1 00:00:00,320 --> 00:00:04,240 Speaker 1: Welcome to zero I am Akshatrati. This week, climate tech 2 00:00:04,559 --> 00:00:19,320 Speaker 1: is resilience. In the weeks since the US and Israel 3 00:00:19,400 --> 00:00:21,840 Speaker 1: began its war on Iran, we have seen oil and 4 00:00:21,920 --> 00:00:26,520 Speaker 1: gas prices spike around the world. Iran has responded in kind, 5 00:00:26,920 --> 00:00:29,520 Speaker 1: blocking the vital oil and gas artery that is the 6 00:00:29,560 --> 00:00:33,280 Speaker 1: Strait of Hormuz and attacking oil and gas infrastructure across 7 00:00:33,280 --> 00:00:36,680 Speaker 1: the Middle East. The war has led many to question 8 00:00:37,000 --> 00:00:40,480 Speaker 1: in which direction the global economy will turn and how 9 00:00:40,560 --> 00:00:44,640 Speaker 1: will it continue to power itself. Will this finally be 10 00:00:44,720 --> 00:00:47,839 Speaker 1: the moment where countries move to renewables on mass or 11 00:00:47,920 --> 00:00:52,400 Speaker 1: will countries deepen their relationship with fossil fuels. As ever, 12 00:00:52,520 --> 00:00:55,840 Speaker 1: we are hearing loud voices on both sides. Last week, 13 00:00:56,080 --> 00:00:59,320 Speaker 1: fossil fuel executives met at the major SERA Weak Energy 14 00:00:59,360 --> 00:01:02,600 Speaker 1: conference in Here, where many said this is exactly the 15 00:01:02,600 --> 00:01:06,399 Speaker 1: moment for the US gas industry to shine, providing reliable 16 00:01:06,440 --> 00:01:09,800 Speaker 1: supply for the world. At the same time, the stock 17 00:01:09,840 --> 00:01:13,640 Speaker 1: prices of Chinese electro tech firms have gained more than 18 00:01:13,760 --> 00:01:17,880 Speaker 1: major oil companies since the war started, signaling that the 19 00:01:17,920 --> 00:01:22,040 Speaker 1: market sees a more optimistic future for climate tech. To 20 00:01:22,160 --> 00:01:25,360 Speaker 1: talk about all this I'm joined by aurore Belfrage, a 21 00:01:25,400 --> 00:01:30,480 Speaker 1: tech investor, a geopolitical risk advisor, and sustainability strategist. She 22 00:01:30,560 --> 00:01:33,240 Speaker 1: is the founding partner of the investment firm and think 23 00:01:33,280 --> 00:01:36,880 Speaker 1: tank Sustainable for a Climate tech investor. She's a broad 24 00:01:36,920 --> 00:01:40,640 Speaker 1: thinker and brings a European focused lens that isn't often 25 00:01:40,800 --> 00:01:43,840 Speaker 1: given the same weight. If you have feedback for the show, 26 00:01:44,080 --> 00:01:47,160 Speaker 1: guest suggestions or anything else, please write to us at 27 00:01:47,240 --> 00:01:48,840 Speaker 1: zero Port at Bloomberg dot net. 28 00:01:52,720 --> 00:01:55,320 Speaker 2: Welcome to zero Er, Thank you for having me. 29 00:01:55,960 --> 00:01:59,200 Speaker 1: So we met in February at the International Energy Agency's 30 00:01:59,280 --> 00:02:03,600 Speaker 1: Conference on Energy Innovation in Paris, and we had a 31 00:02:03,640 --> 00:02:07,960 Speaker 1: great discussion. Your comments, especially to some of the European politicians, 32 00:02:08,000 --> 00:02:11,240 Speaker 1: were on point and got the discussion going in a 33 00:02:11,280 --> 00:02:14,600 Speaker 1: really good way that morning. But in the past month 34 00:02:14,800 --> 00:02:18,280 Speaker 1: we've had a war started. So I want to touch 35 00:02:18,320 --> 00:02:22,200 Speaker 1: on investment trends and climate tech in Europe, but let's 36 00:02:22,320 --> 00:02:25,440 Speaker 1: briefly look at what's happening in the Middle East. Because 37 00:02:25,760 --> 00:02:29,000 Speaker 1: you've had a wide ranging career in finance, venture capital, 38 00:02:29,040 --> 00:02:33,640 Speaker 1: private equity, family offices, and throughout that you think about 39 00:02:33,720 --> 00:02:38,760 Speaker 1: how risk affects investments, geopolitical risk is one of those layers. 40 00:02:39,280 --> 00:02:42,880 Speaker 1: So given what's happening with the US and Israel attacking Iran, 41 00:02:43,800 --> 00:02:48,239 Speaker 1: there is a huge impact on energy markets. How has 42 00:02:48,400 --> 00:02:53,600 Speaker 1: your risk calculus changed and crucially, has that affected your 43 00:02:53,760 --> 00:02:55,880 Speaker 1: investment decisions in any way today? 44 00:02:56,200 --> 00:03:01,960 Speaker 2: Well, i'd say that, I mean, it's not hyperbole that 45 00:03:02,040 --> 00:03:07,560 Speaker 2: we're in unprecedented times. We have multiple threats and opportunities 46 00:03:07,919 --> 00:03:11,520 Speaker 2: to analyze, and this is I think adding a sense 47 00:03:11,560 --> 00:03:16,120 Speaker 2: of urgency to many of them, and the question of 48 00:03:16,160 --> 00:03:21,240 Speaker 2: the energy transition has gone from the one priority to 49 00:03:21,360 --> 00:03:26,320 Speaker 2: being all encompassing. But your question is has that impacted risk? 50 00:03:26,840 --> 00:03:29,840 Speaker 2: And I'm assuming that your underlying question is has that 51 00:03:29,919 --> 00:03:34,440 Speaker 2: impacted how capital flows to this type of innovation? And, 52 00:03:34,880 --> 00:03:39,400 Speaker 2: as you know, right now in the phase of big headlines, 53 00:03:39,520 --> 00:03:44,200 Speaker 2: big emotions, so I think it's hard to tell exactly 54 00:03:44,320 --> 00:03:47,400 Speaker 2: right now how it will impact it, but my guess 55 00:03:47,520 --> 00:03:52,240 Speaker 2: is that it will catalyze capital flow into energy innovation 56 00:03:52,560 --> 00:03:55,880 Speaker 2: that will strengthen European energy sovereignty. 57 00:03:56,320 --> 00:03:59,560 Speaker 1: This is a second energy shock within the last decade. 58 00:04:00,080 --> 00:04:05,280 Speaker 1: Russia's attack on Ukraine caused Europe specifically a lot of 59 00:04:05,280 --> 00:04:09,800 Speaker 1: stress because of how much gas came from Russian pipelines, 60 00:04:10,400 --> 00:04:13,640 Speaker 1: and it forced Europe to act on a very short 61 00:04:13,680 --> 00:04:17,800 Speaker 1: turn around, and it did so in ways that would 62 00:04:18,080 --> 00:04:22,680 Speaker 1: replicate a previous energy crisis response, which is to try 63 00:04:22,800 --> 00:04:26,160 Speaker 1: to get fossil fuels from somewhere else for whatever price 64 00:04:26,279 --> 00:04:29,440 Speaker 1: that they could afford. Tried to cut use of energy, 65 00:04:29,480 --> 00:04:32,760 Speaker 1: which happened in good and bad ways. Industries shut down, 66 00:04:33,080 --> 00:04:37,080 Speaker 1: but also households started consuming less energy. And it did 67 00:04:37,080 --> 00:04:40,760 Speaker 1: something that was different. It really did speed up clean 68 00:04:40,880 --> 00:04:44,240 Speaker 1: energy deployment. What do you think Europe can do now 69 00:04:44,279 --> 00:04:47,040 Speaker 1: that it has this practice of trying to speed up 70 00:04:47,279 --> 00:04:50,839 Speaker 1: energy transitions specifically, now, what can it do to speed 71 00:04:50,839 --> 00:04:52,520 Speaker 1: it up further, diversify further. 