How does it work to buy carbon removal credits from early stage startups and resell them later for profit? What does it mean to support carbon removal startups without equity financing? Are alternatives available beyond conventional venture funding? Enter: the AirMiners Kiloton Fund.
Tune in this week as the great Tito Jankowski, CEO and cofounder of AirMiners, returns to the show to talk about all of those questions, the general state of carbon removal, and how two goofballs like us ended up at TED Countdown in Detroit.
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Full Transcript
Ross Kenyon: 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.
Tito Jankowski: [unclear] — and it’s sort of like, it’s like a wide… like, the roads are really wide. It’s a really strange place.
Ross Kenyon: I was reading that there are fewer people in Detroit now than there were 100 years ago, and everything just feels sized incorrectly.
Tito Jankowski: Yeah. The streets are — yeah, four lanes. They’re really big. They’re really big. There’s no one driving. Even the Lyft I had has been a Suburban, too, by the way.
Ross Kenyon: Yeah, it’s definitely that. Sort of — even if it were filled with cars, this would be very roomy and comfy for cars. It’s like car land. It’s kind of the story that I’ve made up in my head.
Tito Jankowski: I mean, look, if you look at, for example, the ramps going down around the hotel, they’re like — that’s wide enough for like three cars, you know? So it’s like you want to be comfy for the cars.
Ross Kenyon: Interesting place to have a climate conference. I’m sure that’s going to come up. I think people are probably only going to complain about that.
Tito Jankowski: Let’s complain. Let’s complain. It’s a climate change conference, after all. That’s what we do.
Ross Kenyon: Are we supposed to hope? Are we supposed to complain? Or…
Tito Jankowski: We’re supposed to actually work on removing carbon from the air.
Ross Kenyon: That’s right, we’re part of the carbon removal contingent here. TED Countdown in Detroit. I’m told it’s Detroit and not Detroit, by the way. Detroit. Detroit. So, Tito Jankowski of AirMiners here, back again.
Tito Jankowski: Great to be here, Ross.
Ross Kenyon: What’s that? “Great to be here.” What are you doing? You’ve been taking meetings and stuff, but you haven’t really told me what the meetings are about. I imagine they’re big fancy-pants investors and making stuff happen. Handshakes. Kissing babies. What are you doing?
Tito Jankowski: That’s it. I was just at this great brainstorming session this morning with Rethinking Removals — they’re a new nonprofit, I believe, and they’re working on, like, okay, like, where — carbon removal is kind of what they do — and they’re working on mapping out kind of the gaps and the opportunities in carbon removal. We were doing that this morning at a coworking space, Venture X, in Detroit.
Ross Kenyon: How’d it go? Did you guys solve carbon removal?
Tito Jankowski: Done. It’s all taken care of now, Ross.
Ross Kenyon: Are you able to share anything that happened there, or just that it happened?
Tito Jankowski: Oh, it was — it was like a workshop around — we did like a Post-it whiteboard exercise. I don’t know if I can say who was there and what happened.
Ross Kenyon: I didn’t say you can’t, but it was cool.
Tito Jankowski: It was like a bunch of people who are really active in carbon removal talking about, like, you know, here’s the things that could accelerate carbon removal, or here’s the things that we’re worried about. And it definitely kind of converged to a lot of the classic things, right? Like getting buyers on board, getting more suppliers. But the takeaway was like, okay, so yeah, the themes are the same as they’ve been for the last couple of years, but it’s kind of the nuanced pieces of, like, the snapshot of today, where it’s like, okay, there’s particular policies, there’s particular kind of supplier-marketplace relationships that we want to work on.
Ross Kenyon: I mean, gosh, talk about kicking off a conference and being like, okay, now I’m fully up to speed on the big picture of carbon removal. Are you energized? Are you hopeful for the future then?
Tito Jankowski: If anything, Ross, I’m energized by your eyes. You really have pretty eyes, Ross.
Ross Kenyon: I mean, this is a really cool in-person thing. Okay. I was just saying that in the early days I was so tightly wound about doing podcasts only in person, because it’s way better — the body language. And then the pandemic happened, everything was remote for several years, and now this is the first podcast I’ve done in person in probably three years. And I’m telling you, with compliments like that, why am I not doing this all the time? No one’s saying that to me over — the fidelity is too low. Well, I’ve got to sit with that for a second. Thanks, Tito. I’ve got the biggest goofy grin on my face. My God.
Ross Kenyon: Okay, yeah. What’s happening here? I know there’s a bunch of — I saw Julio, OG carbon wrangler himself, Julio Friedmann, speaking later. Who else? Jonathan Foley.
