☁️ "A Breakout Year for Carbon Removal?"

Podcast’s Essential Bites:

[3:20] SL: "In just the last year alone, venture investments in carbon removal have doubled. [...] When we talk about carbon removal, we're talking about two distinct methods: nature based solutions and engineered solutions. Up until now most investments in carbon removal have gone toward nature based solutions."

[7:45] RB: "The key nature based solutions [...] are falling into forestry or soil types. On the forestry side, there are things like agroforestry, afforestation, reforestation [...]. There's also something called improved forest management, which is changing the way we manage existing working forests to store more carbon for longer. On the soil side, there's a number of practices that appear to lead to greater soil organic carbon buildup, like no-till agriculture and cover cropping."

[8:17] SL: "These methods can definitely work, but they have to be closely monitored [...]. Lots of projects are not providing long term carbon benefits because they aren't being properly maintained. There are also climate risks. [...] And that is one of the reasons engineered carbon removal is becoming more attractive for companies with aggressive targets."

[9:26] RB: "I think the best known [engineered solution] is direct air capture, DAC. [...] You capture CO2 from the atmosphere, you concentrate it, you liquefy it, and you have a storage partner who puts it underground. [...]  There are [also] a lot of biomass based pathways. You can call it biomass with carbon removal and storage or bioenergy with carbon capture and storage."

[13:36] RB: "We need probably 10 gigatons, that's 10 billion tons per year of carbon removal in say, 2050. [...] Worldwide, we think the [...] carbon removal capacity per year is about 3 million tons. So we're off by 10,000 X. And that's a very imposing scaling curve. And that's why we're putting so much work into this, not only so that Microsoft can be carbon negative in 2030, but so that we can have jump started the development of an industry that society is going to need very much as we get the remainder of decarbonisation on track."

[16:59] SL: "According to Carbon Direct's analysis, only 2.5 percent of carbon credits are delivering durable removal."

[21:12] JF: "Some of what's in the market is valid, but not removals. Some of what's in the market is bollocks. [...] Many of our customers are concerned very much about reputational risk. So they want to make sure that what they're buying is valid. Those are technical questions. And the market standards don't exist. This is a key issue. [...] There is no SEC for carbon. [...] And developing protocols and standards like that is time consuming and expensive and deeply technical. So do you wait for the ISO to come up with a standard on their own? [...] Or do you lean in and try to do useful stuff in the meantime?"

[26:59] JF: "There's three things that keep me up at night about the engineered [carbon removal] pathways, and it is not cost. We're going to innovate, the cost will come down. [...] The first of those is human capital. [...] We do not have the full complement of business and worker skills to deploy. [...] Thing two is infrastructure. [...] You're moving molecules, so you need the infrastructure to do that [...], [which] largely doesn't exist. [...] The last thing that keeps me up at night is the permitting. And permitting is not just a question of governments executing. It's also a question of the communities associated with these projects."

[33:07] JF: "20 years ago, solar was a failed set of Department of Energy projects in the Mojave Desert that were ridiculously expensive and tiny. [...] And then things changed. [...] So it's impossible to guess how [the carbon market is] going to be [in 20 years]. But I think we are going to see a change of incumbents. I think we're going to see a whole new set of pathways for CO2 removal that we haven't even imagined yet, stuff like wood burial [...]. I think we will begin to see new laws and new protocols. [...] But mostly what we're going to see is a handful of really energetic young entrepreneurs today, ending their careers with success. They are going to say I spent my life working on this problem and it worked."

Rating: ⭐⭐⭐⭐

Additional Links:
Article: "Carbon capture startups received a record $882 million in VC investments" (protocol, 2022)