What is Carbon Upcycling?
Apoorv Sinha - Carbon Upcycling is a carbon capture and utilisation company - focused on a mineralisation pathway to sequester carbon emissions into solid products, primarily targeting an end-use market in the cement and building materials industry. So essentially, if you look at the suite of different carbon sequestration options that we have, there's carbon capture and storage where you can store the CO2 underground, and you have other options of chemically modifying the CO2 to make chemicals for fuels; there’s a range of companies making sustainable aviation fuels or industrial chemicals from CO2, like urethanes, et cetera.
We've been focusing on this mineralisation pathway where the CO2 molecule stays intact and becomes part of a solid matrix as it's embedded into a rock or some industrial byproduct. The thought process is that from an energy balance perspective, mineralisation has a significantly lower energy demand than breaking down the CO2 molecule, which is a very stable, low-energy molecule. So when you don't have to break the CO2 and instead essentially glue it onto a solid matrix to keep it away from the atmosphere, that's an elegant way of solving the problem in the near term.
Currently, we don't have the green energy infrastructure required worldwide. We don’t want to trade our gigatonne-scale CO2 problem for an energy problem, right? We want to avoid conflating one with the other. We see mineralisation almost as a cheat code. If you look at the amount of CO2 stored in oceans or geological formations, it’s more than ten times the amount of CO2 that's in our atmosphere overall. So we're talking about minor percentages of improving that. Suppose we just improve this mineralisation's efficiency and kinetics so that it happens not over a time scale of years and decades but rather over hours. We think that's an essential way between now and 2030 to get us to a lower carbon economy.
I think one of the exciting transformations we've seen in the market in the last year and a half, two years, is there was a massive push towards green hydrogen, sustainable aviation fuels, electrification, and other technologies back in the first half of COVID and the pre-COVID era, primarily because we saw a very rapid transition towards renewables. At the time, we didn't have some of the challenges we now see in the wind industry. Still, I think the most important and unfortunate event that has changed that trajectory is the geopolitical tensions that began in Ukraine and are now transpiring in the Red Sea, and Gaza and Israel as well. Generally, just the volatility in the market means energy infrastructure and clean energy transition are less on the political agenda. We're obviously in an election cycle this year as well, not just in the US but in Canada and a few other countries, and in the next 16 months, we will be going to the polls. Unfortunately, with the issues we've seen on inflation and the higher energy cost, especially in Europe, we're just not seeing as much focus on these high-energy CDR solutions anymore.
As a value-driven organisation, we've focused on pragmatic near-term progress to help us achieve critical 2030 targets. Our view consistently, even before this crisis, but reinforced now by what's happened in the last two years, is that you have to focus on things that make economic and pragmatic sense today instead of waiting for some of these policy levers like incentives to come through. It's not to say that they shouldn't come through; by the way, this is not one or the other; this is both and as quickly as possible. But we don't want to have to wait for the ideal set of circumstances to start making progress on the ground.
Origins
What was the inspiration that led to your carbon removal business?
Apoorv Sinha - It's a great question. I'm entering my tenth year at Carbon Upcycling now, and for the first six years of our work, we were primarily a research organisation. We worked with various Canadian universities and a few in the US, the UK and Australia. But the genesis of all this was to look at a cost-effective, energy-efficient way of making nanomaterials from CO2. We were targeting a high-end application where this pollution source, CO2, could be turned into a valuable resource. And that's where the name, or the term upcycling in our name, came from. We were always about ‘how do we take waste to value?’ Because most of our CO2 comes from our energy needs as a society, right? And so in that supply chain, which is very linear, CO2 comes out literally at the end of the tailpipe. No one cares about it. People want to ignore it. We thought, ‘How do we turn that into a resource that makes a better, higher-performing product?’ As a chemical engineer by training, I had a little understanding of chemical processes and how to think about this at a very early level.
What's evolved over the last six or seven years is combining that aspiration to create a technically viable solution and the motivation to solve a tricky problem with understanding the market context in which this needs to be solved.