Tito Jankowski: Yeah. So, so far today I’ve learned Julio Friedmann is speaking — actually, I think I knew that yesterday. Kelly Erhart from Vesta is speaking. I kind of go to conferences and sort of, like, you know, you absorb it as you sort of learn the schedule as you’re there, because you’re like, I’m going to see this person. Like, okay. So Kelly is speaking, Julio Friedmann is speaking.
Ross Kenyon: Al Gore.
Tito Jankowski: Al Gore is on the charts.
Ross Kenyon: On the charts. Dropping some beats. I tried to track him down. It’s possible he’ll be on, but I was just telling Tito, it’s really hard to interview the quote-unquote celebrity people, because things that they say have already been polished to death by publicists and people who want to make sure that they get their messaging just right. I feel like that doesn’t make for that great of radio. Or you have to do a lot of research to ask questions that are not questions like, “So what’s your theory of social change about ESG?” And they’re like, okay, here’s a 40-minute lecture that I’ve given 100 times. Boring. It’s hard to ask good questions there.
Tito Jankowski: Al Roker. I saw his — I saw him on the thing.
Ross Kenyon: Yeah, I don’t know. Weatherman. Imagine. I don’t know if he’s making a climate switch. I don’t know what he’s up to these days. I guess we’ll find out.
Tito Jankowski: I saw John Sanchez in the lobby. Just — yeah, I just had a sandwich sitting next to John Sanchez.
Ross Kenyon: There you go.
Tito Jankowski: Talking about his new nonprofit with [unclear] Ellis called — blanking on the name. I think it starts with a C.
Ross Kenyon: Is he — can he allow you to say that? Is that even public yet?
Tito Jankowski: Oh shit. Is it, John? We’re going to check with you. Yeah, John. Call him up.
Ross Kenyon: Yeah, I would have liked to, but I guess he was running off.
Tito Jankowski: Cascade. Cascade.
Ross Kenyon: Cascade. Waterfalls. Okay, that’s cool.
Tito Jankowski: They’re working on open climate interventions. It’s a pretty good area, like open systems.
Ross Kenyon: Open systems. Climate interventions.
Tito Jankowski: Yeah, John’s been interested in that for a while. And I like the work that him and I have been doing with their research papers that they’ve published, or their blog posts.
Ross Kenyon: Yeah, that’s a big open question. There’s certainly room for innovation there.
Tito Jankowski: You must have a really broad view of everything happening in carbon removal, Ross. I was just talking to somebody about that, and it was like, you know, Ross cuts across so many different topics. It’s actually really unique in carbon removal. I mean, people can certainly be well read in carbon removal, but you’re out and you’re talking to everybody about kind of their narrative, their podcast, the story, as you do these.
Ross Kenyon: I guess so. I was talking to someone else who’s going to be here that didn’t even know — was it me or she? She saw that I was here. I don’t think she would mind — I’ll check with her though. Wendy Owens from Hexus.
Tito Jankowski: Oh yeah.
Ross Kenyon: Yeah, she messaged me on the TED app, apparently, which I didn’t even know is a thing. But everybody keeps saying, oh, the TED app is so good. I saw you on the list, and I’m like, okay, what is that? Yeah, she’s saying that people still message her and reach out to her as a response to her being on Reversing Climate Change in 2019.
Tito Jankowski: Wow.
Ross Kenyon: And we hear that a lot from guests. Clearly it’s a sticky — we even had guests recently say that they’ve been on lots of podcasts, but the responses that they get from Reversing Climate Change, and reaching out to guests, was much higher than other podcasts that they’ve been on. Yeah, I think I have a pretty wide view. I think in general I am more width than depth in a lot of ways, and I like making weird connections, and that’s entertaining for me. Is it valuable to everyone? I don’t know.
Tito Jankowski: We’re lucky to have you. You know, if you start looking across the space, there’s very few people that are really kind of cutting specifically across a lot of different areas. So I get wide, but it’s like it’s wide but a different facet of it, right? In the sense that you’re talking one-on-one with a very wide range of people. I mean, I spend most of my time talking to startup founders, right? I’ve had hundreds of conversations with the person starting the company, and you’ve had many, many hundreds of conversations with people kind of from around the whole carbon removal world. It’s really an asset to the industry, especially as things continue to grow.
Ross Kenyon: Podcast is an asset. My eyes are an asset. Go on.
Tito Jankowski: Oh yeah, this is — really, this is like…
Ross Kenyon: Who’s interviewing who? As we stare into Canada, high above.
Tito Jankowski: That’s Canada.
Ross Kenyon: Yeah, right at — the bridge. That’s the Ambassador Bridge, yeah. And then right below us is a tunnel. Can I open this window? Actually, I took the tunnel years ago to catch a train from Windsor up to Toronto, and it was one of the most intense border crossings I’ve ever had. The Canadians — I was just out of college, only had a backpack. They were so suspicious of me, wanted to check everything, get addresses of everyone I knew in Canada. I was like, do you just — say that you don’t want me. Just tell me you don’t want me.
