1 00:00:00,360 --> 00:00:02,880 Speaker 1: This is Tom Rowlands Reese and you're listening to Switched 2 00:00:02,920 --> 00:00:05,920 Speaker 1: on the BNF podcast. Those of us who work on 3 00:00:05,960 --> 00:00:09,319 Speaker 1: the energy transition often find ourselves studying technologies that seem 4 00:00:09,360 --> 00:00:12,280 Speaker 1: like science fiction. Harnessing the sun's power to fill your car, 5 00:00:12,360 --> 00:00:14,880 Speaker 1: for instance, or using the wind to run data centers. 6 00:00:15,120 --> 00:00:17,759 Speaker 1: Of course, both of these examples not only exist, they're 7 00:00:17,760 --> 00:00:21,160 Speaker 1: also cheap and practical enough for widespread adoption. Direct air 8 00:00:21,200 --> 00:00:23,799 Speaker 1: capture is another one of those technologies. Can we really 9 00:00:23,840 --> 00:00:26,240 Speaker 1: invent a machine to pull carbon out of the atmosphere, 10 00:00:26,280 --> 00:00:28,800 Speaker 1: putting a lid on humanity's emissions and getting the world 11 00:00:28,800 --> 00:00:31,360 Speaker 1: on track for net zero? The good news is that 12 00:00:31,400 --> 00:00:35,440 Speaker 1: technology absolutely exists. The less good news is it's really 13 00:00:35,520 --> 00:00:40,000 Speaker 1: really expensive. Today. Direct air capture or DAK costs around 14 00:00:40,040 --> 00:00:42,400 Speaker 1: nine hundred dollars on average for capturing a metric ton 15 00:00:42,440 --> 00:00:45,720 Speaker 1: of carbon dioxide, and the process is extremely energy intensive. 16 00:00:46,040 --> 00:00:48,919 Speaker 1: Given that cheaper means of carbon and removal exist, including 17 00:00:48,920 --> 00:00:51,920 Speaker 1: a relatively simple one planting trees, it'd be fair to 18 00:00:51,960 --> 00:00:54,000 Speaker 1: ask whether the direct air capture is really a viable 19 00:00:54,040 --> 00:00:57,040 Speaker 1: decarbonization option, and if so, what'll it take to get 20 00:00:57,080 --> 00:00:59,760 Speaker 1: us there? Today I'm joined by a member of bnef's 21 00:00:59,760 --> 00:01:03,840 Speaker 1: Stemable Materials team associate Brenna Casey, and we discuss findings 22 00:01:03,840 --> 00:01:05,959 Speaker 1: from her note out of Thin Air the cost of 23 00:01:06,000 --> 00:01:09,080 Speaker 1: scaling direct air Capture, which BNAF clients can find at 24 00:01:09,120 --> 00:01:11,880 Speaker 1: bn EF go on the Bloomberg terminal or on bnef 25 00:01:11,959 --> 00:01:14,360 Speaker 1: dot com. All right, let's get talking about the outlook 26 00:01:14,400 --> 00:01:27,040 Speaker 1: for the cost of DAK with Brenner. Welcome to the podcast, 27 00:01:27,040 --> 00:01:28,000 Speaker 1: Brenna Casey. 28 00:01:28,160 --> 00:01:29,959 Speaker 2: Thanks for having me. Tom Rolands Rees. 29 00:01:30,280 --> 00:01:32,760 Speaker 1: I mean, there's a reason that I'm taking us away 30 00:01:32,959 --> 00:01:35,920 Speaker 1: from just using first names here is because I'm going 31 00:01:35,959 --> 00:01:38,560 Speaker 1: to be a little bit unfriendly today to start with, 32 00:01:38,800 --> 00:01:42,760 Speaker 1: and for people listening. I did warn Brenner about this beforehand. 33 00:01:42,800 --> 00:01:44,920 Speaker 1: We went for a coffee couple of days ago and 34 00:01:44,959 --> 00:01:47,000 Speaker 1: I said, you know, we're doing this podcast. You published 35 00:01:47,040 --> 00:01:50,200 Speaker 1: a piece of research about the future cost outlook for 36 00:01:50,400 --> 00:01:53,240 Speaker 1: dak AKA direct air capture. We'll get into that in 37 00:01:53,320 --> 00:01:55,880 Speaker 1: a moment, but before we even do that, I'm going 38 00:01:55,960 --> 00:02:01,680 Speaker 1: to question the very existence of why we are even 39 00:02:01,760 --> 00:02:05,800 Speaker 1: covering DAK and why anyone is even trying with DAK 40 00:02:05,920 --> 00:02:09,520 Speaker 1: so Brenna Casey direct Air Capture. So we can get 41 00:02:09,560 --> 00:02:12,320 Speaker 1: into the technicalities, but is basically taking common dioxide out 42 00:02:12,360 --> 00:02:14,880 Speaker 1: of the air and storing it in the ground with 43 00:02:15,000 --> 00:02:18,840 Speaker 1: a view to reducing emissions primarily. And I suppose the 44 00:02:18,840 --> 00:02:21,480 Speaker 1: reason I say why would we question its whole existence 45 00:02:21,560 --> 00:02:23,920 Speaker 1: is we're in a world right now where people are 46 00:02:23,919 --> 00:02:27,440 Speaker 1: not talking about net zero anymore. People are even questioning 47 00:02:27,480 --> 00:02:30,960 Speaker 1: the legitimacy of electric vehicles, of renewables. These are things 48 00:02:30,960 --> 00:02:34,880 Speaker 1: that can compete with their alternatives even when we don't 49 00:02:34,919 --> 00:02:38,840 Speaker 1: consider environmental factors. Whereas DAK only makes sense in a 50 00:02:38,919 --> 00:02:42,400 Speaker 1: world where we're trying to get to net zero because 51 00:02:42,400 --> 00:02:45,200 Speaker 1: it just serves no other purpose. And so, given the 52 00:02:45,200 --> 00:02:49,600 Speaker 1: way that the pendulum has swung, surely that's curtains for 53 00:02:49,960 --> 00:02:54,080 Speaker 1: direct air capture as a promising new technology. What would 54 00:02:54,080 --> 00:02:57,480 Speaker 1: you say to that? Rather, let me say somewhat downbeat 55 00:02:57,520 --> 00:02:59,959 Speaker 1: assessment of the state of flavor direct air capture. 56 00:03:00,480 --> 00:03:03,360 Speaker 3: Yeah, so I guess from a system's approach, why we 57 00:03:03,360 --> 00:03:05,000 Speaker 3: need direct our capture, and then I'll get into I 58 00:03:05,000 --> 00:03:08,320 Speaker 3: guess more theoretical, kind of upbeat side of why we 59 00:03:08,360 --> 00:03:12,880 Speaker 3: need DAK. Basically, CCS can only abate so many emissions, right, 60 00:03:12,919 --> 00:03:13,480 Speaker 3: So if you're. 61 00:03:13,320 --> 00:03:15,280 Speaker 1: Looking at ccs's common capture and storage. 62 00:03:15,320 --> 00:03:16,000 Speaker 2: Yeah, exactly. 63 00:03:16,080 --> 00:03:18,360 Speaker 3: So just for an example to put this into context, 64 00:03:18,360 --> 00:03:21,520 Speaker 3: the cement industry or the petrochemical industry, they have process 65 00:03:21,560 --> 00:03:24,760 Speaker 3: emissions just inherent to the chemical process itself, which can 66 00:03:24,800 --> 00:03:28,120 Speaker 3: only be abated so much by fuel switching or electrification 67 00:03:28,440 --> 00:03:30,880 Speaker 3: things like that. So you need ccs, But even ccs 68 00:03:30,919 --> 00:03:34,280 Speaker 3: can only abate conservatively ninety percent of emissions. There's things 69 00:03:34,320 --> 00:03:37,360 Speaker 3: like oxy fuel combustion or other newer technologies which can 70 00:03:37,600 --> 00:03:41,360 Speaker 3: up that emissions abatement ninety five to ninty nine percent, 71 00:03:41,400 --> 00:03:45,240 Speaker 3: but there will still be these unaddressed emissions, right, which 72 00:03:45,280 --> 00:03:47,280 Speaker 3: you need DAK for. Right, So it would be to 73 00:03:47,360 --> 00:03:50,720 Speaker 3: cover that last ten percent of emissions again that other 74 00:03:50,760 --> 00:03:51,600 Speaker 3: sources are not. 75 00:03:52,000 --> 00:03:55,160 Speaker 1: But the cynic in me would say that this sounds 76 00:03:55,560 --> 00:03:58,760 Speaker 1: very very twenty twenty three, twenty twenty four. Yes, you know, 77 00:03:58,800 --> 00:04:02,000 Speaker 1: and particularly I realize I'm looking at this from a 78 00:04:02,240 --> 00:04:06,160 Speaker 1: US centric lens, but