a thermal battery associated with it. These are all technologies that some are more developed, some are less developed, but with low cost power and heat that’s going to really drive down the cost of director capture and then kilns, not just for DAC, but also , for cement as well.
Yeah, I think those are all good, all good things to be on the list so far. Let’s see, what would be additive? I think. There’s a lot of talk about transport. We’re talking about, like, moving a lot of mass for some of these solutions. And so how do we think about dealing with that challenge in new ways?
Or what’s the best frame to accomplish it? Because you look at all the, ERW, the Enhanced Rock Weathering Company, is like, you’re talking about moving all of this rock dust from quarries out to tons of farms so that, you know, it can do its thing once it’s applied in the farms, but we’re really talking about how to transport that.
It’s easy when you start thinking about pilots and everything can be transported. Co located right next to each other. And I think that’s the ideal for any of these scenarios that it’s all like co located as much as possible. But like, at some point, are we going to run into a wall and not being able to accomplish it that way?
Does that mean it’s not worth it? And like the LCA and the whole calculation to to keep doing that solution pathway because things are no longer like the quarry doesn’t happen to be next to all the farms that it needs to go to. So We need to think about like how we’re going to get everything where it needs to be.
And maybe that means reimagining where new other pieces of the supply chain are being built in the future, but we’re like so far from being able to change those trajectories right now. We’re still Trying to demonstrate that things work, but I think like transport generally and the costs and footprint of all of that are going to be huge.
And some of the different pathways just because we haven’t really talked about it yet. I mean, everything related to MRV, like, still needs to continue moving forward. I think that. You know, being deep in the weeds right now verifying the 20 X price finalists. We’re doing a site visit for each of those companies.
We’re bringing an MRV contractor with us on each of those who’s doing like a full onsite performance verification. It is very time and resource intensive to do that level of MRV. And then I’m constantly hearing that , Oh, so and so has been hired to do a verification for another investor, another buyer.
And , you multiply that and like the same project is being verified by like, Four different entities just in this a single year like is that that’s not scalable. We’re not going to really be able to do that. If we have hundreds and hundreds of projects that are actually getting the level of investment and purchase agreements that need that level of diligence saying I’m not saying we need to lower the standards, but we need to think about like how collectively the ecosystem grows that and so that is definitely, , a huge space for innovation around how to Automate or streamline different things, how to be able to set up more comprehensive systems with sensors and other things that help, take the question out of some of the data collection, because a lot of these companies are, , building all of that for the first time.
And so they’re, , piecing together the best way to monitor everything, but also the , best in classes, maybe not been discovered yet for some of these new pathways. And so right now, that’s actually kind of a competitive advantage potentially for some of the companies themselves who are advancing that thinking and methodology, but it also can’t sit within a single company because it needs to become part of the standards and all of the rest of it.
I’m saying things that you guys know, but I think that, , this will continue to be a major area for innovation over the next few years. Nikki, I am deeply happy that you brought up transportation and logistics because in waste management, which carbon removal is broadly a waste management category, we often forget that it’s actually all about transport, especially when you look at the cost stack, that is where all the money goes.
And so totally you’re so right that that is such an area that’s right for innovation and continued work because it’s not just. How do we get this co2 that’s been captured two different places via these horizontal pump pipelines, but even like the inputs to the process to the place where the process needs to happen.
So thank you for bringing that up. I will say, , I think that standards on your second point standards versus the actual measurement are kind of two different things. I have heard and I find it a very compelling argument that the actual measurement needs to be. In some cases will need to be vertically integrated into the operation, because it’s just so project specific like there’s going to be some stuff or like this part of the ocean behaves in this way but that other part of the ocean behaves slightly differently because the water is different or the depth is different.
Or the soil over here behaves this way but the soil over there and that patch just over yonder behave slightly differently. And so we can have standards, but measurement may need to be something that happens and is owned. At the kind of like actual provider level, which I think is so challenging, right?
Because then you have to build a whole car company. And going to our previous point about like how much work there still is left to do. I mean, anybody who likes to solve problems, like take your pick. We’re full of problems over here. Yeah, we are. I mean, I think it’s been really. Eye opening to some degree to see some of the projects will see a lot of projects in person.
Like when you’re on the ground watching the demonstration before your eyes, like there is no ignoring the fact that . These are massive operations of logistics. You really start to to realize that many carbon removal companies are just going to be giant logistics companies of figuring out how to connect the dots between other things that need to go from one place to another and other companies are going to just become huge.