Tito Jankowski: To talk about random sampling, perhaps?
Ross Kenyon: Yeah, I think a young guy with not a lot of luggage, with plans that seem somewhat indeterminate. And I ended up hitchhiking from Montreal into Vermont. So they were right. They knew that my plans were not nearly as fixed as they might like.
Tito Jankowski: Wow, they really pegged it.
Ross Kenyon: Yeah. Yeah, whatever. It was a fun trip, kind of. So long ago.
Tito Jankowski: So long ago.
Ross Kenyon: Yeah, that’s the only time I’ve been here before. And it also struck me as being a very overbuilt, weird — the infrastructure just seems off.
Tito Jankowski: I was thinking about that, because, like, I don’t know when Detroit was built primarily. Do you know when it was, like, when did all these skyscrapers go up?
Ross Kenyon: I don’t know. So, like, turn of the century is Henry Ford, assembly line, Fordism, Taylorism, Model T. And that’s all happening, I think, in the — getting started definitely like Edwardian. They don’t say that for American history, that’s just British history. Pre-war, pre-World War One, turn of the century, American history. And then I think it just grew from there. So I imagine it is probably like 120 years is probably when it started to take off.
Definitely has a car feel, like I was saying. I’ve been to, you know, Paris and Zurich and New York, and none of those seem like — they’re alleys, or the alleys are always kind of like there for people to cram themselves into. And here it’s like every alley is like, you can get a car back there. And now if you go to Lower Manhattan, or even if you go to places like the West Village, you’re like Bleecker and MacDougal, and you’re just like, this is made for a smaller time.
Tito Jankowski: Yeah, that’s a pedestrian time.
Ross Kenyon: Cobblestone. This Detroit does not seem like a pedestrian place at all.
Tito Jankowski: I’m mostly from Phoenix, and it does have kind of a Phoenician vibe to it.
Ross Kenyon: When was Phoenix kind of built up? I think it was a post-war city. I think, like, after World War Two, I think.
Tito Jankowski: It’s really, really — are you, like, a historian? Like, I’m asking all these questions. I have no — if anybody asked me about any city I’ve been to, when was San Francisco built? I’d be like, 1792. And Emperor Norton in the 1890s?
Ross Kenyon: Yeah, I have a history degree.
Tito Jankowski: But there you go. There I go.
Ross Kenyon: History and philosophy, which should make sense. I didn’t earn a philosophy degree, I just did some graduate coursework in philosophy. But yeah, I just know that I imagine Detroit probably made a bunch of tanks and, like, deuce-and-a-half trucks in World War Two, probably. Probably after World War Two it switched over to civilian goods, consumer goods. But I don’t know. Motown — clearly stuff is happening here through the ’50s and ’60s. I don’t know, I’d like to learn more, but I wish I had more to say about Detroit.
Detroit right now, yeah — the carbon removal, what’s going to happen here? I feel like there is a strong cohort. I’ve noticed the conference overall seems kind of decarbonization, kind of in that, like, there’s a lot of environmental justice and stuff happening in Detroit too. I don’t know if you have any impressions on what’s happening here now, on TED Countdown, on climate.
Tito Jankowski: I think in terms of timeline, the sense of, like, we’ve been saying we’ve got six more of these until 2030 — similar thing I said at Carbon Unbound in New York. But just when you think about the cadence of yearly, you know, these yearly things, it’s like, hey, this is our chance to get together and make some deals, make some decisions, do some things that we otherwise wouldn’t be able to do in person.
Ross Kenyon: I definitely find myself more responsive to you in person on the podcast. I think on Zoom I have a bit of, like, a hold-a-second to make sure the person’s done talking. Here, somehow, there’s just a lot more data flowing back and forth.
Tito Jankowski: So it’s just kind of like — I mean, interrupting is a different thing than it is on Zoom. I feel much — so I’m going to interrupt you now.
Ross Kenyon: There you go. And now I feel surprisingly at ease about this. I’m wondering, is this going to be great radio, or is this when people do — we should start a podcast, and they listen back and they’re like, okay, this is two buds goofing around? But I think it does feel better than Zoom. What was I scared of? I used to prefer this so strongly, and I was such a resistor, and I think this is the way to do it. I do want to do some more of these. Or maybe we just like to banter. This is probably — possibly a false positive too.
What do you want to talk about? I want to hear about what you’re doing here, like, clearly taking meetings. AirMiners has changed since last time we had you on. You were just starting to talk about the fund that you had raised. You’re changing the way AirMiners is — no longer just a community. Are you allowed to talk about stuff like that, or is it…?
Tito Jankowski: Yeah. Yeah. When’s this going out?
Ross Kenyon: When would you like it to go out?