the US does set the tone 79 00:04:06,200 --> 00:04:08,040 Speaker 1: for a lot of what is happening elsewhere. It's been 80 00:04:08,040 --> 00:04:11,200 Speaker 1: a change of administration, a lot of the impetus and 81 00:04:11,240 --> 00:04:15,480 Speaker 1: support has changed, and in particular the Inflation Reduction Act, 82 00:04:15,520 --> 00:04:17,679 Speaker 1: a lot of that has been unraveled with the big 83 00:04:17,760 --> 00:04:21,880 Speaker 1: Beautiful Bill Act. And so in that scenario where there 84 00:04:21,920 --> 00:04:25,080 Speaker 1: are things that maybe have an emissions impact but also 85 00:04:25,160 --> 00:04:28,320 Speaker 1: have other benefits, like you know, potentially solar is cheaper 86 00:04:28,360 --> 00:04:31,000 Speaker 1: than fossil fuel alterns. In those scenarios, why would we 87 00:04:31,000 --> 00:04:33,080 Speaker 1: think about DAK Because what you were just saying is like, well, 88 00:04:33,200 --> 00:04:36,800 Speaker 1: we can't reduce emissions solely with these technologies, and you 89 00:04:36,800 --> 00:04:39,000 Speaker 1: know you need DAK to fill in the gap. But 90 00:04:39,279 --> 00:04:43,200 Speaker 1: if you're, say, working at a company that is behind 91 00:04:43,200 --> 00:04:45,800 Speaker 1: direct air capture, what is your value proposition in a 92 00:04:45,839 --> 00:04:49,760 Speaker 1: world where there is not a sufficient incentive coming from 93 00:04:49,800 --> 00:04:53,120 Speaker 1: anywhere to eliminate emissions completely if the premise of the 94 00:04:53,120 --> 00:04:56,120 Speaker 1: point of DAK is to eliminate those emissions that can't 95 00:04:56,120 --> 00:04:58,359 Speaker 1: be eliminated through other means, right. 96 00:04:58,240 --> 00:05:00,840 Speaker 3: I mean, it's an interesting question because in the United States, 97 00:05:00,920 --> 00:05:03,440 Speaker 3: you're right, there isn't this third party, which is normally 98 00:05:03,520 --> 00:05:07,760 Speaker 3: the government saying by DAK. Yeah, it's almost always an 99 00:05:07,800 --> 00:05:10,719 Speaker 3: added cost, similar to the way CCS is almost always 100 00:05:10,760 --> 00:05:11,440 Speaker 3: an added cost. 101 00:05:11,480 --> 00:05:13,520 Speaker 2: It's a waste management technique. 102 00:05:13,560 --> 00:05:16,400 Speaker 3: You know, it's not commercially viable, and any mean, the 103 00:05:16,400 --> 00:05:19,360 Speaker 3: only way DAK is going to scale or be adopted 104 00:05:19,400 --> 00:05:22,640 Speaker 3: by anybody really is one a technological step change which 105 00:05:22,680 --> 00:05:26,320 Speaker 3: will help costs come down because they are prohibitively expensive. 106 00:05:25,920 --> 00:05:27,360 Speaker 1: And that's what we'll get to them. 107 00:05:27,760 --> 00:05:28,039 Speaker 2: Yeah. 108 00:05:28,120 --> 00:05:32,360 Speaker 3: The first, I think most important thing is obviously demand, 109 00:05:32,440 --> 00:05:35,520 Speaker 3: and you're not going to have demand right now unless 110 00:05:35,560 --> 00:05:39,200 Speaker 3: you are a Microsoft or a Shopify or Stripe with 111 00:05:39,240 --> 00:05:42,400 Speaker 3: this tremendous good will and they're buying credit. So what 112 00:05:42,480 --> 00:05:46,359 Speaker 3: you need on top of that is compliance markets because 113 00:05:46,400 --> 00:05:48,880 Speaker 3: right now all DAK is traded either B to B 114 00:05:48,880 --> 00:05:52,800 Speaker 3: business business or on these voluntary markets. And so you 115 00:05:52,920 --> 00:05:56,440 Speaker 3: need to see this transition from DAK into again a 116 00:05:56,480 --> 00:05:59,159 Speaker 3: compliance market. And we actually just saw kind of the 117 00:05:59,200 --> 00:06:02,760 Speaker 3: beginnings of this with the UK. The government over there 118 00:06:02,800 --> 00:06:05,760 Speaker 3: said hey, we're going to bake CDR into our. 119 00:06:05,680 --> 00:06:06,640 Speaker 2: Cap Entrade program. 120 00:06:06,839 --> 00:06:11,040 Speaker 3: CDR stands for carbon dioxide removal, Okay, so DAK DAK, 121 00:06:11,240 --> 00:06:14,279 Speaker 3: yeahrect Derek Apsher, Yeah, there are stipulations with that, the 122 00:06:14,360 --> 00:06:17,479 Speaker 3: DAK plant has to be in the UK, things like that, 123 00:06:17,680 --> 00:06:20,400 Speaker 3: but it's a first move, right And then again there 124 00:06:20,440 --> 00:06:24,240 Speaker 3: are whispers of the EU potentially baking in CDR into 125 00:06:24,279 --> 00:06:27,559 Speaker 3: their cap and trade program by twenty thirty maybe twenty 126 00:06:27,560 --> 00:06:29,839 Speaker 3: thirty five. But these are the sorts of things that 127 00:06:30,080 --> 00:06:32,400 Speaker 3: is going to help DAK commercialize. 128 00:06:32,560 --> 00:06:34,360 Speaker 1: Got it? And I think you said something there that 129 00:06:34,520 --> 00:06:36,800 Speaker 1: before we got onto compliance markets. I can see what 130 00:06:36,839 --> 00:06:38,920 Speaker 1: your point is that that is, like, I suppose the 131 00:06:38,960 --> 00:06:41,359 Speaker 1: holy grail for DAK is for there to be meaningful 132 00:06:41,360 --> 00:06:45,240 Speaker 1: compliance markets around the world, and DAK is an option 133 00:06:45,320 --> 00:06:47,640 Speaker 1: in there. But maybe you answered my question is, so 134 00:06:47,760 --> 00:06:50,640 Speaker 1: why this is not completely dead in the water, is 135 00:06:50,680 --> 00:06:53,479 Speaker 1: that the voluntary markets still matter? Regin? You know, just 136 00:06:53,520 --> 00:06:56,400 Speaker 1: because the US federal government is swinging one way doesn't 137 00:06:56,400 --> 00:06:59,760 Speaker 1: necessarily mean that all of the companies in the US 138 00:06:59,880 --> 00:07:02,039 Speaker 1: or worldwide is swinging that direction. And is that what 139 00:07:02,240 --> 00:07:05,159 Speaker 1: is the current market and the current sort of hope 140 00:07:05,320 --> 00:07:07,640 Speaker 1: in the near term for DAK is their use in 141 00:07:07,720 --> 00:07:09,040 Speaker 1: voluntary carbon markets. 142 00:07:09,480 --> 00:07:11,240 Speaker 3: Yeah, I mean I think we can we can take 143 00:07:11,280 --> 00:07:13,680 Speaker 3: this and look back to what happened with solar. 144 00:07:13,960 --> 00:07:17,200 Speaker 2: So Reagan cut solar, just cut it all, and then 145 00:07:17,200 --> 00:07:17,800 Speaker 2: what do. 146 00:07:17,800 --> 00:07:18,680 Speaker 1: You mean he cut it all? 147 00:07:19,240 --> 00:07:20,760 Speaker 2: He just dropped funding for solar. 148 00:07:20,960 --> 00:07:24,120 Speaker 1: Okay, for what for solar? Like research and development. 149 00:07:23,720 --> 00:07:25,840 Speaker 2: Exactly, Yeah, and subsidies, et cetera. 150 00:07:26,120 --> 00:07:28,520 Speaker 3: He ripped the solar panels off the lighthouse, and then 151 00:07:28,560 --> 00:07:30,960 Speaker 3: what happened is Solar died in the United States and 152 00:07:31,000 --> 00:07:33,320 Speaker 3: then moved to Europe because Germany was offering so many 153 00:07:33,360 --> 00:07:35,880 Speaker 3: subsidies to kickstart the market there. And then we saw 154 00:07:36,400 --> 00:07:38,240 Speaker 3: the market move there, we saw the people move there, 155 00:07:38,280 --> 00:07:40,320 Speaker 3: and then again then we saw, you know, through other 156 00:07:40,480 --> 00:07:44,200 Speaker 3: sorts of policy schemes, we then saw solar moved to China. 