In this episode, Ross and Siobhan are joined by Ongeleigh Underwood and Nikki Batchelor to delve into the newly released report from the Circular Carbon Network, an initiative of XPRIZE. The report provides valuable insights into the state of the Circular Carbon Market, addressing crucial questions such as who is building Carbon Dioxide Removal (CDR) projects and who is funding them.
The conversation explores the role of XPRIZE in fostering market growth and collaboration, and examines how companies have evolved since the last carbon-focused XPRIZE, which is when the report started gathering data. Ongeleigh and Nikki shed light on the partnerships formed by companies to complete the carbon removal process and discuss whether Direct Air Capture (DAC) is having a moment.
Listeners gain valuable insights into the current state of the market, funding trends, technological advancements, and the role played by XPRIZE in driving innovation. If you haven’t yet, read the full report here!
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Circular Carbon Network’s state of the market report 2022
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Full Transcript
Alexsandra Guerra: You’re listening to the Reversing Climate Change podcast by the team at Nori, the carbon removal marketplace. This is a show about the innovators and entrepreneurs developing solutions to climate change.
Ross Kenyon: Hello and welcome to the Reversing Climate Change podcast with Nori. I’m Ross Kenyon. I’m one of the co-founders of Nori, which is a carbon removal marketplace in Seattle, Washington. Today I have with me co-host Siobhan Montoya-Lavender of Thanks a Ton and our Meme Lab meme writers crew. Hey, Shiv.
Siobhan Montoya-Lavender: Hey, Ross. How’s it going? We are also lucky to have with us today, we have Nikki Batchelor, who’s the Executive Director of the Carbon Removal XPRIZE. And we have Anjali Underwood, who’s the Managing Director at the Circular Carbon Network. And today they’re going to be talking to us about the report they released on the state of the voluntary carbon market, evaluating what’s happening in 2022. So we’re going to dig into some interesting statistics. We will drop a copy of it in the show notes. So if you want to open that up and follow along, but also just feel free to listen.
We’re going to hear how the carbon markets are doing in the US and globally. Here we go. Welcome, Anjali and Nikki.
Unknown speaker: Hi. Hey, thanks for having us.
Siobhan Montoya-Lavender: Yeah, thanks for coming on board. So I’ve been wanting to talk about this report for a while now. Since I first laid eyes on it. And I think there’s some interesting insights, but mostly I want to just kind of zoom out to begin with and say, why did you guys make this report? Where’s, where’s the virtue of doing this? Where’s the value add and who is the audience for this report?
Ongeleigh Underwood: Yeah, so I’ll take that one. And I also want to clarify, this is actually just the state of the market. So it’s not necessarily the carbon markets particularly. So it’s actually the state of investment trends, commercialization trends in the market. So we collect innovator data from, right now we have over 700 companies that are working specifically in carbon removal, carbon conversion, point source capture, and some select market infrastructure support companies. Most of our data is reported directly from those companies, so we collect intake surveys on different technological dimensions, commercial dimensions, and investment trends going on within those companies, and we pull all of this data together in our market report.
We obviously make it anonymous, and then we also Analyze it over time. This is our third annual market report, so we do have the vantage point of looking back, which is always very interesting. But really this data is for anyone who’s interested in learning more about where we are in development, where companies are generally. We think it’s a really unique snapshot of what’s going on because of how the data is captured. I’m not sure there is Many other primary sources of data collected in the same way that we have been doing so.
And also we’ll say that one of our other side of our mission is to increase investment in the space. And so we do that by collecting data on deals, live deals from these innovators. And we’re targeting basically investors, corporates that are looking to grow and invest in the space.
Ross Kenyon: You mean deals both in like BC deal flow, funds being raised, equity, debt, and then also like big purchases, all of those things together?
Ongeleigh Underwood: Not necessarily purchases, but yes, everything else that you’ve mentioned. Yeah. And philanthropy as well, alternative sources of funding as well is captured in this data.
Siobhan Montoya-Lavender: Yeah, and I think that the kind of trends over time are really interesting. And so I guess one of the first questions would be, What are you most surprised by this year compared to last year? Because you have, you know, 2021 data. We’re looking at 2022 data. A lot’s happened in one year, which I think, you know, I sound like a broken record in the carbon removal space when we talk when we say that because it’s constantly a lot’s happening. But really, you can illustrate that there was some big changes.
