Scrubbing the Skies: Transitioning to a Sustainable Carbon Economy

all right hello everyone and welcome to the latest edition of scrubbing the skies the webinar series of the institute for carbon removal law and policy at American University I'm will Burns and I'm founding co-director of The Institute one of the most imposing challenges that the nascent carbon dioxide removal industry as well as Society faces is what to do with what ultimately may be hundreds of gigatons of carbon captured in facilities such as direct air capture and bioenergy captured with storage installations there's trepidation about whether adequate and safe space will ultimately be available for this purpose and whether public opposition might grow as such operations scale up also many believe that potential valuable uses of captured carbon might help to bolster the business case for carbon removal in recent years a number of companies have emerged in what has become to be known as the carbon capture and utilization or carbon capture and transportation sector while many of these companies are currently focused on uses of carbon captured at Point sources these technologies have obvious and clear implications for the future of the carbon dioxide removal sector also so I thought it'd be helpful to discuss the current state of play in this sector as well as its potential future to help me do so I'm pleased to welcome today Tom dower as my guest Tom serves as vice president for public policy with lonzotec a company that transforms waste carbon into materials such as fuels fabrics and packaging lonzotec which is based in Skokie Illinois the town next to where I live was recently named to fast company's world most Innovative companies for 2023. it was also named as a finalist for the earthshot prize in 2022 and is also the first carbon capture and transformation company to go public which it did in February of this year and it's listed now on on the NASDAQ as a brief potential additional introduction of Tom he has over 25 years of experience in Washington DC in the government and Industry sector specializing in energy and climate policy including 15 years in the U.S Senate as a staffer for uh former Senator Arlen Spector and as a climate advisor to former Senator Jay Rockefeller he was also vice president for the lighthouse Consulting Group representing the U.S climate Action

Partnership and energy sector clients during the 2008-2009 Waxman Marquee process and he's a proud graduate of American University Tom will initially provide a brief overview of lonzotec's approach in the context of carbon capture and transformation I'll follow up with a few questions to seed the conversation and then I'll open it up to our audience so feel free to start populating the chat box with your queries and your comments and with that Tom the floor is yours thank you thanks so much will I really appreciate it appreciate being here and uh and the invitation I will pull up my slides and uh and as you mentioned uh you know I have been working on environment energy and climate uh policy for for quite a while now um and have honestly decided to devote my life to tackling climate change so that that's why I was so so pleased to receive this invitation and um you know in doing so you know I tend to Veer towards the difficult um you know tried to pass cap and trade bills through Congress uh you know worked for moderate Republican and a moderate Democrat um senators from from um you know manufacturing and fossil fuel States and uh you worked for the world's largest steel company pushing the industry on greenhouse gas mitigation and now working with a biotech company going after hard to Abate sectors but in a novel way so I love a challenge and um I'm very glad to join everybody here today this is our standard uh but important disclaimer about forward-looking statements you know we're now a publicly traded company as as will mentioned and so I just want to be careful about what people take away from these these conversations so what is Lance attack all about we were founded in 2005 in New Zealand and over time Lanza Tech has moved to the U.S so now we're a us-based company and as noted as of February we're now publicly traded company on the NASDAQ the first carbon caption transformation company so listed um we really sit at the intersection of science engineering data analytics artificial intelligence and ultimately reducing carbon emissions that's the reason we we exist um and lasitech captures and transforms carbon we do this by using waste in its many forms and we do that by transforming those wastes into essential chemicals fuels and products that still need carbon as their Central molecule even after we reach what we would call the decarbonized or as we say the post-pollution future so before diving into our technology I did want to start with a few things that we fully stipulate first as many processes and sectors as possible should be electrified and the power sector itself must be decarbonized as soon as possible we must also insist on material and Energy Efficiency less waste more recycling but many fuels chemicals and products will still require carbon you know we are in a critical time period where massive emissions reductions are essential to avoid some of the worst impacts of climate change we saw the recent ipcc report which we won't get into in detail but it's it's getting worse and worse and the challenge is is getting larger and so to meet that moment we're going to need carbon abatement carbon removals adaptation I mean they're all crucial pieces of the puzzle fortunately there are technologies that can reduce emissions today and transition to an emissions-free economy in the future and ultimately get to net negative emissions so let me show you how lens attack converts wastes into useful sustainable products we do this through biology and what is known as gas fermentation so at the heart of our process is biology specifically a biocatalyst that is centered around bacteria which wants to consume carbon monoxide carbon dioxide and hydrogen in the form of gases so this is actually a continuous process so much more like a traditional manufacturing process than the batch type process that one would typically see used to make alcohol from sugar and yeast for example in this case we feed carbon and energy to bacteria let me walk through the feedstocks a bit and then the products so um as mentioned you know we have really started with industrial off gases so this is traditional carbon capture but we can send those gases mostly in their current form we do a little bit of gas cleanup and a little bit of compression but our process is operating at near ambient temperatures and pressures because we're dealing with Biology here so this is not high temperature high pressure environment that you would see with with thermal catalysts and Industrial off gases are are what we started with that's what our our founder Dr Sean Simpson looked at in New Zealand looking at steel mill off gases in particular and found that they are really the perfect food for this bacteria