72 00:04:53,279 --> 00:04:56,200 Speaker 2: Well, we've gone from Plant A to Plan B to 73 00:04:56,360 --> 00:04:59,920 Speaker 2: Plan C, so I think we're moving along the contingent 74 00:05:00,040 --> 00:05:04,640 Speaker 2: and see plans and there is a positive element in that, 75 00:05:04,760 --> 00:05:09,000 Speaker 2: and obviously the war isn't that one of the positive impact. 76 00:05:08,839 --> 00:05:15,160 Speaker 2: But hopefully that allows Europe in its analysis to realize 77 00:05:15,160 --> 00:05:20,040 Speaker 2: that the ultimate plan needs to be European. We need 78 00:05:20,080 --> 00:05:23,839 Speaker 2: to supply our own energy. And what I find astounding 79 00:05:23,920 --> 00:05:27,680 Speaker 2: is we've known how to do that for a while. 80 00:05:28,240 --> 00:05:32,960 Speaker 2: It's not a secret contingency plan that someone's now presented. 81 00:05:33,440 --> 00:05:37,159 Speaker 2: We know that we are able to supply ourselves in 82 00:05:37,200 --> 00:05:41,640 Speaker 2: Europe with solar, with wind, with battery capacity. I'm personally 83 00:05:41,640 --> 00:05:47,960 Speaker 2: invested in geothermal, wave, tidal, etc. So I think it 84 00:05:48,040 --> 00:05:51,360 Speaker 2: won't be that difficult to put this in motion because 85 00:05:51,400 --> 00:05:55,480 Speaker 2: the technology exists. Entrepreneurs have been building in the space, 86 00:05:55,920 --> 00:06:01,000 Speaker 2: but we've seen a slight hesitancy from policy makers but 87 00:06:01,120 --> 00:06:06,360 Speaker 2: also from capital and hopefully that will change now, allowing 88 00:06:06,640 --> 00:06:09,719 Speaker 2: many of these technologies that have just been waiting in 89 00:06:09,800 --> 00:06:12,040 Speaker 2: terms of timing to now flourish. 90 00:06:12,240 --> 00:06:14,120 Speaker 1: So let me come back to climate tech. But there 91 00:06:14,200 --> 00:06:16,679 Speaker 1: is a dynamic we should address before we get into 92 00:06:16,839 --> 00:06:20,880 Speaker 1: the investment trends in Europe, which is that Russia, Ukraine, 93 00:06:21,400 --> 00:06:24,640 Speaker 1: this born in the Middle East. Trump's attack on Europe 94 00:06:24,760 --> 00:06:29,320 Speaker 1: are forcing Europe to have a strong desire now to 95 00:06:29,480 --> 00:06:33,440 Speaker 1: rearm and many of the ESG funds, these environmental social 96 00:06:33,480 --> 00:06:37,599 Speaker 1: governance funds that were important in investing in climate tech, 97 00:06:37,920 --> 00:06:41,599 Speaker 1: are now opening themselves up to invest in defense oriented 98 00:06:41,600 --> 00:06:45,400 Speaker 1: companies and technologies. Is that bad news for climate tech 99 00:06:45,440 --> 00:06:47,760 Speaker 1: because limited money is getting diverted. 100 00:06:48,600 --> 00:06:53,640 Speaker 2: No, not at all. I would say climate tech has 101 00:06:53,880 --> 00:06:59,719 Speaker 2: always been resilience tech. If you want we're now reskinning ourselves. 102 00:06:59,760 --> 00:07:02,680 Speaker 2: So many of the portfolio companies that I work with, 103 00:07:02,839 --> 00:07:06,800 Speaker 2: they would call themselves something and the buzzword du jour 104 00:07:07,360 --> 00:07:12,440 Speaker 2: is demonstrating how this type of technology also is defense, 105 00:07:12,720 --> 00:07:17,280 Speaker 2: security and resilience, but it's not fundamentally changing anything in 106 00:07:17,320 --> 00:07:21,800 Speaker 2: the actual technology. It has always been about defense and resilience. 107 00:07:22,080 --> 00:07:25,520 Speaker 2: And I think this scenario that we're facing is just 108 00:07:25,600 --> 00:07:30,120 Speaker 2: allowing new buckets of money to understand that what was 109 00:07:30,160 --> 00:07:34,960 Speaker 2: called climate tech isn't some sort of bo ho experiment 110 00:07:35,440 --> 00:07:38,520 Speaker 2: and some sort of trendy green tech that we nice 111 00:07:38,560 --> 00:07:42,360 Speaker 2: to have. It's also part of the security apparatus. But 112 00:07:43,120 --> 00:07:46,480 Speaker 2: I've been thinking about something that I'd like to discuss 113 00:07:46,520 --> 00:07:48,840 Speaker 2: with you when it comes to this, when it comes 114 00:07:48,880 --> 00:07:53,480 Speaker 2: to defining climate tech versus defense tech as policymakers, but 115 00:07:53,880 --> 00:07:56,320 Speaker 2: I'm looking at myself as an investor. We're all trying 116 00:07:56,360 --> 00:07:58,960 Speaker 2: to predict the future somehow, and I'm not aware of 117 00:07:58,960 --> 00:08:04,160 Speaker 2: anyone that has the actual crystal ball. And we are rearming, 118 00:08:04,240 --> 00:08:07,160 Speaker 2: as you're saying, and we're investing in defense as a 119 00:08:07,200 --> 00:08:11,360 Speaker 2: security measure against the threat. And this is ultimately a 120 00:08:11,400 --> 00:08:16,280 Speaker 2: probability challenge. The likelihood of an invasion is mathematically somewhere 121 00:08:16,280 --> 00:08:20,800 Speaker 2: between one and zero, and in recent times we're concerned 122 00:08:20,800 --> 00:08:24,040 Speaker 2: that this is closer to one than before, so to speak. 123 00:08:24,240 --> 00:08:28,200 Speaker 2: And there is also potentially a threshold where we increase 124 00:08:28,720 --> 00:08:31,440 Speaker 2: investments and that acts as a deterrent. And this is 125 00:08:31,440 --> 00:08:32,800 Speaker 2: not my field, so I'm going to stay in my 126 00:08:32,880 --> 00:08:37,040 Speaker 2: lane and observe. But if we analyze the same investment 127 00:08:37,080 --> 00:08:41,840 Speaker 2: thinking regarding climate, which also has a probability between one 128 00:08:41,880 --> 00:08:46,040 Speaker 2: and zero and a massive amount of data and scientists 129 00:08:46,120 --> 00:08:50,080 Speaker 2: that have a fairly good grasp on future scenarios as 130 00:08:50,080 --> 00:08:53,400 Speaker 2: we over consume and exceed our planetary boundaries, and it 131 00:08:53,440 --> 00:08:57,000 Speaker 2: ain't pretty. And here's my question to you, why is 132 00:08:57,040 --> 00:09:03,160 Speaker 2: the sentiment around climates in investment? It's too expensive and 133 00:09:03,520 --> 00:09:06,400 Speaker 2: I'd argue that the probability of disaster is high, and 134 00:09:06,440 --> 00:09:08,959 Speaker 2: I don't want to go in and compare because not 135 00:09:09,000 --> 00:09:14,559 Speaker 2: a competition. But why in the defense investment it's justified 136 00:09:14,600 --> 00:09:18,600 Speaker 2: as some sort of threat deterrent and essential security measure measurement. 