1 00:00:00,160 --> 00:00:02,840 Speaker 1: This is Dana Perkins, and you're listening to Switched on 2 00:00:03,000 --> 00:00:06,040 Speaker 1: the B andF podcast. Today we're going to talk about 3 00:00:06,080 --> 00:00:09,240 Speaker 1: direct air capture, which we're going to refer to often 4 00:00:09,280 --> 00:00:12,399 Speaker 1: in today's show, just as dak and quite simply put, 5 00:00:12,480 --> 00:00:15,520 Speaker 1: it is sucking carbon out of the air. You know 6 00:00:15,640 --> 00:00:19,079 Speaker 1: that thing that plants do during photosynthesis where they breathe 7 00:00:19,120 --> 00:00:22,120 Speaker 1: in carbon, but this time with a machine. It's a 8 00:00:22,120 --> 00:00:25,439 Speaker 1: fairly new concept, first theorized in nineteen ninety nine, but 9 00:00:25,560 --> 00:00:30,200 Speaker 1: increasingly becoming reality. They're clean tech companies out there pioneering 10 00:00:30,200 --> 00:00:33,479 Speaker 1: this technology and other technical solutions which we'll actually get 11 00:00:33,520 --> 00:00:35,440 Speaker 1: to talk about in the show today. And then there 12 00:00:35,440 --> 00:00:38,440 Speaker 1: are larger companies that are investing in this and looking 13 00:00:38,520 --> 00:00:40,680 Speaker 1: at how to reach their net zero targets in the 14 00:00:40,720 --> 00:00:43,680 Speaker 1: long term. Let me just emphasize that really quickly, the 15 00:00:43,800 --> 00:00:46,559 Speaker 1: net part of net zero. They're thinking about how to 16 00:00:46,600 --> 00:00:49,920 Speaker 1: reduce their greenhouse gas emissions and then find ways to 17 00:00:49,960 --> 00:00:53,400 Speaker 1: subtract carbon from the atmosphere. So who are the companies 18 00:00:53,440 --> 00:00:55,840 Speaker 1: that are giving this a closer look, both on the 19 00:00:55,840 --> 00:00:59,000 Speaker 1: technology side and as investors, and what does it cost? 20 00:00:59,280 --> 00:01:00,520 Speaker 1: I'm going to give you a bit of a hint 21 00:01:00,600 --> 00:01:03,640 Speaker 1: here it is not currently inexpensive when you compare it 22 00:01:03,680 --> 00:01:07,440 Speaker 1: with other forms of voluntary carbon credits. But then how 23 00:01:07,480 --> 00:01:09,880 Speaker 1: long will it take to get closer to cost parity 24 00:01:10,160 --> 00:01:12,440 Speaker 1: and what is the learning rate we'll need to see? 25 00:01:12,600 --> 00:01:15,200 Speaker 1: I think it might surprise you. Also, what do we 26 00:01:15,280 --> 00:01:17,680 Speaker 1: do with the carbon once it's been removed from the air, 27 00:01:17,959 --> 00:01:20,319 Speaker 1: and what do we need to consider when it comes 28 00:01:20,319 --> 00:01:23,000 Speaker 1: to the chemicals that are found in these machines. To 29 00:01:23,040 --> 00:01:26,120 Speaker 1: talk about this and more, I speak with two members 30 00:01:26,120 --> 00:01:28,960 Speaker 1: of our sustainable materials team that are based in New York, 31 00:01:29,160 --> 00:01:31,800 Speaker 1: Sharon Moustri and Brenna Casey. They are going to go 32 00:01:31,840 --> 00:01:33,720 Speaker 1: through some of the highlights that are found in the 33 00:01:33,840 --> 00:01:38,640 Speaker 1: recent research note titled direct air Capture Market and cost outlook. 34 00:01:38,840 --> 00:01:41,320 Speaker 1: As always, if you like this podcast, make sure to 35 00:01:41,360 --> 00:01:44,680 Speaker 1: subscribe and you'll receive an update when we publish future episodes. 36 00:01:44,760 --> 00:01:46,840 Speaker 1: And if you give us a review on Apple Podcasts 37 00:01:46,880 --> 00:01:50,240 Speaker 1: or Spotify, that's going to make us more discoverable by others. 38 00:01:50,600 --> 00:01:52,960 Speaker 1: But right now we're going to jump into my conversation 39 00:01:53,200 --> 00:02:06,680 Speaker 1: with Sharon and Brenna about direct air capture. Brenna, thank 40 00:02:06,680 --> 00:02:08,000 Speaker 1: you very much for joining today. 41 00:02:08,120 --> 00:02:08,800 Speaker 2: Thanks for having us. 42 00:02:08,840 --> 00:02:11,080 Speaker 1: Dana and Sharon, thank you for joining as. 43 00:02:11,000 --> 00:02:12,160 Speaker 3: Well, thank you Dana. 44 00:02:12,639 --> 00:02:15,000 Speaker 1: So we've got you both here to talk about direct 45 00:02:15,000 --> 00:02:17,560 Speaker 1: air capture today, and I promise we will get into that. 46 00:02:17,639 --> 00:02:19,920 Speaker 1: But there's a few things I would really like us 47 00:02:19,960 --> 00:02:22,639 Speaker 1: to talk about in order to give it some context. 48 00:02:22,880 --> 00:02:27,440 Speaker 1: So the first one is carbon markets, So the difference 49 00:02:27,520 --> 00:02:31,960 Speaker 1: between voluntary and compliance carbon markets and its most basic sense, 50 00:02:32,080 --> 00:02:36,000 Speaker 1: because I see direct air capture as intrinsically linked with 51 00:02:36,440 --> 00:02:37,600 Speaker 1: voluntary carbon. 52 00:02:37,680 --> 00:02:42,240 Speaker 3: The short explanation is, there are compliance markets where usually 53 00:02:42,480 --> 00:02:46,079 Speaker 3: a government sets up a whole system where different companies 54 00:02:46,120 --> 00:02:48,360 Speaker 3: have to pay in and their emissions are cupped and 55 00:02:48,400 --> 00:02:51,280 Speaker 3: they have to pay to admit above that cup, or 56 00:02:51,320 --> 00:02:54,640 Speaker 3: there are other types of systems. For voluntary there's no 57 00:02:54,680 --> 00:02:59,000 Speaker 3: one regulating these emissions except the companies themselves internally, so 58 00:02:59,240 --> 00:03:02,320 Speaker 3: they will say we've committed to net zero in order 59 00:03:02,400 --> 00:03:05,040 Speaker 3: to get there. Part of our strategy is to buy 60 00:03:05,200 --> 00:03:08,960 Speaker 3: carbon offsets out of this voluntary market, and that's where 61 00:03:09,040 --> 00:03:11,880 Speaker 3: direct air capture fits in as its kind of main 62 00:03:11,960 --> 00:03:13,239 Speaker 3: business model at the moment. 63 00:03:13,800 --> 00:03:16,960 Speaker 1: So direct air capture in its simplest sense, are for 64 00:03:17,040 --> 00:03:20,080 Speaker 1: the companies that really care an awful lot about carbon 65 00:03:20,120 --> 00:03:25,000 Speaker 1: math and we have had entire shows dedicated to voluntary 66 00:03:25,040 --> 00:03:27,320 Speaker 1: carbon with Kyle in the past, so we will go 67 00:03:27,400 --> 00:03:29,560 Speaker 1: too far down the road on that, although we will 68 00:03:29,639 --> 00:03:33,520 Speaker 1: talk about some prices today for direct air capture. Another show, 69 00:03:33,520 --> 00:03:35,760 Speaker 1: though that we did in the past, was one on 70 00:03:36,120 --> 00:03:39,320 Speaker 1: this technology. It's a couple of years back, and we 71 00:03:39,520 --> 00:03:43,320 Speaker 1: have decided to revisit the topic from a research standpoint 72 00:03:43,480 --> 00:03:45,480 Speaker 1: as well as revisit the topic here on the show, 73 00:03:45,760 --> 00:03:48,480 Speaker 1: And the question for you and for the listeners is 74 00:03:48,760 --> 00:03:52,080 Speaker 1: why is now the right time for us to revisit 75 00:03:52,200 --> 00:03:54,960 Speaker 1: direct air capture and essentially what was that catalyst for 76 00:03:55,040 --> 00:03:57,080 Speaker 1: us to go in a little bit deeper this time. 77 00:03:57,320 --> 00:04:00,640 Speaker 3: Yeah, So there are two things that we found interesting 78 00:04:00,920 --> 00:04:03,520 Speaker 3: that are changing in the market. The first is on 79 00:04:03,560 --> 00:04:06,680 Speaker 3: the technology side, there's a lot more information about new 80 00:04:06,720 --> 00:04:09,560 Speaker 3: technologies and a lot more companies that are trying to 81 00:04:09,600 --> 00:04:13,680 Speaker 3: bring those technologies from lab scale onto commercial scale today, 82 00:04:13,800 --> 00:04:16,600 Speaker 3: so we're learning much more what the benefits of these 83 00:04:16,640 --> 00:04:20,120 Speaker 3: technologies are at a large scale. The second is that 84 00:04:20,360 --> 00:04:22,880 Speaker 3: we also needed to know more about the market. So 85 00:04:23,200 --> 00:04:27,640 Speaker 3: the prices we thought that we're expected for director captured 86 00:04:27,680 --> 00:04:30,160 Speaker 3: today they are now much higher, and we're trying to 87 00:04:30,279 --> 00:04:34,480 Speaker 3: understand why and revising our whole projections for prices and 88 00:04:34,520 --> 00:04:36,520 Speaker 3: for supply and demounts based off of that. 89 00:04:36,880 --> 00:04:40,279 Speaker 1: So in its simplest sense, can you explain what these 90 00:04:40,400 --> 00:04:44,000 Speaker 1: machines look like, and if there are different competing technologies, 91 00:04:44,040 --> 00:04:46,240 Speaker 1: maybe kind of try and paint a picture in our 92 00:04:46,279 --> 00:04:49,359 Speaker 1: minds of what we're looking at. If we're looking at 93 00:04:49,720 --> 00:04:53,560 Speaker 1: essentially a machine that is sucking carbon out of the air. 94 00:04:53,960 --> 00:04:57,760 Speaker 2: Really simply what DAK is, it's these massive fans that 95 00:04:57,839 --> 00:05:01,080 Speaker 2: blow ambient air in through this content where a sorbent 96 00:05:01,279 --> 00:05:03,320 Speaker 2: or solvent solution sits, so it can be either be 97 00:05:03,520 --> 00:05:05,520 Speaker 2: liquid or solid DAC and we'll get into that in 98 00:05:05,520 --> 00:05:09,160 Speaker 2: a second. That CO two, once it comes into contact 99 00:05:09,240 --> 00:05:12,880 Speaker 2: with the sorbent or solvent, is then absorbed or absorbed 100 00:05:12,960 --> 00:05:16,120 Speaker 2: onto that medium, and then it requires because that solution 101 00:05:16,279 --> 00:05:19,680 Speaker 2: only has a finite capacity for the CO two, the 102 00:05:19,680 --> 00:05:23,160 Speaker 2: cutwo has to be stripped from that and then regenerated, 103 00:05:23,200 --> 00:05:25,880 Speaker 2: which can take large thermal requirements anywhere up to nine 104 00:05:25,960 --> 00:05:28,680 Speaker 2: hundred degrees celsius depending on the type of technology that 105 00:05:28,720 --> 00:05:31,599 Speaker 2: you're using. The ambient air that is now free of 106 00:05:31,640 --> 00:05:33,760 Speaker 2: CO two is just blown out, and then the CO 107 00:05:33,960 --> 00:05:36,400 Speaker 2: two is either stored underground or it can be utilized. 