that we use but beyond industrial off gases we can also look at Agricultural and Forestry residues Municipal solid waste non-recyclable waste Etc and those can be gasified and then sent through that same process and then ultimately um you know really going to the Future when many of these wastes will actually hopefully go away over time we can use electrolysis direct air capture for CO2 use clean hydrogen and feed all of those into the same process same equipment um but you can essentially change the feedstocks over time you can transition with the economy Etc and I'll get a little bit into sort of our concept of hardware and software a little later about both the feedstocks that we get and the products so on the on the product side through this fermentation we get lower carbon ethanol which is an energy carrier and can be converted into sustainable aviation fuel into cleaners detergents a huge range of projects from polyester to plastic Fabrics Etc and most importantly those are all products that today come from Virgin fossil fuels with all of the attendant consequences including and Beyond greenhouse gas emissions and as I'll discussed a little later instead of ethanol we can also produce other targeted chemicals through advanced synthetic biology for which Lanza's Tech defines The Cutting Edge and then all of this can be circular so that's a really important message for today is the kind of carb utilization we're talking about is converting above ground waste carbon into the products that Society still needs and will still need in 2050 2100 and Beyond but in some cases those uh those impacts uh will those products I should say will still have emissions associated with them or they will still end up as wastes so we want to turn that into the circular economy where those waste can be reused for the things that Society still needs so on net they have no net impact or ultimately if we could get to negative when we combine that with with CDR Technologies um so as I mentioned the the first version of our gas fermentation process makes ethanol as the the uh the product that comes out of the process but not necessarily with the intention of of using it as a gasoline additive for example which is which is how most of us think about ethanol in the modern world but really it's actually a building block for other fuels chemicals and products and so you can see on the left side here that means fuels like complex carbon chains that are necessary these complex hydrocarbons for uh Transportation fuels particularly Aviation which needs highly energy dense liquid Transportation uh for now and well into the future and then on the right side we've also been able to show these Pathways to polyethylene Meg pet Eva um you know for the soles of your shoes for example for sneakers and and other things and this is not theoretical this is not just on a piece of paper these are real things these are real products you know used across many different sectors everything you see here on this slide was made from recycled steel mill emissions that were turned into ethanol which were then converted down Supply chains to all of these uh really interesting products and with a lot of um consumer-facing brands that have made a lot of commitments about what their uh what they want to do with their supply chains and reducing their emissions but as I mentioned earlier you know not everything can be mechanically recycled and and so you're going to have to have something else in the system that's where our gasification comes in uh where you can recycle as much of those end products that are recyclable but lots of things are not and they will end up in the trash stream and so we need to have something else so we've we've been working on a lot of of projects with uh some of our uh our customers and our and our partners to really show the highest best use of of these recycled materials again um this is not science fiction or anything this is this is very real and you know we are really intending to help decarbonize multiple hard to evade sectors all around the world sometimes multiple sectors at the same time with the same project so imagine uh capturing carbon emissions from a steel mill for example and converting them into sustainable aviation fuel chemicals and products all all of those things all in different sectors but today all of those products are coming from Virgin fossil fuels so we have projects all over the world using diverse feedstocks and using the flexibility that's inherent in our biology-based process here are some examples of of what our commercial facilities look like to to just kind of give you a visual there there's uh you know if it's really compared to the facilities in the industrial case for example you know we're our facilities are rather small compared to you know the humongous steel mills and refineries and others but there's still industrial applications right so these these do have a footprint um but fortunately you know lower energy penalty than a lot of Technologies lower water usage Etc um so this is this is what it looks like um in in the real world and I mentioned earlier this concept of hardware and software so the question that we ask is we're working with partners and we have today a licensing technology we may move beyond that into to build own operate or work with other funders to to build facilities but currently we're working with facilities that have carbon emissions and they want to reduce them so we work with them to install the hardware which is to put essentially a biorefinery on the back end of their industrial facilities as we do that we obviously capture their their off gases we convert those through bacteria to ethanol or these other products and uh and sell those into the market and so it's one of the few options that actually does have a potential Revenue stream granted these are nascent markets so it's not always quite as clear as as oil for example where you can you can Google the price of oil and and find out what it is this minute not quite the same for low carbon products but once you've built this system what makes it really interesting with Biology is that we can change the software so the the particular version of the bacteria that is in this biocatalyst can be changed and so instead of making ethanol we can choose one that makes isopropanol or acetone or Meg which then go down specific pathways so again it's the same capex it's at the same facilities the same reactors um but you may need to make slight modifications but otherwise you're really just scrubbing the bioreactor and filling it with a new version which is really interesting and really only biology can do that in in petrochemical world you know you'd have to build a very specific unit to do a specific thing and so that allows us through synthetic biology to really work with industries that have that are hard to obey they have um real challenges for reducing their emissions and so we can work with them directly so you know we work with the chemicals sector so many different chemicals we've proven in the lab already that we can