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Decarbonizing Tomorrow: The Role of Carbon Removal Today
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00:00Hello, I think we start now.
00:02Thank you so much for joining us.
00:05We're very excited to discuss carbon removal, which is a very hot topic today,
00:09especially in light of our political and economic climate.
00:13I've got two very trailblazing panellists with me
00:16who will introduce themselves better than I can.
00:19So welcome, Marta and Andrew.
00:23Hello everyone, my name is Andrew Shebier.
00:25I'm a partner with a firm called Counteract.
00:27We're an early stage venture investor in all forms of carbon removal,
00:31so everything from direct air capture machines to forests, rocks, soil and everything in between.
00:37Hi everyone, thanks for having me.
00:39I'm Marta Kropinska, I'm the CEO and co-founder of Curate.
00:42We are a London-based carbon removal intelligence platform,
00:46predominantly working with hard-to-abate sectors to help corporates take the right decisions
00:50with regards to what types of carbon removal technologies to work with.
00:54And we also work with banks to help unlock capital for those companies.
00:58Awesome.
00:59To start off with, you know, broadly speaking, carbon removal is an umbrella term
01:04used to describe, you know, safely removing carbon dioxide from the atmosphere.
01:08But to dive in more deeply,
01:09what are some promising solutions you've seen in the ecosystem in the past few years?
01:14So maybe let's start with the basics because the whole language around carbon can be terribly confusing.
01:19So most people would have heard of carbon credits or carbon offsets.
01:23These are the types of technologies or these types of credits that have existed for about 25 years
01:27and quite often they would refer to either protecting existing carbon sinks or reducing carbon emissions.
01:34So it could be protecting forests or maybe paying for cook stoves or solar.
01:39All of that is all good and well, if those credits are high integrity, which they can be, not always.
01:44Then carbon removal is all those technologies that actively sequest the carbon from the atmosphere.
01:49So the idea is if I emit a ton of carbon and I ask Andrew here to switch on his
01:54direct air capture machine,
01:55this sky hoover that filters in air and separates CO2 and puts it deep into geological storage,
02:01I emit a ton of carbon, Andrew removes a ton of carbon, the delta is zero.
02:06So carbon removal is the net in net zero.
02:09And there are about 14 different ways that can enable that process.
02:13And in very broad strokes, they vary from very nature-based to purely engineered.
02:20On the nature side, obviously, we have things like afforestation and reforestation.
02:24Trees make their bodies out of carbon.
02:25It makes complete sense.
02:27Obviously, there are challenges, especially in light of climate change, that those can burn down.
02:33But then there are interesting ways in which we can store carbon in soils.
02:36We can add fungi or microbiomes that turn organic carbon into inorganic carbon, and then it stays down forever.
02:43We've got enhanced rock weathering, which is super interesting.
02:46You take basalt or silicate rock, you grind it up.
02:48It's a little bit like making coffee.
02:50You take a coffee bean and you grind it up to be able to make a stronger brew.
02:54Equally, we take the rock, we grind it up, put it on soils.
02:58That can increase the pH of soils in places where that would increase yield of farms.
03:03So it's really beneficial, not only for carbon reasons, and that speeds up sequestration of carbon that then ends up
03:09in the deep ocean.
03:10Actually, there are fantastic ocean methods that are emerging, but we're very excited about because it is the largest carbon
03:16sink that we have.
03:17And maybe the only other method that I'd like to mention, because one of the reasons why I came into
03:22carbon removal, and for what it's worth, climate science is not my background.
03:25I spent most of my career in fintech, sold two fintechs, and spent a few years at Google and left
03:31it all to come to carbon removal because it really felt like our only hope to stop climate change and
03:36stay below 1.5 by 2050.
03:38The thing that fascinated me about carbon removal is not just the science of removing carbon, it's also the economic
03:44opportunity.
03:44So there are about 2,200 projects globally that remove carbon.
03:48Very many are in the Global South and are creating jobs in places where there aren't that many.
03:53And for instance, we work with a project in the eastern state in India called Odisha, where teams of women
03:59take bio-waste, in this case rice husks,
04:04and they burn them in low-oxygen environments in those artisanal kilns and produce biochar that then becomes a natural
04:10fertilizer.
04:11Now, not only does it remove carbon, it also creates economic opportunity and prosperity in an area where there aren't
04:17very many jobs.
04:20And Marta's job is to find solutions that can deliver for her clients today and tomorrow.