108 00:05:36,640 --> 00:05:39,320 Speaker 2: So there's a couple major companies that are doing this 109 00:05:39,640 --> 00:05:43,719 Speaker 2: climb works which we've all heard of carbon engineering. There's Remover, 110 00:05:44,040 --> 00:05:47,799 Speaker 2: which is using a zeolite, and then Airloom carbon capture 111 00:05:47,880 --> 00:05:50,200 Speaker 2: is doing it's like a passive DEACK, so it doesn't 112 00:05:50,200 --> 00:05:54,560 Speaker 2: require these massive fans. The key difference between liquid DAC 113 00:05:54,680 --> 00:05:59,080 Speaker 2: SO absorption and solid DAC absorption is really the energy requirements. 114 00:05:59,120 --> 00:06:04,600 Speaker 2: So liquid DACK requires these covalent bonds. There'sus high affinity 115 00:06:05,040 --> 00:06:08,760 Speaker 2: for it's like this aqueous alkaline sorment, so high affinity 116 00:06:08,800 --> 00:06:11,040 Speaker 2: for that to the CO two. So it requires these 117 00:06:11,040 --> 00:06:13,119 Speaker 2: extremely high temperatures, like I said, up to nine hundred 118 00:06:13,120 --> 00:06:15,480 Speaker 2: degrees celsius, and then there's also a lot of waste heat, 119 00:06:15,560 --> 00:06:19,559 Speaker 2: so it's not terribly energy efficient. SOLIDDAC on the other hand, 120 00:06:19,640 --> 00:06:23,359 Speaker 2: you can use low grade heat sources because the zeolites, 121 00:06:23,400 --> 00:06:25,800 Speaker 2: the membranes, things like that, they bind to the CU 122 00:06:25,880 --> 00:06:29,680 Speaker 2: two with weaker physical interactions, and so you can use 123 00:06:29,800 --> 00:06:34,640 Speaker 2: PV or wind, geothermal or even hydro to kind of 124 00:06:34,800 --> 00:06:37,400 Speaker 2: move these to capture and regenerate the CO two. And 125 00:06:37,480 --> 00:06:40,039 Speaker 2: so generally it's a bit cheaper because of those lower 126 00:06:40,080 --> 00:06:41,000 Speaker 2: thermal requirements. 127 00:06:41,279 --> 00:06:44,120 Speaker 1: I'm going to need a quick definition. What is zeolite? 128 00:06:45,000 --> 00:06:48,320 Speaker 2: Zeolites there? You can actually find them on Amazon, which 129 00:06:48,360 --> 00:06:51,080 Speaker 2: is which is really interesting. They're kind of little there 130 00:06:51,120 --> 00:06:55,240 Speaker 2: balls almost. They are these highly porous structures, like crystalline 131 00:06:55,279 --> 00:06:59,839 Speaker 2: structures that absorb CO two basically through those tiny pores, 132 00:06:59,839 --> 00:07:03,080 Speaker 2: and you can manipulate the pores to different sizes to 133 00:07:03,400 --> 00:07:06,960 Speaker 2: either accept CO two or kind of select against other 134 00:07:07,000 --> 00:07:10,160 Speaker 2: molecules like nitrogen or things like that that are also 135 00:07:10,240 --> 00:07:11,000 Speaker 2: in the atmosphere. 136 00:07:11,240 --> 00:07:14,600 Speaker 1: Have you ever seen Orbi's no, So these are these 137 00:07:14,640 --> 00:07:17,120 Speaker 1: things that my kids play with, and they're essentially these 138 00:07:17,160 --> 00:07:19,520 Speaker 1: little balls colorful I'm guessing the ones in a direct 139 00:07:19,520 --> 00:07:23,120 Speaker 1: air capture machine are not colorful. But they're these colorful 140 00:07:23,280 --> 00:07:27,320 Speaker 1: balls that if you submerse them in water, they absorb 141 00:07:27,800 --> 00:07:30,560 Speaker 1: all of this water and expand to a much bigger 142 00:07:30,600 --> 00:07:32,440 Speaker 1: size and then the kids just play with them. They 143 00:07:32,480 --> 00:07:35,680 Speaker 1: actually don't do anything particularly useful other than that they're 144 00:07:35,720 --> 00:07:37,560 Speaker 1: fun by for the kids to play with. But I'm 145 00:07:37,600 --> 00:07:41,240 Speaker 1: picturing these balls that you're explaining these zeo lights for 146 00:07:41,320 --> 00:07:44,760 Speaker 1: them to be what roughly the size of a dime 147 00:07:45,040 --> 00:07:48,280 Speaker 1: or a ten cent piece and pence much smaller. 148 00:07:48,320 --> 00:07:52,480 Speaker 2: They're almost like the size of bebes from a BB gun. 149 00:07:52,640 --> 00:07:54,920 Speaker 2: That's kind of how they look. One of the developers 150 00:07:55,040 --> 00:07:57,120 Speaker 2: let us hold onto a couple of them, and yeah, 151 00:07:57,160 --> 00:07:58,600 Speaker 2: they're really really tiny. 152 00:07:58,760 --> 00:08:02,520 Speaker 1: They're pretty close to what an ORB sizes. Then there 153 00:08:02,520 --> 00:08:06,240 Speaker 1: are orb's but filled with carbon instead instead of water. Well, okay, 154 00:08:06,400 --> 00:08:09,880 Speaker 1: so you have these solid and liquid technologies. It does 155 00:08:09,920 --> 00:08:13,000 Speaker 1: seem well, you've explained that on the solid side, the 156 00:08:13,160 --> 00:08:15,800 Speaker 1: energy requirements are lower and you're able to use a 157 00:08:15,800 --> 00:08:19,680 Speaker 1: wider range of clean energy in order to actually make 158 00:08:19,720 --> 00:08:22,920 Speaker 1: these machines work. On the liquid side, Does that therefore 159 00:08:23,080 --> 00:08:25,920 Speaker 1: mean that these machines are actually being powered by what 160 00:08:25,960 --> 00:08:29,440 Speaker 1: we'd consider more traditional base load power sources like Dare 161 00:08:29,480 --> 00:08:32,880 Speaker 1: I say coal in this circumstance or nuclear coal? 162 00:08:32,960 --> 00:08:35,439 Speaker 2: I think is too far out of the question, because 163 00:08:35,920 --> 00:08:38,920 Speaker 2: the carbon intensity of just running that process negates the 164 00:08:38,920 --> 00:08:42,280 Speaker 2: benefit of DAK completely. So the levelized cost of avoidance 165 00:08:42,480 --> 00:08:44,800 Speaker 2: is going to be you're going to basically break even 166 00:08:45,040 --> 00:08:47,680 Speaker 2: essentially if you're using coal to power one of these facilities. 167 00:08:47,760 --> 00:08:50,080 Speaker 2: What we're seeing right now is that carbon engineering is 168 00:08:50,120 --> 00:08:54,160 Speaker 2: actually using natural gas to power DAK. There's a lot 169 00:08:54,200 --> 00:08:57,640 Speaker 2: of contention around the topic of using something like that 170 00:08:57,840 --> 00:09:00,640 Speaker 2: when it comes down to like the opportunity cost of 171 00:09:00,800 --> 00:09:04,960 Speaker 2: using a dirty grid or even nuclear or even natural 172 00:09:05,000 --> 00:09:07,640 Speaker 2: gas to power dack. When you could place a dack 173 00:09:07,760 --> 00:09:10,319 Speaker 2: plant somewhere with a clean grid or where there's hydro 174 00:09:10,440 --> 00:09:13,000 Speaker 2: or geothermal and just run this on clean energy, But 175 00:09:13,080 --> 00:09:15,640 Speaker 2: the cost to run something on natural gas are really high, 176 00:09:15,720 --> 00:09:18,880 Speaker 2: and then your bottom line dollar per ton cost is 177 00:09:18,920 --> 00:09:21,600 Speaker 2: always going to be contingent on a natural gas price, 178 00:09:21,760 --> 00:09:24,680 Speaker 2: and so it'll be easier to reduce the cost and 179 00:09:24,720 --> 00:09:27,480 Speaker 2: scale these technologies if you're not reliant on something using 180 00:09:27,559 --> 00:09:28,640 Speaker 2: coal using. 181 00:09:28,440 --> 00:09:31,800 Speaker 1: Gas, and presumably then also from a natural gas standpoint, 182 00:09:31,880 --> 00:09:35,440 Speaker 1: the net carbon or greenhouse gas emissions benefit is lower, 183 00:09:35,600 --> 00:09:38,800 Speaker 1: So there's an inclination to want to co locate these 184 00:09:39,120 --> 00:09:42,240 Speaker 1: with clean energy exactly. So let's talk a little bit 185 00:09:42,240 --> 00:09:44,880 Speaker 1: about actually some of the companies that are operating in 186 00:09:44,920 --> 00:09:47,040 Speaker 1: this space. I want to know a little bit about 187 00:09:47,080 --> 00:09:50,480 Speaker 1: how big these companies are. Are they small largely what 188 00:09:50,520 --> 00:09:54,200 Speaker 1: you would consider to be technology startups that are funded 189 00:09:54,320 --> 00:09:58,520 Speaker 1: by VC community, or are they big sophisticated, publicly listed 190 00:09:58,520 --> 00:10:01,520 Speaker 1: companies that are you know, in a very different lead. 191 00:10:01,760 --> 00:10:04,240 Speaker 1: Tell me how big these companies are and really then 192 00:10:04,360 --> 00:10:06,440 Speaker 1: who is funding and investing in them? 193 00:10:06,920 --> 00:10:11,040 Speaker 3: Yeah, the whole DUC universe has dozens of companies, most 194 00:10:11,080 --> 00:10:14,200 Speaker 3: of which will be really small startups that are still 195 00:10:14,240 --> 00:10:16,920 Speaker 3: trying to prove their technology in the lab. But they're 196 00:10:17,000 --> 00:10:20,600 Speaker 3: really important because, as Brenna mentioned, we need the second 197 00:10:20,640 --> 00:10:24,400 Speaker 3: generation technologies for Duck in order to bring costs down 198 00:10:24,520 --> 00:10:28,400 Speaker 3: and also make sure we're capturing as much carbon net 199 00:10:28,640 --> 00:10:31,720 Speaker 3: in the process. So those are important, but really the 200 00:10:31,760 --> 00:10:34,840 Speaker 3: ones we focus on in our note are the ones 201 00:10:34,880 --> 00:10:39,280 Speaker 3: that are bringing the capture capacity online by twenty thirty 202 00:10:39,559 --> 00:10:43,120 Speaker 3: and those are just four companies. So this space is 203 00:10:43,200 --> 00:10:47,760 Speaker 3: quite dominated by a few players, and the top ones 204 00:10:47,840 --> 00:10:51,840 Speaker 3: are Carbon Engineering that's from the US and Carbon Capture, 205 00:10:51,880 --> 00:10:55,360 Speaker 3: also based in the US, and then climb Works that's 206 00:10:55,400 --> 00:10:58,920 Speaker 3: originally from Switzerland, although they're building one of their new 207 00:10:58,960 --> 00:11:01,840 Speaker 3: plants is going to be in the and Remover that's 208 00:11:01,880 --> 00:11:03,080 Speaker 3: originally from Norway. 