157 00:07:44,240 --> 00:07:47,560 Speaker 3: And so this could be maybe a window, I would say, 158 00:07:47,560 --> 00:07:49,800 Speaker 3: into what's happening right now. It's just because there is 159 00:07:49,880 --> 00:07:52,200 Speaker 3: this negative sentiment in the United States, and I guess 160 00:07:52,280 --> 00:07:56,680 Speaker 3: let's address also. The Trump administration has paused the subsidies 161 00:07:56,720 --> 00:08:00,240 Speaker 3: for the dee dacos, but they're not fully revoked as 162 00:08:00,280 --> 00:08:02,320 Speaker 3: of right now. So a lot of companies are continuing, 163 00:08:02,560 --> 00:08:05,160 Speaker 3: hesitant to say business as usual, but they are still 164 00:08:05,200 --> 00:08:08,880 Speaker 3: continuing in the United States until that punning is totally gone. 165 00:08:08,920 --> 00:08:11,680 Speaker 3: We also did see the utilization credit for DAK came 166 00:08:11,760 --> 00:08:14,880 Speaker 3: up to parody with storage. You know, that's for eour 167 00:08:14,920 --> 00:08:17,400 Speaker 3: purposes in a lot of ways, which got it backhanded 168 00:08:17,400 --> 00:08:20,720 Speaker 3: for DAK. But I think it's not entirely dead in 169 00:08:20,760 --> 00:08:22,760 Speaker 3: the United States. I think there's less support and maybe 170 00:08:22,760 --> 00:08:25,440 Speaker 3: that's hurting the United States competitiveness right now. But I 171 00:08:25,520 --> 00:08:28,080 Speaker 3: think DAK will still continue in other pockets. 172 00:08:28,280 --> 00:08:29,200 Speaker 2: I'm a book market. 173 00:08:29,520 --> 00:08:32,360 Speaker 1: I mean what you're saying brings to mind. So the 174 00:08:32,400 --> 00:08:35,360 Speaker 1: head of b n EF, John Moore, loves to quote 175 00:08:35,400 --> 00:08:40,319 Speaker 1: this British sports coach, so Clive Woodward, who predominantly famous 176 00:08:40,320 --> 00:08:43,720 Speaker 1: for rugby, but he said success doesn't happen in straight lines. 177 00:08:44,040 --> 00:08:46,320 Speaker 1: So it's to say, you know, you don't start winning 178 00:08:46,320 --> 00:08:48,880 Speaker 1: and then continue to win and then finish winning. There 179 00:08:48,920 --> 00:08:53,400 Speaker 1: are along that the road, there are bumps and setbacks. 180 00:08:53,720 --> 00:08:57,920 Speaker 1: And DAK is a climate technology in the most absolute sense. 181 00:08:58,280 --> 00:09:01,320 Speaker 1: And then that, like the climate question, is a lot 182 00:09:01,440 --> 00:09:05,320 Speaker 1: more long term than any one single administration. So I 183 00:09:05,320 --> 00:09:07,840 Speaker 1: suppose what I'm hearing from you is that you know, firstly, 184 00:09:07,920 --> 00:09:10,400 Speaker 1: it's not about one country, but it's also not about 185 00:09:10,400 --> 00:09:13,080 Speaker 1: one moment in time, and that is why DAK is 186 00:09:13,080 --> 00:09:15,120 Speaker 1: still there. And I think when I spoke to you 187 00:09:15,240 --> 00:09:18,480 Speaker 1: over coffee, I think it's clime Works have recently attracted 188 00:09:18,520 --> 00:09:19,640 Speaker 1: significant funding. 189 00:09:20,160 --> 00:09:22,720 Speaker 2: They just raised one hundred and sixty two million in 190 00:09:22,760 --> 00:09:23,160 Speaker 2: a series. 191 00:09:23,720 --> 00:09:26,720 Speaker 1: So that's not exactly consistent with the dead technology. 192 00:09:27,040 --> 00:09:28,280 Speaker 2: Yeah exactly. 193 00:09:28,400 --> 00:09:31,200 Speaker 3: I mean, you see, obviously what we just address, like 194 00:09:31,280 --> 00:09:35,600 Speaker 3: we've seen political sentiment or political ambiguity, or just market 195 00:09:35,640 --> 00:09:38,920 Speaker 3: sentiment in the United States maybe begin to falter as 196 00:09:38,960 --> 00:09:42,520 Speaker 3: a response of what's happening politically. But again, we just 197 00:09:42,559 --> 00:09:45,160 Speaker 3: saw that climb Works deal. We've seen JP Morgan with 198 00:09:45,240 --> 00:09:47,640 Speaker 3: think it was fifty thousand tons of an off take 199 00:09:47,679 --> 00:09:51,400 Speaker 3: agreement from one point five. We saw United Airlines with 200 00:09:51,480 --> 00:09:55,400 Speaker 3: a huge deal from Airlom long term off take agreement 201 00:09:55,480 --> 00:09:55,760 Speaker 3: as well. 202 00:09:55,840 --> 00:09:59,520 Speaker 2: So the market there's still interest. We are still seeing 203 00:09:59,520 --> 00:09:59,959 Speaker 2: that interest. 204 00:10:00,200 --> 00:10:03,560 Speaker 1: So then I mean, let's move this on to the 205 00:10:03,600 --> 00:10:06,640 Speaker 1: topic of your recent research, which is looking at at 206 00:10:06,720 --> 00:10:09,240 Speaker 1: the costs, because I suppose you know, if we are 207 00:10:09,240 --> 00:10:11,920 Speaker 1: saying this is a long term play, you know there 208 00:10:11,920 --> 00:10:14,240 Speaker 1: are applications for it right now, but it's something that 209 00:10:14,320 --> 00:10:16,439 Speaker 1: if things go according to plan, for DAK will become 210 00:10:16,440 --> 00:10:18,920 Speaker 1: more and more relevant in the future. And for that 211 00:10:18,960 --> 00:10:20,680 Speaker 1: to happen, maybe the costs will come down. And you 212 00:10:20,679 --> 00:10:22,160 Speaker 1: can tell me. I'm about to ask you about that 213 00:10:22,200 --> 00:10:24,200 Speaker 1: in a second, but before we even talk about, you know, 214 00:10:24,240 --> 00:10:26,319 Speaker 1: are the costs going to come down when it comes 215 00:10:26,320 --> 00:10:28,760 Speaker 1: to like the way you've painted the role of DAK 216 00:10:29,320 --> 00:10:33,360 Speaker 1: as part of a suite of emissions reductions options. It's 217 00:10:33,440 --> 00:10:35,880 Speaker 1: like the option of last resort. It does the things 218 00:10:35,880 --> 00:10:38,280 Speaker 1: that nothing else can do. And I suppose a question 219 00:10:38,320 --> 00:10:41,760 Speaker 1: I have is if it's the only option of last resort, 220 00:10:42,040 --> 00:10:44,160 Speaker 1: then in a way it wouldn't be that sensitive to 221 00:10:44,240 --> 00:10:47,080 Speaker 1: costs because it's like there's no other option and it's 222 00:10:47,080 --> 00:10:50,560 Speaker 1: just prohibitively expensive. But I'm assuming there might be other options. 223 00:10:50,760 --> 00:10:52,920 Speaker 1: So what is it competing against? You know, what are 224 00:10:52,920 --> 00:10:57,680 Speaker 1: the costs have to be competitive with for it to succeed? 225 00:10:58,040 --> 00:11:00,520 Speaker 3: Right, So I think you can take this too ways 226 00:11:00,679 --> 00:11:03,160 Speaker 3: if you're looking at offsets just across the board. Sure 227 00:11:03,200 --> 00:11:07,520 Speaker 3: you're competing with deforestation or reforestation and clean cookstoves and 228 00:11:07,600 --> 00:11:10,559 Speaker 3: those sorts of things. There's biochar, there's bio energy with 229 00:11:10,640 --> 00:11:13,439 Speaker 3: carbon capture of backs, there's direct ocean removals. 230 00:11:13,440 --> 00:11:14,440 Speaker 2: There's all sorts of things. 231 00:11:14,440 --> 00:11:17,600 Speaker 3: But not all of these are high integrity offsets, right right, 232 00:11:17,640 --> 00:11:19,199 Speaker 3: we have do you to. 233 00:11:19,120 --> 00:11:21,240 Speaker 1: Just explain what we mean by high integrity offsets for 234 00:11:21,240 --> 00:11:22,040 Speaker 1: people informidia? 235 00:11:22,160 --> 00:11:22,800 Speaker 2: Yeah, exactly. 236 00:11:22,840 --> 00:11:26,400 Speaker 3: So they have low permanence, meaning especially for direct ocean 237 00:11:26,400 --> 00:11:28,720 Speaker 3: removal or a lot of those sorts of technologies, it's 238 00:11:28,840 --> 00:11:32,360 Speaker 3: you don't know when the CU two will resurface or 239 00:11:32,400 --> 00:11:34,640 Speaker 3: come back into the atmosphere. 