make over a hundred different chemicals that number will continue to rise as we work through our our biological processes in engineering we can also go into different materials natural rubber for example uh substitutes because there there is it is very difficult to recycle rubber for example from tires so we're working with with Partners on that um packaging as will mentioned as well working with Danone and other partners to to get at some of those harder to to recycle packages and harder to to create sustainably in the beginning fragrances you know we just had an announcement this week with koti who is a global fragrance producer and a new Gucci line for example um and then Fabrics you know we have Lululemon we have Zara addresses you name it um they need to decarbonize these Supply chains and and one thing I have found really interesting just in my time at Lance attack is that so much comes from Virgin fossil fuels today that we don't even know you know we go to the store and we buy things and um and you know some of us are more informed than others about where where food and materials come from but but even those of us working in the field sometimes don't realize these complex fossil based Supply chains um the other thing I want to talk about a bit is sustainable aviation fuel this is another really interesting and really important aspect of what we do because if we can take waste carbon and convert it into aviation fuel that provides one of the only chances that the aviation sector which is growing due to to Growing population growth and the desire of people around the world to move we can produce now aviation fuel from any kind of ethanol and we worked with the Department of energy on this for over 11 years to bring this to Market and uh also spun out a company called Lanza jet which is currently building the first alcoholic jet facility using this technology in Georgia in the U.S a 10 million gallon per year facility that makes essentially 9 million gallons of of sustainable aviation fuel and and one million gallons of renewable diesel so really targeted towards the hardest to Abate sectors that don't have any other or that many other options and so In Sum we are taking every waste resource um including carbon dioxide through carbon dioxide removals direct air capture to make everything that we need all the things in our in our lives and uh and we ask you know consumers um and everyone else where does your carbon come from um that that ultimately is going to be the question and then um just a couple final thoughts um you know as we're pursuing policy we prefer Tech neutral performance-based policies which set the societal goals but you really Drive Innovation to meet them and too often we're confronting around the world you know the old adage of making the perfect the enemy of the good or even the great um and that recycling carbon is much better than extracting and refining more virgin fossil fuels um so I really wanted to to make that point today and we can get into that more in the discussion but you know they're going to be massive capital turnover uh challenges in a lot of sectors so we really have to look at this sector by sector product by product and uh and we can't be waiting for the Perfect Solutions um while allowing you know highly emitting sectors and industries suggest pump greenhouse gases into the atmosphere unabated which puts further pressure on the already huge goals of of carbon dioxide removal and essentially is allowing you know million or hundreds of thousands of parts per million emissions into the atmosphere and then having to go back and get them at 400 plus parts per million so that's it's sort of illogical to allow that to happen and it's inefficient and it really puts too many eggs in one basket um especially in this critical decade so um someday in my lifetime I'm hoping to present this slide uh welcome to the post-pollution future but in the past tense where we've already established that post-pollution future um thanks will I'll I'll stop there and open it up for uh for questions all right thanks so much Tom okay uh let me let me just ask you a few initial questions and then uh we've got uh plenty of good questions as usual from uh from the audience to uh to work through um I guess one question is and this this riffs a bit off of your comment about not letting the uh uh the the perfect be the enemy of the good um one of the one of the knocks on carbon capture and utilization uh especially for products such as fuels uh is that the carbon sequestration that's ultimately effectuated is pretty ephemeral right and uh and uh how would you respond to to that criticism that it's not actually you know reducing uh uh carbon emissions or atmospheric levels of carbon dioxide yeah I think thanks well great one and that is certainly one we we do here um well first I'd say at the highest level that first of all fuels you know themselves are intended to meet a societal need right so the question is how do you get those fuels um they're not um at first blush uh a carbon sequestration opportunity because like you said those are quickly used uh products in society right um but that said not all fuels are the same and you know really you need to conduct a robust LCA you know I should have mentioned this already in my talk life cycle analysis is so important to considering these things and and really trying as best you can to get them on a Level Playing Field um and for us the fuels for hard to Abate sectors are them are more about the displacement of fossil fuels and if we never replace those fossil Supply chains the Virgin fossil fuels will will live longer and and they than they would otherwise right so so I like to say there's nothing more permanent than leaving fossil fuels in the ground and so for us that's the that's sort of the first test and really going after hard to Abate sectors back to what I said you know fairly early on in my talk we do agree we should Electrify everything we can right so if we can Electrify the light duty vehicle Fleet for example that will just reduce the amount of liquid fuels needed but you still have the the conundrum of Aviation long-haul Trucking uh Maritime right so those are big fuel users and lots of debate about you know what the right answer is to those questions and whether power can be used for some some of those applications but in others it's really about con you know converting energy into some sort of a liquid Transportation fuel so then again you're back into need to do it robustly through life cycle analysis and making sure you're minimizing if not eventually getting to negative emissions for those sectors because the need will not go away right we're not going to stop moving ourselves and things around the planet do in these hard debate sectors do you think there's any danger that uh that carbon capture and utilization uh could could potentially throw a Lifeline to these sectors and and deter them from actually abating when they could because there's there's this potential Jedi get out of jail card right of of of handing it over to to a