What surprised you guys?
Ongeleigh Underwood: Absolutely. So I can’t wait to dig into that, but I would actually like to take a step back and step back even further to the beginning of CCN and let Nikki talk a little bit about how it came about and how it’s really aligned with the XPRIZE and both of the prizes that they’ve run in thin carbon. So it gives us a little bit of a better perspective.
Siobhan Montoya-Lavender: Yeah, for sure. Bring us back to the entryway. Here we are at the very beginning of the door. Nikki, why do we even have Circular Carbon Network?
Nikki Batchelor: Yeah, thanks for that. We launched the Circular Carbon Network back in 2017. At the time, the first Carbon XPRIZE, the NRG COSEA Carbon XPRIZE, was underway. And that one was more focused on carbon utilization, carbon to value, turning CO2 into products. And, you know, we realized that this topic was still very new for a lot of investors and, you know, folks kind of were starting to get interested in what is this circular carbon economy. And we saw an opportunity to leverage the data points that we were collecting through the prize into something that was a little bit more holistic about the growth and evolution of this new market.
But also, simultaneously, we wanted to educate all of the new investors coming into the space and looking at these companies. We also had a direct interest in helping our teams competing in the prize. Raise money at the time because they were really struggling to build these first of a kind demonstrations and in all different kinds of markets that they were working on, the different products that they were developing. And so we started kind of digging into this topic and gathering data and started figuring out like where might be a place for CCN to play.
And so the first few years was really like just trying to bridge that educational gap. We were trying to put out, you know, background, So we did a lot of content and research on the space and it kind of evolved into what we have now, which is a series of databases or indexes where we collect information on innovators. We have an innovator index, which really features all of the startups working in the space. And as of the most recent report, we have over 700 innovators represented, which is amazing. The capital index also profiles all the different investors that are now like actively getting into the carbon tech scene.
And so we are really trying to expand the scope and mission now that we have the XPRIZE carbon removal, which is a 100 million dollar competition funded by the Musk Foundation. And we’ve really tried to bring in all the carbon removal data and layer that on top of the kind of carbon tech utilization data. And so it gives a nice holistic picture of how both of those markets are evolving.
Ross Kenyon: I feel like I hear very little about carbon devalue as a category within the world of carbon removal. Are my ears just sealed up somehow? Or are these sort of in parallel, but there’s less intersection than maybe one might expect as an outsider?
Nikki Batchelor: Yeah, it’s a great question. I mean, we definitely are still kind of tuned in to the carbon to value space because we started there. That’s kind of where our first prize originated. But I think the carbon removal conversation has really kind of taken a little bit of a turn where that is less of the focus right now. And so I think, you know, some folks are able to kind of hit both categories, you know, depending on how your approach is You know, is removing CO2. So our first prize focused on point source capture.
So that’s not really carbon removal from the air or the oceans, which is the focus we have now on the current prize. And so that’s an important distinction to think about where is the source of CO2 coming from? And then the other important distinction is where is the CO2 going? How are you storing it durably? Is it being re-emitted after fuel is being used or is it being stored durably in concrete potentially? Like that one maybe is hitting both categories in the mineralization side of carbon removal, but also the product side.
So I think there’s overlap, but there’s also a lot of distinction. So it depends what segment of the market you’re looking at.
Siobhan Montoya-Lavender: Yeah, I liked though that you really collected data from all All portions of this kind of what we think of as carbon capture, carbon removal space. And as much as sometimes we try to distinguish and separate the two industries, there’s so much overlap, whether it’s technology or storage or even just the people working within the industry. So I thought it was valuable to see a report that really was speaking to both. But then obviously, you know, every graph has CO2 removal, CO2 capture, you know, separated. How do you think that’s been received by the carbon removal community in general?
Because there is kind of this dichotomy of like, how integrated are these two communities?
Nikki Batchelor: Yeah, I mean, anecdotally, I’ll just share, and Anjali, you can maybe speak to the specific kind of breakdown of the market segments, because that’s interesting that we have that data now. But we are seeing a lot of The teams, the carbon startups from our last competition, try and take what they started out as point source capture technology and then now broaden it to include like a direct air capture front end or, you know, they’re experimenting with different ways of Bringing the segments of the end-to-end carbon removal solution online. And so everybody’s looking at it differently, but there are a lot of kind of repeat teams from the last prize that have entered in the new carbon removal prize, but they can’t do what they did for the last one.