209 00:11:03,520 --> 00:11:06,040 Speaker 1: So you mentioned the cost, What is the cost per 210 00:11:06,120 --> 00:11:09,480 Speaker 1: ton right now? On this voluntary you know, anybody can 211 00:11:09,559 --> 00:11:12,040 Speaker 1: set the price and you buy the carbon out there 212 00:11:12,280 --> 00:11:13,520 Speaker 1: on that sort of a market. 213 00:11:13,800 --> 00:11:16,360 Speaker 3: Yeah, so this is kind of what was shocking and 214 00:11:16,400 --> 00:11:19,280 Speaker 3: what brought us back to doing more and more research 215 00:11:19,360 --> 00:11:22,920 Speaker 3: on this. Originally we thought the price was around six 216 00:11:23,000 --> 00:11:26,840 Speaker 3: hundred dollars per ton. This was, let's say, before COVID times. 217 00:11:26,880 --> 00:11:29,640 Speaker 3: Were during COVID times, we had had an update and 218 00:11:29,679 --> 00:11:33,920 Speaker 3: then we saw that a lot of the contracts in 219 00:11:33,960 --> 00:11:37,720 Speaker 3: the market were selling much higher, and after conversations with 220 00:11:37,920 --> 00:11:41,400 Speaker 3: companies in this space, the average price right now seems 221 00:11:41,400 --> 00:11:44,680 Speaker 3: to be a little bit above one thousand dollars per ton, 222 00:11:44,920 --> 00:11:48,360 Speaker 3: which is really it was really amazing to us because 223 00:11:48,400 --> 00:11:51,040 Speaker 3: it's almost double what we were expecting and that was 224 00:11:51,080 --> 00:11:53,600 Speaker 3: already quite high. So this is going to be one 225 00:11:53,600 --> 00:11:56,240 Speaker 3: of the biggest challenges for the market is bringing this 226 00:11:56,400 --> 00:11:58,240 Speaker 3: price down as a scale up. 227 00:11:58,280 --> 00:12:00,280 Speaker 1: Because one of the things we're thinking about when it 228 00:12:00,280 --> 00:12:03,600 Speaker 1: comes to other forms of voluntary carbon is that those 229 00:12:03,640 --> 00:12:07,160 Speaker 1: prices really want to get closer to one hundred a ton, 230 00:12:07,600 --> 00:12:09,679 Speaker 1: which makes them a bit more competitive with some of 231 00:12:09,720 --> 00:12:12,760 Speaker 1: the compliance markets. Now, I know it ranges widely, and 232 00:12:12,840 --> 00:12:14,960 Speaker 1: we're seeing things all the way up to three hundred 233 00:12:15,040 --> 00:12:17,559 Speaker 1: and sometimes five hundred a ton, but in the thousands 234 00:12:17,720 --> 00:12:20,960 Speaker 1: is really shocking for me, which then makes me think, 235 00:12:21,040 --> 00:12:24,680 Speaker 1: you know, what sort of companies are looking at well, 236 00:12:24,679 --> 00:12:27,480 Speaker 1: And essentially willing to pay this price because they believe 237 00:12:27,559 --> 00:12:29,439 Speaker 1: so strongly in this technology. 238 00:12:30,000 --> 00:12:32,800 Speaker 3: There are a ton of companies actually, and part of 239 00:12:32,840 --> 00:12:35,160 Speaker 3: what we did in our research is try to figure 240 00:12:35,160 --> 00:12:38,280 Speaker 3: out what is the size of this demand for removals, 241 00:12:38,480 --> 00:12:41,520 Speaker 3: and what we found is that the total demand for 242 00:12:41,600 --> 00:12:45,559 Speaker 3: removals is much much higher, like an order of magnitude 243 00:12:45,640 --> 00:12:48,600 Speaker 3: or more higher in the next couple of decades than 244 00:12:48,640 --> 00:12:52,240 Speaker 3: what director capture can supply. So we think there's an 245 00:12:52,320 --> 00:12:57,080 Speaker 3: appetite for this technology out there, but the problem is 246 00:12:57,120 --> 00:12:59,760 Speaker 3: that the prices. As I mentioned, so at the moment, 247 00:13:00,120 --> 00:13:03,319 Speaker 3: the companies that have been historically interested in this are 248 00:13:03,400 --> 00:13:07,720 Speaker 3: companies that have pretty high revenues and pretty low emissions 249 00:13:07,880 --> 00:13:11,720 Speaker 3: relative to these revenues. So it's been tech companies or 250 00:13:11,920 --> 00:13:16,200 Speaker 3: financial companies, and they've done a lot of deals in 251 00:13:16,240 --> 00:13:19,480 Speaker 3: the past that were relatively small to get to these 252 00:13:19,640 --> 00:13:23,080 Speaker 3: pilot scales. But the market is changing, so we saw 253 00:13:23,120 --> 00:13:26,600 Speaker 3: in the last year or so really big deals. The 254 00:13:26,640 --> 00:13:29,840 Speaker 3: first one came from Airbus that was for four one 255 00:13:29,920 --> 00:13:33,120 Speaker 3: hundred thousand tons of CO two captured, and it was 256 00:13:33,160 --> 00:13:35,880 Speaker 3: also important because it was an airline coming in and 257 00:13:35,960 --> 00:13:40,520 Speaker 3: demanding deck and exploring that as one of the decarbonization 258 00:13:40,600 --> 00:13:43,720 Speaker 3: technologies that industry can use. And then we saw also 259 00:13:43,800 --> 00:13:47,600 Speaker 3: recently Amazon coming in to do another really big deal 260 00:13:47,800 --> 00:13:51,720 Speaker 3: of two hundred and fifty thousand tons over ten years, 261 00:13:51,760 --> 00:13:55,240 Speaker 3: as well as Microsoft a bit above three hundred thousand tons, 262 00:13:55,280 --> 00:13:58,440 Speaker 3: and those deals are important also because of their scale. 263 00:13:58,440 --> 00:14:01,240 Speaker 3: They're starting to compete with this very big air Bus deal, 264 00:14:01,400 --> 00:14:04,000 Speaker 3: but because of the length of them, So ten years 265 00:14:04,080 --> 00:14:07,440 Speaker 3: is enough for these companies to have a very secure 266 00:14:07,520 --> 00:14:10,120 Speaker 3: off take and then go and get the financing they 267 00:14:10,160 --> 00:14:11,960 Speaker 3: need for these projects. 268 00:14:12,200 --> 00:14:15,480 Speaker 1: So what sort of learning rate would we need with 269 00:14:15,600 --> 00:14:19,160 Speaker 1: this technology in order for it to well essentially for 270 00:14:19,280 --> 00:14:22,400 Speaker 1: it to reach close to one hundred or thereabouts by 271 00:14:22,520 --> 00:14:24,840 Speaker 1: let's say twenty fifty, when we need net zero to 272 00:14:24,880 --> 00:14:28,320 Speaker 1: actually be a reality, and when this importance of carbon 273 00:14:28,360 --> 00:14:31,040 Speaker 1: accounting and for us to be able to balance out 274 00:14:31,080 --> 00:14:33,480 Speaker 1: the net part of net zero to be a reality. 275 00:14:33,600 --> 00:14:35,640 Speaker 1: What sort of learning rate are we looking at here? 276 00:14:35,880 --> 00:14:38,240 Speaker 3: When we were trying to find out whether or not 277 00:14:38,280 --> 00:14:41,080 Speaker 3: the market can actually get to one hundred dollars per ton, 278 00:14:41,480 --> 00:14:45,880 Speaker 3: we assumed for the learning rate about seventeen percent, which 279 00:14:45,960 --> 00:14:49,800 Speaker 3: is not unreasonable for a lot of technologies that scale 280 00:14:49,880 --> 00:14:53,000 Speaker 3: and our modular Obviously, there are some questions on whether 281 00:14:53,200 --> 00:14:56,440 Speaker 3: DAK will be as easy to scale as things like 282 00:14:56,520 --> 00:15:00,680 Speaker 3: solar batteries, but we think it's not unreasonable, especially as 283 00:15:00,840 --> 00:15:05,320 Speaker 3: newer technologies come online. But we have other assumptions that 284 00:15:05,400 --> 00:15:08,160 Speaker 3: we also took into account in order to get these 285 00:15:08,200 --> 00:15:11,240 Speaker 3: costs down. So one was that the supply of the 286 00:15:11,280 --> 00:15:16,400 Speaker 3: market would increase twenty five percent calgar, so y're on 287 00:15:16,480 --> 00:15:20,800 Speaker 3: your and that's a pretty high kind of rate of increase, 288 00:15:21,040 --> 00:15:23,320 Speaker 3: especially in a market that has had quite a lot 289 00:15:23,320 --> 00:15:26,360 Speaker 3: of delays recently. And then the other one is that 290 00:15:26,600 --> 00:15:31,120 Speaker 3: they reach about four hundred dollars per ton by twenty thirty, 291 00:15:31,160 --> 00:15:34,040 Speaker 3: which is what we've heard on average from the players 292 00:15:34,080 --> 00:15:37,520 Speaker 3: in this space. If they scaled to the one million 293 00:15:37,640 --> 00:15:39,080 Speaker 3: tons scale by then. 294 00:15:39,120 --> 00:15:41,160 Speaker 1: I mean, that's a pretty dramatic drop off in a 295 00:15:41,280 --> 00:15:42,640 Speaker 1: fairly short period of time. 296 00:15:43,120 --> 00:15:46,880 Speaker 3: Yeah, I mean, they're kind of in a complicated moment today, 297 00:15:46,880 --> 00:15:49,920 Speaker 3: which is why prices are so high, because the first 298 00:15:49,960 --> 00:15:52,760 Speaker 3: of a kind of anything, you're usually going to have 299 00:15:52,920 --> 00:15:56,840 Speaker 3: higher costs than you expected, and that kind of unsettled 300 00:15:56,840 --> 00:16:00,240 Speaker 3: the market. But they seem to be confident that they 301 00:16:00,280 --> 00:16:02,760 Speaker 3: can bring those down rapidly as they get to these 302 00:16:02,800 --> 00:16:03,800 Speaker 3: really big scales. 