240 00:11:34,240 --> 00:11:36,880 Speaker 1: You're sort of relying on some theory and you know 241 00:11:36,920 --> 00:11:39,000 Speaker 1: you're part of a broader statistical picture. 242 00:11:39,360 --> 00:11:40,160 Speaker 2: Yeah, exactly. 243 00:11:40,240 --> 00:11:44,439 Speaker 3: So there's there's bad MRB or monitoring, reporting and verification 244 00:11:44,760 --> 00:11:48,280 Speaker 3: of that particular offset, and we've seen that with just 245 00:11:48,679 --> 00:11:53,000 Speaker 3: so many PR nightmares over the last couple of years, right, 246 00:11:53,400 --> 00:11:54,240 Speaker 3: just thanks. 247 00:11:54,760 --> 00:11:57,600 Speaker 1: So aside from you know, obviously it needs to be 248 00:11:57,640 --> 00:12:01,120 Speaker 1: close in costs, but what DACKS real magic source it 249 00:12:01,160 --> 00:12:04,800 Speaker 1: has over the alternatives is it is the highest quality option. 250 00:12:05,120 --> 00:12:07,680 Speaker 1: Like a ton of CO two removed through DAK is 251 00:12:07,720 --> 00:12:10,480 Speaker 1: better than a ton of CO two removed through something 252 00:12:10,480 --> 00:12:13,160 Speaker 1: elsewhere there's a little bit more uncertainty about what it 253 00:12:13,200 --> 00:12:13,600 Speaker 1: really is. 254 00:12:13,679 --> 00:12:14,200 Speaker 2: Yeah, I think. 255 00:12:14,559 --> 00:12:17,080 Speaker 3: I mean, we could have an entirely different conversation about 256 00:12:17,280 --> 00:12:20,800 Speaker 3: biochar verst DACK or bex urst DAK. But when you're 257 00:12:20,800 --> 00:12:23,360 Speaker 3: looking at an engineered removal like DAK, and you are 258 00:12:23,440 --> 00:12:27,439 Speaker 3: paying a premium for that removal, but paying that premium 259 00:12:27,559 --> 00:12:32,000 Speaker 3: kind of removes this PR or even like regulatory risk 260 00:12:32,080 --> 00:12:35,000 Speaker 3: that comes with buying some of these lower quality offsets. 261 00:12:35,040 --> 00:12:37,319 Speaker 3: And for that reason, we kind of see DAK as 262 00:12:37,480 --> 00:12:39,960 Speaker 3: one of the gold standards of carbon removal, and I 263 00:12:39,960 --> 00:12:41,719 Speaker 3: think a lot of the market sees that as well, 264 00:12:41,720 --> 00:12:44,560 Speaker 3: and that's why you have Microsoft Stripe Shop Fight kind 265 00:12:44,559 --> 00:12:45,480 Speaker 3: oft three. 266 00:12:45,640 --> 00:12:48,720 Speaker 1: Because I suppose if your incentive in the voluntary markets 267 00:12:48,760 --> 00:12:53,000 Speaker 1: at least is as much to do with reputation, these 268 00:12:53,080 --> 00:12:58,320 Speaker 1: alternatives leave you quite exposed to aixations of greenwashing, whereas 269 00:12:58,520 --> 00:13:01,240 Speaker 1: DAK it's kind of unun No one can accuse you. 270 00:13:01,200 --> 00:13:04,079 Speaker 2: Of that exactly. Yeah, let's move. 271 00:13:03,920 --> 00:13:07,679 Speaker 1: On to them talking about your research into costs. And 272 00:13:07,880 --> 00:13:10,480 Speaker 1: you know, we've talked about director capture, you know, as 273 00:13:10,520 --> 00:13:13,560 Speaker 1: if it's a monolith. And from what I understand from 274 00:13:13,640 --> 00:13:15,840 Speaker 1: the work you've done is we've actually looked at three 275 00:13:15,880 --> 00:13:19,600 Speaker 1: different technology pathways. So maybe like we let's explain what 276 00:13:19,640 --> 00:13:21,360 Speaker 1: those are and then we can start talking about their 277 00:13:21,480 --> 00:13:23,680 Speaker 1: relative outlook for costs on all of them. 278 00:13:23,880 --> 00:13:28,000 Speaker 3: Right, So in this report, we have calcium maxide looping, 279 00:13:28,080 --> 00:13:32,280 Speaker 3: which is pioneered by carbon engineering, a subsidiary of oxy. 280 00:13:32,600 --> 00:13:35,319 Speaker 3: Then we have solid sorbents, so that's mostly in this 281 00:13:35,520 --> 00:13:39,080 Speaker 3: modeling solid amines, so you can think clim works on 282 00:13:39,120 --> 00:13:42,280 Speaker 3: that front. And then we have the more nascent novel 283 00:13:42,480 --> 00:13:45,760 Speaker 3: suite of technologies, which is electrochemical. So these guys are 284 00:13:45,960 --> 00:13:49,440 Speaker 3: their glorified batteries, you can say, so they don't use 285 00:13:49,559 --> 00:13:53,160 Speaker 3: any thermal energy, which mitigates a lot of the associated 286 00:13:53,200 --> 00:13:55,320 Speaker 3: latent heat losses within the system, and so they have 287 00:13:55,480 --> 00:13:59,520 Speaker 3: far lower energy requirements which could help them scale and 288 00:13:59,559 --> 00:14:02,400 Speaker 3: realize far lower costs than the other two solutions. 289 00:14:02,679 --> 00:14:05,000 Speaker 1: Interesting, but that's the sort of the kind of the 290 00:14:05,040 --> 00:14:05,839 Speaker 1: new kid on the block. 291 00:14:06,240 --> 00:14:09,680 Speaker 3: Yeah, that's parking lot stage, got a lab stage. 292 00:14:10,040 --> 00:14:12,320 Speaker 2: Nothing is just a commercial scale. 293 00:14:12,400 --> 00:14:14,480 Speaker 1: Yet I love how you've equated a lab and a 294 00:14:14,520 --> 00:14:18,920 Speaker 1: parking lot. All right, then, so I suppose let me 295 00:14:18,960 --> 00:14:22,000 Speaker 1: just ask the question, what is the answer? What did 296 00:14:22,040 --> 00:14:24,360 Speaker 1: you find in terms of the kind of the cost 297 00:14:24,360 --> 00:14:27,920 Speaker 1: trajectories of these technologies? You know, how cost competitive are 298 00:14:27,960 --> 00:14:30,360 Speaker 1: they relative to each other today? And where do you 299 00:14:30,360 --> 00:14:31,560 Speaker 1: think they'll be in the future. 300 00:14:31,840 --> 00:14:34,960 Speaker 3: Yeah, so I think maybe to put this into context 301 00:14:35,240 --> 00:14:38,680 Speaker 3: even further, taking a very large step back back in 302 00:14:38,880 --> 00:14:42,080 Speaker 3: I think it was twenty ten, twenty eleven, this report 303 00:14:42,160 --> 00:14:46,080 Speaker 3: came out from was the APS American Physical Society, and 304 00:14:46,120 --> 00:14:49,200 Speaker 3: they came out saying DAK will never reach below six 305 00:14:49,280 --> 00:14:51,880 Speaker 3: hundred or five hundred dollars per ton. This is again 306 00:14:51,960 --> 00:14:56,760 Speaker 3: prohibitively expensive. It's impossible. Let's table this forever, and then 307 00:14:56,960 --> 00:15:00,560 Speaker 3: I think it was twenty eighteen carbon Engineering David Keith 308 00:15:00,640 --> 00:15:02,760 Speaker 3: came out and said, hey, listen, like, we have a 309 00:15:02,800 --> 00:15:05,320 Speaker 3: technology and we can get this down anywhere from one 310 00:15:05,400 --> 00:15:07,080 Speaker 3: hundred to two hundred dollars per ton. 311 00:15:07,200 --> 00:15:08,320 Speaker 2: This is commercially viable. 312 00:15:08,400 --> 00:15:11,800 Speaker 3: And ever since then, every kind of maybe incumbent DAK 313 00:15:12,200 --> 00:15:16,240 Speaker 3: company and every company since then has been under this 314 00:15:16,400 --> 00:15:19,920 Speaker 3: pressure now to align with that one hundred dollars per 315 00:15:19,960 --> 00:15:23,200 Speaker 3: ton number to stay relevant in the marketplace. And so 316 00:15:23,240 --> 00:15:25,960 Speaker 3: we had this artificial kind of I was. 317 00:15:25,960 --> 00:15:28,440 Speaker 1: Going to say, because that baseline is just something that 318 00:15:28,480 --> 00:15:31,600 Speaker 1: someone said once exactly when they were trying to get 319 00:15:31,640 --> 00:15:33,000 Speaker 1: some pr exactly. 