company like uh like Lanza what would you say to that because I we obviously hear that a lot yeah yeah that's the whole the moral hazard question right um yeah absolutely so so first I'd say and I wish I wish I had a slide that showed again what I did tried to describe which was like the size of the lands attack uh technology on the back end of a humongous industrial facility right I would say in addition it's it's about the cost right the these are um hundreds of millions of dollar sort of abatement options on billions of of dollars of assets sets so it's it's to me it's a bit of the tail on the dog that that these industries are going to make decisions based on the best economics for for them and you know we can help with with those emissions but you know we're also here to be a transition Source we are not targeting sectors in order to keep them alive longer we are targeting sectors that have difficulty abating their emissions and will continue to have difficulty for quite some time so that we can reduce those emissions as they transition going in fully eyes wide open and certainly you know my with my steel industry background you know we're all on board with if hydrogen can work at scale and cost as as is on projected or beyond that direct electrolysis for example um in in conjunction with you know biomaterials in the in the front end as feedstocks plus some carbon sequestration at the back end right like there's a whole bunch of technologies that kind of work together we think for certain Industries and those will actually morph and transition over time but if we think we're going to flip the entire built Universe of industrial facilities in the next five to ten years we I just think we have another thing coming so uh you know we do not think we're we are extending the lives of those things in fact we're looking for facilities that are pretty locked in like for steel they've just realigned a blast furnace that's going to last 20 or 25 years right they're kind of stuck right they don't really have a lot of options and so you know we think we can help those as well as stranded assets that might not have accessibility to ccs and then I'll also say if we only look at at Carbon capture and geologic sequestration at CCS that actually could lock in a little bit more of a linear model right where you're still extracting fossil resources you you mean you do something with them and then you take the carbon and you pump it underground that's actually linear what we're talking about is a fully circular sustainable supply chain okay thanks for that um so you know obviously one of the reasons I invited you on the show was uh the the implications for the for the carbon removal uh industry uh right uh it's as is true for anybody engaged in uh in point source right it's going to be a challenge what we do with the with the CO2 in in in Bex facilities and Dax facilities and so forth is uh is uh is lonza directly uh engaged with any uh CDR uh sector players at this point yeah the short answer is yes uh the the even shorter answer is we're under non-disclosure agreements so I can't talk fully about about that but absolutely and it's and it's part of our story as part of our transition um story and we want to help that industry get up and running and um you know as we're looking at project deployment and this goes beyond the licensing model right when we're looking at actually deploying projects with other partners um you know we are looking at all the parameters so you know maybe you have uh industrial gases but let's say you don't have additional hydrogen to bring in or you don't have Renewable Power nearby or you know there's a lot of details around putting these kinds of projects together so citing is really important so if we can go somewhere where there are abundant um renewable resources for example electricity and we could make hydrogen and we could capture CO2 from the atmosphere that could be a really perfect solution to to making again some of these essential uh products rather than than merely you know capturing those and and storing them underground and ultimately you know if we're skating to where the puck is going to be that's going to be the long-term solution right there will be some amount of waste agricultural food wastes Etc that are always going to be around Human Society but then you know humans use a lot of stuff and to the extent that we can then use carbon dioxide that we need to pull out of the atmosphere to do that again rather than pulling new fossil resources out of the ground I just I just think CDR is going to be really important and and first important to go get get the carbon out of the atmosphere and pump it underground okay and put or put it into other permanent Solutions totally on board with that but we're talking about that sliver of the economy that will still be there that is going to need waste carbon resources okay all right I'm going to ask you one more question and then go to audience questions uh broad question for you uh in in what has to be if as is true with all startups a a a challenging milieu what do you see as the as the biggest challenges first for scaling up uh carbon capture and and utilization over the course of the next couple of decades yeah I mean the biggest I would biggest challenge is I would really put them into into buckets right so and of course wearing my my policy hat policy is a huge one if you don't get the policy right on this it makes it very difficult um we see very different um considerations applications Etc uh geographically around the world um some some places are there's more pressure for you know Carbon emitters to do something which then you know is is puts us in the in you know a position to work with them of course some places are all the some of those same places are highly regulated and they have lots of opinions about oh this is this is exactly right or that's exactly wrong and and so you know policy can can be a double-edged sword so we obviously want supportive policy and I mean as a as first blush um a price on carbon would be the first thing that would encourage uh you know emitting Industries to reduce their emissions and in the US we don't we don't have that right we have the carrot approach but not the stick and what I what I'd like to say to to folks who are very supportive of r d Innovation etc those are incredible and we need those but they only take you so far they don't actually deploy the technology you know we need we need people to want to and need to deploy the technology and so policy is number one then you get into The Usual Suspects of financing infrastructure you know really getting these synergies uh and then finally a like a higher level one and I think that as part of our conversation right now is also sort of um the the inertia of of confusion about where are all those things I just mentioned going where is policy going you know as a company you know people with fiduciary responsibilities do they bet on an early technology a startup or something that hasn't been tested or it's been deployed commercially in a couple