137 00:09:18,720 --> 00:09:21,800 Speaker 2: It's life and death, as it should be. However, climate 138 00:09:23,800 --> 00:09:27,720 Speaker 2: requires a return on investment, and it needs to strictly 139 00:09:27,760 --> 00:09:30,560 Speaker 2: adhere to the rules of the market, and it needs 140 00:09:30,600 --> 00:09:34,560 Speaker 2: to make financial sense only. And I find these two 141 00:09:36,320 --> 00:09:40,960 Speaker 2: separate ways of thinking in similar tech hard to understand. 142 00:09:41,160 --> 00:09:43,360 Speaker 2: And I'm sure there's a smart reason, right, I just 143 00:09:43,400 --> 00:09:45,160 Speaker 2: don't get it. How do you see this? 144 00:09:45,440 --> 00:09:49,040 Speaker 1: Well, it's a good point, you know. I was thinking 145 00:09:49,120 --> 00:09:54,000 Speaker 1: about Bloomberg Green's launch, which happened in January twenty twenty. 146 00:09:54,120 --> 00:09:57,160 Speaker 1: You know, Bloomberg was making this big bet on the 147 00:09:57,240 --> 00:10:00,880 Speaker 1: desire that people have to read more coverage about climate 148 00:10:00,960 --> 00:10:05,120 Speaker 1: and climate solutions and how governments and investors are thinking 149 00:10:05,160 --> 00:10:08,440 Speaker 1: about this big challenge in front of us. And just 150 00:10:08,480 --> 00:10:11,600 Speaker 1: about then, of course, the pandemic happened and we were 151 00:10:11,640 --> 00:10:14,120 Speaker 1: all locked down, and there was a moment of sort 152 00:10:14,160 --> 00:10:17,760 Speaker 1: of reflecting inward as the Bloombergreen team was being put together, like, 153 00:10:18,040 --> 00:10:19,800 Speaker 1: oh my god. You know, we were going to focus 154 00:10:19,800 --> 00:10:21,640 Speaker 1: on this big important challenge, but now the world is 155 00:10:21,679 --> 00:10:24,160 Speaker 1: going to be focused on a pandemic, Like, you know, 156 00:10:24,360 --> 00:10:27,520 Speaker 1: what will people want to read about? And it turned 157 00:10:27,559 --> 00:10:30,800 Speaker 1: out actually people wanted to read more about climate change 158 00:10:30,840 --> 00:10:33,760 Speaker 1: at that moment because the pandemic was sort of showing 159 00:10:33,800 --> 00:10:37,160 Speaker 1: you there's this big global challenge that because we did 160 00:10:37,200 --> 00:10:40,040 Speaker 1: not do enough about now we are suffering and climate 161 00:10:40,080 --> 00:10:42,520 Speaker 1: is something we have understood and we actually can do 162 00:10:42,600 --> 00:10:46,200 Speaker 1: something about. And we saw in your investment world a 163 00:10:46,280 --> 00:10:49,600 Speaker 1: huge boom in climate tech investments in twenty one and 164 00:10:49,640 --> 00:10:52,480 Speaker 1: twenty two. So when I was reflecting on that in 165 00:10:52,520 --> 00:10:56,240 Speaker 1: this current moment, it actually turns out that if anything, 166 00:10:56,720 --> 00:10:59,840 Speaker 1: in this six year period, technologies have only gotten better. 167 00:11:00,280 --> 00:11:03,880 Speaker 1: Green technologies have only gotten cheaper. And so now that 168 00:11:04,040 --> 00:11:06,640 Speaker 1: this crisis is upon us, and it's a very different 169 00:11:06,679 --> 00:11:09,720 Speaker 1: kind of crisis than the pandemic, but it is focusing 170 00:11:10,080 --> 00:11:13,080 Speaker 1: the reader's mind on the war because of the uncertainty, 171 00:11:13,200 --> 00:11:18,240 Speaker 1: because of the price of energy. But the overall way 172 00:11:18,320 --> 00:11:21,280 Speaker 1: to react to this in the climate space will be 173 00:11:21,520 --> 00:11:25,000 Speaker 1: to try and speed up the deployment of these technologies 174 00:11:25,040 --> 00:11:27,520 Speaker 1: which have become easier to get and cheaper to build. 175 00:11:27,640 --> 00:11:30,800 Speaker 1: And the reason I think we don't treat it as 176 00:11:31,320 --> 00:11:35,240 Speaker 1: equivalent to say investing in the defense technologies that are 177 00:11:35,280 --> 00:11:41,800 Speaker 1: necessary is the human timeline on which these crises play out. 178 00:11:41,880 --> 00:11:44,840 Speaker 1: The pandemic was a live crisis playing out within a 179 00:11:44,920 --> 00:11:48,120 Speaker 1: year two years. The war plays out over months and 180 00:11:48,200 --> 00:11:52,880 Speaker 1: maybe years, whereas climate change is a decadal challenge, and 181 00:11:52,960 --> 00:11:57,080 Speaker 1: so you tend to then lower it in the priority 182 00:11:57,160 --> 00:11:59,400 Speaker 1: list because yes, we will have to deal with it, 183 00:11:59,480 --> 00:12:01,720 Speaker 1: you know, even after the war is over, even after 184 00:12:01,720 --> 00:12:06,320 Speaker 1: the pandemic is over, and it is certainly not being 185 00:12:06,360 --> 00:12:09,160 Speaker 1: treated with the same urgency. So that's my observation of 186 00:12:09,240 --> 00:12:13,760 Speaker 1: how I've seen you investors and politicians treat this challenge. 187 00:12:14,200 --> 00:12:17,079 Speaker 1: What I will note is that in the background, most 188 00:12:17,120 --> 00:12:20,400 Speaker 1: of them do not start ignoring climate, even if they 189 00:12:20,520 --> 00:12:22,400 Speaker 1: might put it down the priority now. 190 00:12:22,440 --> 00:12:27,280 Speaker 2: And I agree with that. I think especially many energy 191 00:12:27,320 --> 00:12:33,200 Speaker 2: intensive industrial players know that this calculation isn't changing. The 192 00:12:33,200 --> 00:12:36,480 Speaker 2: physical environment is changing. There's an insurance play on that 193 00:12:36,679 --> 00:12:40,400 Speaker 2: my physical assets are at risk, my energy costs is increasing. 194 00:12:40,960 --> 00:12:45,680 Speaker 2: Many key players that are affected are continuing to double 195 00:12:45,720 --> 00:12:49,560 Speaker 2: down on climate, both in terms of an investment. But 196 00:12:50,559 --> 00:12:55,360 Speaker 2: the general mood still fascinates me because when it comes 197 00:12:55,480 --> 00:13:03,559 Speaker 2: to defense and the pandemic, to a degree, the return 198 00:13:03,640 --> 00:13:06,920 Speaker 2: on investment wasn't important. We weren't talking about it in 199 00:13:07,000 --> 00:13:10,160 Speaker 2: terms of an investment that needed a return. It was 200 00:13:10,640 --> 00:13:14,120 Speaker 2: a crisis in life and death, and this crisis, the 201 00:13:14,160 --> 00:13:17,960 Speaker 2: climate one. You're not allowed to talk about it in 202 00:13:18,000 --> 00:13:21,560 Speaker 2: those terms. You have to show a return on investment 203 00:13:21,640 --> 00:13:25,400 Speaker 2: on every dollar spell into every crown spent and That's 204 00:13:25,400 --> 00:13:27,000 Speaker 2: one of the things that we talked in Paris about 205 00:13:27,040 --> 00:13:30,520 Speaker 2: which I find fascinating, which is how do we create 206 00:13:31,040 --> 00:13:39,200 Speaker 2: a political environment where we calculate two separate calculations. One 207 00:13:39,320 --> 00:13:41,920 Speaker 2: is the cost of investment and there I will come 208 00:13:41,960 --> 00:13:44,080 Speaker 2: as a private investor in the private capital and fine 209 00:13:44,559 --> 00:13:48,640 Speaker 2: and family offices, et cetera. And then in parallel you 210 00:13:48,720 --> 00:13:52,880 Speaker 2: compare it to the cost of inaction. What happens if 211 00:13:52,880 --> 00:13:56,360 Speaker 2: we don't do this, And you need both those numbers 212 00:13:56,400 --> 00:13:57,719 Speaker 2: in order to take decisions. 