Tito Jankowski: So let’s send it out whenever it’s ready, because I just realized we’re good. We have all our other things out. We have our press releases going on Wednesday, just tomorrow, I’ve been told. So yeah, we’re good.
Ross Kenyon: Wow. Okay. What’s the press release going to say? I guess this will come out after that.
Tito Jankowski: So, you know, we’ve been looking at this thing for a long time, in the sense that there’s this capital gap for early-stage startup companies. We’ve had 95 freaking startups go through AirMiners Launchpad.
Ross Kenyon: Man, that’s such an illustrious list, too. It’s impressive. In two years, right?
Tito Jankowski: It really speaks to, like, it’s go time for carbon removal. And 95 teams come through. They’ve raised $90 million of venture capital and grants. Isn’t that crazy? Like, go carbon removal, go AirMiners, go 95 startup companies. And we just kept seeing this, like — you know, as these companies are getting funded, obviously the majority of funding goes to a very few companies. But when you’re starting a new concept, there’s a gap of, you know, a couple hundred thousand dollars, a million dollars, and we wanted to figure out how do we fill that gap.
That’s what we’re announcing: it’s the AirMiners Kiloton Fund. So specifically what we’re doing is we are buying carbon removal credits from early-stage companies instead of equity. But it’s basically a way of investing money into a company as they start to get going.
Ross Kenyon: So you’re going to be their first customers, and then are you recouping by selling those credits later?
Tito Jankowski: Yep, that’s the idea. We’re buying the credits now, and we’ll sell them — we’ll sell them later.
Ross Kenyon: Does anyone else do it like that?
Tito Jankowski: Not yet. To me, this model definitely seems inevitable in carbon removal, in that sense — the idea that you would be able to finance your company based on your future product sales just seems like this is how it’s going to happen. AirMiners is doing it because we’re in a good position to, especially at these very early stages of a company, to be there for it. But it has that feeling of inevitability, where it’s just like, yeah, all these companies are making the same product: carbon removal credits. There’s got to be some way to finance them rather than equity sales, or rather than offtake agreements, which are a very powerful market signal, but they’re not actually cash today.
And so, you know, again, working with 95 companies, we just saw this capital gap and we said, well, how can we solve this, or how can we create a solution for this? And that’s what this Kiloton Fund is, which is a test — it’s a test pilot for the Megaton Fund. So the numbers, you know, the words kind of tell you a little bit about where this is.
Ross Kenyon: The next one is maybe an order of magnitude bigger, or much more.
Tito Jankowski: Yeah. You can speculate on what that name means.
Ross Kenyon: Okay. Yeah, offtake agreements — we’ve referenced them on the show before, but it might be useful to listeners to have that refreshed here. So what signifies an offtake agreement?
Tito Jankowski: An offtake agreement is fundamentally, it’s: hey, if you deliver carbon credits, or when you deliver carbon credits, we’ll be here to buy them at this particular price.
Ross Kenyon: So Frontier is well known for its offtake agreements. It also does prepurchase agreements, which are different, and sometimes those two things get mixed together. But offtake agreements are a promise to pay in the future upon delivery. And you’ve chosen to do something closer to the prepurchase model. Why?
Tito Jankowski: So closing the funding gap in carbon removal was the — is the problem. So that’s what we ultimately looked at: how do we build a solution to that? And so every solution that we looked at always had to be, how do we get cash to startup companies today? And so that kind of narrowed our scope of, like, that’s the problem, so therefore the solution needs to be cash today.
Ross Kenyon: So you’re saying that these offtake agreements are structured settlements, but you need cash now? You ever see those commercials? Is that anything?
Tito Jankowski: It’s like, you have a structured settlement. But…
Ross Kenyon: I said it with such deadpan seriousness.
Tito Jankowski: Say it ten times fast. That’ll be the radio commercial.
Ross Kenyon: Didn’t you stay home sick from school and watch bad TV?
Tito Jankowski: I’m sure I did.
Ross Kenyon: Just young [unclear] Tito, yeah?
Tito Jankowski: That’s it. Growing up, that’s it. Didn’t have a TV at those times, but I was more of a reading books, and I don’t think—
Ross Kenyon: Law ads made themselves into books.
Tito Jankowski: That’s it.
Ross Kenyon: So okay, so the companies that have already passed through there — are they being considered for this fund? Or is it companies that are now going through Launchpad? How does it work?
Tito Jankowski: Yeah, we’re keeping it separate, in the sense that, you know, we’re not only buying from companies that have gone through the Launchpad accelerator. So we’re open to buying from any startup company that’s working on removing carbon from the sky. They can apply for this program. We’re going to be announcing more of the details in a couple of weeks.
Ross Kenyon: How are you going to sell them, and when?