So they’re trying new innovations. And I do think we’re seeing some interesting progress coming out of that. But Anjali, what do you think from your perspective?
Ongeleigh Underwood: Yeah, absolutely. So we spent a lot of time over the last year and a half, 18 months or so, integrating carbon removal into our index questions and our intake survey, and then really specifically targeting carbon removal, because again, the origin of the indexes. It was really in utilization. So we’ve just seen a huge jump in responses of folks specifically working on carbon removal. But we also saw about 180 of our 700 are pursuing more than one solution type. And most of those are doing both removal and conversion. So you’re seeing a lot of mixing as well.
Ross Kenyon: Within the same company that are developing removal tech and carbon to value tech at the same time?
Ongeleigh Underwood: Yeah, well, they’re essentially classifying their solution as such.
Ross Kenyon: Do you have an example or maybe even a couple examples of companies like that?
Nikki Batchelor: No, I’d say like a lot of the companies that are looking at concrete, you know, carbon care is in both competitions. So they’re kind of looking at, okay, what does it look like to go from... And think that’s a good example. There’s kind of a lot in that in that realm. If we want to go deeper, we can. I don’t know how long you want to talk about this.
Ross Kenyon: I don’t know how it’s going to change because I mean, the long running one of the oldest Nori pieces of wisdom that we picked up from an early advisor was that no one really wants to buy a barcode and the risk of doing anything within the world of offsets or carbon assets is people are just buying like an intangible feeling and or a mark on a balance sheet that it really doesn’t feel as good as you might want it to. And it was interesting to see For a while, I feel like I used to see more projects like this that were trying to diversify, be like, well, even if the carbon markets never show up, we actually are producing something of value that we could still sell.
We will still have a market if there’s no policy, if there’s no market that arrives in time, we’re still good, or at least can hang on long enough where if you’re only dependent on carbon offset selling, then you are at risk in a market where there’s less availability of funds for discretionary Budgeting. Go ahead, Anjali. Looks like you want to bite on this one.
Ongeleigh Underwood: Well, I mean, this was something that I was thinking about. What surprised you the most? And that was one of the, I think the things that did surprise us the most is that over half of the companies that we surveyed are split on revenue. So half are making a physical product and have that revenue stream. And the other half basically don’t. And additionally, we did see about 160% jump and increase in responses of folks really targeting the carbon market as their target customer. So it does play out.
Siobhan Montoya-Lavender: I’m curious to see, like, from your perspective, how the XPRIZE’s announcement of this new XPRIZE, not the Koja XPRIZE, this current one, how that impacted that jump? Because I noticed one place in your report you talk about You went from 35 countries to 55 countries represented in terms of teams competing. And that it’s interesting that it coincided with this prize. And there was a belief that this prize actually increased the number of people participating. Anecdotally, I certainly think that’s the case. I remember the week after the prize was announced, Tito Jankowski of Airminer’s said that he was inundated with applications to join Airminers, that there was just a massive spike that could be attributed to nothing besides the announcement of the prize.
And so how do you feel about your role in expanding, you know, CDR startup project developers?
Nikki Batchelor: Well, I think we feel great about it, if it’s actually true. I mean, that was the whole goal of the prize to begin with. The purpose of using an incentive prize model was really to increase the Amount of carbon removal supply that existed out in the world. So that’s kind of our primary like guiding force. And, you know, we’re seeing the numbers coming in that show that it’ll be interesting to see how it kind of evolves over time. But right now we have over 1100 registered teams in the competition. I think it’s from over 85 countries as they count right now.
It’s amazing to see that volume, but also we know that the real number of projects will be smaller than that, but we’re still waiting to see how it plays out because all of those folks basically raised their hand and said, I want to take a stab at this. They signed something called a competitor agreement, they joined the competition, and so they’re like, Technically all signed up and ready to go. But now they have to build a physical demonstration. So they have to remove a thousand tonnes of CO2 next year, basically.
And so the competition is still open, which a lot of people don’t realize. You still can register and throw your hat in the ring for the remaining $80 million that’s on the line. And September 7th, 2023 is our deadline for that. At that moment is when we’ll really get a sense of how many physical projects are being built in the world because teams have to submit something called an intent to compete, which will give us like the latest details about What is your project? Where is it going to be? How much progress have you made?