213 00:13:58,120 --> 00:14:02,400 Speaker 1: So the idea of the framing of a climate emergency 214 00:14:03,360 --> 00:14:07,280 Speaker 1: was trying to do that thing where it wanted to 215 00:14:07,320 --> 00:14:11,360 Speaker 1: put climate on the same moral footing as the idea 216 00:14:11,400 --> 00:14:16,720 Speaker 1: of defense or dealing with a pandemic. But maybe that's 217 00:14:16,760 --> 00:14:20,600 Speaker 1: the moment to then look at this wider trend that 218 00:14:20,720 --> 00:14:22,880 Speaker 1: you have been an investor for the last decade. You 219 00:14:22,920 --> 00:14:27,200 Speaker 1: have invested mostly in European companies, independent of what's happened 220 00:14:27,200 --> 00:14:28,720 Speaker 1: in the US, and we will come to the US 221 00:14:28,760 --> 00:14:31,200 Speaker 1: because it does impact how you think about in Europe. 222 00:14:31,240 --> 00:14:35,080 Speaker 1: But independent of the US, what have you seen in 223 00:14:35,120 --> 00:14:39,400 Speaker 1: the last decade of investments in climate tech in Europe? 224 00:14:39,800 --> 00:14:43,600 Speaker 1: Because we went from a period where governments were very 225 00:14:43,680 --> 00:14:46,840 Speaker 1: keen on subsidizing these green technologies. As a result, the 226 00:14:46,880 --> 00:14:51,840 Speaker 1: investors were seeing written on investment to then yanking those 227 00:14:51,840 --> 00:14:55,640 Speaker 1: subsidies as Germany did and Spain did for solar, to 228 00:14:55,720 --> 00:15:01,200 Speaker 1: then losing those solar companies to China. Broadly, in climate tech, 229 00:15:01,320 --> 00:15:03,200 Speaker 1: you know, how do you think the trends have evolved 230 00:15:03,240 --> 00:15:05,160 Speaker 1: in your ten year period in Europe? 231 00:15:05,440 --> 00:15:13,320 Speaker 2: Well, Luckily, investors and entrepreneurs and researchers are different species, 232 00:15:13,640 --> 00:15:16,920 Speaker 2: and they work on different timelines and they have different missions, 233 00:15:17,320 --> 00:15:20,440 Speaker 2: which is a good thing for both for investors as myself, 234 00:15:20,480 --> 00:15:23,600 Speaker 2: but also for humanity, which means that all those things 235 00:15:23,600 --> 00:15:30,680 Speaker 2: that you talk about are macro scenarios. It's policy, it's 236 00:15:30,760 --> 00:15:34,800 Speaker 2: yanking money back and forth, et cetera. And the undercurrent 237 00:15:35,400 --> 00:15:43,000 Speaker 2: of mission driven bright PhD students, professors, entrepreneurs solving problems 238 00:15:43,560 --> 00:15:48,040 Speaker 2: is that they've actually powered through all of this, and 239 00:15:48,360 --> 00:15:52,240 Speaker 2: sometimes life becomes easier because policy makers go, oh, this 240 00:15:52,360 --> 00:15:55,680 Speaker 2: is exciting, and then suddenly life comes to be harder 241 00:15:55,720 --> 00:15:57,840 Speaker 2: and it's called a winter of some sorts, and policy 242 00:15:57,840 --> 00:16:01,040 Speaker 2: makers aren't that interested, which also has advantages because then 243 00:16:01,080 --> 00:16:06,560 Speaker 2: you can build free from all the headlines and free 244 00:16:06,640 --> 00:16:08,000 Speaker 2: to build as you want and make a bit of 245 00:16:08,280 --> 00:16:11,840 Speaker 2: some mistakes. So if I look at it from I 246 00:16:12,480 --> 00:16:15,280 Speaker 2: tend to be an early stage investor. I work closely 247 00:16:15,440 --> 00:16:19,600 Speaker 2: with the universities and labs and what's coming out of 248 00:16:20,280 --> 00:16:25,360 Speaker 2: research and applied research, and there the understanding of the 249 00:16:25,480 --> 00:16:30,800 Speaker 2: general problems which creates opportunities has been relatively steady, and 250 00:16:30,920 --> 00:16:33,840 Speaker 2: many of the things that I invest in aren't flashes 251 00:16:33,880 --> 00:16:37,400 Speaker 2: in the pan. It is four or five ten years 252 00:16:38,080 --> 00:16:43,680 Speaker 2: of research and dedicated brains are continued to be dedicated. 253 00:16:43,880 --> 00:16:46,680 Speaker 2: So I wouldn't say that we will that we see 254 00:16:46,720 --> 00:16:49,400 Speaker 2: that type of up and down waves when it comes 255 00:16:49,440 --> 00:16:53,080 Speaker 2: to what it's actually coming out. But it affects it 256 00:16:53,120 --> 00:16:56,440 Speaker 2: of course, which is what you're implying. Money allows you 257 00:16:56,520 --> 00:16:59,600 Speaker 2: to scale quicker, It allows you to recruit, It allows 258 00:16:59,600 --> 00:17:02,240 Speaker 2: you to test in a different phase. And I hear 259 00:17:02,320 --> 00:17:05,600 Speaker 2: I'd love to hear your thoughts on the US versus Europe, 260 00:17:05,640 --> 00:17:11,320 Speaker 2: because scaling and throwing money at something has its advantages. 261 00:17:11,680 --> 00:17:13,840 Speaker 1: It's a good moment to bring the US in because 262 00:17:14,280 --> 00:17:17,159 Speaker 1: the country just seems to swing between wanting to do 263 00:17:17,200 --> 00:17:21,080 Speaker 1: something about climate to trying to meddle with anyone trying 264 00:17:21,119 --> 00:17:24,439 Speaker 1: to do anything on climate these days, and yet it 265 00:17:24,520 --> 00:17:27,600 Speaker 1: remains the hub of climate tech. Most of the climate 266 00:17:27,640 --> 00:17:31,800 Speaker 1: tech startups are still in the US. The amount of 267 00:17:31,840 --> 00:17:35,800 Speaker 1: capital available in the US is just so much bigger, 268 00:17:36,280 --> 00:17:40,040 Speaker 1: and how that capital flows has an impact on Europe. 269 00:17:40,440 --> 00:17:43,800 Speaker 1: After the Inflation Reduction Act was passed under Joe Biden, 270 00:17:44,040 --> 00:17:46,600 Speaker 1: there's all this fear in Europe that, oh my god, 271 00:17:46,680 --> 00:17:49,879 Speaker 1: European startups are going to have to go to the 272 00:17:50,040 --> 00:17:52,640 Speaker 1: US now because clearly the money is going to be there, 273 00:17:53,640 --> 00:17:55,439 Speaker 1: and maybe we saw one or two companies, but not 274 00:17:55,480 --> 00:17:59,720 Speaker 1: really that many move. And now, of course, with all 275 00:17:59,760 --> 00:18:04,200 Speaker 1: that reversed, the Inflamation Reduction Act has been decapitated. It's 276 00:18:04,240 --> 00:18:08,840 Speaker 1: been reversed by attack on clean energy. The latest headline is, 277 00:18:09,440 --> 00:18:12,400 Speaker 1: you know, the Trump administration is actually going to buy 278 00:18:12,440 --> 00:18:17,639 Speaker 1: out licenses from Shell and Total energies that want to 279 00:18:17,640 --> 00:18:21,120 Speaker 1: build offshore wind so that they'd never get to build 280 00:18:21,119 --> 00:18:25,960 Speaker 1: them again. So in this swing that happens in the US, 281 00:18:26,000 --> 00:18:28,760 Speaker 1: and yet the fact that there's big capital there still, 282 00:18:29,200 --> 00:18:32,920 Speaker 1: how does that affect your climate tech investments in Europe? 