320 00:15:33,240 --> 00:15:36,880 Speaker 3: So we have seen the industry coalesce around this one 321 00:15:36,960 --> 00:15:38,840 Speaker 3: hundred dollars per ton number. 322 00:15:39,080 --> 00:15:41,560 Speaker 1: That doesn't seem like a lot, you know, as in, 323 00:15:41,880 --> 00:15:45,160 Speaker 1: it's not a million miles off from where certain compliance 324 00:15:45,200 --> 00:15:48,040 Speaker 1: carbon markets are. I mean, yeah, you know, and given 325 00:15:48,040 --> 00:15:50,080 Speaker 1: the role we've described for DAC, it seems like if 326 00:15:50,080 --> 00:15:51,600 Speaker 1: there was one hundred dollars, you know, we wouldn't have 327 00:15:51,600 --> 00:15:53,680 Speaker 1: a climate crisis. Would just be like pump in all 328 00:15:53,720 --> 00:15:56,120 Speaker 1: the common dixide into the ground exactly exactly. 329 00:15:56,360 --> 00:15:59,680 Speaker 3: But again that's what The note was kind of built 330 00:15:59,720 --> 00:16:02,280 Speaker 3: on what we've seen in the past is companies again, 331 00:16:02,480 --> 00:16:05,400 Speaker 3: like as I just said, companies continue to announce these 332 00:16:05,560 --> 00:16:08,520 Speaker 3: overly optimistic estimates to where their deck technology is going 333 00:16:08,560 --> 00:16:11,280 Speaker 3: to go, and when you look at the thermodynamics of 334 00:16:11,320 --> 00:16:14,080 Speaker 3: that process, it's impossible. So what we found, if you're 335 00:16:14,080 --> 00:16:17,520 Speaker 3: looking at technologies today, electro chemical is the most expensive, 336 00:16:17,680 --> 00:16:19,680 Speaker 3: just because it is the most novel. You're looking at 337 00:16:19,720 --> 00:16:22,760 Speaker 3: costs around sixteen hundred dollars per ton of CO two 338 00:16:23,240 --> 00:16:25,880 Speaker 3: solid sorbents today are going to be around that one 339 00:16:25,880 --> 00:16:29,600 Speaker 3: thousand dollars per ton plus or minus range. Those companies, again, 340 00:16:29,640 --> 00:16:33,200 Speaker 3: it's the climb works the air means, it's remover that 341 00:16:33,280 --> 00:16:34,480 Speaker 3: they're a zeolite company. 342 00:16:34,640 --> 00:16:36,320 Speaker 2: They're using zeolites instead of amines. 343 00:16:36,440 --> 00:16:39,080 Speaker 3: And then we have you know, carbon engineering calcium oxye 344 00:16:39,120 --> 00:16:41,920 Speaker 3: looping that hovers it around you know, the four to 345 00:16:42,040 --> 00:16:44,800 Speaker 3: maybe less than six hundred dollars per ton range. The 346 00:16:44,840 --> 00:16:47,520 Speaker 3: way all of those costs come down the curve are 347 00:16:47,840 --> 00:16:52,040 Speaker 3: wildly different. So Climorks Solid Sorbents is really is the 348 00:16:52,040 --> 00:16:54,360 Speaker 3: only company today actually with the commercial scale project. 349 00:16:54,440 --> 00:16:57,560 Speaker 2: It's it's almost forty thousand ton per year facility. It's 350 00:16:57,560 --> 00:16:59,600 Speaker 2: not running at old capacity. 351 00:16:59,160 --> 00:17:01,640 Speaker 3: By any mean they have that going, then we have 352 00:17:01,880 --> 00:17:04,240 Speaker 3: Carbon Engineering has a half a million ton plant set 353 00:17:04,280 --> 00:17:06,199 Speaker 3: to come online by the end of this year. I 354 00:17:06,200 --> 00:17:08,919 Speaker 3: guess we'll start with solid sorbents. So starting at this, 355 00:17:09,200 --> 00:17:11,920 Speaker 3: let's say, for simplicity's sake, around one thousand dollars per 356 00:17:11,960 --> 00:17:16,680 Speaker 3: ton range, we're likely to see moderate learning rates anywhere 357 00:17:16,720 --> 00:17:20,000 Speaker 3: from four to seven percent, So you'll see a much 358 00:17:20,160 --> 00:17:25,080 Speaker 3: more dramatic cost down than calcium oxide looping one because 359 00:17:25,119 --> 00:17:27,800 Speaker 3: these guys are able to leverage modularity, so you have 360 00:17:27,840 --> 00:17:31,119 Speaker 3: increased learnings from that. But again, when you come to 361 00:17:31,520 --> 00:17:35,880 Speaker 3: this twenty thirty five twenty fifty range, even with enhanced 362 00:17:35,960 --> 00:17:38,600 Speaker 3: learnings learning by doing, you're still going to see solid 363 00:17:38,640 --> 00:17:39,600 Speaker 3: sorbins maybe be. 364 00:17:39,960 --> 00:17:42,520 Speaker 2: One of the most expensive technologies at scale. 365 00:17:42,600 --> 00:17:45,840 Speaker 3: And that's because when you look at the capex breakdown, 366 00:17:46,040 --> 00:17:48,920 Speaker 3: the only really novel component is the air contactor, which 367 00:17:48,920 --> 00:17:51,920 Speaker 3: doesn't actually make up that significant of a portion of 368 00:17:52,080 --> 00:17:55,800 Speaker 3: the capex, and so most of the component parts are 369 00:17:55,840 --> 00:17:59,840 Speaker 3: off the shelf. They're vacuum pumps or keat exchangers, things 370 00:17:59,840 --> 00:18:03,720 Speaker 3: like that that which won't actually realize significant learnings because 371 00:18:03,720 --> 00:18:07,080 Speaker 3: they're like reupholstered from other parts of industry, right, so. 372 00:18:07,080 --> 00:18:12,640 Speaker 1: It's a solid sorbent process, is built off of mature 373 00:18:12,640 --> 00:18:17,919 Speaker 1: technologies and combination, and its biggest I guess advantage in 374 00:18:18,000 --> 00:18:21,000 Speaker 1: terms of cost physics modularity is that what you say. 375 00:18:21,080 --> 00:18:23,160 Speaker 3: Yeah, you could say, that's probably one of the key 376 00:18:23,480 --> 00:18:25,760 Speaker 3: things just because you have don't get I mean, don't 377 00:18:25,760 --> 00:18:27,960 Speaker 3: get me wrong, because what we've seen climorks do is 378 00:18:28,080 --> 00:18:31,080 Speaker 3: I mean they've released an announcement saying we have caught 379 00:18:31,080 --> 00:18:34,680 Speaker 3: capex by fifty percent just because they've reconfigured the process 380 00:18:34,720 --> 00:18:37,800 Speaker 3: designed to allow for more efficient like they've increased the 381 00:18:38,280 --> 00:18:40,680 Speaker 3: kinetics of the reaction, so it happens quicker. 382 00:18:41,200 --> 00:18:42,560 Speaker 2: Amines themselves are. 383 00:18:42,600 --> 00:18:45,159 Speaker 3: Highly volatile, so that they degrade quite quickly in the 384 00:18:45,200 --> 00:18:48,840 Speaker 3: presence of impurities, meaning they have to be replaced quite often, 385 00:18:48,880 --> 00:18:50,720 Speaker 3: and they're actually really expensive, so that kicks up the 386 00:18:50,760 --> 00:18:54,120 Speaker 3: oppex costs pretty significantly. What they're doing is making that 387 00:18:54,240 --> 00:18:56,840 Speaker 3: sortment itself far more efficient, so you can you can 388 00:18:56,920 --> 00:18:59,520 Speaker 3: realize learnings, and people are still realizing learnings. But at 389 00:18:59,520 --> 00:19:01,600 Speaker 3: the end of the day, there is this bottom line, 390 00:19:01,840 --> 00:19:05,040 Speaker 3: this thermodynamic limitation with the SORBM in itself that you 391 00:19:05,200 --> 00:19:06,600 Speaker 3: just can't really, So. 392 00:19:06,520 --> 00:19:09,000 Speaker 1: That's sorting under, right, I'm curious to know, and I 393 00:19:09,040 --> 00:19:12,560 Speaker 1: suppose this applies to the other technology pathways as well. 394 00:19:12,600 --> 00:19:16,359 Speaker 1: And what fraction of the cost of DACK is the 395 00:19:17,119 --> 00:19:19,720 Speaker 1: capex and what fraction of it is the opex and 396 00:19:19,720 --> 00:19:21,520 Speaker 1: in particular the energy consumed. 