It’s kind of like the precursor submission to the real submission that happens next February. That’s like a deep technical data set that the judges will review and pick our 20 finalists that we work with really closely next year. I think, you know, we always make bets on our side like how many people will make it to that point. We hope it’s still, you know, within the hundreds of real demonstration projects that are up and running and moving. I think one of the challenges with The whole kind of competing in the prize and also building your businesses, like the timelines don’t always align 100%.
And sometimes companies do have to make choices about, you know, where they put their money and how they construct their timelines. And so that knocks a few people out of the competition, just like logistically speaking. And, you know, things outside of people’s control sometimes get in the way too, like permitting delays. That’s a really big topic of discussion right now in the U. S. especially. And then also things like supply chain delays, like things like that. Might be hindrances to really strong companies and teams. So I think we try and take a industry-wide approach, like looking at the cohort, the prize is about accelerating the whole industry.
It’s not about just focusing on a winner. So everything that we’ve been doing in the background, things like the circular carbon network report, work that we’re trying to do to advance environmental justice, all of these things are really trying to move this space forward broadly.
Ross Kenyon: I love the approach in general. I think it’s really inspiring. I think it’s encouraging to people to have a contest like this. Um, it makes me think whimsical thoughts too. I remember reading that the ancient Greeks had invented a steam engine. They like put fire underneath a brass container with water and it had like two spouts on it and the steam would just spin it around, but they never figured out how to hook it to like a locomotive device to turn it into anything. It was like I wonder if anything like would fail in this contest that would be that the archaeologists will discover like 3,000 years from now or like they were so close to figuring out cold fusion, which I guess we have figured out now at this point.
That’s a kind of whimsy though that a contest like this invention-based makes me think. I think that’s a really important communications tool. Like it’s inspiring. That’s just me saying nice things about you. I’m glad that you exist and I’m doing this. No question, just thumbs up.
Nikki Batchelor: Well, I think you’re right, though, that many things like might not pass muster right now, but they might be huge inventions 5, 10, 15 years from now. And they just needed more time, more investment to get them to the place they needed to be more research, you know. So hopefully some really great stuff will continue to come out the back end as well.
Siobhan Montoya-Lavender: Yeah, because, you know, There’s a lot of kind of OGs in this space that probably signed up on day one, right? They’re like, yes, we are already doing this. This fits with our manifesto. But then there’s all these smaller teams that maybe just have an idea and... Yeah, they might get knocked out in this next round because maybe they’re not at a stage where they can remove 1,000 tonnes, but maybe they’re at a stage where they could remove the first 100 tonnes, and maybe they go on to become something because they had the initiative to start this, to compete in the prize.
So I think that’s also kind of very catalytic in these formats, and I’m excited to just see, I hope there’s a way to track these teams over time, even the ones that don’t end up Competing or winning, I would love to just see like where everyone is five, 10 years from now. You know, I think that could be really exciting. So what do you guys think? What do you guys think about the teams you have in terms of the context of this report to kind of bring it back to the report?
You know, in terms of the breakdown, first of all, I felt like Dak is just having a moment right now. So should we talk about DAC? Both policy wise, both technology revenue level wise. Do you guys see DAC as like this big, big behemoth in the industry or how do you view it?
Ongeleigh Underwood: Yeah, I mean, well, it’s not about how we view it, right? It’s what the data shows. And what we’re seeing is that DAC does have the most amount of rounds out there. I think we’re looking at somewhere around 44 deals, just as what we’re tracking organically and just want to just Double down on that. Like we are, this is an organic collection and we do do some research as well to supplement it, but I’m not going to say that we represent a hundred percent of the industry, but yeah.
Ross Kenyon: 44 deals, like one company might have multiple series deals within it and that’s, it’s not 44 companies, it’s 44 deals, right? Am I correct?
Ongeleigh Underwood: 44 deals, but that’s mostly represented per company, mostly for the most part, yeah.
Ross Kenyon: Oh, okay. Sorry to interrupt, but yeah. Okay.
Ongeleigh Underwood: Yeah, no, yeah, totally. And yeah, so they’re raising the largest amount of rounds and have the, you know, the total deal value of what we tracked at 1. 2 billion. So yeah, they totally are having a moment.
Ross Kenyon: What’s next after them? Oh, sorry, go ahead.
Ongeleigh Underwood: So DAC and LAND, Ecosystems are about actually head-to-head, maybe 1% less on land ecosystem solution.