283 00:18:33,520 --> 00:18:38,480 Speaker 2: Well depends on which hats I'm wearing. And if you 284 00:18:38,840 --> 00:18:46,600 Speaker 2: talk about that from a European geopolitical perspective, there's a 285 00:18:46,720 --> 00:18:51,320 Speaker 2: massive opportunity. The underlying trend is the same. We are 286 00:18:51,400 --> 00:18:55,320 Speaker 2: moving from a fossile economy to a fossile free economy. 287 00:18:55,480 --> 00:18:58,680 Speaker 2: Will that take two, three, five, six, ten, fifteen. I 288 00:18:58,760 --> 00:19:05,480 Speaker 2: mean it is ultimately the main trajectory. And this allows 289 00:19:05,600 --> 00:19:10,720 Speaker 2: Europe to re establish itself as a hub for that 290 00:19:10,800 --> 00:19:13,800 Speaker 2: time of climate take. And it's an opportunity for family 291 00:19:13,840 --> 00:19:17,760 Speaker 2: offices to invest, for venture capital to dig how their 292 00:19:17,840 --> 00:19:20,879 Speaker 2: statutes are built in order for them to be more 293 00:19:21,320 --> 00:19:24,639 Speaker 2: aligned with the actual timelines of how this type of 294 00:19:24,640 --> 00:19:28,480 Speaker 2: investment pans out. I'd argue, and I'd argued in a 295 00:19:28,520 --> 00:19:31,919 Speaker 2: book that I've written two years ago, this is a 296 00:19:32,280 --> 00:19:37,600 Speaker 2: massive geopolitical opportunity as we exchange the fundaments of our 297 00:19:37,680 --> 00:19:43,720 Speaker 2: economy to a fossile free platform. That is the lever 298 00:19:43,920 --> 00:19:48,399 Speaker 2: and the next chapter of our economy of the human 299 00:19:48,480 --> 00:19:52,240 Speaker 2: existence and the players that are moving the fastest has 300 00:19:52,800 --> 00:19:57,320 Speaker 2: a massive opportunity. I'm not sure Europe is leading yet, 301 00:19:57,480 --> 00:20:01,960 Speaker 2: and I look at China who's leaning in to renewables 302 00:20:02,240 --> 00:20:07,040 Speaker 2: and the energy transition. But however, the US taking a 303 00:20:07,080 --> 00:20:10,959 Speaker 2: bit of a pause currently allows an opportunity for Europe However, 304 00:20:11,000 --> 00:20:13,480 Speaker 2: if you give me, if you ask me as an investor, 305 00:20:15,080 --> 00:20:22,520 Speaker 2: that creates a predicament for my European startups because it's 306 00:20:22,640 --> 00:20:26,520 Speaker 2: easier to raise capital in the early phases in your 307 00:20:26,600 --> 00:20:28,439 Speaker 2: local market with local investors. 308 00:20:32,400 --> 00:20:35,720 Speaker 1: After the break, will countries return to coal or will 309 00:20:35,760 --> 00:20:39,280 Speaker 1: we see a surge in interest for clean energy. If 310 00:20:39,280 --> 00:20:41,760 Speaker 1: you're enjoying this episode of Zero, please take a moment 311 00:20:41,760 --> 00:20:44,280 Speaker 1: to rate and review the show on Apple Podcasts, YouTube, 312 00:20:44,440 --> 00:20:47,440 Speaker 1: or Spotify. It helps new listeners find the show. 313 00:20:47,800 --> 00:21:00,000 Speaker 3: Thank you. 314 00:21:00,960 --> 00:21:03,600 Speaker 1: If we again take the last ten years. The first 315 00:21:03,680 --> 00:21:07,480 Speaker 1: Trump term was negative for climate tech, but only mildly. 316 00:21:07,800 --> 00:21:11,680 Speaker 1: Then of course, this Trump term has been much harder 317 00:21:12,200 --> 00:21:15,159 Speaker 1: because there was an upswing in all the Inflation Reduction 318 00:21:15,240 --> 00:21:18,679 Speaker 1: Act stuff, and then that money was yanked. We have 319 00:21:18,800 --> 00:21:24,400 Speaker 1: seen that companies are having to adapt to this landscape 320 00:21:24,400 --> 00:21:26,800 Speaker 1: in the US, and they are doing it in the 321 00:21:26,840 --> 00:21:32,760 Speaker 1: way a crisis would unfold. Companies are doing layoffs. We've 322 00:21:32,800 --> 00:21:38,359 Speaker 1: reported on Green Cement startup, Sublime, Green Steel, Boston Metals, 323 00:21:38,440 --> 00:21:42,680 Speaker 1: direct air capture climb works, even battery metals recycling, which 324 00:21:42,800 --> 00:21:45,000 Speaker 1: you know, through all the climate tech seems to be 325 00:21:45,080 --> 00:21:48,399 Speaker 1: one that people are interested in. Even redwood materials has 326 00:21:48,440 --> 00:21:51,480 Speaker 1: seen job cuts in the past twelve to twenty four months. 327 00:21:52,119 --> 00:21:57,560 Speaker 1: Many have gone bankrupt. Sodium ion battery startup Neatron solar company, 328 00:21:57,640 --> 00:22:02,119 Speaker 1: so Nova battery maker twenty four m. If this is 329 00:22:02,160 --> 00:22:06,080 Speaker 1: an opportunity for European investors, does that opportunity also mean 330 00:22:06,200 --> 00:22:10,560 Speaker 1: going out and trying to get existing startups to maybe 331 00:22:10,640 --> 00:22:13,800 Speaker 1: come to Europe or trying to invest in them, or 332 00:22:13,880 --> 00:22:18,280 Speaker 1: is it a warning for European startups that look, this 333 00:22:18,400 --> 00:22:20,680 Speaker 1: kind of thing will happen to you as well, because 334 00:22:20,920 --> 00:22:24,480 Speaker 1: it is US capital that is starting to pull out, 335 00:22:24,520 --> 00:22:27,280 Speaker 1: which is a major contributor in this space. 336 00:22:27,800 --> 00:22:31,800 Speaker 2: I think it's an excellent question. However, it's industry specific. 337 00:22:32,440 --> 00:22:38,679 Speaker 2: I think from a transition point of view, I'd like 338 00:22:38,920 --> 00:22:42,520 Speaker 2: us to acknowledge that we've moved into another phase between 339 00:22:42,560 --> 00:22:47,760 Speaker 2: the pandemic and now we saw a massive increase in innovation. 340 00:22:48,200 --> 00:22:51,199 Speaker 2: The smart PhDs that I were talking about created a 341 00:22:51,240 --> 00:22:55,520 Speaker 2: lot of technologies that allows us to use energy in 342 00:22:55,560 --> 00:23:01,200 Speaker 2: a morefficient way industrial applications, actual renewable et cetera, et cetera. 343 00:23:02,080 --> 00:23:06,199 Speaker 2: And now we're entering another phase which is scaling that 344 00:23:06,880 --> 00:23:10,320 Speaker 2: and that is where we understand that we need to 345 00:23:10,800 --> 00:23:16,560 Speaker 2: use our time and efforts to create demand and maybe 346 00:23:16,600 --> 00:23:20,720 Speaker 2: even subsidize that demand, or think about that in a 347 00:23:20,760 --> 00:23:24,439 Speaker 2: different way, allowing the tech that we have to scale. 