04:26I guess my job is to find solutions that will advance the state of the art the day after that
04:30and the day after that.
04:32And all of those are important.
04:34I guess some of the things that this year we're particularly excited about are those that change the game from
04:38a resource point of view in carbon removal.
04:41So some of you will have heard that carbon removal is naturally quite resource intensive.
04:46Regardless of how you do it, you're trying to get a very dilute molecule out of the air and concentrate
04:52it.
04:53And that's fighting against entropy.
04:55So it's naturally, it uses energy, it uses materials, or it uses biological or geological processes to fight against entropy.
05:05We're trying to find ways to cheat.
05:07And I guess a couple of ways that we're interested in, particularly this year, that we've been looking at hard,
05:12are hacks, if you like, against thermodynamics.
05:16One of those hacks is changing the game in direct air capture.
05:20So you've heard a lot about how direct air capture companies are doing something that's enormously resource intensive and takes
05:26two, three, four megawatt hours just to get a ton of CO2 out of the air.
05:30The next generation of direct air capture companies is maybe using a quarter, a fifth, or even less of that
05:37energy by using new chemistry, by innovating in new materials,
05:43or actually by making direct air capture a by-product of another industrial process.
05:48Similarly, there are quite a lot of companies that have realized that they can do carbon removal as part of
05:54an existing industry.
05:55So, for example, by refining a metal, either from water or from rocks, they're able to produce by-products that
06:03themselves bind very hungrily to carbon in the air.
06:07And so rather than setting out to be a carbon removal company, they're a company that happens to remove carbon,
06:13and they make their money by doing something else.
06:16That fundamentally changes the economics of carbon removal as an industry, and it greatly improves its scalability, particularly in an
06:23environment where, you know, getting sustainability on its own funded can be more and more difficult.
06:28So, we're excited about those kind of hacking of the system, if you like.
06:32Yeah, I love an accidental carbon removal opportunity.
06:36And moving on to, you know, incentives for backing this technology, it's been kind of widely accepted that companies don't
06:45just invest in and fund carbon removal out of the goodness of their heart.
06:49But, you know, it is a bottom-line decision with economic incentives.
06:52So, that being said, Marta, what are some reasons that corporates should invest in carbon removal, and what is the
07:00business case for it?
07:02I love the question because I really think we need to be talking about the business case for doing the
07:07right thing.
07:07If we're hoping that corporates will do it out of the goodness of their heart, it's always going to be
07:11small CSR budget side of desk.
07:14So, for us, really, the economic buyer is the CFO, and it's about protecting the license to operate, it's about
07:20saving money, it's about making more money.
07:22And exactly within those terms, we think about it at Curate, we talk about save money, make money, avoid jail.
07:28The reasons that are related to avoiding jail is predominantly in regulated industries, and actually, we work a lot with
07:35hard-to-abate sectors.
07:36When you think about, for instance, aviation, one-third of net zero in aviation is going to come from carbon
07:42removal, and that's because sustainable aviation fuel is not abundant and actually very expensive.
07:48Hydrogen planes are not here yet, last I checked, and obviously, about a third is going to come from carbon
07:52removal.
07:53So, these are companies that need to make sure that they're going to be able to get access to enough
07:57carbon removal and at a price point that doesn't break their bank.
08:01So, within the save money category, and this is what we're seeing Microsoft do, they have the most ambitious net
08:07zero target and actually a historical one, they're buying billions of dollars of carbon removal, and they know that by
08:13entering the market early, they can negotiate better prices, and they can get access to the best projects.
08:18Then, there's the make money category that I think is very interesting, and this is banks that want to make
08:23sure that they'll know how to lend against the new asset class.
08:26This will be a trillion-dollar industry driven by compliance, and not often is a trillion-dollar industry born, so
08:32obviously, that's exciting for financial services.
08:35So, they want to lend against it, they want to offer it to their clients through ESG solutions or carbon
08:40trading desks.
08:41Equally, consultants want to provide it to their clients, but then there are more interesting business models.
08:46For instance, in real estate, we've done the first carbon-removed building in London, because real estate owners can rent
08:53out offices that are net zero at a premium, because from a carbon accounting perspective, when you're thinking about your
09:00carbon footprint, it is better to have a carbon reduction rather than a carbon removal.
09:06So, those carbon-reduced spaces are very valuable.
09:10You know, that's super interesting, and something that's, you know, really been a point of debate is, who does the
09:18owners fall on?
09:19Should government bodies be investing in carbon removal?
09:22Should the owners fall on polluters?