facilities but but not in not in the United States for example um and getting everything to work work right with the IRA and the the bipartis infrastructure law right and getting connecting all the dots getting the the energy transmission infrastructure in place Etc and you have got big emitters making big decisions and if they make the wrong one they're like out of business kind of it's kind of that bad right so I think that's uh ultimately all of that swirl of stuff just just doesn't doesn't lead to certainty and to making big investment decisions so we have to tackle all of them good luck with that hey welcome welcome to my my everyday and probably you know 90 of the people on this call are more yeah probably true all right so let's uh let's move to some of those questions uh first question is are your only inputs uh uh uh uh uh is CO2 Rich gas and bacteria um so no it's it's carbon monoxide carbon dioxide and hydrogen in various compositions so we we have to look at industrial gases we'll look at what the specific composition is and whether we need to bring in additional hydrogen for example but to the extent that we get you know fairly pure CO2 streams CO2 is inert so you know you and I couldn't eat just that and and neither can our bacteria we would need to feed it additional energy in the form of hydrogen it tends to like to operate on carbon monoxide which is why we have have targeted things like steel mills which do have energetic gases still available but uh but any of those options gasifying um biomass Etc that's giving us essentially coco2 and hydrogen okay all right next question uh if the process that's described as possible especially industrial off gas capture and conversion wouldn't this be a more sensible thing to pursue than deep well injection of carbon which is being uh pushed by the department of energy and other agencies in the United States well I mean my general view is we need it all I mean you need all of these Technologies and and you you mentioned earlier in the intro the the gigaton question right and so um and you also have different different Regional differences Etc so you know I I think I think we need it all and to get at that scale um I do remember being you know a younger Hill staffer and having people come in and explain to me some of the other utilization Technologies like baking soda Etc and all I could think of was we're going to be buried in baking soda right if you put it all to one thing um it's just like moderation and balance in life uh it that won't work so I do think we need the wide array of solutions particularly just on that scale question it's just so massive that um it's hard for me to think of ways to only use utilization for for all of that waste carbon we we have we have taken millions of years worth of solar energy in that's in biomass that converted to fossil fuels and we have put it up in the atmosphere in basically a century and a half and and we got to go get that stuff in some way and avoid avoid new to the atmosphere as much as possible has your company done any back of the envelope calculations of of what percentage of this overall process might be utilization as opposed to uh to storage in the in the future uh not really and part of that is just it it's really hard to do that I mean iea and others have have attempted to do such things um but I'll go back to my regional comments because the the both the sort of built environment and the geologic sequestration options and um you know the nasancy or or your relative development of the countries that we're dealing with they're all over the map and so it's really hard to to come up with I mean there's probably a theoretical um answer to that question but there's also the question of you know sometimes utilization products can can be um you know long-lived as well right concrete and other things but there's only so much concrete in the world right um so I don't have a good number for that but I'll go back to my we need to do it all anyway so and there's plenty of Market to share okay all right next question um uh with uh with a bit of a of an environmental justice overlay uh in the conversion of landfill and plastic waste uh what are the air quality and quality of life impacts to communities near these facilities that uh gasify uh plastic waste yeah great great question so um we're really looking at all aspects of of environmental justice and and diversity Equity inclusion and accessibility Etc um you know that's that's exactly the question you need to ask when you are actually gasifying something and one of the challenges there are many different gas fires there are hundreds of different gasifiers it's not like you know Coke and Pepsi are like the two the two big uh contenders uh in in gasification world so um you do need to look at that there are lots of systems for gas cleanup Etc and uh pollution control so you know you re but that is that's the question you need to ask I mean I think we would prefer you out of the landfills you get as much of of things that are like Plastics that are recyclable and you do mechanical recycling of those but then converting through gasification into gases that can be used the good thing about what we're doing is we have biology in the middle so rather than um additional chemical processes you really looking at the biology moving and you're converting those gases into something useful and then we have wastewater treatment on the back end so if something has come in through the system it will be removed as a solid on the back and the back end but great question and we are absolutely attuned to that and looking at it closely for projects okay thanks uh next question uh what kind of CO2 capture technology do you use is it your own or do you license or uh uh contracted any Partnerships on the capture side I'm glad I'm glad this person asked this question because it's it's different than when we hear the words carbon capture those of us working in the space we usually think about using amines and other things Etc to to capture the carbon income and uh and uh concentrate it with the lands attack process we're talking about like putting a straw in and and just just feeding off the actual raw gases from from the industrial facility so it's it's actually we're taking all of the gases not we're not just getting it down to the carbon dioxide now we may need to do some um some concentrations Etc but overall in terms of lands attack we're just taking those industrial gases assuming we've you know agreed that we looked at those compositions and we and it has enough energy content for example um to go into our process so we don't have to go through those really high energy penalty processes uh high heat uh you know temperature gradients Etc and lots of of catalysts going in you know to in chemicals to to Really concentrate the CO2 so it's a little different than the traditional carbon capture world that we hear about okay great question next question what's the price difference between current alcohol to Jet uh production versus synthesis from carbon dioxide and uh and hydrogen