Tito Jankowski: So we’re aiming to — in a sense, we want to keep it really simple, right? We’re getting these credits so that we can sell them to buyers in the future without having to do too much on the market-making side. And so, you know, open to buyers — we’re putting out another press release — buyers who want to buy tons from us can email us at tons@airminers.org. But yeah, I mean, in terms of the sales side of it, I think we need to be good at it. But really, the part where we’re really well positioned to work with startup companies is more on the startup side, obviously.
Ross Kenyon: It seems like it’s something that you’re doing as part of a full suite of services. Like, these companies could potentially partner with some of the other resellers or marketplaces within carbon removal, but they’re not going to get the mentorship and the connections and the sort of value-adds that AirMiners is known for.
Tito Jankowski: That’s it. Yeah. We want to help get you plugged into the whole ecosystem. Actually, Stacy from Shopify is on the press release saying what a swell — what a swell thing this is.
Ross Kenyon: Has she been on this? Has Stacy been on this? I don’t think so.
Tito Jankowski: You’ve got to get her. She’s, like, totally—
Ross Kenyon: Yeah, she’s really good.
Tito Jankowski: No, she is good. We should.
Ross Kenyon: Stacy, we’re coming for you. As Kristoff used to say.
Tito Jankowski: That sound I made — that was kind of like a judo chop, kind of like right to the point, really clear. She’s got a great background and just, like — anyway, she’ll come and tell her story, and it’s happening.
Ross Kenyon: I’ve never had someone give a note to the audience for how to interpret their gesticulation.
Tito Jankowski: I’m used to Zoom. I live on Zoom these days.
Ross Kenyon: You live on Zoom?
Tito Jankowski: Yeah.
Ross Kenyon: It feels better, doesn’t it? I prefer this, this human interaction. Do you remember when the pandemic started and everyone said in the future it was going to be nothing but Zoom? We’re all going to do whatever and be far away.
Tito Jankowski: Yeah, I’m actually — I’m pretty sold on Zoom. I mean, for one, on Zoom I wouldn’t have to explain my hand gestures.
Ross Kenyon: But you still would, because no one’s watching the video.
Tito Jankowski: Like, who are you? They’re still only listening, huh?
Ross Kenyon: Yeah, this is fallacious thinking. Only — you’re only allowed to listen. Blindfold yourself with the [unclear].
Tito Jankowski: He does judo chops and other pearls of wisdom.
Ross Kenyon: Okay. What were you saying that was actually probably important, in terms of buyers — they’re able to come in and get in conversation with AirMiners about what you’re buying and how you’re looking at selling it? Are you going to do that, you know, yet, in terms of buyers? And who on your team is going to be selling these and making these deals?
Tito Jankowski: Yeah. So it’s the three of us: Jason, Adina, and I. I’m the one kind of leading the fund side. But ultimately, sign up — the application process, interviewing teams. We’re going to use a lot of what we learned from interviewing. We’ve interviewed hundreds of teams. We’ve had 800 applications for our Launchpad accelerator to date. Maybe it’s 900. It’s just, like, it’s an incredible amount of people that have come in and said, hey, I’ve got something and I need your help, or can you help us? And some of them we’re like, yeah, you know what, we can’t help you. But the ones that we accept are like, okay, they meet the criteria that we set, and we believe that we can expedite their journey.
Ross Kenyon: How are you delivering compliments to me about being someone with a very wide view of carbon removal — you have spoken to 900 companies, 800 or 900 companies. That’s probably as wide as it gets.
Tito Jankowski: It’s very, very, very wide in, like, carbon removal startup world. It just doesn’t extend beyond that. So in terms of policy, in terms of, you know, other stuff — but yeah, startups, like, we’ve talked to them. Like, Jason and Adina and I have probably individually talked to more startups than, well, anyone on earth besides the other two. It’s pretty wild. And it just gives you so much in terms of just, like, being able to see where somebody’s at, and just, yeah, understand what is it that they — what’s their goal, what’s their plan to get there, and where are they stuck?
That’s, like, the three questions. And not, like, mystery questions — that’s what we ask you in the application and the interview. And it really does give a sense of where somebody’s at: what’s your goal, what’s your plan for getting there, and where are you stuck? Everybody’s stuck somewhere, right?
Ross Kenyon: You see, I’m not stuck anywhere.
Tito Jankowski: It’s like, well, why are you here?
Ross Kenyon: I’m stuck somewhere, you know. I’m stuck in Detroit.
Tito Jankowski: Hey. Wow.
Ross Kenyon: I mean, the easy podcasting move here is to ask you those questions. But maybe I’ll come back.
Tito Jankowski: Yeah, go for it.
Ross Kenyon: Actually, I wanted to ask you, given that you are seeing things at such great volumes: what trends are you seeing that maybe are not currently the mainstream wisdom within carbon removal? Because we all have our — yeah, our path dependencies here.