09:25And Andrew, you invest in carbon removal startups, so what kinds of stakeholders are you co-investing with, and what
09:31is your investment thesis?
09:33Because we're an early-stage investor, and we take risk, we like risk, we think it's important, most of our
09:40co-investors are early-stage investors as well.
09:42There is some government support available, but typically that's a co-investment alongside private capital, rather than, you know, direct
09:50subsidy.
09:51Grant funding is very important, though, particularly in academic or early stages, and we're very grateful for that.
09:57But mostly, we work alongside other funds or corporates, and a lot of corporates are very active, particularly corporate venture
10:04capital,
10:04because they know that these kinds of technologies are going to be important to their future business.
10:08So, we're not just talking about oil and gas companies, but they are probably the largest individual vertical.
10:14Also, the CVCs within aviation, shipping, construction, I'd say, are particularly active, and they're really important partners to us,
10:22because they also help us figure out which technologies are going to scale the most easily.
10:27Governments don't typically invest directly into early-stage projects, but obviously, they're really important, from a policy point of view,
10:34in clearing the path to making sure that these can be financed, and that the demand in the long run
10:38will be there.
10:39Yeah.
10:39Can I just jump in?
10:40Because if we're talking about financing carbon removal, this point is really important.
10:44With any new industries, well, innovation needs to be matched by financial innovation as well.
10:50So, right now, there are about 2,200 projects globally that remove carbon.
10:55We track about 1,000.
10:56The issue that we keep on coming up against is lack of low-cost debt for first-of-a-kind
11:01projects.
11:01So, if you think about being a founder of a direct air capture company or a biochar company or an
11:06enhanced rock weathering company,
11:07you maybe got a little bit of money from grants.
11:10And then, if you're lucky, Andrew and Counteract are going to give you some more money.
11:14But then, often, the VC money would go towards coming up with your innovation, scaling up your offering.
11:21To use venture capital money to then build a plant or to buy rocks and spread them on fields makes
11:28no sense.
11:29It's expensive, and it increases the risk of the project not being successful.
11:32So, it's really important that we work with banks.
11:35Two years ago, we did our first transaction with Standard Chartered Bank.
11:38We were the first people in the market that can offer low-cost debt to projects that produce carbon removal
11:44off the back of the contracts that they sign.
11:46So, I think this is also a really important piece that we provide debt.
11:50Yeah, absolutely.
11:52And then, on the flip side, should polluters be mandated to fund carbon removal?
11:57What's your take on that?
11:59In the long run, the only way this works is through regulation.
12:04What we're seeing right now from the likes of Microsoft, Shopify, Amazon, Google, Meta, and so forth, is fantastic.
12:10But let's be practical about it.
12:12There aren't many companies that can afford to abate their emissions through voluntary removals, or would choose to.
12:19Or whose shareholders would tolerate it.
12:22So, in the long run, we have to force big emitters to get to net zero.
12:27And that's going to be through law.
12:29I don't believe it's a good idea to force people to do carbon removal specifically.
12:33I think we have to create laws that allow people to choose the best way to get to net zero,
12:38and hopefully beyond.
12:39And, in many cases, that won't be through carbon removal.
12:44It's probably easier to inset your emissions or abate your emissions before you go and do CDR.
12:50But if you look at our worldwide emissions, probably 15 to 20 billion tons a year of CO2 are easier
12:59to abate through carbon removal than to get rid of, in those really hard-to-abate sectors.
13:04So, I'm thinking, for example, about aviation.
13:06I'm thinking about shipping.
13:07It's actually cheaper and more resource-efficient to allow a ship to emit and then do CDR than to try
13:15and find some alternative way of creating a synthetic fuel that allows that ship to operate or to create some
13:21kind of new technology for shipping.
13:23So, CDR is going to be a really important part of the puzzle, but we do need to allow the
13:28market and its participants to figure out what the right combination of abatement, insetting, new technology, and carbon removal is.
13:35Otherwise, we can create distorting forces, and we can misprice things.
13:39On the road to that point, we're going to need regulation that's really well-designed, that gets the balance right,
13:45because we do need to subsidize early-stage technologies and de-risk them.
13:48And that's why some of these policies that we've seen have been really helpful.
13:51Now, the U.S. has been a leader in this space with some of the tax credits that they launched,
13:58but actually, with the new policy backdrop that we're seeing and some of the political change, I think it's an
14:02opportunity for Europe and Asia to lead.