jet ooh okay well I don't I don't have that answer that's a that's a that's a good economics question um you know I know essentially all of the sustainable Aviation fuels are at a maybe two to three times jet fuel petroleum-based jet fuel but I don't I don't have the depth of numbers to be able to to parse out the differences I would say they're all you know generally um in in roughly the same range and we all sort of lobbied together for the sustainable aviation fuel blenders tax credit for example in in the inflation reduction act that sort of thing where you know you get a dollar 25 to 1.75 a gallon to help make up that difference and really it's about the competition between the the ground transportation fuels because right now you know we're pre-ira making renewable diesel made a lot more economic sense um but now we're finally seeing closer to a Level Playing Field so that yeah I'd have to I'd have to talk to our friends at Lanza jet or others to to see if those numbers are are knowable right now right but probably in line with that with that double or triple uh metric that we we generally look at in that sector correct that's what I've heard yes okay thanks for that um next question uh does it make sense uh to focus on development of thermochemical Pathways such as pyrolysis and hydrothermal liquid liquefication over uh oleochemical Pathways for production of fuels there are um probably a hundred people at Lanza Tech much better suited for me to have than me to answer that that that's deep in in the chemistry um so I I'm gonna have to take a pass on that one I'm happy to be in touch with with the whoever's asking that but that's that's a little too chemistry not my political science side okay thank you that person's denominator is anonymous attendee but if Anonymous attendee wants to drop us a line we'll uh we'll pass it on to uh uh to Tom to pass it on to uh to some of the folks there uh for a response uh next question um our feed stocks like Municipal Solid Waste uh use to produce jet fuel from what I understand only bioethanol from cooking oil can be used to mix up to 50 uh blend with fossil jet fuels um and so so there are essentially seven uh ASTM approved Pathways for saf um the the reason we think about the the sort of fats oils and greases the the fogs um or or hepha you'll feed stocks is because those are the most readily available so yes those are the ones that are are being used early but what I'd call second generation sap technology like the alcohol the jet um technology that that we have spun out to lands a jet those can absolutely use all the waste that I talked about before or or including industrial but uh but yeah MSW or biogenic waste from from biomass uh from you know landfill gas you know there there's a lot of different Pathways to get there that have been approved for this 50 uh blend essentially into Jed a which which uh all saf all staff is able to be Blended at 50 at this point and uh the you know the oems ETC are working on getting that up to 100 I mean we've yeah my CEO flew on a flight from United from Chicago to Washington where one of the engines was on 100 sap um and so we we trust that it works okay all right uh next question uh where is the uh uh the green premium the lowest for products made with uh lonzotec uh process where's the green premium the lowest oh gosh um yeah that I'd say the green premium was all over the map and so I go back to it's it's partly Regional uh which country you're in how much pressure um you know each sector is under and then within within sectors right you know some manufacturing facilities I mean take the EU ETS for example you know some some sectors have been in for a long time others aren't you know some are Upstream um products some are Downstream consumer products which you know sometimes are are laggards in terms of if they're going to have direct regulation it's more up it's more Upstream at the sort of basic chemical and material Level so I I don't I don't know that there's there's really an answer to that question I mean we certainly see more and less developed markets I mean obviously the EU is a highly developed Market they've they've had a regulatory scheme for quite some time the US um is is you know behind that obviously lots of us were working on trying to do economy-wide uh you know Kappa trade um you know over a decade to go didn't happen right so so we're we're even our two you know relatively similarly developed uh regions are are quite different um and then you have India for example we're doing a lot of work in India but that you know they're they're really pushing for a fuels policy I mean they're they're still bringing energy and clean water to to their you know over a billion people right so um I I think it's you really have to parse it out there's no there's no blanket answer to that question it really depends on the sector and you see some of the early deployments that we've done in fragrances in cleaners in um in Fabrics you know for Consumer facing Brands so you know some of these that are more iconic more recognizable but where we're going and what we're trying to do is make sure that we get we actually get that premium lowered so that there's more accessibility of lower carbon products for everybody for all people and not not just in develop fully developed economies when we were talking about India China Africa you know all around the world and even in United States and other developed economies we we think you should be able to go you know buy strawberries that are packaged in in a sustainable package not um you know not only um some of the higher end consumers consumer goods but those are some of the places that that just makes a lot of sense to start in okay uh next question uh what about non-carbon dioxide Aviation emissions yeah great question um well this is this is actually one of the the benefits and advantages of moving to sustainable aviation fuel um we don't use that word sustainable uh lightly and we don't mean it only to mean greenhouse gases um there's a lot of work being done on looking at contrail reduction because there is contrail reduction now the exact um effect of that on climate is is being studied so you don't want to be definitive about that but if you look at a particular matter Etc um you know there are essentially no aromatics in saf so it is it is actually much lower polluting so I you know I really think about about get back to the environmental justice questions is about what airports look like uh if if those those planes on the ground are you're burning sap there there's hardly any air pollution from that so you know it they're actually amazing reductions and there's also a higher energy density to saf so you can use less of the fuel itself as well so there's a really incredible on co2 emissions benefits from using sap okay and that's basically all staff not just not just the kind that we that we work with with alcohol to chat right all right uh let's see what percentage of carbon dioxide that's captured is uh utilized in in products such as fuels or chemicals um you know that's