303 00:16:04,080 --> 00:16:07,760 Speaker 2: On the technology side, another assumption that we're using to 304 00:16:07,840 --> 00:16:10,600 Speaker 2: understand this market more is kind of how DAK is 305 00:16:10,640 --> 00:16:12,800 Speaker 2: a little bit parallel to what we saw with batteries. 306 00:16:12,840 --> 00:16:15,880 Speaker 2: So there were so many different battery chemistries that were 307 00:16:16,120 --> 00:16:19,280 Speaker 2: being designed at the nacency of that industry, and then 308 00:16:19,320 --> 00:16:21,960 Speaker 2: over time we saw the industry coalesce around one. So 309 00:16:22,000 --> 00:16:25,480 Speaker 2: this lithium ion chemistry, obviously there's variance within that, but 310 00:16:25,800 --> 00:16:27,760 Speaker 2: that helped bring it to scale, and that helped bring 311 00:16:27,840 --> 00:16:31,320 Speaker 2: costs down pretty substantially, and so we're expecting to see 312 00:16:31,640 --> 00:16:34,560 Speaker 2: some sort of market change like that. So rather than 313 00:16:34,600 --> 00:16:37,120 Speaker 2: focusing on all of these different types of dacks, so 314 00:16:37,200 --> 00:16:42,360 Speaker 2: liquid solvent, zeolite or solids heoltes, molecular organic frameworks, we're 315 00:16:42,360 --> 00:16:45,520 Speaker 2: expecting to see maybe one or two of these technologies 316 00:16:45,760 --> 00:16:48,240 Speaker 2: really take the forefront for the market to just take 317 00:16:48,280 --> 00:16:51,280 Speaker 2: those two or three, develop them, build out the supply chains, 318 00:16:51,480 --> 00:16:54,040 Speaker 2: and then bring those to scale. There are a couple 319 00:16:54,280 --> 00:16:58,440 Speaker 2: different things that developers really are looking to achieve to 320 00:16:58,520 --> 00:17:02,040 Speaker 2: bring these learning rates down. It's one optimizing the contactor itself. 321 00:17:02,080 --> 00:17:04,960 Speaker 2: Because these fans are massive, they take up a lot 322 00:17:04,960 --> 00:17:08,640 Speaker 2: of space, and if you optimize the solvent. With the contactor, 323 00:17:08,840 --> 00:17:13,080 Speaker 2: you can maximize the surface area while also minimizing this 324 00:17:13,240 --> 00:17:16,520 Speaker 2: pressure drop, which keeps costs low but also reduces the 325 00:17:16,520 --> 00:17:19,280 Speaker 2: amount of steel you need. And with inflationary pressure, the 326 00:17:19,280 --> 00:17:21,560 Speaker 2: cost of steel right now is extremely high, so this 327 00:17:21,600 --> 00:17:24,320 Speaker 2: helps keep capex costs for these sorts of plants low. 328 00:17:24,520 --> 00:17:26,840 Speaker 1: Can you explain what you mean by take up a 329 00:17:26,840 --> 00:17:29,520 Speaker 1: lot of space? Because land use is something that I 330 00:17:29,560 --> 00:17:32,160 Speaker 1: think we're all looking a little bit more closely at 331 00:17:32,200 --> 00:17:34,920 Speaker 1: than we ever have before when it comes to various 332 00:17:35,040 --> 00:17:38,719 Speaker 1: parts of carbon intensive technologies and then increasingly also with 333 00:17:38,800 --> 00:17:41,560 Speaker 1: competition with agriculture. So what does take up a lot 334 00:17:41,600 --> 00:17:43,639 Speaker 1: of space look like? Are these units the size of, 335 00:17:43,760 --> 00:17:46,320 Speaker 1: let's say, an air conditioning unit or are they size 336 00:17:46,320 --> 00:17:46,879 Speaker 1: of a boeing. 337 00:17:47,480 --> 00:17:52,240 Speaker 2: They're basically the cargo containers, yeah, exactly that you see 338 00:17:52,240 --> 00:17:55,879 Speaker 2: on a ship or on a train. But they're modular, 339 00:17:55,960 --> 00:17:57,679 Speaker 2: so you stack them on top of each other and 340 00:17:57,680 --> 00:18:00,960 Speaker 2: then you can build them outwards to the megaton scale. 341 00:18:00,960 --> 00:18:02,920 Speaker 2: So when we're thinking about a scale like this, it 342 00:18:02,960 --> 00:18:05,639 Speaker 2: obviously depends on the type of renewable energy that you're using, 343 00:18:05,680 --> 00:18:08,760 Speaker 2: whether it be PV or wind or geothermal, but we 344 00:18:08,840 --> 00:18:11,680 Speaker 2: see the land area DAC ticks up at around two 345 00:18:12,000 --> 00:18:16,000 Speaker 2: kilometers squared for solid DAC. When we compare this to 346 00:18:16,200 --> 00:18:20,200 Speaker 2: other forms of removals, so BES, for example, it's around 347 00:18:20,200 --> 00:18:24,000 Speaker 2: three hundred kilometer squared, and then reforestation or a forestation 348 00:18:24,359 --> 00:18:26,920 Speaker 2: to deliver the exact same amount of removals, it actually 349 00:18:26,960 --> 00:18:30,600 Speaker 2: is around eight hundred kilometer squared. So while DAC does 350 00:18:30,960 --> 00:18:33,640 Speaker 2: require a little bit of land, it is far less 351 00:18:33,680 --> 00:18:35,560 Speaker 2: than some of the other removal types that we're seeing. 352 00:18:35,800 --> 00:18:39,480 Speaker 1: So you mentioned some competitor technologies, BEX being bio energy 353 00:18:39,560 --> 00:18:42,800 Speaker 1: with CCS, let's talk a little bit about, well, essentially, 354 00:18:42,880 --> 00:18:44,520 Speaker 1: what else is going to be out there from a 355 00:18:44,560 --> 00:18:48,359 Speaker 1: supply standpoint and competing with that you've already established is 356 00:18:48,560 --> 00:18:51,720 Speaker 1: very high demand for carbon removal technology. Give us a 357 00:18:51,800 --> 00:18:55,600 Speaker 1: quick definition of what this Bech's bio energy with CCS is. 358 00:18:55,880 --> 00:19:00,440 Speaker 2: BEX. Basically, you take biomass, which, once burned, is technically 359 00:19:00,520 --> 00:19:03,480 Speaker 2: a biogenic form of CO two because it's already drawn 360 00:19:03,600 --> 00:19:05,960 Speaker 2: carbon down from the atmosphere. So when you burn it 361 00:19:06,000 --> 00:19:09,080 Speaker 2: and capture that biogenic COO two, you can actually claim 362 00:19:09,119 --> 00:19:12,040 Speaker 2: a negative emission. What's really interesting about BES is that 363 00:19:12,200 --> 00:19:16,240 Speaker 2: because DAC, it's just a waste management technique. Essentially, bex 364 00:19:16,320 --> 00:19:18,960 Speaker 2: can also produce and sell power to the market while 365 00:19:18,960 --> 00:19:21,919 Speaker 2: also delivering removals, so you have this double revenue stream. 366 00:19:22,200 --> 00:19:24,440 Speaker 2: So that's why it's really compelling right now. 367 00:19:24,720 --> 00:19:27,480 Speaker 1: And is this bio energy essentially is it coming from 368 00:19:27,560 --> 00:19:31,520 Speaker 1: things that have been farmed specifically for this technology or 369 00:19:31,760 --> 00:19:32,760 Speaker 1: is it waste product? 370 00:19:33,000 --> 00:19:35,200 Speaker 2: So it's a little bit of both. In the EU, 371 00:19:35,320 --> 00:19:38,399 Speaker 2: they have a landfill directive which incentivizes the use of 372 00:19:39,000 --> 00:19:42,760 Speaker 2: municipal waste for use to be burned. This it's a 373 00:19:42,920 --> 00:19:48,320 Speaker 2: very contentious topic because there are regulations that define what 374 00:19:48,359 --> 00:19:53,240 Speaker 2: sustainable biomass is which exclude old growth forests large trees 375 00:19:53,680 --> 00:19:57,280 Speaker 2: like areas with large primary forests. I guess, however, what 376 00:19:57,320 --> 00:20:01,639 Speaker 2: we're seeing is that companies are actually going in and 377 00:20:01,920 --> 00:20:05,679 Speaker 2: cutting down those trees, procuring the biomass from the primary forest, 378 00:20:05,800 --> 00:20:08,440 Speaker 2: or this unsustainable biomass. When you look at the life 379 00:20:08,440 --> 00:20:12,240 Speaker 2: cycle assessment of the process, you can actually instead emit 380 00:20:12,359 --> 00:20:15,600 Speaker 2: COO two rather than produce COO two from the atmosphere. 381 00:20:15,640 --> 00:20:17,880 Speaker 2: So there needs to be more stringent frameworks in place 382 00:20:17,920 --> 00:20:19,680 Speaker 2: to make sure we're doing this right. 383 00:20:20,040 --> 00:20:23,280 Speaker 1: Let's next go into reforestation, which you brought up. I'm 384 00:20:23,320 --> 00:20:26,400 Speaker 1: sure that some people listening are thinking about, well, why 385 00:20:26,400 --> 00:20:29,919 Speaker 1: not trees. They certainly do a very similar job when 386 00:20:29,960 --> 00:20:33,200 Speaker 1: it comes to removing carbon from the air as these machines, 387 00:20:33,320 --> 00:20:36,399 Speaker 1: and I know a lot of the tension around talking 388 00:20:36,440 --> 00:20:39,399 Speaker 1: about some of these technologies does then link back to 389 00:20:39,640 --> 00:20:43,479 Speaker 1: voluntary carbon markets and this need to prove additionality and 390 00:20:43,560 --> 00:20:46,679 Speaker 1: to show what it is that you're removing over what 391 00:20:46,840 --> 00:20:49,840 Speaker 1: period of time, and to basically properly account for how 392 00:20:49,920 --> 00:20:52,520 Speaker 1: much carbon is being removed. So let's talk a little 393 00:20:52,560 --> 00:20:57,240 Speaker 1: bit first of all about what reforestation the term specifically addresses, 394 00:20:57,480 --> 00:21:01,240 Speaker 1: and then under the circumstances that one I prefer dax 395 00:21:01,320 --> 00:21:06,040 Speaker 1: technology to trees are first and best known form of 396 00:21:06,080 --> 00:21:06,920 Speaker 1: carbon removal. 397 00:21:07,160 --> 00:21:11,040 Speaker 3: With reforestation, I think it's important to say is it 398 00:21:11,080 --> 00:21:13,360 Speaker 3: is a technology we will need as well, and it 399 00:21:13,400 --> 00:21:17,160 Speaker 3: has a lot of added benefits like bringing in biodiversity. 