348 00:23:24,880 --> 00:23:27,439 Speaker 2: And here is where Europe has an opportunity because that 349 00:23:27,480 --> 00:23:33,399 Speaker 2: technology exists, we have industrial players, and we understand the 350 00:23:33,400 --> 00:23:38,800 Speaker 2: transition timeline. So I would say, sure, this is an 351 00:23:38,840 --> 00:23:43,720 Speaker 2: opportunity to lure startups to Europe, but from a transition 352 00:23:43,760 --> 00:23:47,080 Speaker 2: point of view, I'd say the big opportunity is now 353 00:23:47,080 --> 00:23:52,760 Speaker 2: for private equity, infrastructure, capital and public procurement to realize 354 00:23:52,960 --> 00:23:53,840 Speaker 2: their time is now. 355 00:23:54,119 --> 00:23:55,760 Speaker 1: No, that is a very good point. I mean the 356 00:23:55,800 --> 00:23:59,000 Speaker 1: list of companies that I mentioned, many of them have 357 00:23:59,080 --> 00:24:03,080 Speaker 1: failed at that moment of going from having proven the 358 00:24:03,080 --> 00:24:06,639 Speaker 1: technology working at a demonstration scale to really wanting to 359 00:24:06,640 --> 00:24:11,320 Speaker 1: build a factory to install or to manufacture the types 360 00:24:11,359 --> 00:24:14,640 Speaker 1: of things that are needed. And that requires this different 361 00:24:14,840 --> 00:24:17,320 Speaker 1: type of capital that needs to come in and different 362 00:24:17,320 --> 00:24:19,679 Speaker 1: type of off takes that need to come in. So 363 00:24:20,480 --> 00:24:25,680 Speaker 1: the European Industrial Accelerator Act, which was you know, put 364 00:24:25,720 --> 00:24:28,399 Speaker 1: in place in some way as a reaction to the 365 00:24:28,440 --> 00:24:32,399 Speaker 1: Inflation Reduction Act, is reaction to this big report on 366 00:24:32,520 --> 00:24:38,159 Speaker 1: European competitiveness that was published by Italian politician and former 367 00:24:38,800 --> 00:24:43,560 Speaker 1: central banker Druggi. And that act is now at least 368 00:24:43,560 --> 00:24:47,360 Speaker 1: in proposal form being published in Europe, and it promises 369 00:24:47,400 --> 00:24:49,399 Speaker 1: a bunch of things that you talked about. It says 370 00:24:49,520 --> 00:24:53,840 Speaker 1: it's going to have procurement requirements for things like cement 371 00:24:53,920 --> 00:24:56,399 Speaker 1: and steel, is going to have at least a one 372 00:24:56,480 --> 00:25:00,000 Speaker 1: hundred million euros worth of fund for non European country 373 00:25:00,000 --> 00:25:03,359 Speaker 1: trees that are you know, major players in the space 374 00:25:03,480 --> 00:25:08,320 Speaker 1: outside maybe electric vehicles, maybe batteries, maybe critical materials that 375 00:25:08,560 --> 00:25:13,160 Speaker 1: Europe doesn't have. It is looking to and this phrase 376 00:25:13,200 --> 00:25:16,720 Speaker 1: I always hate, but mobilize one hundred billion euros worth 377 00:25:16,840 --> 00:25:22,720 Speaker 1: of support for European made clean manufacturing. What have you 378 00:25:22,840 --> 00:25:26,760 Speaker 1: made of the Industrial Accelerator Act? Is it good enough 379 00:25:27,000 --> 00:25:29,879 Speaker 1: or is it coming too slow? What kind of impact 380 00:25:29,920 --> 00:25:32,360 Speaker 1: will it have on European climate tech companies? 381 00:25:32,720 --> 00:25:36,439 Speaker 2: And I don't want to spend an hour moaning about 382 00:25:36,480 --> 00:25:42,040 Speaker 2: the speed, the glacial speed of us absorbing the drug 383 00:25:42,280 --> 00:25:46,680 Speaker 2: report and then producing something, So I think my sentiment 384 00:25:46,760 --> 00:25:49,119 Speaker 2: is clear, and let's move on to the to the 385 00:25:49,119 --> 00:25:57,520 Speaker 2: actual content of it. And I find this procurement challenge 386 00:25:57,920 --> 00:26:02,640 Speaker 2: slash opportunity fascinating because it's an easy word to say, 387 00:26:02,840 --> 00:26:10,040 Speaker 2: let's mobilize European procurement, and it it sounds very reasonable. 388 00:26:11,480 --> 00:26:15,280 Speaker 2: But if you break that down, where does procurement happen 389 00:26:15,600 --> 00:26:20,040 Speaker 2: by whom? And how like, what's the what's the culture, 390 00:26:20,119 --> 00:26:23,359 Speaker 2: what's the DNA of the people that public really procure? 391 00:26:24,000 --> 00:26:33,119 Speaker 2: And still the procurement legislation environment was built for a 392 00:26:33,200 --> 00:26:40,760 Speaker 2: different time, and that the northern star was we have 393 00:26:40,800 --> 00:26:44,680 Speaker 2: to be prudent with taxpayers money. And when you say 394 00:26:44,720 --> 00:26:49,080 Speaker 2: that sentence, please be prudent with taxpayers money, everyone nots 395 00:26:49,280 --> 00:26:52,240 Speaker 2: is of course we should be prudent with taxpayers money. 396 00:26:53,920 --> 00:26:57,800 Speaker 2: And the under the subtext to that is you buy 397 00:26:58,200 --> 00:27:03,080 Speaker 2: robust and tested technic. You don't test. You don't buy 398 00:27:03,160 --> 00:27:06,480 Speaker 2: innovative things. You don't buy things that are new off 399 00:27:06,480 --> 00:27:12,000 Speaker 2: the shelf. You know, however, in this current climate, buying 400 00:27:12,160 --> 00:27:16,320 Speaker 2: robust and technology means that someone else, someone else has 401 00:27:16,359 --> 00:27:19,960 Speaker 2: tested it, the market has created it, and you are 402 00:27:19,960 --> 00:27:25,359 Speaker 2: by definition five six years behind of its being built. 403 00:27:25,880 --> 00:27:30,159 Speaker 2: And you have openly said I don't want to be 404 00:27:30,200 --> 00:27:33,480 Speaker 2: in the driving seat. Someone else is in the driving seat, 405 00:27:33,720 --> 00:27:38,520 Speaker 2: and I will buy it later. A you're too slow, 406 00:27:38,960 --> 00:27:43,480 Speaker 2: but two more importantly, you don't get to impact the 407 00:27:43,600 --> 00:27:47,040 Speaker 2: artificial intelligence that's being built as a foundation of it, 408 00:27:47,200 --> 00:27:52,200 Speaker 2: the values that are important. You don't get to have 409 00:27:52,240 --> 00:27:55,440 Speaker 2: a say in how it fits your infrastructure, et cetera, 410 00:27:55,440 --> 00:27:57,200 Speaker 2: et cetera. And I can do the long list. You 411 00:27:57,240 --> 00:28:00,640 Speaker 2: get the picture. And I think that's where we need 412 00:28:00,640 --> 00:28:05,920 Speaker 2: to have a public debate around how do we, as 413 00:28:06,400 --> 00:28:12,280 Speaker 2: bureaucracies and policy makers and procurement institutions adopt some sort 414 00:28:12,320 --> 00:28:17,520 Speaker 2: of venture capital entrepreneurial spirit and iteratively build with them. 415 00:28:17,640 --> 00:28:20,119 Speaker 2: And we have no experience of doing that. And I 416 00:28:20,119 --> 00:28:25,000 Speaker 2: think that's the challenge. It's what stated in the document 417 00:28:25,240 --> 00:28:30,720 Speaker 2: makes sense, but now implementing it requires a massive change 418 00:28:31,240 --> 00:28:33,400 Speaker 2: in how we procure. 