14:04And now, I think the European Union's emissions trading scheme is the largest of its kind in the world, and
14:10it has the opportunity to become a platform for carbon removal to scale through regulatory policy rather than just voluntary
14:16demand.
14:16And for me, that's an enormous source of hope.
14:18Yeah.
14:19No, that's great to hear.
14:20And just to quickly bring that point back to polluters for a second, I know this has been a controversial
14:26point, but the role of oil and gas companies in this ecosystem, they've often been criticized for using carbon capture
14:33and storage as this get-out-of-jail card and as this license to pollute.
14:37But how can we ensure that the technology is being used in a productive way to enable the energy transition?
14:43I mean, I think it's obviously incredibly important that we are careful about greenwashing, that we hold corporates to account,
14:50that we make sure that, indeed, this is not a license to pollute.
14:54However, I think we're being slightly naive if we think that Patagonia by themselves would stop climate change and we
15:02can only wait for the ones that are incredibly pure in their brand and in their operations to then work
15:08on climate change.
15:09This actually is counterintuitive for me, because ultimately huge parts of our economy, and this is not only oil and
15:15gas, let's look at finance that is massively invested in oil and gas.
15:19A lot of the capital in the economy is not pure from a sustainability perspective, and we need all of
15:26that capital to build those industries that are going to stop climate change.
15:29If carbon removal, we need 10 gigatons minimum, so about 10 billion tons by 2050, about 25% of our
15:36annual emissions.
15:37We're going to need to spend hundreds of billions of dollars to get to that point.
15:41That capital is going to have to come from somewhere, and I would actually really much more focus on the
15:46point that if you think about economics,
15:48as Andrew pointed it out, if I'm a CFO of a company, how do I manage to keep my business
15:54going and preferably grow it at the lowest possible cost to the planet?
15:59And the whole moral hazard argument, this is a license to pollute.
16:02If I'm a CFO, I am going to, in most cases, reduce emissions within my value chain, because that's going
16:08to be the cheapest.
16:09Between 75% and 95% of all emissions in a company are cheaper to reduce than to remove.
16:16Then I might look into insetting, again, if that's commercially viable, and only then will I be removing.
16:21So I would say, if we think about it from this perspective, we are commercially minded, economically minded.
16:28Let's think about how do we continue building an economy in which we can grow our businesses,
16:34and in which we incentivize the right actions at the right price point.
16:38I agree a million fold.
16:40You know, I think about carbon removal all day long, but the reality is it's the last 10%.
16:45It's the bit that gets you the hardest to abate emissions over the line.
16:49And no one's going to go do the hardest bit first because it's cool.
16:53They're going to do the cheaper bits.
16:55And I know that we're going to need CDR, and, you know, it may only be 10%,
16:59but that's still billions and billions of tons of removal and a multi-trillion dollar economy.
17:04But I think the moral hazard argument is completely false.
17:07And, you know, it's a good question, but for me, it's just not going to happen.
17:12And perhaps if I can just use an example.
17:14The direct air capture company that today has the biggest opportunity for scale
17:19and is about to launch a plant that removes half a million tons of carbon each year
17:24is a subsidiary of Accidental Petroleum.
17:27Now, if you ask me, I'd be quite happy to get oil and gas companies removing carbon
17:32rather than pulling oil.
17:34And if that meant that their market cap remains high
17:37and, you know, they actually start cleaning up the mess that they've made,
17:41I think that's good news.
17:42I think actually just on that specific plant,
17:45it could never have been financed outside of an oil company, right?
17:48It's a really interesting case in point.
17:50They financed that plant.
17:52They went through their first, their final investment decision with one customer,
17:57probably about a fifth of the demand that a private investor would have said needed to be in place.
18:01They just made a strategic decision.
18:03They were going to do it with their own balance sheet.
18:05And you talked about financing earlier.
18:06Well, a lot of this is going to happen within the capital stack
18:10that the oil and gas industry commands.
18:13That is maybe unpalatable to some founders with idealistic goals.
18:16But realistically, we are talking about enormous capital investor.
18:21And it's not going to be able to be done without the resources,
18:25the capital and the expertise, the engineering expertise that exists within these organizations.
18:29So there are important partners in it.
18:31Yeah, so all hands on deck is what we're saying.
18:34Awesome.
18:36And kind of segueing to a point you made earlier, Andrew,
18:39about looking to the US and the progress being made there.
18:43With Trump 2.0 and a lot of the legislations put in place
18:46and the policies put forward, climate tech there has been kind of in this limbo phase.