400 00:21:17,320 --> 00:21:20,639 Speaker 3: So reforestation is one of a suite of what we 401 00:21:20,720 --> 00:21:24,399 Speaker 3: call nature based solutions for carbon removal, and they do 402 00:21:24,480 --> 00:21:27,879 Speaker 3: have a place in the market, but as you mentioned, Dana, 403 00:21:28,040 --> 00:21:31,480 Speaker 3: they have some controversies as well, so it's much harder 404 00:21:31,600 --> 00:21:34,960 Speaker 3: to manage those projects and account for the carbon that 405 00:21:34,960 --> 00:21:40,200 Speaker 3: they're actually storing and calculating that additionality, but also ensuring 406 00:21:40,280 --> 00:21:43,600 Speaker 3: the permanence of it is much more complicated compared to 407 00:21:43,880 --> 00:21:46,760 Speaker 3: things like DAK, where it's very easy to account for 408 00:21:47,040 --> 00:21:51,000 Speaker 3: how much COTO you're capturing. You can literally measure it 409 00:21:51,119 --> 00:21:54,399 Speaker 3: and then put it down, mineralize it into the ground, 410 00:21:54,520 --> 00:21:58,320 Speaker 3: and you're not worried about any of this permanence issues 411 00:21:58,359 --> 00:22:01,720 Speaker 3: as well. So they are kind of like almost two 412 00:22:01,720 --> 00:22:05,199 Speaker 3: different technologies that should be in two different markets, but 413 00:22:05,240 --> 00:22:08,720 Speaker 3: we put them together as one in removals, and there's 414 00:22:08,760 --> 00:22:11,159 Speaker 3: a space for both of them. Also because of a 415 00:22:11,280 --> 00:22:15,080 Speaker 3: timeline issue, so DAC will take much longer to scale 416 00:22:15,359 --> 00:22:18,560 Speaker 3: at the levels we need. As I mentioned, there's a 417 00:22:18,680 --> 00:22:21,920 Speaker 3: huge supply gap when we look at demand for removals 418 00:22:22,000 --> 00:22:27,960 Speaker 3: versus DAK supply, and there bex or other solutions like 419 00:22:28,320 --> 00:22:31,600 Speaker 3: reforestation can come and kind of fill the gap at 420 00:22:31,600 --> 00:22:34,119 Speaker 3: the moment. As we scale the market and as we 421 00:22:34,200 --> 00:22:37,880 Speaker 3: put in more stringent regulation, then we see DUCK being 422 00:22:37,880 --> 00:22:39,560 Speaker 3: a very important player. 423 00:22:39,520 --> 00:22:42,480 Speaker 1: Because of this specific need to be able to certify 424 00:22:42,480 --> 00:22:44,600 Speaker 1: additionality or for another reason. 425 00:22:44,920 --> 00:22:48,520 Speaker 3: Yeah, that's a big one. That's the main reason. 426 00:22:48,840 --> 00:22:51,200 Speaker 1: How about technologies, It kind of sit. I would say 427 00:22:51,240 --> 00:22:55,280 Speaker 1: halfway between technical and nature based, and what I'm thinking 428 00:22:55,320 --> 00:22:59,359 Speaker 1: of specifically here is enhanced rock weathering and then ocean removals. 429 00:22:59,359 --> 00:23:01,880 Speaker 1: Can you talk a little bit about where that technology 430 00:23:01,960 --> 00:23:05,240 Speaker 1: is and whether or not it will be competing in 431 00:23:05,280 --> 00:23:07,680 Speaker 1: a real way with direct air capture in the air term. 432 00:23:07,920 --> 00:23:10,720 Speaker 2: I like to think of them not as competing, because, 433 00:23:10,760 --> 00:23:14,480 Speaker 2: as Sharon says, we're going to need this large portfolio 434 00:23:14,560 --> 00:23:16,880 Speaker 2: of solutions to actually get to the gig a toon 435 00:23:17,000 --> 00:23:19,639 Speaker 2: scale of removals that's needed to reach net zero or 436 00:23:19,720 --> 00:23:23,120 Speaker 2: even net negative in that case enhanced weathering. It's really 437 00:23:23,160 --> 00:23:25,960 Speaker 2: interesting because I think especially in the US, where we 438 00:23:26,040 --> 00:23:28,680 Speaker 2: have the comparative advantage is the amount of land that 439 00:23:28,760 --> 00:23:32,800 Speaker 2: we do have, and so enhanced weathering, biochar things like 440 00:23:32,840 --> 00:23:35,760 Speaker 2: that could be a pretty good option. The issue with 441 00:23:35,800 --> 00:23:38,639 Speaker 2: a lot of these technologies right now, especially with ocean 442 00:23:38,680 --> 00:23:42,480 Speaker 2: based removal, is that there isn't any long term research 443 00:23:42,880 --> 00:23:46,480 Speaker 2: right now that shows that doing these techniques changing the 444 00:23:46,480 --> 00:23:50,080 Speaker 2: biogeochemistry of the ocean and the long term or even 445 00:23:50,280 --> 00:23:54,360 Speaker 2: local ecosystem impacts that will have that research non existent, 446 00:23:54,520 --> 00:23:56,680 Speaker 2: and the way the ocean works and the carbon cycle 447 00:23:56,720 --> 00:23:58,760 Speaker 2: in the ocean works is that you change one thing 448 00:23:58,800 --> 00:24:02,040 Speaker 2: and it can have a butterfly and in effect global fisheries, 449 00:24:02,160 --> 00:24:04,040 Speaker 2: so it can actually have a large impact on the 450 00:24:04,080 --> 00:24:07,000 Speaker 2: economy as well. And Silicon Valley kind of just in 451 00:24:07,040 --> 00:24:09,960 Speaker 2: my opinion, really jumped into this because they saw a 452 00:24:10,000 --> 00:24:11,960 Speaker 2: business model and they saw something that they could make 453 00:24:12,000 --> 00:24:14,480 Speaker 2: money off of. And I don't think there's enough research 454 00:24:14,560 --> 00:24:17,359 Speaker 2: or even regulations to manage the large scale deployment of 455 00:24:17,400 --> 00:24:20,520 Speaker 2: a lot of these technologies. So for now I'm team DAK. 456 00:24:20,520 --> 00:24:22,720 Speaker 1: But perhaps looking at it very much the way that 457 00:24:22,800 --> 00:24:25,280 Speaker 1: I was even forming the question. And thank you for 458 00:24:25,359 --> 00:24:27,520 Speaker 1: challenging me to think a little bit differently about it, 459 00:24:27,560 --> 00:24:30,080 Speaker 1: because I'm thinking about these in terms of supply and 460 00:24:30,119 --> 00:24:33,560 Speaker 1: demand and market dynamics, and you're talking about it in 461 00:24:33,640 --> 00:24:38,879 Speaker 1: terms of a holistic set of solutions. Really well, so 462 00:24:39,119 --> 00:24:42,320 Speaker 1: let's continue to talk about some of these solutions. Obviously, 463 00:24:42,760 --> 00:24:45,840 Speaker 1: the price or direct air capture is a concern, but 464 00:24:45,960 --> 00:24:48,520 Speaker 1: are there other things that we need to consider? Are 465 00:24:48,520 --> 00:24:51,920 Speaker 1: there ways aside from land use, that maybe it impacts 466 00:24:51,920 --> 00:24:55,920 Speaker 1: the natural ecosystem? What are the other considerations one needs 467 00:24:55,960 --> 00:24:58,240 Speaker 1: to think about when deploying this technology. 468 00:24:58,600 --> 00:25:01,639 Speaker 2: I think the biggest thing is the availability of twenty 469 00:25:01,680 --> 00:25:04,119 Speaker 2: four to seven clean power. And I'm going to use 470 00:25:04,160 --> 00:25:07,520 Speaker 2: the US as an example here because it's across the board. 471 00:25:07,560 --> 00:25:10,639 Speaker 2: Everybody's talking about the US as the epicenter of DAK. 472 00:25:10,760 --> 00:25:14,199 Speaker 2: But I don't think that we would be talking about 473 00:25:14,240 --> 00:25:16,800 Speaker 2: the US so much in terms of how it relates 474 00:25:16,800 --> 00:25:20,040 Speaker 2: to DAK if the government didn't throw so much money 475 00:25:20,119 --> 00:25:22,360 Speaker 2: at the technology. And I say this because a lot 476 00:25:22,400 --> 00:25:25,199 Speaker 2: of the companies right now that are coming out and 477 00:25:25,240 --> 00:25:28,399 Speaker 2: saying we're going to build these megaton scaled projects in 478 00:25:28,480 --> 00:25:31,480 Speaker 2: the United States and we're only going to use renewable energy. 479 00:25:31,600 --> 00:25:33,760 Speaker 2: It's kind of just like, where are you going to get. 480 00:25:33,600 --> 00:25:37,000 Speaker 1: That and when did that start? Is this a direct 481 00:25:37,000 --> 00:25:39,320 Speaker 1: response to something that was a part of the Inflation 482 00:25:39,400 --> 00:25:40,080 Speaker 1: Reduction Act? 483 00:25:40,280 --> 00:25:43,520 Speaker 2: Yeah, definitely. So following the Inflation Reduction Act, the carbon 484 00:25:43,600 --> 00:25:46,600 Speaker 2: Capture Project five million tons was announced maybe a month 485 00:25:46,680 --> 00:25:49,000 Speaker 2: or so after in Wyoming, and then we've also seen 486 00:25:49,119 --> 00:25:53,600 Speaker 2: companies like climb Works or other European companies voice intent 487 00:25:53,760 --> 00:25:56,360 Speaker 2: to move into the United States market to take advantage 488 00:25:56,359 --> 00:25:58,200 Speaker 2: of these credits, and they're pretty steep. They're upwards of 489 00:25:58,200 --> 00:26:00,679 Speaker 2: one hundred and eighty dollars per ton, so it makes sense. 490 00:26:00,840 --> 00:26:03,320 Speaker 3: And then also only a couple of months ago, the 491 00:26:03,440 --> 00:26:06,960 Speaker 3: US announced Kapech subsidies, so it's not only support on 492 00:26:07,000 --> 00:26:10,080 Speaker 3: the opic side with the IRA, but then they're literally 493 00:26:10,119 --> 00:26:14,440 Speaker 3: giving you each They chose kind of two broad projects 494 00:26:14,480 --> 00:26:17,959 Speaker 3: and they're each getting in total a billion dollars, so 495 00:26:18,400 --> 00:26:21,880 Speaker 3: that's enough for them to probably build these really big plants. 496 00:26:22,040 --> 00:26:26,400 Speaker 3: And just like de risking, the financing bit of DAK 497 00:26:26,440 --> 00:26:30,359 Speaker 3: in the US is working out to attract all of 498 00:26:30,400 --> 00:26:31,240 Speaker 3: these companies. 