going to be very case specific um and for us it's about how much energy we can bring to the CO2 um so if we can bring enough hydrogen we can get essentially close to 100 carbon efficiency which is bringing back is is embedding that carbon into those products to the extent that we go less than that then there would we would just get less abatement um than than would otherwise be the case so so you can get up to you know close to 100 CO2 conversion into products but again it's going to depend on the product it's going to depend on on the system you're using and and what you're bringing to it okay so for us that means CO2 and hydrogen basically um speaking of hydrogen um this is this is a question I had also so I'm glad to see it teed up here um it says from what you've told us your energy source is hydrogen uh what color hydrogen are you using if green does that rule out certain locations such as without wind or solar do you have to say no uh to some steel plants so um hydrogen is is important for us it's not the only energy source though so if we get carbon monoxide that has carbon and energy so that's the first thing we want so but but then if you do go to Pure CO2 we yes we need hydrogen um we are color agnostic we want low carbon hydrogen and we want it as low as possible and green is ideal right you know green or if you want to say pink for for nuclear I mean it is it zero carbon hydrogen is what we want um and it matters too I mean the life cycle of you know we we will use so much hydrogen that the if there's if there's any blip on the the life cycle screen um that will be a problem for for our overall life cycle emission story and so you know that that could yeah if we if we get if we were to use um higher carbon hydrogen it just wouldn't make a project make sense because lanzotec is not in the business of just making stuff with use with cart with waste carbon we're in the business every reducing global climate change okay so that so that's a very important pillar of it's that's like why we exist is to improve climate change if we don't actually improve the climate situation then that's not something we're we're seeking so we have to make that life cycle work right so does that really constrain you given the fact that there's a very small percentage of of hydrogen that's being made with green hydrogen at this point right um does that really constrain uh the the operations that you can engage with and and ultimately claim from a life cycle assessment that there's a substantial reduction in in CO2 emissions um well first I'll say there is some low-hanging fruit so to again to these extent that we find emissions um from industrial facilities that have carbon monoxide have energy already or they or some of them actually also have hydrogen and just as a part of their process so they might have Coco CO2 and hydrogen in various ratios so I'd say every ton of carbon we can Abate is is a good ton to Abate and then um you know getting to you know nearer to Perfection will absolutely require um the the build out of the the clean hydrogen industry and so we're very supportive of that um so so yeah I mean it it's a limiting factor as there there are lots of limiting factors though to to all of this right back to my you know talking about projects and how we put them together you know you also need enough enough clean electrons to make that hydrogen and if you're doing it with electrolysis you need enough water to do that and if you're you're either moving electrons or you're moving hydrogen unless you're doing it all on site which you know lots of concentric circles that you kind of have to to work through and it's it's not just the Lanza Tech Challenge right this is a societal challenge that we're all trying to work through um but again we're trying to find highest best uses of that waste carbon and uh and think we need to get started today so even if if there's a project that's you know not perfect if it's really good we'd like to do that do that project and then over time as that infrastructure develops it just gets better and better for us and more impactful okay uh next question uh this question related to to uh to carbon accounting uh in order to count or realize reduction or removal and corporate inventories does lonza have to get a credit verifier involved in other words does this technology enable selling offsets or do your corporate clients just aim to reduce their scope one emissions um you know I actually haven't been close enough to some of our specific deals with customers to really be able to answer this question well um but you know there are certainly cases where we would need a third party verifier um and then certainly with some of the government programs that's a requirement 45q is an example you know Carbon utilization is the only part of and by non-non-enhanced level recovery carbon utilization is the only area within 45q that requires life cycle analysis at all and we have to prove sequestration into a product or displacement of fossil fuels in that final product by making the final product so and those require third-party verification as well so um I think it's it's really Company by company how they're doing this um yeah I think it will it will solidify over time but you know I've had lots of discussions over the years in this job and others uh you know about how consumer-facing Brands and others who have made those commitments however they're going to meet them and I do think as kind of a company by company answer at this point are you are you uh you or the the companies that you're working with uh heavily engaged in the 45q process at this point yeah like yeah yeah I mean we've we've been we've been heavily engaged in 45q for quite some time um and when when Lance attack was was working with uh my with me and my previous company steel company in the U.S you know we worked to actually change the definitions of of the 2018 45q update to include carbon oxides not just carbon dioxide to make sure that you don't have carbon monoxide out there that has to be Transit transferred into CO2 right you have to um you have to under EPA destruction requirements you have to flare it basically and so we thought that was a really bad idea if you could capture it and use it for something so we've been heavily engaged in that we were heavily engaged in the the IRA and of course are following very closely the you know the IRS treasury guidance as well around the program all right uh next uh questions uh which of the precursors you are making has the most potential to scale to gigatons of carbon removal annually well I mean I would start with the ethanol that we're making I mean that in many cases that can re that can replace uh the fossil fossil carbon that is going into the the petrole uh petrochemical refining industry so that's a huge swath of of emissions across the economy so so that's a huge one and then then it's almost subsets of that to some extent if if we can get to a a particular chemical um by skipping processes so instead of inserting ethanol into the existing supply chain which could still