Ross Kenyon: Wow, I guess I wouldn’t have expected that, except unless you’re counting something like Indigo Ag, which they’ve raised oodles of money, so maybe that bumps the numbers up?
Ongeleigh Underwood: Oh, are you talking about from the amount of people out there or of deals being raised? Deals being raised, we’re looking at conversion being the next CO2 conversion. Yeah, yeah.
Ross Kenyon: Well, then wait, what was I asking about then? Oh God, is this too confusing at this point? Do we need to start over? In what way is land second to DAC?
Ongeleigh Underwood: Like the amount of people out there that are looking to provide that solution. So I think it’s 39% DAC, you know, 38% land ecosystems. Like the number of companies in each of those categories. Yeah. It gets, this all gets very confusing very quickly, so it’s fine.
Siobhan Montoya-Lavender: We’re used to this. Interesting though, like the total deal value of DAC is much higher than land. It is. So that’s just, again, like DAC taking the top spot there. I mean, what is it, double?
Ross Kenyon: I mean, they got tubes. Their stuff looks like oil refineries. I feel like that stuff just looks like money, right? Yeah.
Nikki Batchelor: You know, they have the top spot, but just because they’re the most expensive doesn’t necessarily mean.
Ross Kenyon: More money, more better. It’s simple.
Ongeleigh Underwood: Yeah, I don’t know.
Ross Kenyon: This is the level of analysis that I bring in podcasting, by the way. We’re modern-day philosophers. Just want you to know. There’s a lot of philosophy here.
Siobhan Montoya-Lavender: We’re going to destroy Anjali’s podcasting experience. We’ll look back at every episode and think, oh my gosh, is that really how this was made?
Ross Kenyon: Literally that stupid, yes, it is.
Siobhan Montoya-Lavender: I’m curious about the sources of this capital. So obviously DAX has a lot of high value deals going on. But I think something that’s really interesting is between, especially between 2020 and then 2022, Just not just the amount of money, because we all know that like way more money has gone into CDR and carbon capture, but the sources of the money. So we have corporate equity still leading the way, you know, for as many years as you’ve been tracking this, but the fact that philanthropic funds really went up and also government funding.
So what do you think that means for the for the ecosystem?
Ongeleigh Underwood: Absolutely. Siobhan, you’re really touching on all of the top points that I had pulled out for this podcast. You’re doing it organically. So that’s great. Yeah. And so, yeah, alternative funding in general has increased. We see about half of all reported capital raised to date is that alternative funding source. So that includes founder or self-funded capital, family and friends, money, philanthropic, Government at about half of the funding that we’re seeing being recorded. Specifically grants almost doubled in response. And even angel and institutional as a reported source of funding did drop off just slightly.
Ross Kenyon: I wouldn’t have expected philanthropic money to be gone. I guess because I don’t hear that much about that relatively. I think BC, just like venture-backed companies, It’s like a lot of the oxygen out of the room, and then the policy advances too. But what should we be keeping our eyes on for philanthropy? And how is that maybe changing things and having new incentives in the mix?
Ongeleigh Underwood: Yeah, and I mean, Nikki might have a take on this as well, but I think you’re generally seeing philanthropy getting more and more into the scene and getting more into the mix and adding on arms to their funding. Strategies to play in the climate space. I think you see that reported from the innovators as well.
Siobhan Montoya-Lavender: Nisha Merchandani was on the podcast a couple of months ago and mentioned, what was it, Ross? It was like a trillion dollars or something. It was an astounding number of philanthropic dollars that are just sitting, waiting to be spent. And unlocking the capacity of philanthropic funds could have a huge impact. And she had some interesting thoughts about like why we’re not doing that or how we could do that better. But the reality is, is that those funds are there. And I wonder how much of this is just like, how much do philanthropic funds need to go to like something cool and buzzy and something that you can put on a brochure?
And is CDR there? Will it ever be there? What do you guys think is like, what do you guys think are like the hurdles to funding that you’re seeing in these reports?
Nikki Batchelor: Yeah, it’s a great question because I think there are, A number of different sources that we’re seeing of philanthropies that are trying to put money into carbon removal. I don’t have the exact percentage right now, but I know that Climate Works Foundation does track this, what percentage CDR is of overall climate philanthropy, and it’s still very low. Philanthropy for climate, I think, you know, is definitely increasing, but the CDR component is still like a little bit newer here. And so you’re seeing folks like Climate Works Foundation, the Chan Zuckerberg Institute, Grantham, all of these different philanthropies that are getting into the CDR space, they all have specific Kind of focus areas that they’re looking on.