Tito Jankowski: What’s — bring us out of — the beauty of talking to startups, which basically, there’s nothing such as a startup, but there is, like, the beauty of talking to a person, or two people, or three people that say they’re starting a company: you get this just really clean snapshot of, like, one person’s view and their plan for what they’re going to do about it. That’s one of the things I love about working with these early companies — you get this snapshot. Also, you get that from talking with students too. Students seem to have, like, they’re not trying to paint too much of, like, a complete narrative, they’re just kind of like, boom, here’s what we’re doing.
One of the things that came up was — this isn’t a business idea that you talked about, like, what are the bigger concepts. I’m now curious about, like, are we categorizing carbon removal companies in a way that’s effective toward accelerating what’s needed and where the gaps are? So for example, or at least if you look back, traditionally we categorize companies by how the carbon is captured. It’s direct air capture, it’s soil, it’s trees, it’s enhanced rock weathering, it’s ocean-based carbon removal. So many of those, like, really come with this thick layer of capture. And if you think about the capture stuff, it’s like, I don’t know, it’s a couple of seconds, it’s, you know, a month, right? Like, Climeworks, when they capture carbon — you know, I don’t know, they sit on it for a couple of hours or a couple of days or something. But then ultimately, like, it comes down to storage.
And so I talked with a group of students at — I think they’re students, gosh, I thought they were doing like a student internship, maybe I got that wrong — but they were working on kind of different questions in carbon removal, and they were like, what do you think about categorizing things like this? I was like, that’s super brilliant. It was categorizing based on verification method. It’s like, what if you reorganized all carbon removal classifications by what is the verification method of this removal? Anyway, you asked, like, you know, what’s the hot topic in carbon removal, or, like, an emerging topic in carbon removal.
Ross Kenyon: Yeah, I want you to — I mean, I like that topic too. But break one of these conventional nuggets that everyone has taken for granted at this point, and that maybe no longer holds true. I know it’s kind of a tough question, but do you have one like that?
Tito Jankowski: Oh, well, that’s what I just said, right? Isn’t it? So recategorize based on — yeah, recategorize based on verification method or storage method rather than capture method. Another is, gosh, that’s another great insight. This one was from a startup founder. They came in and they just happened to say a phrase. It was like, “and obviously, since Climeworks is an integrator, da da da da.” And, like, it just — for me, I was like, huh, I always saw Climeworks as really, like, this, you know, startup that had some kind of really core technology they were building a company around. And at this stage — I mean, I got to visit Climeworks in Zurich, and it’s like, whoa, they’re really pulling — they’re, like, really at the integrator layer, where they’re pulling together all these — just the whole planet — to build these direct air capture systems.
Ross Kenyon: I’m interested to know what it’s like for them spiritually, I guess, is the word I’m looking for, given that they’re DAC 1.0 and they have all these DAC 2.0 people coming around saying DAC 1.0 is so inefficient, not nearly as modular as we need. You’re just nodding.
Tito Jankowski: Yeah. Yeah. Well, I get it. I mean, it’s like, yeah, like, those are all great questions and discussions to have. And it’s like, yeah, like, what — ultimately it’s about how to remove billions of tons of carbon from the air. It’s cost. The only variable is, what is the value of modularity? What does modularity even mean, right? Like, if you have a shipping container-size unit, is that small enough? Do you need, like, a desktop-based system?
Ross Kenyon: [unclear] told me that modularity could be — I don’t want to misquote you, [unclear] — but could literally be as big as an industrial facility. It almost does not correlate to size. Modular does not have to be a window DAC unit.
Tito Jankowski: Yeah, so maybe modular is a word we dig more into, being like, okay, what do you mean by modular? Like, how much does this thing weigh, or something? Ask a question like that. Yeah. Wow. I really need to get closer to what modularity actually means here.
Ross Kenyon: What about, like, these categorization questions — one of the big gauche dichotomies that people don’t like anymore: nature-based and engineered? That’s pretty far out. I almost never hear anyone talk like that anymore.
Tito Jankowski: Oh, I hear that often, in a sense of, like, kind of people who are maybe newer to carbon removal. But then when you start to listen, it does get used often: nature-based systems, engineering-based systems.
Ross Kenyon: I’ve just — for what it’s worth — I have found those terms less useful than durability, permanence, cost, those sorts of things. Do you think that carbon removal should include less permanent types of carbon storage? Or do you think that only permanent carbon removal should be qua carbon removal? So, permanence.