include um some other uh emitting not greenhouse gas but you know there's there's some really um uh hazardous processes that the chemical uh you know we're finding in you know industry has to go through if we can skip those and use biology to go directly to those like Meg we were talking about before and and Skip some of these more polluting um vectors then then that's that's really going to be a big win as well well and again Beyond just the CO2 but I would say yeah yeah making ethanol and making those chemicals that today come from fossil fuels that just that's a huge that's a huge Market okay all right well we're we're going to move to intellectual property rights uh is it uh is it possible to uh to patent microbes how does this work um yeah we have at this point I think we have over 1250 patents um and well over usually over 500 pendings so IP is the name of the game for for us a very important part of our business business portfolio um and we are patenting um not just the specific biology uh I don't know the specific answer the question whether we can patent a microbe specifically but I think we can patent the the the method by which we have produced that microbe doing a lot of synthetic biology and uh and how the biology works with the engineering and the chemistry you know there's a lot of processes that are that are going on here that that we have a lot of expertise in and really you know on The Cutting Edge of of those and using artificial intelligence for example characterizing how organisms will react to different uh different concentrations of of um of gases and also you're working with with different uh bio catalysts and essentially like the vitamins and you know the enzymes and the things that you would work with uh with the biology to make it make it work so really interesting area I do have experts that could talk much much deeper on that um but yeah IP is critical to our our industry um how much uh carbon monoxide versus carbon dioxide does your process need can it run on just carbon dioxide plus hydrogen um I mean I think the short answer is yes um but what happens biologically is that the organism will actually split carbon dioxide back into carbon monoxide so it does like it does like Co um but I I you know I think we're working on that but obviously we're starting with with carbon monoxide uh concentrations and then adding in additional CO2 and hydrogen on top of that is is sort of the preference um but I think from a technical perspective you could you can get there or you can take CO2 and you can run that through an electrolyzer and convert that to CO as well the bug does like Co that's that's its favorite it's his favorite food it's like ice cream foreign I've never heard carbon monoxide compared to ice cream before so that's that that is that is a first all right uh let's see uh what expertise is required uh on site to operate your process does it require lots of Maintenance or expert babysitting can it scale down to smaller sites where appropriate gases are generated by some process yeah yeah great great question um actually I think of this also in the context of the energy transition because you know these are small biorefineries um it's a lot of valves to be turned um you know it's but but it's not um you know it's not something we don't need a bunch of phds running around doing this this is really blue collar jobs you know you might have an engineer on site Etc but um no these are great and in fact this question about scaling down right most people ask us about scaling up but we are really interested in finding the right scale and and that is mostly driven I think as as the the questioner was sort of insinuating on feedstock right so you want to be able to put these um you know and they the the units right now are modular I mean some of these facilities like the there are some metal Ghent facility which uh was just commissioned in in December um it has four you know bioreactors and so you know you can put these in train you could put a whole lot of them or you can put fewer I think where where the rubber meets throat is really about economics of that it's how you know how big does it need to be with that given feedstock at what cost and with which utilities because once you build this you know you've got to build in to make sure you have enough power and and the other utilities that need to come in uh maybe they're already existing there so that all gets around really to project economics and how much does it take you know how much production do you need to make to make enough money by selling that product to uh you know to essentially pay off the financing for the facility mm-hmm you probably don't know because you don't have a lot of experience with it but you think that would create any constraints in terms of uh smaller uh DAC or Bex facilities for example I mean what what scale do these have to be to be to to cost out um I I don't I don't think well okay yeah I mean Everything's Relative right so you know if you get a thousand thousand ton a year facility that's that that's not going to make enough that's not going to make enough product right so you know I think I think we're really looking at um probably a hundred thousand tons of CO2 a year or more would probably be you know kind of in the in The Sweet Spot um in terms of coupling that with with hydrogen and gas fermentation okay that's helpful all right I think we have time for one more question and uh uh uh we always have a question on biochar so I'm glad we had one in here so it's kind of a Hallmark of the of the series uh so the question is uh biochar production is always accompanied by syngas carbon monoxide and hydrogen good lonzotec work with uh biochar companies yes yeah sure sure short answer absolutely and by the way if we are using gasification technology we could also have biochar availability so we're interested in that as well and looking at the applications for you know better uptake of soil uh of CO2 in soils and other applications of actual biochar so that's um that's of interest to us not just as a potential syngas provider but also as a as an end product and I didn't even talk about the fact that we also get a protein with our bacteria you know it has an end of life and it it is a high protein source so you know for example in our China facilities we're able to take that and use that as feed for um for chickens for fish you know you name it so um that's another opportunity to really get as much of that value and carbon into the system as possible all right that is a good place to stop we are at the top of the hour so I would uh first of all like to uh thank uh Tom for uh uh coming on the show and uh and and telling us about this uh uh this fascinating process which is I said um will ultimately have a lot of implications for uh for the for the CDR uh industry as we look at this uh mix of of utilization and and storage and and what will be the optimal uh balance uh thereof is going to be heavily influenced by what what utilization

2023-04-13 15:06

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