397 00:19:21,840 --> 00:19:26,399 Speaker 3: I think the biggest bottleneck for director capture, and probably 398 00:19:26,440 --> 00:19:30,240 Speaker 3: one of the most scrutinized parts of director capture by 399 00:19:30,400 --> 00:19:34,560 Speaker 3: the general public, is the energy consumption land use, but 400 00:19:34,640 --> 00:19:36,120 Speaker 3: also energy consumption. 401 00:19:36,520 --> 00:19:39,600 Speaker 2: And if you're looking at you know, calcium oxye looping. 402 00:19:39,440 --> 00:19:42,200 Speaker 3: It it requires temperatures of up to nine hundred degree CE, right, 403 00:19:42,240 --> 00:19:45,080 Speaker 3: And if you're looking at solid sorbents it requires you know, 404 00:19:45,280 --> 00:19:46,840 Speaker 3: one to three hundred degree C. 405 00:19:47,119 --> 00:19:48,880 Speaker 2: But it's still a pretty. 406 00:19:48,560 --> 00:19:53,760 Speaker 3: Significant amount of the capex, especially for solid DAC approaches. 407 00:19:53,920 --> 00:19:58,000 Speaker 1: And this is energy that presumably can't be provided by 408 00:19:58,040 --> 00:20:01,560 Speaker 1: electricity for those two processes. And you know you mentioned electrochemical, 409 00:20:01,760 --> 00:20:05,000 Speaker 1: which presumably it is powered by electricity. Are these ones 410 00:20:05,040 --> 00:20:06,000 Speaker 1: relying on fuels? 411 00:20:06,640 --> 00:20:06,960 Speaker 2: Right? 412 00:20:07,080 --> 00:20:10,879 Speaker 3: So l DAK or calcium oxyde looping is reliant right 413 00:20:10,920 --> 00:20:12,120 Speaker 3: now on natural gas. 414 00:20:12,520 --> 00:20:12,760 Speaker 1: Right. 415 00:20:12,840 --> 00:20:17,360 Speaker 3: Oxy has said that they're looking to potentially use an 416 00:20:17,359 --> 00:20:21,320 Speaker 3: ecal signer. Airloom is working on creating an ecal signer. 417 00:20:21,640 --> 00:20:25,119 Speaker 3: They require high temperature heat as well. Right now, the 418 00:20:25,160 --> 00:20:28,920 Speaker 3: Climax plant in Iceland relies on geothermal, so that's twenty 419 00:20:28,920 --> 00:20:29,720 Speaker 3: four seven clean. 420 00:20:30,000 --> 00:20:32,760 Speaker 2: But again that's at a very very small scale. 421 00:20:32,840 --> 00:20:34,600 Speaker 1: We'll come back to this question of energy maybe when 422 00:20:34,640 --> 00:20:37,879 Speaker 1: we've talked about electric chemical because maybe I'm jumping the gun, 423 00:20:38,000 --> 00:20:41,639 Speaker 1: but let's talk about the calcium oxide looping. Tell us 424 00:20:41,680 --> 00:20:44,600 Speaker 1: a bit about how that works and what its particular 425 00:20:44,760 --> 00:20:46,199 Speaker 1: cost outlook is. 426 00:20:46,680 --> 00:20:50,359 Speaker 3: Right, So, calcium oxide looping it's around four to six 427 00:20:50,440 --> 00:20:52,440 Speaker 3: hundred dollars today. 428 00:20:52,960 --> 00:20:54,400 Speaker 2: That tech is. 429 00:20:54,400 --> 00:20:58,560 Speaker 3: Looking at even lower learning rates than solid sorbents. 430 00:20:58,640 --> 00:20:58,880 Speaker 2: One. 431 00:20:59,040 --> 00:21:03,240 Speaker 3: That's because it's inherently it's large fully integrated. It's half 432 00:21:03,240 --> 00:21:06,520 Speaker 3: a million times already, so it's reached this natural economies 433 00:21:06,520 --> 00:21:07,280 Speaker 3: of scale, so. 434 00:21:07,200 --> 00:21:09,600 Speaker 1: There's no economies of scale to be gotten out of it. 435 00:21:09,920 --> 00:21:12,639 Speaker 1: They and it can't be modulario. 436 00:21:12,200 --> 00:21:13,560 Speaker 2: There are components of it. 437 00:21:13,600 --> 00:21:17,000 Speaker 3: You could say that maybe the air contactors themselves are modular, 438 00:21:17,040 --> 00:21:20,120 Speaker 3: whereas you know where you kind of flow the chemicals 439 00:21:20,359 --> 00:21:23,760 Speaker 3: is integrated. But fundamentally it's not going to achieve the 440 00:21:23,800 --> 00:21:27,480 Speaker 3: same learnings as a functional modularity as electrochemical or solid 441 00:21:27,480 --> 00:21:31,840 Speaker 3: sorbents well, again similar to STAK or solid a means 442 00:21:31,880 --> 00:21:34,920 Speaker 3: those sorts of approaches. Many of the component parts are 443 00:21:35,160 --> 00:21:38,560 Speaker 3: off the shelf, so again mature technologies used in other 444 00:21:38,560 --> 00:21:41,200 Speaker 3: parts of industry, and the air contactor, which is one 445 00:21:41,240 --> 00:21:45,520 Speaker 3: of the only novel components, makes up a relatively small 446 00:21:45,680 --> 00:21:48,560 Speaker 3: fraction of that capex, so you have very limited room 447 00:21:48,720 --> 00:21:51,080 Speaker 3: to see costs come down that curve because each component 448 00:21:51,119 --> 00:21:53,760 Speaker 3: will realize different learnings. What we've done is we've aggregated 449 00:21:53,800 --> 00:21:56,280 Speaker 3: those learnings into the four to five percent that we're 450 00:21:56,359 --> 00:21:59,480 Speaker 3: going to see for liquid absorption or calcium oxy looping, 451 00:21:59,520 --> 00:22:01,960 Speaker 3: and then the for five to seven that we're seeing 452 00:22:01,960 --> 00:22:04,400 Speaker 3: for solid deck some of the. 453 00:22:04,400 --> 00:22:08,679 Speaker 1: Mature technologies calcium oxide looping and then solid absorption. So 454 00:22:08,720 --> 00:22:12,760 Speaker 1: calcium oxide looping is cheaper today but has less prospects 455 00:22:12,880 --> 00:22:15,119 Speaker 1: of costa coins in the future. Is that Did I 456 00:22:15,160 --> 00:22:16,000 Speaker 1: understand that correctly? 457 00:22:16,359 --> 00:22:16,679 Speaker 2: Yes? 458 00:22:16,840 --> 00:22:19,360 Speaker 3: But you know, even so, if you're looking at kind 459 00:22:19,359 --> 00:22:21,360 Speaker 3: of our graph that's in the note, if you guys 460 00:22:21,400 --> 00:22:24,399 Speaker 3: have access to that, it could in the best case scenario, 461 00:22:24,800 --> 00:22:28,399 Speaker 3: liquid absorption technology could still be competitive with some of 462 00:22:28,440 --> 00:22:31,960 Speaker 3: the more expensive forms of electrochemical technologies by twenty fifty, 463 00:22:32,400 --> 00:22:35,920 Speaker 3: whereas even though we're seeing solid sortment technologies start at 464 00:22:35,920 --> 00:22:39,200 Speaker 3: a far higher first be kind cost realize a much 465 00:22:39,200 --> 00:22:42,480 Speaker 3: more dramatic cost down by twenty thirty, and by twenty 466 00:22:42,520 --> 00:22:46,719 Speaker 3: fifty you're still seeing solid technologies probably be on the 467 00:22:46,720 --> 00:22:50,520 Speaker 3: more expensive side of all three. Obviously there's margins of 468 00:22:50,640 --> 00:22:51,440 Speaker 3: error of that. 469 00:22:51,680 --> 00:22:54,200 Speaker 1: It's such an interesting point because, I mean, fun fact 470 00:22:54,280 --> 00:22:56,800 Speaker 1: about me is when I joined ANYF, and it was 471 00:22:56,840 --> 00:22:58,960 Speaker 1: before we would be NF. I joined any F as 472 00:22:59,000 --> 00:23:01,480 Speaker 1: an intern in the summer of two thousand and nine, 473 00:23:01,520 --> 00:23:05,720 Speaker 1: which really ages me, and I was looking at CCS, 474 00:23:05,720 --> 00:23:08,200 Speaker 1: and so I started, you know, before I started my internship, 475 00:23:08,240 --> 00:23:10,680 Speaker 1: googled CCS and learned what I could about it. And 476 00:23:10,760 --> 00:23:12,640 Speaker 1: one of the things someone tulted is, like, the great 477 00:23:12,640 --> 00:23:17,720 Speaker 1: thing about CCS is it's built out of existing mature technologies, 478 00:23:17,800 --> 00:23:20,480 Speaker 1: so it's definitely gonna work, which you know, some people 479 00:23:20,520 --> 00:23:23,520 Speaker 1: might dispute. But like the thing that now hearing you 480 00:23:23,560 --> 00:23:25,760 Speaker 1: say this, this reflection is is that thing that was 481 00:23:25,800 --> 00:23:28,440 Speaker 1: tiulted as a strength it's built out of mature, well 482 00:23:28,520 --> 00:23:31,679 Speaker 1: understood technologies, is actually, in a way it's weakness. I 483 00:23:31,720 --> 00:23:33,440 Speaker 1: was about CCS. It isn't about DAK but you know, 484 00:23:33,480 --> 00:23:36,640 Speaker 1: obviously they're yeah, tod, but this is actually being built 485 00:23:36,640 --> 00:23:40,560 Speaker 1: out of mature technologies. Is only an advantage up to 486 00:23:40,600 --> 00:23:42,960 Speaker 1: our point. And if we're thinking about the long term 487 00:23:43,000 --> 00:23:46,880 Speaker 1: prospects for something, maybe something exciting and new is exciting 488 00:23:46,920 --> 00:23:48,679 Speaker 1: and new. 489 00:23:48,560 --> 00:23:51,720 Speaker 2: Also harder to project finance, then yes, yeah. 490 00:23:51,480 --> 00:23:53,320 Speaker 1: Of course, of course that's I mean, if it was 491 00:23:53,359 --> 00:23:55,720 Speaker 1: all that easy, then we'd all be just getting rich 492 00:23:55,760 --> 00:23:57,919 Speaker 1: off of whatever is exciting and you but let's talk 493 00:23:57,920 --> 00:24:01,440 Speaker 1: about what's exciting and new electric chemic tell us about 494 00:24:01,560 --> 00:24:04,040 Speaker 1: what that is and how it works. And yeah, you 495 00:24:04,119 --> 00:24:06,639 Speaker 1: mentioned it's so nascent. Do we even have a cost 496 00:24:06,760 --> 00:24:07,920 Speaker 1: idea for it? Right now? 497 00:24:08,040 --> 00:24:12,160 Speaker 2: It's so nebulous, right, nobody really knows. 498 00:24:12,359 --> 00:24:14,040 Speaker 1: You've got to go to the label of the parking lot. 499 00:24:14,080 --> 00:24:15,440 Speaker 2: You have to go to the parking lot. 500 00:24:16,080 --> 00:24:18,680 Speaker 1: Ask people how much does it cost? They're just trying 501 00:24:18,720 --> 00:24:19,840 Speaker 1: to buy their groceries. 502 00:24:19,920 --> 00:24:22,600 Speaker 2: But your parking might be more expensive. 503 00:24:23,280 --> 00:24:26,439 Speaker 1: Most probably everything. Nothing is more expensive than New York pokast. 504 00:24:26,520 --> 00:24:29,520 Speaker 3: Yeah, so I guess in our modeling, we don't actually 505 00:24:29,560 --> 00:24:32,480 Speaker 3: start modeling for electro chemical until I think it's around 506 00:24:32,480 --> 00:24:35,200 Speaker 3: twenty thirty one. That's around when we're expecting to see 507 00:24:35,200 --> 00:24:37,720 Speaker 3: the first of a kind of commercial. 508 00:24:37,200 --> 00:24:38,480 Speaker 2: Plant come online. 509 00:24:38,680 --> 00:24:40,920 Speaker 3: At that point, you know, we start the modeling and 510 00:24:41,000 --> 00:24:44,239 Speaker 3: around seventeen hundred dollars per ton of CO two and 511 00:24:44,280 --> 00:24:46,880 Speaker 3: then obviously is a function of demand, which it could 512 00:24:46,880 --> 00:24:50,399 Speaker 3: be an entirely separate podcast, similar to what we've seen 513 00:24:50,600 --> 00:24:54,680 Speaker 3: in the battery industry, we could see learnings around eighteen percent. 514 00:24:54,960 --> 00:24:57,679 Speaker 3: That's a function of modularity, that's a function of the 515 00:24:57,720 --> 00:25:01,840 Speaker 3: system being extremely novel holorified batteries. So I mean, it's 516 00:25:01,840 --> 00:25:05,399 Speaker 3: a chemical process, right, and that eighteen percent learning is 517 00:25:05,640 --> 00:25:10,640 Speaker 3: pretty standardized of learnings that we've tracked in other chemical processing, right. 518 00:25:10,680 --> 00:25:13,560 Speaker 1: I mean, I mean at BNF, we've looked at batteries 519 00:25:13,600 --> 00:25:16,400 Speaker 1: for more than a decade and seen established these kind 520 00:25:16,440 --> 00:25:18,920 Speaker 1: of learning rates for those kinds of technologies. So that's 521 00:25:19,000 --> 00:25:21,800 Speaker 1: why it's exciting, is it has that prospect of that 522 00:25:22,000 --> 00:25:24,360 Speaker 1: exponential cost decline definitely. 523 00:25:24,440 --> 00:25:27,679 Speaker 3: And I think what's probably more exciting is the fact 524 00:25:28,040 --> 00:25:32,240 Speaker 3: it requires seventy percent less energy, And especially when we're 525 00:25:32,440 --> 00:25:35,359 Speaker 3: kind of I mean the narrative right now in the 526 00:25:35,440 --> 00:25:37,720 Speaker 3: media and throughout I feel like most of the work 527 00:25:37,760 --> 00:25:42,520 Speaker 3: we're doing at BINA is increased load from data centers, right, 528 00:25:42,800 --> 00:25:46,760 Speaker 3: we don't have enough energy and scary energy security things 529 00:25:46,800 --> 00:25:48,680 Speaker 3: like that. And then you add DAK into the mix, 530 00:25:48,720 --> 00:25:51,240 Speaker 3: where there has been a lot of negative pr recently 531 00:25:51,600 --> 00:25:56,199 Speaker 3: saying these require too much, too much energy and the 532 00:25:56,280 --> 00:25:59,040 Speaker 3: land use required if it's you know, to power deac, 533 00:25:59,080 --> 00:26:02,560 Speaker 3: if it's solar wind, far too large and it doesn't 534 00:26:02,560 --> 00:26:04,840 Speaker 3: even capture as many tons of CO two as it 535 00:26:04,880 --> 00:26:07,639 Speaker 3: took to build the plant, right, which is you know, 536 00:26:07,840 --> 00:26:10,440 Speaker 3: not necessarily true, unfair for a lot of reasons. 537 00:26:10,960 --> 00:26:14,000 Speaker 1: When when I asked you earlier about the cost of energy, 538 00:26:14,160 --> 00:26:16,719 Speaker 1: and why I asked is it electricity or fuel is 539 00:26:16,840 --> 00:26:20,359 Speaker 1: because everything you say is correct about you know, increasing load, 540 00:26:20,480 --> 00:26:23,320 Speaker 1: and you know this might be something another competing thing. 541 00:26:23,480 --> 00:26:25,879 Speaker 1: But you know, my jam is I look at the 542 00:26:25,920 --> 00:26:29,480 Speaker 1: power system, power markets, and whilst it's true that overall 543 00:26:29,520 --> 00:26:32,400 Speaker 1: load is growing, at certain times of day there will 544 00:26:32,400 --> 00:26:37,920 Speaker 1: be excess power. And the ideal scenario is there something 545 00:26:38,160 --> 00:26:40,520 Speaker 1: that can be useful that can be done with that power. 546 00:26:40,560 --> 00:26:43,399 Speaker 1: And the ideal candidate is something that is energy intensive 547 00:26:43,480 --> 00:26:45,679 Speaker 1: but not too CAPEX heavy, so you don't need to 548 00:26:45,720 --> 00:26:49,160 Speaker 1: be worrying about running it twenty four hours to sort 549 00:26:49,200 --> 00:26:53,000 Speaker 1: of fully monetize your initial investment. You can run it 550 00:26:53,119 --> 00:26:55,960 Speaker 1: during the daytime when you know the solar is producing 551 00:26:55,960 --> 00:26:58,160 Speaker 1: excess powercuse that's probably what it would be, it would 552 00:26:58,160 --> 00:27:00,600 Speaker 1: be excess solar. And so I was really asking because 553 00:27:00,680 --> 00:27:03,920 Speaker 1: I'm like, is that a potential future for DAK or 554 00:27:03,960 --> 00:27:07,280 Speaker 1: whatever can run on electricity and has maybe a lower 555 00:27:07,320 --> 00:27:09,800 Speaker 1: proportion of its cost is in the capex rather than 556 00:27:09,840 --> 00:27:10,760 Speaker 1: the energy costs. 