18:51And people are saying it's an opportunity for Europe to kind of step forward
18:55and become a frontrunner in this space.
18:57Marta, I'd love to know, you know,
18:59what kind of appetite are you seeing for carbon removal on the continent
19:04and more broadly across the globe?
19:06Yeah.
19:07I think this is such an important question.
19:09Because, I mean, already given the fact that carbon markets have been struggling for years,
19:14and a lot of that is related to some of the reputational challenges
19:18that reduction credits have suffered
19:20and predominantly a type of carbon credit called RET+.
19:24I keep on hearing from people,
19:26oh, how are you doing?
19:27Your industry is in crisis.
19:29And then Trump 2.0 definitely isn't helping the narrative.
19:33Now, for me, the biggest challenge is the green hushing element.
19:38So because of the narratives right now around sustainability,
19:41and I'm not only hearing this from companies in America,
19:44but also companies that do business in America,
19:46there is pressure not to be seen to be doing things that are related to climate
19:52or diversity for that matter and pretty much everything else that I hold dear.
19:55But when we think about sustainability,
19:58I have clients that have been purchasing carbon removal
20:01and announcing their deals,
20:02and now they continue purchasing and they just choose not to share it.
20:07In the last three months,
20:09more carbon removal had been purchased than ever before.
20:12We're now at cumulative $9 billion.
20:15That's really encouraging.
20:16The only trouble is,
20:17again, going back to being a founder
20:19and trying to finance a carbon removal company,
20:22those companies come to Andrew.
20:23Well, he knows because he's one of the best investors in the world
20:25that invests in carbon removal.
20:27But if you go to a generalist investor,
20:29it's very hard to see the data
20:31because these transactions are not public
20:33and it looks like the market is slowing down.
20:36So I feel there is still a lot of interest
20:38and it is coming from the U.S. and from Europe.
20:41Asia is really leading.
20:43Japan is the first country to include carbon removal
20:46in their emissions trading scheme,
20:48which is very encouraging.
20:50Singapore is leading the way.
20:52They're launching a government procurement process,
20:55so they're also starting to buy for their own purposes.
20:57By the way, I'm a huge fan of public procurement.
21:00If there are any policymakers in the room
21:02or anyone that has influence over them,
21:05I think sending demand signals by government
21:07is one of the biggest things
21:09that we can do for our industry right now.
21:12That's a really interesting point.
21:14And we often talk about the U.S. as a playbook and blueprint,
21:18but Asia is doing so much in that space.
21:20And I think, Andrew,
21:21if you had any thoughts on what's happening in Japan and whatnot.
21:25Yeah, Japan's a super exciting market in carbon removal.
21:28They're the first in the world to integrate carbon removals
21:31into their emissions trading scheme.
21:33So that's to say,
21:34you can right now earn credit for a removal that you've bought
21:37against an emission from your cement factory
21:40or your steel mill.
21:43And that's a really big step
21:45because it means that suddenly
21:46there's some liquidity in carbon removal.
21:48It's not just something that you buy and hold for yourself,
21:50but there's a market for it.
21:52Certainly, the price point is something
21:54that we'll have to work on over time.
21:56But I hope that's a blueprint that we'll follow over here.
22:00And generally, the fact that these policies
22:03are catching on worldwide is really, really exciting.
22:06I think I just sort of,
22:07if I can jump back up to your previous question,
22:09something I'd just add.
22:10There's been a lot of noise in the market
22:12about a couple of companies doing layoffs, right?
22:16And is this the end of the carbon removal scene?
22:20And I just, I can't quite get my head around that question.
22:24Like, what healthy industry doesn't have failures and layoffs, right?
22:28Even Meta and Amazon and Google
22:30are laying people off at the moment.
22:32Like, it is a sign that the industry
22:34is holding itself in balance.
22:36Now, that's not to say that every carbon removal company
22:39is going to succeed.
22:40They won't.
22:41And some of the companies that have got layoffs
22:43may go further.
22:45But I just think it's crazy
22:46to start diagnosing an industry
22:48that is booming and growing super fast
22:51off the back of the fact
22:52that some of its earliest participants
22:54with some of its oldest technology
22:55are having to adjust.
22:57Of course they are.
22:58If I was their investors,
23:00I'd want to know that my money
23:01was being spent responsibly.
23:03And, you know, as an investor,
23:04one of the hardest things
23:05is that we expect most of our investments to fail.