499 00:26:31,480 --> 00:26:33,800 Speaker 1: So this is essentially a technology that is in some 500 00:26:33,840 --> 00:26:37,120 Speaker 1: sense synonymous with the United States. But are there other 501 00:26:37,160 --> 00:26:39,359 Speaker 1: parts of the world where companies are looking at this 502 00:26:39,520 --> 00:26:42,400 Speaker 1: more closely and you think it could potentially take off. 503 00:26:42,800 --> 00:26:45,800 Speaker 2: In Iceland, there's lots of geothermal, that's where we saw 504 00:26:45,920 --> 00:26:48,520 Speaker 2: a couple of the Climwork's pilot plants. And then they 505 00:26:48,520 --> 00:26:51,639 Speaker 2: also have these ultramafic rocks, so you can do carbon 506 00:26:51,680 --> 00:26:55,520 Speaker 2: mineralization there, which turns the CO two into just carbonate 507 00:26:55,720 --> 00:26:58,119 Speaker 2: essentially stone in only two years, so you don't have 508 00:26:58,119 --> 00:27:00,439 Speaker 2: to sit there and monitor the well forwards of one 509 00:27:00,480 --> 00:27:03,120 Speaker 2: hundred years. And so Iceland's a really great spot. I know, well, 510 00:27:03,160 --> 00:27:05,639 Speaker 2: Sweden is a little bit different, but Sweden has a 511 00:27:05,640 --> 00:27:09,320 Speaker 2: reverse auction scheme for BEX and then there's also Norway 512 00:27:09,560 --> 00:27:11,240 Speaker 2: that's planning to do that for DAK. And then we've 513 00:27:11,280 --> 00:27:14,399 Speaker 2: also been seeing projects in Kenya, so there was I 514 00:27:14,440 --> 00:27:18,160 Speaker 2: think it's Project Hummingbird. It's a thousand ton plant that's 515 00:27:18,200 --> 00:27:20,520 Speaker 2: due to come online this decade because they have a 516 00:27:20,520 --> 00:27:23,359 Speaker 2: lot of geothermal So I think actually Kenya could be 517 00:27:23,400 --> 00:27:26,639 Speaker 2: a really great spot to just build up DAK capacity 518 00:27:26,680 --> 00:27:29,800 Speaker 2: in because they have this fundamental renewable energy and we're 519 00:27:29,840 --> 00:27:32,080 Speaker 2: not using natural gas, so we're not going to try 520 00:27:32,119 --> 00:27:34,440 Speaker 2: and permit a nuclear plant to power DAC, which is 521 00:27:34,520 --> 00:27:36,760 Speaker 2: dystopian and in some. 522 00:27:36,760 --> 00:27:41,240 Speaker 1: Respects direct air capture could actually help the geothermal industry grow. 523 00:27:41,400 --> 00:27:42,720 Speaker 3: Yeah, there's a lot of synergy. 524 00:27:43,040 --> 00:27:44,760 Speaker 1: And you mentioned a term and I just want to 525 00:27:44,800 --> 00:27:48,879 Speaker 1: kind of circle back on another definition ultramatic rocks picturing 526 00:27:48,960 --> 00:27:51,520 Speaker 1: some sort of a ward a kid would get in 527 00:27:51,600 --> 00:27:54,360 Speaker 1: high school for a math competition. So what's an ultramatic rock? 528 00:27:54,960 --> 00:27:59,080 Speaker 2: Basically they are these it's volcanic rocks, so lots of magnesium, 529 00:27:59,119 --> 00:28:01,919 Speaker 2: lots of cat eye that will readily react with the 530 00:28:01,960 --> 00:28:05,000 Speaker 2: CO two to just turn it into that stone. So 531 00:28:05,040 --> 00:28:06,879 Speaker 2: there's Iceland as a hot spot for that, but we 532 00:28:06,920 --> 00:28:09,960 Speaker 2: also see places like Washington State having a lot of 533 00:28:10,000 --> 00:28:12,440 Speaker 2: these sorts of rock, so that could be another place 534 00:28:12,440 --> 00:28:14,600 Speaker 2: where carbon mineralization really takes off. 535 00:28:14,840 --> 00:28:17,080 Speaker 1: I've never been to Iceland. Have you guys been to Iceland? 536 00:28:17,600 --> 00:28:18,080 Speaker 3: No? 537 00:28:18,080 --> 00:28:19,240 Speaker 1: No, we've got to. 538 00:28:19,160 --> 00:28:22,880 Speaker 2: Do a show and I I was just about to say, Dana, Yeah, this. 539 00:28:23,000 --> 00:28:27,160 Speaker 1: Is other than the invariably dubious parts of our emissions 540 00:28:27,160 --> 00:28:28,919 Speaker 1: with our flight getting there, but hopefully we can get 541 00:28:28,960 --> 00:28:33,360 Speaker 1: the direct air capture to make it a net neutral experience. 542 00:28:34,160 --> 00:28:37,800 Speaker 1: Jumping into another question that really is kind of burning 543 00:28:37,840 --> 00:28:40,560 Speaker 1: in my mind when you mentioned both of the solid 544 00:28:40,600 --> 00:28:44,160 Speaker 1: and liquid technologies, is this presence of chemicals and really 545 00:28:44,200 --> 00:28:47,080 Speaker 1: what the profile is of those chemicals from both an 546 00:28:47,120 --> 00:28:50,880 Speaker 1: emission standpoint and from an end of life standpoint, because 547 00:28:50,920 --> 00:28:54,480 Speaker 1: this really brings to light really thoughts of other areas 548 00:28:54,520 --> 00:28:57,560 Speaker 1: that we also cover. Let's talk about batteries, for example, 549 00:28:57,600 --> 00:29:00,120 Speaker 1: there's a lot of conversation at the moment regarding not 550 00:29:00,160 --> 00:29:04,080 Speaker 1: only circular and stripping the batteries of those very important 551 00:29:04,120 --> 00:29:06,160 Speaker 1: metals that can be used to make more batteries, but 552 00:29:06,200 --> 00:29:09,680 Speaker 1: then also the proper treatment of this waste at the end. 553 00:29:09,840 --> 00:29:13,320 Speaker 1: So the question behind the question is are these chemicals 554 00:29:13,400 --> 00:29:17,200 Speaker 1: in and of themselves hazardous? What is their emissions dissociated 555 00:29:17,240 --> 00:29:19,280 Speaker 1: with them, and really what's going to happen to them 556 00:29:19,280 --> 00:29:20,280 Speaker 1: at the end of life. 557 00:29:20,680 --> 00:29:25,720 Speaker 2: Short answer, a lot of these are toxic and highly corrosive, 558 00:29:25,920 --> 00:29:30,240 Speaker 2: especially for liquid DAC. So those aqueous solvents that I 559 00:29:30,320 --> 00:29:34,480 Speaker 2: mentioned earlier are not biodegradable and actually really harmful, and 560 00:29:34,520 --> 00:29:38,040 Speaker 2: so that's one of the key components developers are working on. 561 00:29:38,080 --> 00:29:39,560 Speaker 2: That's where they're putting a lot of the R and 562 00:29:39,600 --> 00:29:42,920 Speaker 2: D efforts into. So it's making these solvents a bit 563 00:29:42,960 --> 00:29:47,360 Speaker 2: more biodigradable in general, but also increasing the lifetimes of them, 564 00:29:47,440 --> 00:29:50,960 Speaker 2: so rather than having maybe to dispose of them every 565 00:29:51,040 --> 00:29:54,880 Speaker 2: couple cycles, or maybe extending the lifetime of these materials 566 00:29:55,000 --> 00:29:57,040 Speaker 2: for five and ten years. And actually a really good 567 00:29:57,080 --> 00:30:00,400 Speaker 2: example of this is the zeolites, because the zeo lights 568 00:30:00,440 --> 00:30:03,720 Speaker 2: actually are biodegradable and they have lifetimes of three to 569 00:30:03,880 --> 00:30:07,240 Speaker 2: five years if I remember correctly. And so it's really 570 00:30:07,320 --> 00:30:10,720 Speaker 2: just developing new sorts of materials and new source of technologies. 571 00:30:11,000 --> 00:30:15,240 Speaker 1: Let's now go back to prices, because really that is 572 00:30:15,600 --> 00:30:18,440 Speaker 1: the lynchpin for scaling technology at least with the way 573 00:30:18,520 --> 00:30:21,520 Speaker 1: the world is currently run right now, and you brought 574 00:30:21,600 --> 00:30:24,400 Speaker 1: up another technology that is a parallel of sorts in 575 00:30:24,400 --> 00:30:28,600 Speaker 1: that it's heavily technology reliant or machine reliant rather than 576 00:30:28,640 --> 00:30:32,480 Speaker 1: a nature based solution, which is this bioenergy with ccs. 577 00:30:32,600 --> 00:30:34,880 Speaker 1: What are the prices right now and what are our 578 00:30:35,120 --> 00:30:39,320 Speaker 1: forecasted prices for that technology for essentially some of the 579 00:30:39,480 --> 00:30:42,280 Speaker 1: companies out there that are looking to figure out what 580 00:30:42,440 --> 00:30:45,320 Speaker 1: their next moves are in the voluntary carbon space. 581 00:30:45,800 --> 00:30:49,840 Speaker 2: The competitiveness of BEX is highly contingent on the market 582 00:30:49,920 --> 00:30:53,760 Speaker 2: because there's different policies in place. There's different obviously carbon 583 00:30:53,800 --> 00:30:56,080 Speaker 2: prices in each of these markets, and then there's different 584 00:30:56,120 --> 00:30:58,880 Speaker 2: power prices. You can sell whatever power you're producing at 585 00:30:58,880 --> 00:31:01,480 Speaker 2: a different level depending on where you are. Another major 586 00:31:01,520 --> 00:31:03,560 Speaker 2: thing is the feedstock. So if you're in the UK 587 00:31:03,680 --> 00:31:07,440 Speaker 2: and you're importing biomass feedstock from the US, you're going 588 00:31:07,480 --> 00:31:10,200 Speaker 2: to see extremely high prices upwards of three hundred and 589 00:31:10,240 --> 00:31:13,760 Speaker 2: fifty dollars per ton when compared to Norway or anywhere 590 00:31:13,760 --> 00:31:15,720 Speaker 2: in the Nordic region where they're able to just use 591 00:31:15,720 --> 00:31:18,840 Speaker 2: this municipal waste and they can see feedstock costs sometimes 592 00:31:18,920 --> 00:31:22,080 Speaker 2: under fifty dollars per ton for backs. In some of 593 00:31:22,120 --> 00:31:25,840 Speaker 2: these more expensive regions, it's around upwards of two hundred 594 00:31:25,880 --> 00:31:28,560 Speaker 2: dollars per megawat hour, and then if you're in the 595 00:31:28,600 --> 00:31:31,360 Speaker 2: Nordic regions where you have access to cheap feedstock, you'll 596 00:31:31,400 --> 00:31:34,640 Speaker 2: see costs like in the one hundred dollars per megawat 597 00:31:34,640 --> 00:31:37,680 Speaker 2: hour range roughly. But when we took a global average, 598 00:31:37,720 --> 00:31:40,920 Speaker 2: a global weighted average of all the different costs of backs, 599 00:31:40,960 --> 00:31:43,760 Speaker 2: what we found is that the offset price required to 600 00:31:43,880 --> 00:31:46,920 Speaker 2: make this technology feasible was at around one hundred dollars 601 00:31:46,960 --> 00:31:50,200 Speaker 2: per ton right now, falling to around eighty dollars per 602 00:31:50,240 --> 00:31:52,560 Speaker 2: ton come twenty thirty, and then around forty dollars per 603 00:31:52,560 --> 00:31:55,720 Speaker 2: ton in twenty fifty. So if you're comparing it to DAK, 604 00:31:56,160 --> 00:31:59,880 Speaker 2: just based on the offset price required, it's far more doable, 605 00:32:00,120 --> 00:32:03,400 Speaker 2: especially near term when DAK it costs eleven hundred dollars. 