557 00:27:11,280 --> 00:27:16,159 Speaker 3: Yeah, it's obviously for solid solid sorbit DAC and calcium 558 00:27:16,200 --> 00:27:19,920 Speaker 3: oxa being impossible. As you said, it's far too capitally 559 00:27:19,960 --> 00:27:23,080 Speaker 3: intensive to even think about wanting to do that. 560 00:27:23,359 --> 00:27:25,680 Speaker 1: We did just have to run it all the time. 561 00:27:26,359 --> 00:27:28,800 Speaker 2: Yeah, yeah, one hundred percent. We did run an analysis 562 00:27:28,800 --> 00:27:29,240 Speaker 2: on that. 563 00:27:29,119 --> 00:27:32,399 Speaker 3: Which will be coming out in a second part of 564 00:27:32,440 --> 00:27:33,239 Speaker 3: this cost now. 565 00:27:33,600 --> 00:27:34,879 Speaker 1: Oh nice, watch this space. 566 00:27:35,160 --> 00:27:36,760 Speaker 2: Yeah, we're teeing that up. 567 00:27:36,800 --> 00:27:41,040 Speaker 3: Also for electrochemical there are some companies that have said, hey, 568 00:27:41,240 --> 00:27:44,560 Speaker 3: we're running on behind the meter power, or hey we've 569 00:27:44,760 --> 00:27:48,439 Speaker 3: built in a sort of battery into the process of 570 00:27:48,480 --> 00:27:51,120 Speaker 3: the system, and so we don't need power one hundred 571 00:27:51,119 --> 00:27:53,520 Speaker 3: percent of the time, right, and we'll just use these 572 00:27:53,680 --> 00:27:58,120 Speaker 3: reservoirs that we have of different chemicals sitting and that 573 00:27:58,160 --> 00:27:58,439 Speaker 3: will be. 574 00:27:58,440 --> 00:27:59,760 Speaker 2: Able to kind of I guess power it. 575 00:28:00,480 --> 00:28:02,439 Speaker 3: So that has been floated. I don't know if I 576 00:28:02,440 --> 00:28:04,959 Speaker 3: can say, oh, yeah, we're definitely going to be able 577 00:28:05,000 --> 00:28:09,359 Speaker 3: to see electric chemical running on intermittent renewables, because the 578 00:28:09,440 --> 00:28:12,560 Speaker 3: economics of everything are just still so ambiguous. For electric 579 00:28:12,600 --> 00:28:17,160 Speaker 3: chemical in particular, that would be obviously the best case scenario. 580 00:28:17,119 --> 00:28:19,640 Speaker 1: Right, but it hasn't been yet been proven out. 581 00:28:19,920 --> 00:28:23,360 Speaker 3: Yeah, I think it's still pretty ify because again, right now, 582 00:28:23,400 --> 00:28:27,600 Speaker 3: electric chemical it's still insanely gapply intensive, got it, you know? 583 00:28:27,960 --> 00:28:31,600 Speaker 3: And who's to say we don't see based on lower 584 00:28:32,000 --> 00:28:36,199 Speaker 3: maybe demand signals. Maybe there isn't this crazy growth of 585 00:28:36,240 --> 00:28:39,720 Speaker 3: demand from all of these companies, you know, dack realistically 586 00:28:39,840 --> 00:28:42,640 Speaker 3: or maybe more pragmatically, maybe we won't see that eighteen 587 00:28:42,680 --> 00:28:45,040 Speaker 3: percent learning which we'll get it down to those kind 588 00:28:45,040 --> 00:28:47,040 Speaker 3: of eighty dollars per ton levels. Maybe we do still 589 00:28:47,040 --> 00:28:50,120 Speaker 3: see electrochemical hovering at that two hundred dollars per ton range, 590 00:28:50,160 --> 00:28:51,800 Speaker 3: which will mitigate that ability. 591 00:28:51,960 --> 00:28:55,400 Speaker 1: I think two hundred dollars a ton sounds expensive, but 592 00:28:55,760 --> 00:28:59,560 Speaker 1: for something that is finessing the last little details of 593 00:29:00,040 --> 00:29:03,280 Speaker 1: combatting climate change, that's not expensive. You know if that's 594 00:29:03,320 --> 00:29:04,240 Speaker 1: where it can get. 595 00:29:04,080 --> 00:29:06,880 Speaker 3: To, right, and then especially I mean we had the 596 00:29:06,920 --> 00:29:09,560 Speaker 3: euets is at around one hundred dollars per time. 597 00:29:09,560 --> 00:29:11,600 Speaker 2: You don't need DAK to get to below one hundred 598 00:29:11,640 --> 00:29:12,200 Speaker 2: dollars per time. 599 00:29:12,240 --> 00:29:15,120 Speaker 3: That's obviously, you know, if you're operating in a market 600 00:29:15,120 --> 00:29:18,560 Speaker 3: with a compliance market, right, But in some instances you 601 00:29:18,640 --> 00:29:20,520 Speaker 3: just kind of have to reach parody with that. 602 00:29:20,880 --> 00:29:24,640 Speaker 1: Thank you very much for this conversation, Brenna Casey. I 603 00:29:24,680 --> 00:29:28,959 Speaker 1: came at you with a bit of a barrage of 604 00:29:29,480 --> 00:29:32,200 Speaker 1: unfriendly questions, and to be honest with you, if you 605 00:29:32,240 --> 00:29:34,400 Speaker 1: hadn't given good answers, then the second half of this 606 00:29:34,480 --> 00:29:37,000 Speaker 1: podcast would have been pointless, yeah, because we would mean, 607 00:29:37,240 --> 00:29:38,800 Speaker 1: why are we talking about the cost of something that 608 00:29:38,840 --> 00:29:41,720 Speaker 1: doesn't matter? But I think you really did establish that 609 00:29:41,760 --> 00:29:46,240 Speaker 1: it does matter. And it's actually really quite an interesting topic, 610 00:29:46,680 --> 00:29:50,200 Speaker 1: both from a technological point of view, but also you know, 611 00:29:50,240 --> 00:29:53,160 Speaker 1: coming back to this idea success doesn't happen in straight lines. 612 00:29:53,600 --> 00:29:56,560 Speaker 1: How this nascent industry that let's say, let's be honest, 613 00:29:56,600 --> 00:30:00,000 Speaker 1: it is facing some headwinds, but it also has friends 614 00:30:00,080 --> 00:30:02,720 Speaker 1: in important places, it sounds like, so how does it 615 00:30:02,840 --> 00:30:04,640 Speaker 1: navigate its way to the top, and I think all 616 00:30:04,680 --> 00:30:08,000 Speaker 1: of this is so interesting and so thank you so 617 00:30:08,120 --> 00:30:10,440 Speaker 1: much for coming on today. And I guess as of 618 00:30:10,520 --> 00:30:12,000 Speaker 1: next week, by the way, we're going to be sitting 619 00:30:12,000 --> 00:30:14,440 Speaker 1: on neighboring desks. So I suppose I should start calling 620 00:30:14,480 --> 00:30:18,640 Speaker 1: you Brenner rather than Branna Casey. But yes, thank you 621 00:30:18,680 --> 00:30:19,440 Speaker 1: for joining today. 622 00:30:19,640 --> 00:30:21,760 Speaker 2: Thank you guys for hiring me. 623 00:30:29,760 --> 00:30:32,880 Speaker 1: Today's episode of Switched On was produced by Cam Gray 624 00:30:33,120 --> 00:30:36,800 Speaker 1: with production assistance from Kamala Shelling. Bloomberg NIF is a 625 00:30:36,840 --> 00:30:39,960 Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This 626 00:30:40,080 --> 00:30:42,760 Speaker 1: recording does not constitute, nor should it be construed as 627 00:30:42,800 --> 00:30:46,719 Speaker 1: investment advice, investment recommendations, or a recommendation as to an 628 00:30:46,760 --> 00:30:49,960 Speaker 1: investment or other strategy. Bloomberg ANNIAF should not be considered 629 00:30:49,960 --> 00:30:53,280 Speaker 1: as information sufficient upon which to base an investment decision. 630 00:30:53,360 --> 00:30:56,360 Speaker 1: Neither Bloomberg Finance LP nor any of its affiliates makes 631 00:30:56,360 --> 00:31:00,120 Speaker 1: any representation or warranty as to the accuracy or completeness 632 00:31:00,120 --> 00:31:03,120 Speaker 1: of the information contained in this recording, and any liability 633 00:31:03,160 --> 00:31:05,840 Speaker 1: as a result of this recording is expressly disclaimed.