Host: Radhika Moolgavkar
Guests: Susan Su | Partner | Toba Capital &
Josh Santos | CEO & Co-Founder | Noya
Category: 💸 Funding | Carbon Removal
Podcast’s Essential Bites:
[1:09] RM: “It's been a big month for carbon removal funding news. Climeworks announced $650 million in new fundraising from a large group of private equity investment management firms. Stripe paid […] close to a billion dollar […] to take their CDR purchasing program to an all new level by partnering with Alphabet, Meta, McKinsey, Shopify, and many more to pool carbon credit dollars in by removals from companies and facilities that sometimes don't even exist yet. […] The climate focussed VC firm, Lowercarbon Capital raised 350 million to invest in carbon removal companies. And then finally, the Carbon XPrize: 15 $1 million milestones and grants given in the first round.”
[2:26] JS: “For those of you who may not know what Noya is, we are essentially designing a process that radically reduces the upfront capital costs and the installation time required to perform direct air capture. In our approach, we retrofit existing pieces of industrial equipment, like cooling towers, and turn them into CO2 capture machines. For the past few months, we have been working hard on getting over some of the big design decisions and design risks that have been in our process since we started. Namely around this question of if you retrofit [a] cooling tower that's moving lots of air, how do you guarantee that the cooling tower is still going to work? […] And I'm really excited to say that we've been able to get around that problem.”
[6:24] JS: “When we started our business plan was actually to capture CO2 from the air and sell it to people that we're going to use it. People like small businesses in food and beverage. […] So we just skipped that first step of bottling up CO2 and reselling it. And we just are now focused solely on removing carbon and have been gaining a lot of attention through that.”
[9:31] SS: “If I put my investor hat on, the reason why I think CDR, carbon removal overall, is kind of seemingly surprising us right now is because it's possibly just following a J curve. Where you see a little bit of a slow down, you see […] something that looks like a loss at first, and then it really doesn't look like a loss after that. We have to remember that a lot of carbon removal […] on the non nature based side is so technology driven. And if there is one thing we know about technology, it's that once it starts moving, it starts moving really fast. It snowballs. […] And I think that's why a lot of venture capitals are really interested in carbon removal, specifically technology driven carbon removal.”
[12:09] JS: “If you believe that there will be a happy world in the future that has successfully kept warming […] below 1.5 degrees Celsius, then you must also believe that there has to be an incredibly large carbon removal market of at least one gigaton per year in size, but potentially up to 10.”
[13:31] JS: “Our approach at the very beginning, we're retrofitting pieces of equipment to keep our CapEx low and […] to essentially mitigate the fact that the market for carbon removal is both unpredictable and small, relatively speaking. […] And so when I think about how we scale, we're actually kind of hacking the lending side of it right now, because of our low capital spend requirements to actually get our process out into the world. And so we are, by no means writing off the future, where we are building these huge, hundreds of million dollars, billion dollar mega plants that will get us incredibly low costs. We're just going about it in a way that is capital light right now, while all of these things are starting to be built up, so that we can scale, learn, remove, and continue growth.”
[31:51] JS: “Supplies is going to catch up. […] Let's say we start with there being 1000 tons removed next year. If we 3x that year over year, for the next eight years, we're at a billion tons. And I think that as we continue to see these new entrants into the purchasing side of the market, and we continue to see how that impacts policy, […] we'll see the ability for companies to be confident in the creation of additional supply and the investments required to reach additional supply happen. […] It's very likely that the growth is actually going to happen much faster than that.”
Rating: ⚡⚡⚡
🎙️ Full Episode: Apple | Spotify | Google
🕰️ 47 min | 🗓️ 04/29/2022
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