Tito Jankowski: Okay, so here’s another thing. This is from some emails recently I’ve exchanged — sounds so fancy. I’m on my phone. No, but, like, so exactly: an issue with permanence and permanent is, like, permanent is a binary thing. Something is permanent or not permanent. Any binary words in carbon removal are likely less effective than kind of more full-spectrum kind of variables. So permanence is a nice one, because it’s like, well, you know, let’s talk about the permanence of something. But the issue is — and this is a radio-test kind of thing — permanence and permanent, they sound the same, freaking thing. So I’ve been using durable, durability. Durable and durability don’t have that same kind of — they’re easier to hear, and they kind of don’t imply so much of, like, a black-and-white kind of thing. It’s more of a spectrum, you know? What’s the durability? It doesn’t answer the question you’re actually asking, but…
Ross Kenyon: Yeah. I mean, the way that I’ve heard it put, the difference between durability and permanence is that durability also takes reversal risk into account. Or permanent — something could be permanent if it is not reversed, but durability also has this, like, is it long-lasting and unlikely to be reversed?
Tito Jankowski: Interesting.
Ross Kenyon: But then again, there’s no dictionary definition for this either, and so I hear people use these terms. Maybe they’re using it incorrectly. I’ve probably used them incorrectly at various points too. Or maybe it’s less of a distinction than it needs to be. I’m not sure.
Tito Jankowski: Yeah. First, I didn’t know about the difference between durability and permanence in that sense, that there’s kind of another—
Ross Kenyon: Just things that people made up and wrote on the internet. Or maybe it came out in a scientific paper. I don’t even know.
Tito Jankowski: That’s it. I mean, look, going back to the Kiloton Fund, like, one of the beauties of it is we have the fund, we’ve raised a quarter of a million dollars to go out and make these purchases. And, like, having money and going out to make purchases, it really does kind of force, like, okay, this is a real, you know, this is a real conversation, it’s a real discussion — some of the other kind of more philosophical aspects of carbon removal. I mean, one of the benefits of, again, having an accelerator program working with 95 startup companies: you really get into, okay, what is your actual problem? Like, what’s your problem this week? Like, what’s the thing that you’re stuck on this week? And it’s not, like, what are things that you might be stuck on. It’s like, you get really into, like, are you stuck on this? And if anybody out there is really struggling with durability versus permanence, or, like, these other terms, I’d love to hear from you: tito@airminers.org.
Ross Kenyon: Yeah.
Tito Jankowski: Just again, like, when you’re out doing things, you kind of — I don’t know, a lot of stuff does kind of fall on the priority list in terms of, like, yeah, like, it is good to get clear on the language you use, and, like, is anybody actually blocked by this right now? Maybe. But otherwise, maybe not.
Ross Kenyon: I mean, that was one of the things that Nori — one of the best criticisms to levy against us has been that we’ve always been too far in the future, where we were solving problems that were several years ahead of schedule. Which, when the market catches up with us, like, look out. I think that’s going to be a time. So now we’ve had to go back and look for some of these intermediate steps of what’s actually blocking the industry right now. That’s a good question to anchor to.
Tito Jankowski: Yeah, yeah. It is — solving things, or looking at what’s actually blocked right now, it really does have a way of just — it clears out. Like, there are a lot of possible problems that carbon removal will face. Infinite possible problems. But if you look at what problems are right now, it just has a way of, like, it cuts through a lot of stuff to just get down to, like, okay, what’s the thing actually on your mind right now? Like, no judgment. Like, what is actually on your mind. It really does just kind of, like, okay — it gets, it gets, it gets to it all.
Ross Kenyon: All right. Well, physician, heal thyself. What’s blocking you, Tito?
Tito Jankowski: What’s blocking me at this moment? I am — what’s blocking me? There’s a thing I can’t mention on the show, but that’s, like, it. Let me think of other things that are blocking me. Well, we’re making this announcement tomorrow, Wednesday, and so by the time you hear this, this will already be out, and we have a sign-up for people to get connected to the Kiloton Fund. You can go to airminers.org/kiloton. And what’s blocking it as of now? Well, since we haven’t announced this, we have zero people that have signed up. But once this goes live, I would love to connect with people who are interested in selling carbon removal credits to this new fund.
Ross Kenyon: Do they have to be a certain size or age?
Tito Jankowski: That’s part of what making it real is — it’s like, okay, let’s go and figure that out. In terms of our requirements, not really. I think the deal and discount that we’re going to be sharing more about is going to be most appealing to, like, early-stage companies.
Ross Kenyon: When are you looking to sell these and to start having your own revenue?
Tito Jankowski: That’s going to be a couple of years down the road, and it’s going to depend on what we buy specifically. But we’re not looking to — we’re not going to be selling carbon immediately.
Ross Kenyon: I’m going to wrap my head around how to ask this question. Are you anticipating prices for carbon removal are generally going to trend upwards, and thus there will be an ability to get that difference? That delta is going to be captured by you?