So it’s not necessarily like an obvious fit for all the startups, but I think if they find a match, you know, some folks are able to do grant applications in that capacity. The DOE funding is going to be really significant for companies in the U. S. , all of the new money coming in to the DAC hubs and, you know, and the other kind of legislation that’s coming out. So I think definitely keeping an eye out for that. I think a lot of US-based companies are really trying to figure out how to access all of that money.
I don’t know, Anjali, what else would you add? Anything from the philanthropy side?
Ongeleigh Underwood: No, I would say it’s definitely on the smaller side of what it is that we keep our eye on and what we track. I mean, we mainly are focused on that VC and institutional investment angle and deal data. We want to continue to track that in a more concise way. So it’s certainly one of the agendas for this year coming up.
Ross Kenyon: Any funding source is going to distort in a similar kind of way. Like I think venture backed companies, they all have investors who are looking to make exits at some point or to recoup a lot of money. And that means they’re attracted to software deals that are sort of infinitely scalable. They want things that are going to eat the world as the expression goes. I’m wondering if there are similar kinds of distortionary pressures based upon public funding, government funding and philanthropic dollars. I don’t know what they are. I’m sure they have interests that they probably want to carry out through their investments, but I don’t have enough experience to know what those might be.
Do you think there’s anything there or is this a question you might not even have an answer to?
Nikki Batchelor: Yeah, I mean, I think it’s true both for kind of sources of government funding, but also corporate buyers who are willing to pay exorbitant amounts per ton right now. And it’s, you know, almost like a blended strategy of part of that is like a philanthropic kind of mindset, even though it’s still purchasing tonnes. But if you’re going to spend over a thousand dollars per ton, that is still distorting the market. I was having some interesting questions. Conversations with folks at the Carbon Unbound conference last week in New York and people were kind of musing around like how helpful that is or how distortionary it could be as you know the market is starting to evolve because it’s so necessary right now because in order for anybody to be getting these early next gen kind of DAC companies off the ground like that is the price it is going to cost and those companies need to raise significant capital to get their First of a kind pilots up and running and to bring down the cost curves as they start to scale.
But also, what does it mean, you know, that we are buying tonnes that, you know, between, I think it’s like $500 and $1,800 the recent Frontier purchases were. So it’s a hefty price tag still. Not everyone, well, most people are not willing to even entertain that. And so what is the next generation of corporate buyers that are going to come onto the scene? And what is their kind of cost appetite going to be is a big question right now. I think there’s a lot of different angles to this topic itself.
What Frontier and Stripe and Shopify and all those folks have been able to do is incredible for the carbon removal space. It has gotten... A lot of companies to where they are to be able to continue in these early years. But I think, you know, what, what it evolves into over the next couple of years and into 2030, when I believe they’re supposed to have spent kind of that fund by will be really interesting, like how we start to transition into like all of the rest of the voluntary carbon marketplaces that are out there.
And, you know, other folks that are kind of working on it from different perspectives, like time CO2 and watershed and, um, You know, they’re all kind of trying to service this corporate demand side of things. So, like, it’s also an interesting topic to ask folks, do you think if we’re demand constrained or supply constrained? People come at that, you know, from a lot of different perspectives. And, you know, I think the best answer that I have heard and I think I agree with is that, you know, we’re We’re supply constrained now, but we’re maybe demand constrained in the future.
And so we need to get more supply up and running because the folks like Frontier have already purchased up all the tonnes that are available. There’s just not that much else that’s available. We need to advance and accelerate these companies as fast as we can. But simultaneously, we need to convince all these future buyers to get into the market and start making commitments now for the future because If they just wake up in 2030, 2040 and are like, I want carbon removal now, it may not be available. So that’s the incentive for companies to get involved earlier.
Ross Kenyon: I also wonder what happens given that once, like right now, companies that do carbon removal are seen as industry leaders and super, super cool brands. But what happens when enough companies are doing it that every additional company doesn’t get really any brand value from doing it? It’s like the valley of death of PR. Like, when does that happen? I think it’s Couple of years away, but it’s like the more that it grows, the less value investing in this drives for a company. It’s scary.