As I'm sure you'll agree, there's a big difference between invention and innovation. We've spent the first six and a half years inventing and coming up with chemical pathways to mineralise CO2 and confirm that our analytical chemistry was right. And especially with these nanomaterials, we found some fascinating results, but then translating that into something that meets a product market fit, something a customer cares about and says, ‘Hey, you're solving a real problem for us’, not just a philosophical problem - unfortunately many of the blue chip companies right now do think of CO2 pollution and environmental issues as more of an intellectual thing, something to do, because we need to do right by our kids, as opposed to something that is fiscally right for them to do or financially viable for them to do on a quarterly or annual basis. Trying to bridge that gap has been the innovation part. The inspiration has taken a long time to translate to that, but that's been the slog in the last four years.
Carbon Removal Challenge
It's relatively easy to make something work in a lab, but doing it repeatedly and in an economical way that makes business sense is tricky. What we're trying to achieve as a summit is to introduce more ways for academia to meet with investors and business people to go, ‘Right, how can we make these connections work, and how can we bring it to profitability?’ Carbon Unbound is partnering in 2024 with The Open Air Collective - its Carbon Removal Challenge for students is a way to bridge the gap between academia and business. It’s a global student competition to develop ideas to help the CDR industry, whether around innovation in engineered or nature-based solutions or even MRV.
Apoorv Sinha - Awesome! I am very much in favour of that. Carbon Upcycling actually sponsored the first Carbon Removal challenge because getting these early-stage innovators in front of governments and blue-chip companies like Klarna, Microsoft, and the Frontiers of the world is paramount. Because even if we take the Industrial Revolution into account and look at what happened in the early 1700s, the pace of innovation was different from what we need to do between now and 2030. We have a historian based out of the UK that we've been working with to draw parallels between what's happening now and what happened back then, for example, those exciting times when the steam engine evolved from the new common engine to what Watt built. It happened over a 30-year period. We don't have 30 years. So how are we going to do that? You just pointed out an excellent micro example of the stuff that needs to happen more and more.
Breakthroughs
Can you share that 'aha' breakthrough in your journey that excited you about its potential?
Apoorv Sinha - I would say it was when we crossed that boundary from the invention to the innovation piece, and I think that happened for us in late 2019. We had done a lot of work on ‘how do you get a solid material chemically activated to absorb CO2, to chemically bond with CO2 to carry out the mineralisation?’ If you look at most chemical absorption research, most of that R&D is focused on wet chemistry. So, most of it is concentrated in sequestering CO2 into wet processes or solids immersed in wet liquids, which creates a range of other secondary issues around water usage and more elaborate water treatment systems and higher capital costs, operating costs, etc.
A big focus for Carbon Upcycling ever since our genesis in late 2014 has been on dry methods of sequestering CO2 into solids. In 2019, the milestone that we hit was our first set of proof of concept results. They proved what could be achieved with a variety of new feedstocks that we hadn't looked at before, but more importantly, the feedstocks that we had now investigated and gotten sound proof of concept results with were highly relevant to the cement and the concrete industry. It was only about four years ago that we began to look at the concrete industry as our target market. In hindsight, you can say, ‘That decision led us to where we are today.’ Given the level of traction and carbon impact, we believe we can now realise both by abating and sequestering CO2 in this industry and our pipeline. I would have to say we made the right choice.
Feedstocks
You mentioned feedstocks, and just for a layman such as myself, does feedstock mean the initial materials you are required to put in to create the cement?”