606 00:32:03,600 --> 00:32:07,640 Speaker 3: But just to rein a bit on Brennus, yeah, parade. 607 00:32:08,520 --> 00:32:12,360 Speaker 3: There are some risks with BECs that could undermine kind 608 00:32:12,400 --> 00:32:15,960 Speaker 3: of this trajectory downward. So the first one is availability 609 00:32:16,000 --> 00:32:19,000 Speaker 3: of biomass, which we think we're doing a lot of 610 00:32:19,000 --> 00:32:22,120 Speaker 3: research on this because there's a lot of sectors competing 611 00:32:22,160 --> 00:32:25,200 Speaker 3: for biomass in order to decarbonize, and we think this 612 00:32:25,320 --> 00:32:29,000 Speaker 3: will tend to push prices up and biomass will go 613 00:32:29,160 --> 00:32:31,880 Speaker 3: to only the places that need it the most in 614 00:32:31,920 --> 00:32:35,080 Speaker 3: the end. And then the other part is that as 615 00:32:35,160 --> 00:32:39,719 Speaker 3: renewables come onto the grid, you'll see lower power prices, 616 00:32:39,840 --> 00:32:43,080 Speaker 3: and probably BECs will be able to recover less of 617 00:32:43,080 --> 00:32:47,200 Speaker 3: its costs through selling power and will require higher carbon 618 00:32:47,240 --> 00:32:50,680 Speaker 3: credit prices. So it's a bit of a complicated dynamic 619 00:32:50,760 --> 00:32:53,920 Speaker 3: with becks, as Brenna said, but we think it has 620 00:32:53,920 --> 00:32:56,600 Speaker 3: the potential to come down, but we're not sure. Now. 621 00:32:56,600 --> 00:32:59,320 Speaker 1: You mentioned earlier on in the show that there were 622 00:32:59,680 --> 00:33:02,760 Speaker 1: really large companies, some of them tech companies, that were 623 00:33:02,800 --> 00:33:06,200 Speaker 1: looking at buying this technology, or in fact already have 624 00:33:06,400 --> 00:33:10,280 Speaker 1: and have bought quite a few tons of carbon removal. 625 00:33:10,480 --> 00:33:13,120 Speaker 1: Are they buying them all as clients or have any 626 00:33:13,160 --> 00:33:16,120 Speaker 1: of these companies gone in and tried to actually acquire 627 00:33:16,200 --> 00:33:20,760 Speaker 1: these companies that are offering these credits or even perhaps 628 00:33:20,880 --> 00:33:25,480 Speaker 1: buying the specific units themselves as opposed to the carbon removal. 629 00:33:25,640 --> 00:33:27,920 Speaker 1: So the parallel that I'm thinking about is when a 630 00:33:28,000 --> 00:33:31,920 Speaker 1: company puts a solar farm next to one of their 631 00:33:32,040 --> 00:33:34,920 Speaker 1: sites and they fully own that solar farm and a 632 00:33:34,960 --> 00:33:37,880 Speaker 1: company just came in and built that for them. 633 00:33:38,280 --> 00:33:42,120 Speaker 3: Yeah, the investment panorama for Duck has changed a lot 634 00:33:42,200 --> 00:33:44,800 Speaker 3: in the last year, so you're right. What we used 635 00:33:44,840 --> 00:33:48,960 Speaker 3: to see it was mostly dominated by vcs and that 636 00:33:49,200 --> 00:33:54,120 Speaker 3: funding was enough for these like lab scale, demo scale projects. 637 00:33:54,160 --> 00:33:57,000 Speaker 3: As I was mentioning, now that we're going into the 638 00:33:57,200 --> 00:34:01,200 Speaker 3: ten thousand ton applications and then very quickly into the 639 00:34:01,520 --> 00:34:05,640 Speaker 3: one million ton projects, we need much much more money. 640 00:34:05,840 --> 00:34:09,160 Speaker 3: So what's happening is we're seeing yes, a lot of 641 00:34:09,200 --> 00:34:12,200 Speaker 3: it is coming from the government and government support, but 642 00:34:12,360 --> 00:34:16,120 Speaker 3: also what you just mentioned, so more private players coming 643 00:34:16,160 --> 00:34:19,759 Speaker 3: into the space and investing. And probably the largest deal 644 00:34:20,120 --> 00:34:25,200 Speaker 3: we've seen so far was Oxy acquiring Carbon Engineering for 645 00:34:25,480 --> 00:34:29,000 Speaker 3: a bit above a billion dollars. And now we have 646 00:34:29,160 --> 00:34:32,560 Speaker 3: this oil and gas company that owns this director captured 647 00:34:32,560 --> 00:34:37,160 Speaker 3: technology and is also associated to the direct air capture 648 00:34:37,360 --> 00:34:40,319 Speaker 3: company that is trying to scale up the quickest and 649 00:34:40,480 --> 00:34:41,760 Speaker 3: to the largest degree. 650 00:34:42,000 --> 00:34:45,320 Speaker 2: I think something really interesting that we've just plus wanting 651 00:34:45,400 --> 00:34:48,279 Speaker 2: Sharon here is that oil and gas and DAK have 652 00:34:48,400 --> 00:34:51,879 Speaker 2: become inextricably linked over the past year, and so we've 653 00:34:51,920 --> 00:34:56,720 Speaker 2: seen Chevron, Exon and again Oxy all invest in DAK, 654 00:34:57,000 --> 00:34:59,880 Speaker 2: and it's mainly in the US where we're seeing this, 655 00:35:00,080 --> 00:35:02,560 Speaker 2: and so I think the DAK narrative and all these 656 00:35:02,560 --> 00:35:05,800 Speaker 2: oil and gas companies are becoming intertwined. And we're seeing 657 00:35:05,800 --> 00:35:09,160 Speaker 2: a lot of these, especially occidental claim that they can 658 00:35:09,239 --> 00:35:12,440 Speaker 2: utilize DAK in order to prolong fossil fuel use for 659 00:35:12,480 --> 00:35:15,799 Speaker 2: the next seventy eighty years. And I think, especially while 660 00:35:15,800 --> 00:35:18,080 Speaker 2: it's just these first of a kind plants that are 661 00:35:18,239 --> 00:35:21,279 Speaker 2: up and running, that's kind of setting the stage for 662 00:35:21,320 --> 00:35:23,360 Speaker 2: where the technology is going to go. And I think 663 00:35:23,520 --> 00:35:26,480 Speaker 2: they're playing a little bit of a dangerous game exactly. 664 00:35:26,880 --> 00:35:29,360 Speaker 3: And just to go back to your kind of challenges 665 00:35:29,400 --> 00:35:32,319 Speaker 3: to the market question data, one of the big ones 666 00:35:32,360 --> 00:35:35,840 Speaker 3: we're seeing is permitting. And this is really closely linked 667 00:35:35,840 --> 00:35:38,680 Speaker 3: to what Brenna was just talking about, because there's less 668 00:35:38,719 --> 00:35:42,720 Speaker 3: and less community acceptance or let's just say more skepticism 669 00:35:43,120 --> 00:35:46,160 Speaker 3: and people looking more closely into how these things are 670 00:35:46,200 --> 00:35:49,240 Speaker 3: being used. So we need to make sure that even 671 00:35:49,280 --> 00:35:52,080 Speaker 3: for DUCK, where there is this like good accounting and 672 00:35:52,160 --> 00:35:56,200 Speaker 3: additionality and permanence for these removals, that we are using 673 00:35:56,239 --> 00:35:59,080 Speaker 3: them in the right way, and that it builds confidence 674 00:35:59,120 --> 00:35:59,960 Speaker 3: on this technology. 675 00:36:00,640 --> 00:36:02,480 Speaker 1: So I want you to give a solution to a 676 00:36:02,520 --> 00:36:05,479 Speaker 1: skeptic and let's just go down that road for another minute, 677 00:36:05,520 --> 00:36:08,560 Speaker 1: which essentially is, let's think about a company that is 678 00:36:08,719 --> 00:36:12,840 Speaker 1: using the direct air capture technology to prolong their existing 679 00:36:13,160 --> 00:36:17,560 Speaker 1: high carbon business as opposed to transitioning away from carbon, 680 00:36:17,920 --> 00:36:21,080 Speaker 1: using it as a short term solution, and then essentially 681 00:36:21,080 --> 00:36:24,000 Speaker 1: in the long run, only applying this technology to meet 682 00:36:24,000 --> 00:36:26,840 Speaker 1: those hard to abate sectors where we maybe haven't fully 683 00:36:26,880 --> 00:36:29,640 Speaker 1: figured out the solution completely yet. And I'm thinking in 684 00:36:29,640 --> 00:36:33,719 Speaker 1: those circumstances things like even with sustainable aviation fuel the 685 00:36:33,760 --> 00:36:39,080 Speaker 1: airline industry or cement as opposed to traditional energy sources 686 00:36:39,320 --> 00:36:41,880 Speaker 1: and some of what the oil and gas community sells 687 00:36:41,920 --> 00:36:45,200 Speaker 1: their products to. What interventions do you think will be 688 00:36:45,280 --> 00:36:48,880 Speaker 1: required in order to ensure that DAK truly is filling 689 00:36:48,920 --> 00:36:52,080 Speaker 1: that void in the market that makes the carbon accounting, 690 00:36:52,360 --> 00:36:54,880 Speaker 1: you know, get to that net zero place. Is it 691 00:36:54,920 --> 00:36:58,320 Speaker 1: policy intervention or do you think that this will really 692 00:36:58,520 --> 00:37:01,200 Speaker 1: take care of itself as a solution in the market. 693 00:37:01,680 --> 00:37:05,200 Speaker 3: One important place to start is just having the conversation 694 00:37:05,520 --> 00:37:09,120 Speaker 3: with people about what it means to implement this technology. 