Nikki Batchelor: Well, there’s the PR angle, which, you know, definitely gives folks value, but really we’re also talking about like how are companies going to meet their net zero targets. And so there’s a big. I’m a push right now to think about maybe the concept of twin targets and how do we make sure that carbon removal has its appropriate place in the kind of broader conversation next to mitigation and reductions. And, you know, it’s kind of had a moment in the last year or two, carbon removal. It’s like everybody just has heard about it and excited about it.
And the momentum has changed. Been growing, but also, you know, we don’t want that to be at the expense of all of the critical, like other climate action that needs to happen immediately now. And so thinking about them in tandem is important as well.
Siobhan Montoya-Lavender: Yeah, I’m also, it’s curious that you say that, because I feel that way a lot too, that everybody knows about carbon mobile. It’s kind of the buzz topic. It’s the hot new technology. But then, and I’m sure I’ve said this on the podcast before, the second I step out of like my climate bubble, I realized that no one has heard of carbon removal. No one knows what it means. And if they think they know what it means, they think it’s a bad avoided forest credit or they think it’s a bad, you know, there’s just, there’s, I would actually argue there’s a lot of knowledge gaps in carbon removal for the general public.
And I think that probably the X Prize has actually played a significant role In disseminating information around what carbon removal is and what it means to compete in this prize and what the goals of this prize are. But I guess, how do you view both this report, the carbon removal XPRIZE as kind of, you know, the lighthouse to a lot of lay people about CDR and how do you then change your communications based on that?
Nikki Batchelor: Yeah, we’re constantly thinking at XPRIZE about how do we kind of spread the message around what we’re doing and what the topics are that we’re working on. So this is definitely true for carbon removal. It’s also true for a lot of the prizes that we work on, but how do we reach both kind of the... General population, the climate-interested population, the folks that are kind of, I guess, ready to receive that information, because it’s maybe not everybody that you’re trying to reach immediately, but it’s like concentric circles. We’re trying to reach, you know, all the folks working on carbon-related things, and then everybody working on climate-related things to understand how this fits into the climate portfolio, and then folks that are just following along in the general public.
There have been some really cool pieces recently. There was... An Anderson Cooper CNN episode that came out that was all about carbon removal and we were super excited to see that I think like eight or so companies were featured everything from ocean carbon removal to. To DAC and sequestration models. And I think they did a pretty good job trying to make that relatable. There was also a 60 Minutes episode in the same week. I think everybody was lining up their Earth Week programming and they were like, oh, let’s talk about carbon removal.
And so you also got like a deep dive on Climeworks and CarbFix and the 60 Minutes episode. Those things are great because it provided both the narrative of like why this matters, but also the visuals of what it looks like. And so when you talk about like making this relatable, people need to know what it looks like. It’s like a very like tangible human need to understand like the visuals behind something. And I know that there were some And I think that’s one of the, um, renderings that Captura did about what ocean carbon removal could look like at scale, which I think are super helpful to see like, oh, this floating thing out in the water, what it could look like.
There are some other projects we’ve been talking to where they’re like trying to build into their, um, like community engagement strategies, like site visits and tours from like community members to just pop in and be like, I’m going to walk through and see what this looks like and ask questions. How do you build comfort and answer questions? Like all of that as part of your kind of like engagement and environmental justice strategy and like thinking about like, what does it look like to kind of bring people along with you?
Siobhan Montoya-Lavender: I am waiting for like the, like the YouTube series on carpet removal that you like, you know, that’s like, I watched this tiny house. I have no desire to live in a tiny house. And yet I’m compelled to watch these like tiny house YouTube shows. And there’s like this guy that goes around and, you know, looks at the people’s tiny houses. And now I feel like so informed, so personally connected to tiny houses somehow. How do you have time for this? How do I, man? Maybe you sell them on the side.
Ross Kenyon: My startup.
Siobhan Montoya-Lavender: It’s my, yeah, it’s like, I don’t know, it’s my junk TV or something, but I’m waiting for that for carbon removal, you know, I think... I think exactly what you say, Nikki, like making it, bringing people inside and making it seem real and tangible. Because I think it was, I was talking to Peter Oliver who said, it’s not that carbon removal is intangible. It’s incredibly tangible to the people that are doing it. You know, like shipping oil on, you know, bio oil or something is very tangible. Like touching biochar is very tangible.