Apoorv Sinha - That's exactly right. To give you a very high-level overview of how our process works, in a mineralisation process, you generally need the gas being mineralised (the gas being embedded into the solid), and then you need the solid itself that serves as a sponge. An analogy we've used in the past is that it's very much like the sponge you use when you do your dishes in the kitchen, except we're chemically embedding the water into the sponge. So imagine instead of being able to squeeze that sponge out just with physical force, you have to chemically put it into a reactor to take that CO2 out. That's what we're building: a chemical sponge for CO2. This is analogous to a range of carbon capture companies you'd be aware of. For example, if you look at the DAC unit that Carbon Engineering is building, their chemistry is fundamentally similar to ours. They're taking something that has an affinity to CO2, so something that's like calcium oxide or calcium hydroxide, and that's your feedstock, your solid feedstock. And that powder then gets bombarded with CO2 from the air or a point source emission like a power plant. Then, CO2 essentially impregnates into the matrix of that solid. So technically, when I say feedstock it is input into our process. So CO2 is a feed, as is that solid product, and we found a range of materials. So when you're mining for nickel or copper or some of these minerals that we need for the electric vehicle revolution and some of the battery storage we're building, the tailings produced as a byproduct of that mining can be used to sequester CO2. It can mineralise CO2 with a process like ours and/or make a cementitious product that can lower the life cycle carbon footprint of construction materials. Similarly, slags produced in the steel industry, ash produced from decommissioned power plants that are sitting in landfills can also make feedstock. So, there's a whole range of versatility in the solid part of our inputs. And a tremendous amount of R&D effort that we're constantly undergoing to keep perfecting that. For example, our project in the UK in Rugby, just outside of Birmingham, uses glass. So it's using post-consumer glass, like beer and wine bottles that are thrown away. They're too dirty to go back into making new glass bottles. So, chemically modifying that material to create a cementitious product is massive because you're abating nearly a tonne of carbon emissions for every tonne of glass that can go into cement or a block of concrete. After all, it has a negative carbon footprint versus something that emits a lot.
Investors
What have you found the best way of garnering investor or buyer attention?
Apoorv Sinha - I'll answer this in the context of what we touched on a couple of minutes ago, about how the overall ecosystem context has changed a little bit, how people have become more pragmatic, people have become maybe a little less bullish about the rate at which things are going to happen, which is disappointing. Still, it has changed the type of questions that we've been asked. So we raised our last round, our Series A fundraising round, as the interest rates rose. And so we were raising funds in a very tough market last year. The type of questions we were asked were very much about the immediacy of our deployment plans. Can we do something over the next couple of years? Can we do this without a green premium, not projecting the green premium to go away in five years but in two to three years? And so we saw a level of scrutiny that was not there before. And quite frankly, at a meta-level, I'm not convinced that's the right thing we must do right now for our space. I think we need all types of solutions to get all the support that they require, but what has worked for us so far with our strategic partners that have cement plants and the investors that have led our rounds is essentially being able to create a compelling case that we have a practical solution that can be de-risked entirely over the next two to three years, and then scale very rapidly between then and 2030 because it has the economic viability and the scalability and technical components figured out. So creating that level of comfort that the tech is relatively far along with our demonstration plants, as an example, and then showing that the economics do make sense, even in today's economic climate. Those are the two big things that have resonated. And those are simple but hard because a lot goes into creating a compelling case on those two fronts.
Scalability
How are you approaching scalability, and what tools or strategies have proven most effective in levelling up your solution?
Apoorv Sinha - If you look at emissions, the cement industry produces about 7% of global emissions out of humanity’s ~36 gigatonnes total, so that’s just under three gigatonnes a year. If you look at what we've been able to show so far, not just with our lab-scale units but our demonstration-scale units, we've shown that we can take the emissions of that cement blend in cases down by up to 60% if our solution was to be implemented at scale. And that doesn't get cement to net zero. Still, suppose you look at what their paths to net zero are. If you look at the two prominent associations that work on this, which would be the Portland Cement Association and the Global Cement and Concrete Association, they all talk about how being a hard-to-abate industry, cement and concrete is going to endeavour to get to net zero by 2050. By 2030, they are targeting a 30 to 35% reduction in their emissions because it's not as easy as changing a coal power plant with a renewable power plant, right? So pragmatically, I think one thing that we're very excited about is we've now demonstrated a range of different feedstocks that are relevant to geographies around the world - we have a project in the UK at the moment, we have a project in Belgium, we have two projects in North America. And for each of these, the dynamics are different; the supply chains and feedstocks are different. Being able to demonstrate in a multitude of those environments that we can hit an average 30% or 40% reduction compared to the baseline just with our solution is what we find exciting. Many investors that have come into Carbon Upcycling have their own GHG calculators to see the impact of these solutions if they capture X per cent of market share and things like that. And I think from a strategic perspective, I would say being able to translate the lab scale results that we have to show that we can hit these numbers is critical, and that’s what we're focused on.