695 00:37:09,200 --> 00:37:12,680 Speaker 3: So if you are going to decarbonize, DAK is your 696 00:37:13,080 --> 00:37:16,880 Speaker 3: last option, especially now, the costs are super super high, 697 00:37:16,960 --> 00:37:22,000 Speaker 3: so you wouldn't really use DAK in order to offset 698 00:37:22,080 --> 00:37:24,960 Speaker 3: all of your emissions. You use it as a last resort. 699 00:37:25,160 --> 00:37:28,600 Speaker 3: But I think what people are missing is in order 700 00:37:28,680 --> 00:37:32,760 Speaker 3: to buy that argument, is this regulation that ensures us 701 00:37:32,920 --> 00:37:36,440 Speaker 3: that they are going to bring whatever kind of hypothetical 702 00:37:36,480 --> 00:37:38,920 Speaker 3: company we're talking about, that they are going to bring 703 00:37:39,200 --> 00:37:42,600 Speaker 3: these CO two emissions down. Because a lot of what 704 00:37:42,680 --> 00:37:47,080 Speaker 3: we've seen so far is companies internally regulating themselves and 705 00:37:47,080 --> 00:37:50,719 Speaker 3: committing themselves to net zero, but then sometimes stepping back 706 00:37:50,719 --> 00:37:53,600 Speaker 3: and saying, oh, we're going to change this timeline or 707 00:37:53,640 --> 00:37:57,600 Speaker 3: we're not so sure anymore. So just giving that security 708 00:37:57,680 --> 00:38:01,080 Speaker 3: I think would help people know thats are going down 709 00:38:01,400 --> 00:38:04,239 Speaker 3: and DAK is not really what you're gonna use for 710 00:38:04,600 --> 00:38:07,080 Speaker 3: most of those emissions, but you do need it in 711 00:38:07,080 --> 00:38:10,480 Speaker 3: the end for the last like let's say maximum ten percent, 712 00:38:10,800 --> 00:38:14,440 Speaker 3: where removals make sense or it's just not possible to 713 00:38:14,520 --> 00:38:18,280 Speaker 3: get maybe to full zero, so you need net zero. 714 00:38:18,640 --> 00:38:21,640 Speaker 2: So something that we're seeing right now in the EU 715 00:38:21,880 --> 00:38:24,880 Speaker 2: is that they've sat down. I guess we can compare 716 00:38:24,880 --> 00:38:26,600 Speaker 2: it to the US, because with what the US did 717 00:38:26,680 --> 00:38:28,719 Speaker 2: is we just threw a bunch of money at DAK 718 00:38:28,800 --> 00:38:32,880 Speaker 2: in order to increase investor confidence, which obviously has worked. 719 00:38:32,920 --> 00:38:34,640 Speaker 2: But what the EU is doing they took a couple 720 00:38:34,680 --> 00:38:37,360 Speaker 2: steps back and sat down, taking a couple of years 721 00:38:37,400 --> 00:38:41,279 Speaker 2: to just define and understand what good carbon removal looks like. 722 00:38:41,560 --> 00:38:45,000 Speaker 2: And then once they have that baseline and that framework 723 00:38:45,160 --> 00:38:47,400 Speaker 2: is when they're going to start throwing money at it. 724 00:38:47,440 --> 00:38:49,680 Speaker 2: So it's kind of the exact opposite of what the 725 00:38:49,840 --> 00:38:52,480 Speaker 2: US is doing. But I think obviously there needs to 726 00:38:52,480 --> 00:38:54,799 Speaker 2: be that money to get this technology up and off 727 00:38:54,800 --> 00:38:57,319 Speaker 2: the ground, but there has to be this framework of 728 00:38:57,360 --> 00:38:59,640 Speaker 2: what does good look like to make sure this market 729 00:38:59,680 --> 00:39:02,399 Speaker 2: stays regulated and then scales in a sustainable way. 730 00:39:02,840 --> 00:39:05,040 Speaker 1: So we've been talking a bit about policy here, and 731 00:39:05,200 --> 00:39:08,720 Speaker 1: really my final question comes down to as this technology grows, 732 00:39:09,000 --> 00:39:11,680 Speaker 1: because demand is likely to spur it on, and with 733 00:39:11,760 --> 00:39:14,400 Speaker 1: the learning rates that we're predicting, it does have a 734 00:39:14,440 --> 00:39:17,880 Speaker 1: bright future, do you expect to see more policy intervention 735 00:39:18,239 --> 00:39:22,399 Speaker 1: both spurring this technology on and also ensuring that it's 736 00:39:22,440 --> 00:39:25,719 Speaker 1: applied to the parts of carbon and drive to net 737 00:39:25,800 --> 00:39:29,200 Speaker 1: zero that really make it occupy the most useful space 738 00:39:29,280 --> 00:39:29,839 Speaker 1: for us. 739 00:39:30,160 --> 00:39:32,640 Speaker 3: It's hard to predict, but I do hope that there 740 00:39:32,680 --> 00:39:35,719 Speaker 3: is more policy that comes online or more support from 741 00:39:35,719 --> 00:39:38,920 Speaker 3: the government. These projects are huge. I mean they each 742 00:39:39,080 --> 00:39:42,600 Speaker 3: cost roughly a billion for a one million ton plan, 743 00:39:42,719 --> 00:39:45,759 Speaker 3: so it requires a lot of money for a technology 744 00:39:45,760 --> 00:39:49,279 Speaker 3: that's still really new. And we often think about this 745 00:39:49,360 --> 00:39:53,200 Speaker 3: in general to all like decarbonization solutions, to just throw 746 00:39:53,239 --> 00:39:55,960 Speaker 3: everything at the board and see what sticks. And DAK 747 00:39:56,120 --> 00:39:59,759 Speaker 3: does have the potential to scale, to bring casts down 748 00:40:00,080 --> 00:40:04,320 Speaker 3: and to offer a reliable solution to removals in the future, 749 00:40:04,360 --> 00:40:06,760 Speaker 3: which I do think we will need to some degree 750 00:40:06,840 --> 00:40:10,279 Speaker 3: or another. So I think it's worth trying to make 751 00:40:10,320 --> 00:40:14,000 Speaker 3: sure the policy supports the industry but also regulates it 752 00:40:14,280 --> 00:40:18,640 Speaker 3: and brings the best possible technologies online because of the 753 00:40:18,680 --> 00:40:21,440 Speaker 3: ones we're operating with today are not the most efficient, 754 00:40:21,480 --> 00:40:22,440 Speaker 3: as Brenda mentioned. 755 00:40:22,719 --> 00:40:24,560 Speaker 1: So I know I said my last question was my 756 00:40:24,640 --> 00:40:26,759 Speaker 1: last question, but I was just kidding. I do have 757 00:40:26,800 --> 00:40:30,080 Speaker 1: one more that just came up, which essentially I'm wondering, well, 758 00:40:30,200 --> 00:40:32,520 Speaker 1: how these projects are financed and whether or not there 759 00:40:32,560 --> 00:40:35,160 Speaker 1: any financial instruments that we can think about as a 760 00:40:35,200 --> 00:40:39,120 Speaker 1: potential way of essentially inspiring this industry to grow. 761 00:40:39,719 --> 00:40:43,879 Speaker 3: How these projects get financed today is usually a lot 762 00:40:44,000 --> 00:40:48,040 Speaker 3: through government support, and then the rest is the company 763 00:40:48,080 --> 00:40:50,799 Speaker 3: has raised this money, for example in the case of 764 00:40:50,840 --> 00:40:54,200 Speaker 3: clim Works, through kind of vcs and kind of general 765 00:40:54,360 --> 00:40:58,839 Speaker 3: tech startup methods. So in the future that is likely 766 00:40:59,000 --> 00:41:02,359 Speaker 3: to change. And probably what we will see is that 767 00:41:02,600 --> 00:41:07,279 Speaker 3: as the technology is proven, more traditional investors will come 768 00:41:07,360 --> 00:41:10,279 Speaker 3: in and finances. So I'm not sure if they will 769 00:41:10,360 --> 00:41:13,160 Speaker 3: use like a specific kind of bond or loan, but 770 00:41:13,280 --> 00:41:16,160 Speaker 3: we do think that traditional banking might get into this 771 00:41:16,280 --> 00:41:18,960 Speaker 3: space once we know okay, you can do it at 772 00:41:19,000 --> 00:41:21,040 Speaker 3: a really big scale, and you could do it at 773 00:41:21,080 --> 00:41:24,560 Speaker 3: reasonable costs, and that the market is there for it. 774 00:41:24,640 --> 00:41:27,320 Speaker 3: And even though we say there's like a huge potential 775 00:41:27,360 --> 00:41:31,040 Speaker 3: demand for removals, what the companies say themselves is yeah, 776 00:41:31,080 --> 00:41:33,440 Speaker 3: but we need to actually have the contracts and the 777 00:41:33,520 --> 00:41:36,279 Speaker 3: off take because otherwise we don't get those loans. So 778 00:41:36,560 --> 00:41:38,640 Speaker 3: all of this is playing out and all of the 779 00:41:38,719 --> 00:41:42,440 Speaker 3: moving parts will come together probably in the next five years, 780 00:41:42,560 --> 00:41:45,840 Speaker 3: and we'll see, Okay, was it real, like did you 781 00:41:45,880 --> 00:41:48,680 Speaker 3: actually build this huge plant and did the costs actually 782 00:41:48,719 --> 00:41:49,160 Speaker 3: come down? 783 00:41:49,480 --> 00:41:52,000 Speaker 1: Thank you so very much for joining today, for sharing 784 00:41:52,080 --> 00:41:54,719 Speaker 1: an update on what's happening with direct air capture and 785 00:41:54,800 --> 00:41:58,480 Speaker 1: really broadly linking back into what's happening with the voluntary 786 00:41:58,520 --> 00:42:01,400 Speaker 1: carbon space, which I know we're all watching closely. It 787 00:42:01,440 --> 00:42:02,760 Speaker 1: was great to have you both on the show. 788 00:42:02,960 --> 00:42:04,919 Speaker 3: Thanks Na, it was great to be here. 789 00:42:13,760 --> 00:42:16,800 Speaker 1: Bloomberg n EF is a service provided by Bloomberg Finance 790 00:42:16,920 --> 00:42:20,359 Speaker 1: LP and its affiliates. This recording does not constitute, nor 791 00:42:20,400 --> 00:42:24,600 Speaker 1: should it be construed, as investment advice, investment recommendations, or 792 00:42:24,640 --> 00:42:28,160 Speaker 1: a recommendation as to an investment or other strategy. Bloomberg 793 00:42:28,280 --> 00:42:31,560 Speaker 1: n EF should not be considered as information sufficient upon 794 00:42:31,600 --> 00:42:35,200 Speaker 1: which to base an investment decision. 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