23:08But that is the nature of an early stage
23:10and innovative ecosystem.
23:12And I want to continue to see failures
23:14because we're going to learn from it.
23:15I often say,
23:17I think we have a huge duty of care in our role
23:20to think about the planetary resources
23:23that we're deploying.
23:24And if we get them wrong,
23:26we're potentially talking about enormous missteps
23:28that could have diverted that electricity
23:30or that cement or that steel
23:33into something else that would have abated
23:34or improved the footprint of what we're doing.
23:37So we have to get it right.
23:38And the market holds things in check.
23:40So these are quite good effects.
23:42In reality, from a policy backdrop,
23:46the new administration is not as supportive
23:47as the old one.
23:49But mostly they seem to be in favor of carbon removal.
23:52And none of the laws that have underpinned
23:53either the DAC hubs
23:54or the 45Q tax credit
23:57have actually been changed
23:58or even talked about being changed.
24:00I don't want to jinx anything
24:02and there's no wood to touch here.
24:03But I think it's important
24:05to sort of remind ourselves
24:06of the commercial context as well.
24:07Yeah, absolutely.
24:09And then to your point,
24:10what policies could be put in place in Europe
24:13to maximize our chance of success
24:15for the ecosystem?
24:17So I think definitely including carbon removal
24:20in the European emissions trading scheme
24:22is a really important one.
24:24The UK also just announced its alignment
24:26with the European one.
24:27so I think obviously that makes everything easier.
24:30That would be hugely important.
24:32And again, it's not just important
24:34because companies will be able
24:35to make additional revenues.
24:37It also is important
24:38that we just have policy certainty.
24:40So if you ask me,
24:42I actually don't think it is that material
24:44whether it happens in 2028 or 2029 or 2031.
24:48I think we just need to know
24:49as soon as possible
24:50that it's absolutely going to happen
24:52because then that creates certainty
24:54for corporates
24:54that can include it
24:55in their procurement plans
24:56that creates certainty for investors.
24:59So I think that is probably
25:00a very important one.
25:01Another one that's important
25:02is from a voluntary rule setting perspective.
25:05So if you're a CRO, CFO, CSO
25:07of a corporate right now
25:08and if you are planning for net zero,
25:11if you're building your transition plan,
25:13you're probably listening
25:14to an organization called SBTI
25:17which tells you
25:18what good climate action looks like.
25:20There was a new recommendation
25:22posted by SBTI recently
25:23that says
25:24that you should start investing
25:25in carbon removal.
25:26We need more firm
25:28and clear guidance.
25:30The worst thing you can do
25:31is give unclear guidance
25:32because then everyone's confused
25:33and nothing happens.
25:35Equally,
25:36the Oxford Offsetting Principles
25:37which is another organization
25:38is sort of recommending
25:39the use of carbon removals.
25:40The ISO
25:41is putting out a recommendation
25:43that's recommending
25:43the use of carbon removal.
25:44So I think both voluntary
25:46and compliance regimes
25:49are really important.
25:50The last thing I would add
25:51is there is also industry level regulation.
25:54There is a reason
25:54why we work so much
25:55with hard to abate
25:56because again,
25:57aviation, automotive,
25:59real estate, pharma,
26:00they already have regulations
26:03within their industry
26:04that tell them
26:05what they need to be doing.
26:06So as we're waiting
26:08for in a zero world
26:09that's legally binding,
26:10let's also lobby
26:11for integrated climate action
26:14that asks for carbon removal
26:16use today
26:16rather than later down the line.
26:19and I think this is the piece
26:20that's really, really key.
26:21Some of the confusion
26:22in this space
26:23was related to the fact
26:24that as we talked
26:25about carbon accounting,
26:27quite often the thinking has been
26:28I'm going to finish
26:29my reduction pathway
26:31and then once I've done all of this
26:32I'm going to worry
26:33about carbon removal
26:34and I anyway
26:35only have a net zero goal
26:36in 2040.
26:38Now the trouble is
26:39it's a little bit like
26:40if we were building out
26:41the EV ecosystem
26:42and saying
26:43that there is no point
26:43buying EVs
26:44until the grid
26:45is completely clean
26:47because then there'd be
26:48no EV industry
26:49to buy from.
26:50We need to be buying
26:52carbon removal today
26:53and investing
26:53in carbon removal today
26:54so that when we are
26:56actually purchasing
26:57for net zero
26:58that those credits are there.
27:01Absolutely.