From a technical perspective, scalability is a much more complex problem to solve, and there, it boils down to partnerships and collaborations. We've been able to onboard a set of advisors who understand mineral processing, material handling, the cement industry and the integration into a cement plant. And that, coupled with many of the R&D collaborations that we have at the university level, is how we're trying to solve the crux of that issue.
We started our company in late 2014 with a cookie jar reactor, and it was minimal. We could only do about a gram to two grams at a time. We now serve the City of Calgary and a few home developers, producing around 60 tonnes of product weekly. So, having gone from two to three grams per batch to now being able to do 60,000 kilos a week, again, these are minute numbers compared to the gigatonne that you just talked about, and we acknowledge that, but we've already learned a lot about that scale. The real challenge, the next challenge for us, is to take this tonne level number; instead of 60 tonnes a week, we need to get to 60 tonnes an hour. We know how to do that strategically, tactically, and from a technical standpoint, but we've got a lot of homework on engineering and process design. And it's exciting. We've made so many mistakes and learned from them in the last six years that I'd be shocked if we create a new one now, but you know, you never say never. There's a lot to do.
Challenges
What's the biggest challenge your business/and the industry at large is facing in 2024, and what do you think is required to solve it?
Apoorv Sinha - I think the biggest challenge for us is getting these industrial players to activate at the operational level. There's a fascinating podcast called Farnam Street about organisational change that I listened to a couple of weeks ago. Essentially, this organisational consultant was talking about how we think of, for example, Microsoft as one organisation, but it's a multitude of teams that are 20 to 30-odd people, literally thousands of teams of 20 to 30 people. Dealing with the cement industry or any heavy industrial partners in steel, cement or waste management, this couldn't be more accurate. You have a corporate group that sits in an office talking to the shareholders and the board, and they're convinced that this transition needs to happen and that it needs to happen quickly. At the operational level, the team of 50, 100 or 200 people that serve the plant, keep it running and keep the uptime have a very different view of what needs to happen, and you need to earn your stripes with each of them separately. Just because X Cement Company loves you at the corporate level and talks well about you at every conference does not mean that the plant manager at the plant you're at will roll out the red carpet and give you whatever you want. And that's a very, very interesting challenge. That's a challenge we're all going to face because a lot of what we need to do for carbon removal, at least at the industrial level, will be symbiosis. DAC plants will be greenfield; some carbon capture can be greenfield, but most of this will be bolted onto existing industrial sites. You look at the UK strategy of these industrial hubs. You're going to have a cement, a steel, a glass, a petrochemical company, all in the same location, all giving CO2 to a place, and you’ve got to do something with it. And if you can't figure out that challenge of working with them in a consistent and long-term way, to us, that's a recipe for disaster - not just for us, but for any other group that's faced with that. Given that we've got three projects dealing with those in real-time, that's our biggest challenge.
