Brinc Recap: Climeworks’ Carbon Removal Summit

Janina Motter

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Flashback to almost a year ago, just after the first Carbon Unbound summit Brinc attended, when Robert Hoglund, Cofounder at CDR.fyi and Climate Advisor at Marginal Carbon AB, asked: “where are the [CDR] buyers?” With an expected make-up of ~70% potential buyers as attendees at the Climeworks CDR summit, the atmosphere was very different. While the most prolific CDR buyers can still fit around a dinner table (11 innovators purchasing > 50 kt), ~300 companies were reported as having purchased some credits (more data on cdr.fyi) and over 1000 sustainability leaders as “planning” to purchase within the next 18 months.

In addition to internal stakeholder alignment, a willingness to be seen as a first-mover/innovator (or, in the next few years, not a “laggard” within the industry), an internal carbon price seems like a critical step to develop a CDR purchasing strategy. Other financing solutions were proposed, such as creating an “R&D-like” budget, and several attendees mentioned plans to position their own company know-how and strategic assets to work with CDR startups to help them scale. There were many questions and predictions on who would join the next wave of buyers, as most current interest is from the tech and finance sectors (though it was highlighted by Bayo Owolabi, Principal at Boston Consulting Group, that demand from these sectors is untapped and should still play a critical role in the demand scale up of ~150 Mt (US$50b) needed by 2025). The two most common responses were 1) those with some strategic alignment (e.g. the mining sector) to certain CDR pathways and 2) consumer-facing companies that could demonstrate brand value (and presumably had higher profit margins to absorb CDR costs, and/or opportunities to pass on these costs to their customers). There was a long, interesting analogy within one panel on decisions behind buying a dress shirt, and I could only think of the process of ordering a tailor-made suit as comparable to purchasing CDR credits today. Buyer guides and clubs to aggregate both demand and resources are clearly critical components of the next few years of the voluntary carbon market (VCM). 

The plenary day opened with Climeworks’ presentation of their Gen 3 technology, positioned as the next step down their cost curve “in real life, not a model” at 50% energy usage and 50% cost (it wasn’t clear if this was benchmarked on actual in-field costs given recent challenges highlighted). The strategic positioning, telling newer DAC startups “good luck” was clear, all the way down to the “lead to zero” marathon marketing and free shoelaces received under our seats… Seeing the full engineering team onstage at the event and later joining in the site tour, I was struck by the engineering infrastructure they’ve developed, especially for testing/high-throughput screening, that newer players will be up against in addition to their funding and multi-year head start. “Better numbers” are not enough, as startups today are competing with Climeworks five years (or more) from now. Startups must also demonstrate a very clear (and fast) scale-up trajectory. Climeworks shared a strategy of reaching megaton annual removal capacity by 2030 and gigaton by 2050. While it’s staggering to imagine one company achieving this potential, building with this ambition from day one must be part of the fundraising narrative for today’s startups. 

Little discussed at the event, but a focal point of the tour, were Climeworks’ initial pilot units ~500 ton/year annual capacity which had been built (and presumably financed) to support utilization projects for a nearby greenhouse and carbonation for Coca Cola to validate their technology in the field. While exact costs for CO2/ton compared to “fossil fuel” alternatives weren’t disclosed, these types of projects were likely critical to reach the scale Climeworks operates at today with Mammoth and are often overlooked in the development plan (and potential creative financing strategies) for startups we’ve encountered. A startup from Brinc’s first CDR cohort, Airhive, has taken this approach to heart, also working with Coca Cola and demonstrating recent traction. 

One of the recent projections most in favor of DAC has highlighted how current costs are lower than e-SAF alternatives for airlines. In the panel on CDR for “hard-to-abate” sectors, Lars Kroeplin, Head of Corporate Responsibility Strategy Customer & Commercial at Lufthansa Group, was directly asked by the audience how this calculation fit into the general net zero strategy on DAC vs. SAF investments. His response highlighted that, while future pricing (and supply) dynamics are unknown, their strategy will always clearly prioritize emissions reductions while ensuring all relevant pathways are available (they will be investing in biomass-driven SAF as well as e-fuels approaches).

The panel I was most excited about, “how to finance the scale up of capital intensive climate tech,” left me with more questions than answers. The type of financing needed for early-stage, hardtech startups with significant technical risk was presented as a new asset class, but I heard very little concrete details on how this should work within the panel or conversations with other attendees (though many had the same question/concern). Many comparisons were made throughout the day on how solar (and generally renewables) have come down a similar cost curve within a similar timeframe to the climate imperative for CDR. However, most of the discussions focused on the policy-driven component of this by Germany. There was almost no mention of China’s role in driving down manufacturing costs, though this is unsurprising in today’s environment focused on localized production and higher standards across all definitions of sustainability. In any case, the need for corporates/strategics as part of the equation was clear, both as a demand signal and given their potential to provide other financing opportunities (e.g. funding pilots critical for field testing). I will be curious to see how much insetting-type arguments influence the growth trajectory of certain novel CDR pathways. In closing remarks, panelists offered sage, simple advice for startups to demonstrate compelling unit economics and focus on the three Cs: “capital stack, contracts, creativity.”

In such an evolving ecosystem and nascent industry, there are many roles for an accelerator like Brinc to play to support startups in avoiding “valleys of death” and scaling up faster. We’d love to connect with more (potential) CDR buyers and investors with an appetite for tech risk. To founders, we are here to help!

Please reach out at
climatetech@brinc.io to chat further.

Janina Motter

Janina is the Sustainability Program Manager at Brinc. She holds a Bachelor's degree in Chemistry and a Master's degree in Materials Science & Engineering from Stanford as well as a joint MS/MBA degree from Harvard. Janina has extensive experience working in research and development, operations, and business development at deep tech startups in Silicon Valley and Boston. She also has venture capital experience at SOSV and Clean Energy Ventures. Janina was involved with ecosystem-building initiatives during business school, such as the sustainability track ("Eco") of the biotech incubator Nucleate and the Harvard Circular Economy Symposium.

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Janina Motter

Janina is the Sustainability Program Manager at Brinc. She holds a Bachelor’s degree in Chemistry and a Master’s degree in Materials Science & Engineering from Stanford as well as a joint MS/MBA degree from Harvard. Janina has extensive experience working in research and development, operations, and business development at deep tech startups in Silicon Valley and Boston. She also has venture capital experience at SOSV and Clean Energy Ventures. Janina was involved with ecosystem-building initiatives during business school, such as the sustainability track (“Eco”) of the biotech incubator Nucleate and the Harvard Circular Economy Symposium.

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  • Janina Motter

    Janina is the Sustainability Program Manager at Brinc. She holds a Bachelor's degree in Chemistry and a Master's degree in Materials Science & Engineering from Stanford as well as a joint MS/MBA degree from Harvard. Janina has extensive experience working in research and development, operations, and business development at deep tech startups in Silicon Valley and Boston. She also has venture capital experience at SOSV and Clean Energy Ventures. Janina was involved with ecosystem-building initiatives during business school, such as the sustainability track ("Eco") of the biotech incubator Nucleate and the Harvard Circular Economy Symposium.

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