27:03And it's quite easy
27:04to get dumerous about this
27:06especially we've seen
27:07a lot of high profile companies
27:08have layoffs
27:09but what would you say
27:11to people that say
27:12the market is slowing down?
27:17Well, it's not.
27:19Look at the data.
27:21Unfortunately
27:22like with many
27:23emerging industries
27:24this industry
27:26is riddled with
27:27just opinions
27:28rather than looking
27:30at hard data.
27:31I recommend you look
27:32at a website
27:32called cdr.fyi
27:34they post
27:35all transactions
27:36that happen
27:37in high durability
27:38carbon removal
27:39and increasingly
27:40I think they just announced
27:41that they've included
27:42lower durability credits
27:43as well.
27:44So you can look
27:44at all of the volumes
27:45what are the big purchasers doing
27:47and how the transactions
27:48are taking place
27:49again
27:50doesn't mean that
27:51all transactions are there
27:52but you already see
27:53from the publicly available data
27:55that this year
27:56more carbon removal
27:57was purchased
27:57than ever before.
27:59So objectively speaking
28:00carbon removal
28:01isn't shrinking
28:02it is growing
28:03carbon avoidance
28:05is shrinking indeed
28:07so maybe sometimes
28:08it's the confusion
28:09between which parts
28:10of the carbon market
28:11are which
28:12and yeah
28:13Andrew what'd you say?
28:15I think I'd say two things
28:17one I'd say
28:17bad news travels fast
28:19and gets broadcast
28:20really loudly
28:21but actually there are
28:22some incredible
28:22success stories out there
28:24and the other thing
28:26I'd say is that
28:26I'd never felt
28:27so much innovation
28:28in this sector
28:29now when we started
28:30Countract in 2021
28:32I think there were
28:33like a couple of dozen
28:34carbon removal companies
28:35in the world
28:37so our investment universe
28:38was not very big
28:39but also there was
28:40a lot of white space
28:41right
28:41and most people
28:42would pitch us
28:43these vertically integrated
28:44carbon removal companies
28:45I'm going to do
28:47carbon removal
28:47and I'm going to earn credits
28:48and I'm going to sell them
28:49and these days
28:51we don't hear that that much
28:52now we hear
28:53I've got a really interesting way
28:54to think about
28:55making cement differently
28:57or to think about
28:58a new way
28:59to produce steel
29:00or a new way
29:01to build roads
29:02or a new way
29:03to refine aluminium
29:05or magnesium
29:05and I can happen
29:07to do that
29:08in a way
29:08that is carbon negative
29:10and that's a fundamentally
29:12different proposition
29:13so it may be true
29:15that there's less buzz
29:15around carbon removal
29:17vertically integrated businesses
29:18and it might be harder today
29:19to get a DAC startup funded
29:21than it was in 2021
29:23probably
29:24but there is also
29:25extraordinary innovation
29:27and I think what's great
29:28actually is
29:29that we're seeing
29:30the CDR ecosystem
29:31connecting into
29:32other ecosystems
29:33and people are thinking
29:35about systemic change
29:36and that's important
29:37because it de-risks
29:38the market
29:39it makes us much more
29:40resilient to political change
29:43and it means
29:44we have to pay less
29:45for the carbon removal
29:46because other things
29:46will help subsidise it
29:47and I just
29:49maybe an example
29:50that is really left field
29:52we invested in a company
29:53called Carbon Run
29:53in Nova Scotia
29:55in Canada
29:57and Carbon Run's
29:59main purpose
30:00is making rivers
30:01less acidic
30:02and the reason
30:03they care about that
30:04is because salmon
30:05and trout
30:05can't spawn
30:06in acidic rivers
30:07and partly as a result
30:09of acid rain
30:10partly as a result
30:11of agricultural runoff
30:12rivers around the world
30:13are getting really acidic
30:15and that's really hurting
30:16fish stocks
30:16all over the place
30:18now it happens
30:19that you can make rivers
30:20less acidic
30:21by dissolving
30:22an alkaline mineral
30:23in them
30:23most simply limestone
30:25it's cheap
30:26and abundant
30:26it costs about
30:2720 bucks a ton
30:28if you mill it
30:30and put it in a river
30:30the river will get
30:31more alkaline
30:32and it's really
30:32just putting some
30:33natural material
30:34in a natural body
30:35it's good for everything
30:36it also happens
30:38to be good
30:38for the climate
30:39because a more
30:41alkaline river
30:42will draw CO2