419 00:28:33,400 --> 00:28:34,879 Speaker 1: I think it is a good point. I mean, we 420 00:28:34,920 --> 00:28:37,920 Speaker 1: talk about numbers, and we talk about trends, but there 421 00:28:38,080 --> 00:28:41,320 Speaker 1: is an aspect of this that is so human in 422 00:28:41,360 --> 00:28:45,760 Speaker 1: our world of artificial intelligence that we cannot quantify it, 423 00:28:45,840 --> 00:28:49,160 Speaker 1: but we know it makes a difference, which is your 424 00:28:49,720 --> 00:28:55,120 Speaker 1: attitude as an entrepreneurial, not just startup, but as an 425 00:28:55,240 --> 00:29:01,560 Speaker 1: entrepreneurial state your attitude towards risk taking and towards prudency. 426 00:29:02,600 --> 00:29:05,880 Speaker 1: Things break, Yeah, and you go to America and being 427 00:29:06,240 --> 00:29:08,880 Speaker 1: a startup that goes bankrupt is sometimes seen as a 428 00:29:08,920 --> 00:29:12,200 Speaker 1: badge of honor. You tried something really risky and you failed. 429 00:29:12,240 --> 00:29:12,520 Speaker 2: Great. 430 00:29:12,960 --> 00:29:13,480 Speaker 3: You go to. 431 00:29:13,520 --> 00:29:16,320 Speaker 1: Asia and you have this energy where there are huge 432 00:29:16,360 --> 00:29:19,360 Speaker 1: amounts of challenges because the government doesn't work, and yet 433 00:29:19,440 --> 00:29:22,120 Speaker 1: there is this desire for people to want to make 434 00:29:22,160 --> 00:29:26,520 Speaker 1: things and benefit from it. In Europe, that attitude change 435 00:29:27,120 --> 00:29:30,880 Speaker 1: hasn't come yet, and maybe these crises will force people 436 00:29:30,920 --> 00:29:35,000 Speaker 1: to do that. But if we take an aspect of 437 00:29:35,040 --> 00:29:39,400 Speaker 1: this which you have invested in, which is geothermal, how 438 00:29:39,400 --> 00:29:43,760 Speaker 1: do you think that attitude of risk and entrepreneurialism prudency 439 00:29:43,960 --> 00:29:46,880 Speaker 1: is playing out in that technology today. 440 00:29:47,160 --> 00:29:50,320 Speaker 2: Well, everyone loves to quote Churchill, never let waste the 441 00:29:50,440 --> 00:29:54,160 Speaker 2: spoil a good crisis, and I'll do the same. And 442 00:29:54,240 --> 00:29:58,120 Speaker 2: I think this is an opportunity here because there is 443 00:29:58,160 --> 00:30:02,600 Speaker 2: a sense of urgency. Costs increasing, there is a green 444 00:30:02,760 --> 00:30:06,400 Speaker 2: arms race, so to speak, in terms of energy, and 445 00:30:06,480 --> 00:30:09,120 Speaker 2: as we were saying, we're now into the contingency plan. 446 00:30:09,200 --> 00:30:12,960 Speaker 2: Europe needs to build its own energy and geothermal is 447 00:30:13,000 --> 00:30:17,320 Speaker 2: a massive opportunity literally standing on a battery. 448 00:30:17,200 --> 00:30:20,480 Speaker 1: But apart from Iceland, where we know there is just 449 00:30:20,720 --> 00:30:25,720 Speaker 1: really attractive geology that allows you to deploy geothermal at 450 00:30:25,720 --> 00:30:28,320 Speaker 1: scale and really make it very cheap and actually turn 451 00:30:28,480 --> 00:30:31,960 Speaker 1: Iceland from a developing country into a developed country. Where 452 00:30:32,000 --> 00:30:35,240 Speaker 1: else in Europe is that opportunity there? Does the geology 453 00:30:35,280 --> 00:30:39,080 Speaker 1: not matter, Is the technology advanced and are we taking 454 00:30:39,080 --> 00:30:40,720 Speaker 1: the risk to actually deploy it in Europe? 455 00:30:41,760 --> 00:30:45,760 Speaker 2: So Turkey is another market that's come quite far when 456 00:30:45,760 --> 00:30:49,280 Speaker 2: it comes to geothermal. But I think more importantly the 457 00:30:49,360 --> 00:30:54,080 Speaker 2: last ten years, quietly in labs in Europe and the US, 458 00:30:54,240 --> 00:30:57,560 Speaker 2: we've seen innovation, and I think it's important to break 459 00:30:57,600 --> 00:31:03,480 Speaker 2: down the different aspects of geothermal. Iceland knows how to 460 00:31:03,520 --> 00:31:06,880 Speaker 2: transform heat into electricity, so everything that's above ground is 461 00:31:06,880 --> 00:31:09,440 Speaker 2: a commodity, so to speak. We don't need any innovation there. 462 00:31:09,720 --> 00:31:12,040 Speaker 2: We also know how to drill. We've been drilling for 463 00:31:12,120 --> 00:31:15,000 Speaker 2: ages and we have all the infrastructure there, not least 464 00:31:15,040 --> 00:31:17,480 Speaker 2: the oil and gas industry, the rigs, the hard hats, 465 00:31:17,520 --> 00:31:22,600 Speaker 2: the geologists, etc. The missing piece has been cost efficiently 466 00:31:23,000 --> 00:31:27,840 Speaker 2: drilling through the hard rock. And there we're seeing some 467 00:31:27,920 --> 00:31:33,160 Speaker 2: really interesting companies, both in the US and in Europe, 468 00:31:33,360 --> 00:31:36,640 Speaker 2: and I have an invested interest in some of them. 469 00:31:36,840 --> 00:31:44,720 Speaker 2: And this allows us to use conventional drilling and a 470 00:31:44,760 --> 00:31:48,160 Speaker 2: whole industry and just adding a few elements that will 471 00:31:48,200 --> 00:31:52,320 Speaker 2: decrease cost. But your question wasn't necessarily about the technology, 472 00:31:52,320 --> 00:31:55,520 Speaker 2: which I would say is here now. It's about are 473 00:31:55,520 --> 00:31:59,680 Speaker 2: we willing to take risk? And here I think the 474 00:31:59,760 --> 00:32:04,080 Speaker 2: current crisis will force us to take risk and we 475 00:32:04,120 --> 00:32:06,840 Speaker 2: will come out on the other end happier and more 476 00:32:06,880 --> 00:32:13,680 Speaker 2: sovereign and energy rich for it. Because we're seeing energy 477 00:32:13,720 --> 00:32:19,280 Speaker 2: intensive industries in Europe going to their local policy makers 478 00:32:19,880 --> 00:32:24,000 Speaker 2: requiring a certain amount of energy that their local grids 479 00:32:24,080 --> 00:32:28,480 Speaker 2: can't provide, and they're also saying, I want to know 480 00:32:28,760 --> 00:32:31,760 Speaker 2: that it's green, renewable energy, and the local grids become 481 00:32:31,800 --> 00:32:37,080 Speaker 2: even more stressed realizing that they cannot provide this. There's 482 00:32:37,120 --> 00:32:42,200 Speaker 2: a supply issue. And my prediction hot take for the 483 00:32:42,240 --> 00:32:45,520 Speaker 2: next ten years is what we'll see industries create their 484 00:32:45,520 --> 00:32:48,200 Speaker 2: own off grid solutions with geothermal. 