The second one, which is more of a systemic challenge, is the lack of synchronicity in alignment with policy and incentivisation at the government, corporate, and startup levels. You mentioned R&D, which I'm glad you did because that also means the research level. So these four spheres have bubbles within themselves, with academics chasing peer-reviewed publications, startups chasing VC money, blue chip companies chasing a jump in stock price, and governments chasing re-election cycles. All of these need to be appropriately aligned. Right now, these gears are all turning in very different ways. I'll give you one very specific example that just came up this week. There's a policy that affects one of our projects, and I won't name the government or the region. Still, it's designed precisely to help projects like ours and help carbon capture and utilisation projects. But the way it's been written and the rate at which consultation processes are happening concerning that legislation, it's not going to have a material impact on Carbon Upcycling’s trajectory until probably three years from now. So you're talking late 2026 by when we might not be alive if we don't deliver on our following three projects, which is our problem, but the bigger systemic problem is, think of all the companies like the ones that you found; they don't need to know what policy looks like in 2026 when they talk to a VC firm today, or even a government grant. They need support now to accelerate their adoption in the marketplace. You compare what's happening in computing and AI, and what we need to do is even faster than that. One of the things is that in the Apple and Microsoft days of the 80s and 90s, these were not capital-heavy businesses yet. You could do, at minimum, a viable product in a garage like Steve Jobs and Wozniak did. You can't do that with a CDR system. And that worries me. I think we only have 24 quarters between now and 2030. There isn't that much time.
We've had many steering committee meetings and board discussions with a few of our partners, like CRH, the Irish company out of the UK. They're strategically one of our most prominent investors and the largest market cap company in the building materials world. If you need to build a project with them, just as an example, you need to get that approval on a capital budget a year before breaking ground. And that's just on the administrative side of things. And governments, as I just mentioned, are two years and beyond, which could be better.
Risks
Is there anything further from an industry point of view that you see as a big risk coming down the road?
Apoorv Sinha - I hope we can finish on a better note than this one. Still, that sense of urgency in the organisational hierarchy has yet to transpire across huge organisations. I'd like to know if everyone at Microsoft understands this, or is the sustainability group driving the mandate where everyone else is doing business as usual? And John Cotter at the Harvard Business School many years ago wrote about change institutionally and said, essentially, that you have the mothership, which has to keep going. But if you're going to make a radical change, you create this small task force on the side, give them all the empowerment they need, give them a budget, give them autonomy, and then let them run with it. And when they gain critical mass, they can return to the mothership and change behaviours. I would say over and over and over, at least with the dozen or so industrial partners that we have engaged with in any way in the last three, four years, we've seen many versions of how people do it well or sort of well and how people do it terribly. And societally, we just have to get good at that.
Industry Positivity
Our industry is so nascent. You've been around ten years, and that's a lifetime in CDR. So, many of the CDR innovators I speak to are two- or three-years-old, and there is a worry that things aren’t happening fast enough. However, we conducted a video interview for a mini-doc series at our last event with Dr Gabriel Walker. She left with a very positive thought - in this climate change industry, CDR “can not just stop the problem getting worse; it can make it better!” You're abating carbon, you're taking it out of the air, you're doing positive things with it, you're using that carbon in a useful way and trying to future-proof it. So I think that is a real positive for this young industry. And I've found from the 20 or so interviews I've done so far in the last three months that it's the most optimistic and collaborative community of business people and academics I've ever encountered. I've worked in e-commerce for Nissan, Tesco for Sony. But this is the most positive-looking industry, and I hope it stays that way.
Apoorv Sinha - I'm so glad we're finishing on that because I agree with everything you just said. We need a lot of brave optimism, and yeah, it's really good to hear. My professional life has only been in this space, so I don't have your frames of reference. I appreciate hearing that because I think these are not insurmountable problems; they’re challenging. And the more talented, optimistic, driven people join, the better. And that collaborative thing, we can't lose sight of that. I'm headed to an investor event next week, and of course, you'll have a bubble again. You will have all these carbon tech companies, CDR companies, and clean tech companies under one roof with a subset of investors from which we're all vying for attention. I think it's important to remember that we're not competing against each other at all; we're not. I met another co-founder yesterday for lunch, and she said this really interesting line: being from Alberta and an oil-heavy province, her view was that every dollar that goes into maintaining our current assets could have gone towards the energy transition or CDR. That is what we should be looking at changing the dynamic, not if we can get X dollars from this private equity or VC group instead of two other quote-unquote competitors. We try as much as possible not to refer to anyone as competition but as colleagues in our space, and I think we all have to get significantly more extensive and stronger.
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