30:43out of the atmosphere
30:43and that will
30:44lock it away
30:45in the form of
30:46ocean bicarbonate
30:46when it ultimately
30:47flows to the sea
30:48it's one of the
30:49cheapest pathways
30:50to carbon removal
30:51but actually
30:52it started out
30:53as an idea
30:53to help fish
30:54and we're just
30:56seeing tons
30:56and tons
30:57of these sorts
30:57of innovations
30:58now
30:58which for me
30:59means that the
31:00market is more
31:00vibrant than it's
31:01ever been
31:01even if not
31:02everything looks
31:03like a pure play
31:04CDL company
31:05can I use
31:06another example
31:06because I think
31:07those examples
31:07really bring it
31:08to life
31:08so for good reason
31:10a lot of us
31:11have been worried
31:12about the rise
31:13of AI
31:14and the amount
31:14of computes
31:15that it will require
31:16and the impact
31:16of AI
31:17on climate
31:20if you think
31:21about next
31:22generation
31:23direct air capture
31:24that Andrew
31:24was talking
31:25about earlier
31:25there are companies
31:27that are looking
31:27to use waste
31:29heat
31:29from data centers
31:31and co-locate
31:32direct air capture
31:33with data centers
31:34so again
31:35that might not
31:35count as a carbon
31:36removal credit
31:37but it removes carbon
31:39in the process
31:39of running AI
31:40and I think again
31:41I think it'd be naive
31:42for us to think
31:43that we're going
31:43to not to do AI
31:44because it's bad
31:45for the climate
31:45I also think
31:46it's completely naive
31:47to think that AI
31:47will get so smart
31:48it will just
31:49clean itself up
31:50we very much
31:51have responsibility
31:52to do it
31:52but again
31:53it's application
31:54of direct air capture
31:55company
31:56exactly in the value
31:58chain
31:58in which it should exist
32:01wonderful
32:01and conscious
32:02of time
32:03but one last
32:03quick fire question
32:04is what types
32:06of approaches
32:06do you think
32:07have the best chance
32:08of reaching
32:08planetary scale
32:09in today's
32:10socio-political
32:11and economic
32:12ecosystem
32:15I'll go first
32:16bluntly I think
32:17it's those that
32:18survive
32:19and that's true
32:19of any startup
32:20ecosystem
32:21you have to get
32:22to survival
32:23and I think
32:24in particular
32:25the next 5 to 10
32:26years are
32:26really important
32:27because they're a watershed
32:29half decade
32:30decade
32:30for carbon removal
32:31I am hopeful
32:33that by the middle
32:34of next decade
32:35we'll have a strong
32:36regulatory backdrop
32:38for carbon removal
32:39until that's there
32:40it's about survival
32:42and that means
32:43finding ways
32:44to finance your business
32:45being really creative
32:46about how you think
32:46about alternative markets
32:48it might mean
32:49selling into
32:50other industries
32:51chemical industries
32:52sustainable aviation
32:53fuel
32:53or other materials
32:55and it might just mean
32:56finding really innovative
32:57ways to raise capital
32:58whether it's from
32:59states or from
33:00private investors
33:01or banks
33:02you've got to get
33:03through that
33:03and it's going to be hard
33:05but that's an important
33:06it's going to be important
33:07discriminating 10 years
33:09and the only thing
33:10I'd add is
33:11I think everyone
33:11is looking for a silver bullet
33:13is it going to be
33:14direct air capture
33:15or enhanced truck weathering
33:16or direct ocean capture
33:17not a single method
33:19that we know today
33:20scales to the 10 gigatons
33:21that we need
33:22and we might actually need
33:23much more than 10 gigatons
33:25because we're not on track
33:26to the carbon ice
33:27as much as we should
33:27so all of those methods
33:29are vital
33:29a lot of those methods
33:31lend themselves better
33:32to certain types of
33:33geographies
33:33certain types of
33:34talent density
33:35so I think let's not
33:37pick winners
33:37let's invest in all of them
33:38let's not panic
33:40if some of them fail
33:41keep coming
33:42carry on
33:43yeah
33:44well thank you
33:45I think we finished
33:46before time
33:47which is great
33:47so yeah
33:50do we walk up
33:50thank you
33:51thank you
33:52thank you
33:52for having us
33:53thank you
33:53thank you
33:53thank you
33:53thank you
33:53thank you
33:53thank you
33:53thank you
33:54thank you
33:54thank you
33:54thank you
33:54thank you
33:54thank you
33:54thank you
33:55thank you
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