485 00:32:48,440 --> 00:32:50,160 Speaker 1: Yeah, and you're starting to see that, at least in 486 00:32:50,200 --> 00:32:53,280 Speaker 1: the AI data center space, where just given how much 487 00:32:53,320 --> 00:32:56,200 Speaker 1: capital they have and how much desire they want for electricity, 488 00:32:56,440 --> 00:33:01,000 Speaker 1: they are starting to deploy their own of grid solutions, 489 00:33:01,360 --> 00:33:05,240 Speaker 1: which tend to be right now gas heavy, but maybe 490 00:33:05,280 --> 00:33:09,040 Speaker 1: it also becomes renewable because that is easier to build 491 00:33:09,160 --> 00:33:11,160 Speaker 1: if not in the US and other places. 492 00:33:11,000 --> 00:33:15,000 Speaker 2: And Europe can't afford that. Many of these companies say adios, 493 00:33:15,080 --> 00:33:21,760 Speaker 2: we will build somewhere else. We will see that the opportunity, 494 00:33:21,800 --> 00:33:27,240 Speaker 2: the lack of supply will need to meet the current demand, 495 00:33:27,560 --> 00:33:29,600 Speaker 2: both in terms of we need to keep the jobs 496 00:33:29,640 --> 00:33:31,600 Speaker 2: in Europe, we need to keep the sovereignty, we need 497 00:33:31,640 --> 00:33:35,320 Speaker 2: to keep the data centers, et cetera. So I foresee 498 00:33:35,560 --> 00:33:38,040 Speaker 2: the next five or six years we will see a 499 00:33:38,120 --> 00:33:42,480 Speaker 2: massive deployment of geothermal in Europe. And I'm not the 500 00:33:42,520 --> 00:33:45,400 Speaker 2: only one saying it. We're seeing it in many other markets. 501 00:33:45,400 --> 00:33:50,400 Speaker 2: And the international Energy agencies also rejigged their analysis and 502 00:33:50,520 --> 00:33:53,160 Speaker 2: predicted this would be fifteen percent of the energy mix 503 00:33:53,240 --> 00:33:54,080 Speaker 2: by twenty fifteen. 504 00:33:54,480 --> 00:33:58,920 Speaker 1: Asian countries have been relying on Katari loqu ordinatural gas, 505 00:33:59,040 --> 00:34:02,760 Speaker 1: so as Europe now now given it's getting or at 506 00:34:02,840 --> 00:34:07,320 Speaker 1: least wanting to get more Cathari LNG in a gas crisis, 507 00:34:07,400 --> 00:34:10,640 Speaker 1: we know that fuel switching happens for countries that can 508 00:34:10,920 --> 00:34:14,319 Speaker 1: fueld switch, which is go back to coal and coal 509 00:34:14,360 --> 00:34:18,799 Speaker 1: emissions to go up. We see that happening in Asia. 510 00:34:19,080 --> 00:34:21,839 Speaker 1: We might even see it in Europe because there are 511 00:34:21,840 --> 00:34:24,120 Speaker 1: still huge amounts of coal power plants in Germany and 512 00:34:24,160 --> 00:34:28,160 Speaker 1: in Poland. What can be done to try to stop 513 00:34:28,200 --> 00:34:32,120 Speaker 1: coal from coming back and increase in European emissions in 514 00:34:32,160 --> 00:34:33,719 Speaker 1: this gas crisis. 515 00:34:34,560 --> 00:34:40,640 Speaker 2: We talked originally about the need to have a return 516 00:34:40,680 --> 00:34:45,160 Speaker 2: on investment on every aspect of climate investment versus defense, 517 00:34:45,280 --> 00:34:49,759 Speaker 2: which is simply life and death. And I don't mean 518 00:34:49,800 --> 00:34:54,280 Speaker 2: to be flippant, but if we look at the market 519 00:34:54,320 --> 00:34:58,799 Speaker 2: at play when it comes to climate technologies, there is 520 00:34:58,840 --> 00:35:01,799 Speaker 2: a case for or a returnal investment of all of 521 00:35:01,800 --> 00:35:03,880 Speaker 2: these things that we've talked about. And as an investor, 522 00:35:04,040 --> 00:35:07,239 Speaker 2: I'm not that worried. I'm very excited about the opportunity 523 00:35:07,320 --> 00:35:12,520 Speaker 2: of how we're building back and building a phossolt Fie economy. However, 524 00:35:12,800 --> 00:35:17,840 Speaker 2: there are market failures that we also could correct to catalyze. 525 00:35:18,040 --> 00:35:23,160 Speaker 2: So to answer your question, if we speed up putting 526 00:35:23,160 --> 00:35:26,520 Speaker 2: a price on carbon and green haass gas emissions, that 527 00:35:26,640 --> 00:35:31,200 Speaker 2: will allow us to make the calculation quicker, forcing innovation, 528 00:35:31,400 --> 00:35:35,120 Speaker 2: forcing scale up and adoption. Because as long as we 529 00:35:35,200 --> 00:35:39,000 Speaker 2: don't do that, and we have this gaping hole in 530 00:35:39,080 --> 00:35:42,719 Speaker 2: the equation, it makes sense to switch to. 531 00:35:42,719 --> 00:35:45,840 Speaker 1: Call yeah, and that is something that the European Union 532 00:35:45,920 --> 00:35:48,279 Speaker 1: is now under force to try and revise, to try 533 00:35:48,280 --> 00:35:51,920 Speaker 1: and add more permits in the European emissions trading system 534 00:35:52,000 --> 00:35:54,080 Speaker 1: so that the price can be lower, which might actually 535 00:35:54,120 --> 00:35:56,480 Speaker 1: allow more cold to come through the system. And this 536 00:35:56,520 --> 00:35:59,239 Speaker 1: is the moment where politicians have to stand up for 537 00:35:59,280 --> 00:36:05,040 Speaker 1: principles for longer term thinking despite the crisis in front 538 00:36:05,080 --> 00:36:05,480 Speaker 1: of us. 539 00:36:05,719 --> 00:36:09,160 Speaker 2: But it's also a market correction. I think we have 540 00:36:09,280 --> 00:36:13,040 Speaker 2: to see it as that if we are very strict 541 00:36:13,080 --> 00:36:18,719 Speaker 2: and prudent about applying market rules to the climate transition 542 00:36:18,840 --> 00:36:21,959 Speaker 2: and we want a return on investment, we can't have 543 00:36:23,040 --> 00:36:27,680 Speaker 2: an externality like greenhouse gas emissions, and we also we 544 00:36:27,719 --> 00:36:33,040 Speaker 2: can't have massive subsidies to the fossile industry. Both these 545 00:36:33,040 --> 00:36:34,680 Speaker 2: things need to be corrected. 546 00:36:35,360 --> 00:36:37,680 Speaker 1: Thank you, er, thank you very much for having me, 547 00:36:42,239 --> 00:36:44,719 Speaker 1: and thank you for listening to zero. Now for the 548 00:36:44,760 --> 00:36:53,759 Speaker 1: sound of the week. That is the sound of the 549 00:36:53,800 --> 00:36:57,600 Speaker 1: white dailed eagle, once extinct in the UK, but now 550 00:36:57,680 --> 00:37:02,240 Speaker 1: growing in number thanks to successful reintroduction campaigns across the country. 551 00:37:02,680 --> 00:37:04,600 Speaker 1: If you liked this episode, please take a moment to 552 00:37:04,680 --> 00:37:07,719 Speaker 1: rate and review the show on Apple Podcasts, YouTube, and Spotify. 553 00:37:08,440 --> 00:37:11,480 Speaker 1: This episode was produced by Oscar boyd Our theme music 554 00:37:11,600 --> 00:37:15,160 Speaker 1: is composed by wonder Lee. Special thanks to Soamersadi, Laura 555 00:37:15,200 --> 00:37:18,880 Speaker 1: Milan and shan Chan. I'm Akshatrati back soon.