Platform like project developers, because they might have figured something out, but each iteration of that project can only get so big. And so for any of them to become, gigatons scale levels, we’re talking about, they’re going to need so many versions of it. So they all need massive partner models.
And so they can’t, build it all on the ground themselves, , over and over in each city that they decide to go to, so it’s just. Now they’re really just like recruiting a bunch of other people to do it. So they need to figure out , okay, I need to make something that’s like fits in a shipping container and I can send to every continent.
And then there can be 50 of them in each state. And , that’s how they’re going to scale. In some cases, that’s what carbon removal will be. It’s, it’s just interesting to see and feel the weight of how big the operation is. Totally. And I don’t want to, you know, like to oil and gases horn here, but I do like this phrase of carbon management.
Because and I just am referencing how many of them are saying, oh, we’re going to become carbon management companies in the future, yada, yada. But like, it’s a great phrase, because it really is about managing all of those systems. It’s like a whole value chain, super complex, isn’t just like one thing.
amazing, exciting sci fi technology or enablement technology that’s going to make it happen. It’s actually a lot of really, really boring stuff. Okay. With that, I want to get into our rapid fire segment that is going to close us out starting with Jack. Okay. Jack, what is the most underrated carbon removal technology in your mind today?
I am a rock guy. And so I will say enhanced rock weathering. Surprise. Cause I thought you were a DAC guy, but I’m for it. That’s awesome. Nikki, in one word, what is the biggest challenge facing CDR today? Only one word. Demand. No, it’s like I teed it up and you just hit it out of the park. Really easy.
Okay. Jack, name one company in the CDR space that you think will be a household name in 10 years. I’m going to say. Air loom. Nice. Shashank will be happy to hear that. Nikki and Jack, what’s a climate intervention, whether it’s a technology or something non technology based that you’re skeptical of? And it doesn’t have to just be CDR or even within CDR, any climate intervention that you’re currently skeptical of.
I mean, I might say SRM because I feel like it starts to get into a territory that makes everybody really nervous and it’s. It’s an only if we have to go there kind of proposition, but I would say a technology in which I advocate for pretty frequently, which is carbon capture and sequestration, whether that’s in the industrial or whether that’s in power sector usage. I think it’s right to be skeptical of carbon capture and sequestration. I think it’s important that we find other ways to.
Make industrial materials and power because is just a cost additive and it should be applied only in cases where there’s no better way to decarbonize. Dude, Jack, you’re the both and guy, so it totally makes sense, right? Yeah, I mean, listen, CCS is good when nothing else will do it. And Nikki on SRM, stay tuned.
We have a lot of SRM stuff coming up on the podcast. . Jack, next rapid fire question for you. If you had a hundred million dollars to invest in one single CDR project, what would it be? That would be a coherent and cohesive policy project associated with turning a hundred million dollars of high quality reports education at the community and federal level into billions of dollars of demand and R& D support.
Thinking about scale, I like it. Nikki, ocean based CDR, game changer or regulatory nightmare? I think both, unfortunately, because some of the ocean ideas are going to be regulatory nightmares. There is no way around that. But some of them could be game changers and might be less complicated than others to execute. Okay. Last question for both of you. What is the most exciting piece of climate news or climate happening that you have come across this year?
I am going to take a little bit of a liberty and say every headline that talks about. The numerous number of investments in battery manufacturing, solar developments, wind developments that have stemmed from the enactment and the federal funding flowing from the Bipartisan Infrastructure Act is all of those headlines I love seeing because climate policy in the United States only works if it’s bipartisan and it’s, it’s been great to see you.
All of that work that was done actually come to fruition to reindustrialize the United States through climate and benefit local communities in the economy.
That is a great answer. I mean, I think I agree that it’s not a single thing. It’s the additive effect of progress that we’re making across multiple Planes simultaneously, like both within CDR, like every time I see an announcement that like so and so just closed around, you know, it’s exciting or every time there’s a new offtake agreement that comes out, like we’re propelling the industry forward.
But, yeah, it’s important to remember that, like, carbon removal is dependent on all of these other climate areas advancing to and being able to bring down costs of clean energy and everything. It’s, it’s all going to be. Building into hopefully this breakthrough moment when all of it converges and we’re able to Really get the industry off the ground and we’re not there yet, but hopefully we’re getting closer for sure Well, thank you guys so much for joining me it was awesome to get into the spicy details.
So thank you for being such great sports and joining us on this inaugural episode of climate on the edge. It was wonderful to have you and I am excited to have you guys back yeah. Thanks Susan. Awesome. so much.