It’s intangible, unfortunately, to the customer. Oftentimes when we’re talking about the credit revenue streams, not the goods revenue streams. And so I think anything we can do to make it more tangible, it has to be done. Because to your point, Nikki, about demand now versus demand in the future, in order to get to that demand, people have to understand it, I guess. Yeah. Start at the very basics of understanding it. Report helps with, for sure. I think this report is helping me understand kind of where the market is. How are you getting, you can finish your sentence if I interrupted you, but how are you getting this report in front of investors was a big question I had because you have a whole investor section.
And I’m like, well, if I was an accredited investor, how would I find this? How would this find me?
Ongeleigh Underwood: Sure. So we have a process for becoming an accredited investor through the Circular Carbon Network on our websites. Which is circularcarbon.org. You can go there and apply and we touch every single application. So we make sure that you’re not just somebody looking to scout more deal information for your competitors or that you are a verified accredited investor. And then we essentially package this information up in a quarterly basis and we send it out to our accredited investors. And as far as the report goes, we were actually lucky to be a part of the Credit Suisse Summit that XPRIZE co-hosted last month.
And so that was another great way to just print out report to on the table with a bunch of folks, decision makers, really.
Nikki Batchelor: So, yeah. So just a little background on that initiative. We at XPRIZE are always trying to think about how to help the teams raise money. And so one of the ways that we Do that in the competitions that we run are organizing investor summits, pitch days, and try and look at different ways to do that. Credit Suisse has been organizing something called the Carbon Negative Conference for the last couple of years. So we decided to join forces with them and co-planned this year’s that happened in April 2023. And it was a really great convening of over 100 carbon removal companies and Several hundred investors, I think it was around 300 investors that were in attendance who were all interested in getting involved basically in the carbon space.
So folks that were both already actively investing and kind of had been sitting on the sidelines and We brought all the data with us from the Circular Carbon Network report and made that available to investors to give them the market landscape. Then we also tried to develop deep profiles of all the competitors in the XPRIZE carbon removal, like an investor prospectus book for all of them to flip through. Like, oh, I’m interested in DAC. I’m interested in Biochar. You can go and find people and be like, oh, they’re at Series A, Series B.
Who’s a match for me? It was a nice mashup of I think 600 people came to the event and over 1,400 one-on-one meetings took place, which is kind of a unique format for an event. So it was basically like a massive speed dating between investors and carbon removal companies. So it’s a new way to try and get all of that information out there and continue building relationships between the startups and the capital community, which they all desperately need.
Siobhan Montoya-Lavender: What do you guys think you’re gonna see next year? What do you have your eye to most for next year’s report? Like, where do you think the biggest changes are gonna be?
Nikki Batchelor: I think there’ll be an increasing jump in the carbon removal segments because just practically speaking, I think, you know, I mentioned we had 1,100 teams registered in the competition. All of those are not represented yet in the Circular Carbon Network database because a lot of them were still early initial idea stage. And so we try and have folks that move into the Circular Carbon Network database be more established companies with a website up and running and starting to raise money. And so I think a lot of companies will maybe be able to transition over into that Real stage of like forming their companies.
We represented the Top 287 qualified teams from the milestone round of the competition on the CCN indexes. So we have those folks all in the data set. So just to be clear, like of the 1100, 287 definitely all went into the CCN databases. So I think that next year we should have another bump of an increase in carbon removal companies that are on there. So I think You’re also just seeing an explosion of new companies in that space, I think more so than like the C2V companies. But that’s kind of my guess.
I don’t know, Anjali, what you would add.
Ongeleigh Underwood: Yeah, I would agree with all of that. I would also say I think it’ll be really interesting to see how the overall market dynamics this year affect circular carbon and carbon removal in general, whether we continue to see just the booming investment that we’ve had in the last two years. In this space, see if it continues or if it starts to maybe level out as well. So I think that’s something I’m really going to be keeping my eye on.
Ross Kenyon: Well, great. We appreciate you both being here. Link is in the show notes. If you’d like to go and read the report, you absolutely should. It has a lot of great insights. It’s very much what people are talking about right now. Thanks for being here, all three of you.
Ongeleigh Underwood: Yeah, thanks for having us.
Nikki Batchelor: Yeah, great talking to you guys today.
Ross Kenyon: Follow us on social media. We will catch you next time.