Tito Jankowski: I don’t know — oh, you guys. We’re not — I’m not planning on this, and we haven’t modeled that, like, so much that the price changes rapidly. I think Bloomberg has a nice chart that’s like, prices are going to peak around 2030, 2032, and then fall. So they’re going to peak around $225 in 2032, and then they’re going to descend to $100 by 2050. So I’m a fan of that model, in the sense that it says, you know, prices are going to go up through 2030, and then — in the sense that there’s just, like, a massive supply crunch, and then after that there’ll be enough supply that we can start to work our way down the price curve.
Ross Kenyon: I’m really curious — we should probably do an entire show about this — but about how offsetting claims are changing in a post-Delta-lawsuit world. Have you tracked that at all?
Tito Jankowski: Delta lawsuit?
Ross Kenyon: Yeah, Delta Air Lines sued for false representation of their ESG, mostly for using not-so-good offsets. And I think that’s probably going to be a boon. It will either be a boon for carbon removal, or companies are just going to change the way they characterize cheap things as being, like, climate positive but no longer go for neutral or objective claims. They’ll be, like, [unclear] — or both. Like, both of those things could happen. I think it’ll be bifurcated, probably. I don’t know if you’ve thought about it, but it sounds like you just — I just dropped it on you like Tom and Jerry. Speculate on this thing that we haven’t heard about.
Tito Jankowski: I mean, when I look — we absolutely need a working market for offsets. We absolutely need a working market for removals. Any issues faced by the removals market need to get fixed. Like, we need an offset market that people are willing to pay for. We need a removals market that people are willing to pay for. I don’t think it’s any sense of, like, is it just that people are going to switch from offsets to removals? I don’t really — I was going to say I don’t really think that’s going to happen. But what I’m more saying is we absolutely need a working off— offset, darn it. We need an offset market, and we absolutely need a removals market. And yeah, there’s some issues in the offset market. Somebody needs to go get to work on those. There’s an opportunity there for somebody to build a working — to raise the bar for offsets.
Ross Kenyon: Yeah. I’m wondering, like, are we going to see carbon removals take off? Are we going to see companies finally say, you know, we’re actually trying to get to net zero and we’re going to buy these several years in advance? Future-vintage carbon removals that are very expensive — yeah, at least an order of magnitude, sometimes several orders of magnitude, more expensive than offsets they’ve bought previously. Is that going to happen beyond just the Microsofts and Shopifys of the world? I think that’s a big question.
Tito Jankowski: It’s a big question in carbon removal. I always go back to, like, the inevitable, right, in the sense of getting to two degrees of warming scenarios. Getting to one-and-a-half degrees of warming scenarios requires massive amounts of decarbonization and also requires a trillion dollars per year, roughly, of carbon removal as a market. Who buys it? What the pathway looks like to that? We get to discover that together. I’d like to know more corporates to come online and be participating in these things in a way that makes sense to them, for there to be a second generation of more and more buyers joining programs like Frontier. New things like Frontier popping up.
Some buyers are going to want to go after that more catalytic bit, where they’re paying up front, or they’re kind of being part of the innovation story. Other buyers are going to say, look, when you deliver the carbon, then we’ll buy it. Great. They all have a role to play in creating this, or in discovering this market. I think that discovering speaks more to the inevitability of carbon removal than kind of, like, a let’s-see-if-it-happens approach. Which, in my model of carbon removal, it’s that it is going to happen. It’s a matter of our path to it versus, like, is it going to happen or not.
I think if you really take a big, like, universal picture, I think if you look at any stable planetary system, it has some kind of economic system for [unclear] its atmosphere. I know UFOs are in the news, so we can talk to them. But yeah, if you really look at any stable planetary system with an active civilization, they’ve got, for lack of a better word, a carbon market.
Ross Kenyon: What, if you look at any planetary system, they have a carbon market?
Tito Jankowski: Yeah. If you just sort of come at carbon removal from an inevitability standpoint, rather than, like, you know, will there be more buyers — inevitably there will be, because creating a stable planet is a requirement.
Ross Kenyon: Unless they’re just like the Borg, and they have no individual consciousness, but they all just work for the greater good, and they’ve solved the problem without money and markets. And, like, maybe there’s a way of doing that. And I bet in our language we would draw a circle around it and say that that’s a market.
Tito Jankowski: Yeah, it’s actually, like, paradigm blind. You’re just like, okay, that’s what that is.
Ross Kenyon: I think it’s time for us to start going to the conference.
Tito Jankowski: Yeah, let’s do it.
Ross Kenyon: Okay. Thanks for hanging, Tito.
Tito Jankowski: That’s fine. Good seeing you, Ross.
Ross Kenyon: Thank you so much for listening. If you could please subscribe and give us a great rating and review on Apple Podcasts, or a rating on Spotify, that’d be much appreciated. It helps us get our content out to more people. You can sign up for our newsletter at nori.com, follow us on social media, and we will catch you next time.
