Many hardtech entrepreneurs develop a technology and then figure out how to commercialize it. What happens if you find an industry with potential and then engineer a solution to open an entirely new market to them?
Today's show is with two of the cofounders of CO280: Natalie Khtikian, the Chief Commercial Officer, and Jonathan Rhone, the Chief Executive Officer.
Natalie and John explain what it's like working with an industry as established as pulp and paper, structuring joint venture deals with them, and showing them the potential upside to opening business lines in carbon removal.
The deal mechanics of joint ventures for carbon removal are discussed (though probably deserve their own full show!), and Natalie shares some reasons why she is optimistic about carbon removal despite some of the headwinds the industry is currently experiencing.
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Full Transcript
Ross Kenyon: This is the Reversing Climate Change podcast. I’m Ross Kenyon, and I’m the host of the show. Today’s sponsor is Arbonics. We need a lot more forestry projects in order to prevent the worst of climate change. Forestry is not an easy thing to get right. I come from the world of soil organic carbon, also a tricky thing, but we really need to figure out how to make the terrasphere hold more carbon for longer. I’m honored to share that goal with Arbonics, who’s doing amazing work in Europe for forestry. There aren’t actually that many forestry projects within carbon markets that even take place in Europe. At this point in 2024, there’s only 0.5% of the 13 million [unclear] credits coming from European forest carbon projects, so it’s pretty rare.
Arbonics is one of the few groups out there trying to make credible, high-quality forestry projects make sense in a European context. If you’d like to learn more about just how Arbonics is going to market, how they’re thinking, what opportunities they see to make high-quality forestry projects make sense, they just released a new report on the state of European forest carbon credits in 2025. It’s a practical guide to how forest credits are generated and verified, and how developers handle permanence, leakage, and social integrity within Europe. Comparing against methodologies and registries and figuring out how they differ, how pricing works, and the timing of these projects and when to even get involved in them is pretty difficult work. It’s laborious work to understand.
If you’re a CSO, you’re working in a company, you don’t have a lot of time to wrap your head around these things. It’s nice that Arbonics has basically drawn you a map that you can refer to so you can quickly understand forestry projects in Europe. How do they actually work, and of the choices that are available, what should you choose and for what? Go check out Arbonics. Check out their report. I’ll put the link in the show notes for that, and to listen to the episode I did with Lisett. And thanks so much for listening. Here is your show.
Hello. Thank you for all the listeners. My name is Ross Kenyon. I am a carbon removal entrepreneur and the host of Reversing Climate Change. Thanks for listening to the podcast. If you love this show, please give it a great rating and review in Apple Podcasts or Spotify. Just open the app real quick and do that. There’s also paid subscriber options if you’d like to pay $5 a month for ad-free listening, for bonus content. Go ahead and join, support the show. It is very much appreciated, and thanks for helping me keep this thing going. I love doing it. Presumably you love listening. Thank you for doing so.
And okay, I’m going to introduce the show now. Today’s show is with CO280. If you follow carbon removal, you almost without a doubt know CO280. They are high on the leaderboard on CDR.fyi for tonnes sold. They keep announcing big offtakes, and they are helping the pulp and paper industry practice carbon removal. Emissions from pulp and paper in the processing of biogenic materials — it represents a very large amount of carbon. We talked about this in the show. The founders of CO280 noticed this and said, how do we help this industry decarbonize and practice carbon removal?
It’s funny because I think a lot of entrepreneurs go the other direction, where they become enamored of a certain technology and then they’re trying to figure out how to go to market. I suspect if anyone is listening as a carbon removal entrepreneur, or even a climate tech entrepreneur, you probably got super into biochar, or you are a material scientist who developed some sort of new sorbent or something like that. And then the trick is to figure out, how do you commercialize this tech? I’m really excited by people coming into carbon removal from the opposite direction, where they are just saying, all right, how do I engineer a solution for this exact industry that has a problem that they actually would like to be solved?
We’re seeing a lot more of that now, and I think that’s one of the most powerfully positive things that’s happening in carbon removal right now. If you want to start a company but you haven’t yet, I would advise you to potentially look at doing that yourself. I don’t know what it is about hard tech, deep tech, frontier tech, whatever we want to call this, that makes people come at it from this way. I suspect because so much comes out of universities and tech transfer offices and just, like, you know, serious STEM people who want to commercialize the stuff that they’ve discovered or advanced in the lab. But it doesn’t actually have to be that way. There’s another way to go.
In any case, today’s show is with Jon Rhone, the cofounder and CEO of CO280, and Natalie Khtikian, who is the cofounder and chief commercial officer of CO280. I’m really glad to have had them on. I’ve admired their work for a very long time. I think the go-to-market is very smart and worth a very serious think. Well done to CO280 for so many of these big offtakes, and getting an industry that I think a lot of people were not thinking about or looking at that closely very, very deep into carbon removal. Maybe that’s one of the things I can put you on to, too — that if you’re listening, if you can help turn an industry on to carbon removal, to see opportunity there, that’s probably some of the most important work that you could do.
Okay, enough prologue. Here is your show. Thanks for listening. Rate and review on Apple Podcasts, Spotify, become a paid subscriber, or otherwise just listen to the show. That’s good. We can just get right to that. Thanks for listening. And here it is. Natalie and Jon, thanks for being here.
Natalie Khtikian: Yeah. Thanks for having us, Ross.
Jonathan Rhone: Yeah. Thank you, Ross.
Ross Kenyon: I’m very happy to have you. CO280 has certainly made a huge splash. I like the fact that you’re working with an industry that I think is one of those fields that people take for granted. Not a lot of people think about pulp and paper unless you’re in it, but then you just sort of outflanked everyone in carbon removal, making these enormous deals that have very wide backing.
Natalie Khtikian: I can give a little bit of background into how we kind of started CO280, but I think before that, you know, we are amongst a group of big CDR companies. I wouldn’t say we’re necessarily the biggest or the best, but we are, you know, doing the best we can to remove a bunch of carbon, so.
Ross Kenyon: [unclear], Natalie, some enormous deals.
Natalie Khtikian: Yeah, they are enormous deals for sure. And we have a lot of support from buyers, and we’re very grateful for that. We are a tech-agnostic project developer, and we started CO280 with the thesis that we needed permanent, really high-quality CDR for, you know, around $200 a tonne today that could scale, right? So we didn’t start out with the idea of pulp and paper necessarily, but pretty quickly after looking at all the different ways that you could create CDR that hit those parameters, we realized that removing CO2 from existing industrial processes at pulp mills was one of the most efficient ways to create high-quality permanent CDR. And what’s nice about efficiency is that it is two things. So when you’re efficient, it’s greener and it also is lower cost, right? So that pathway was what we landed on.
Jonathan Rhone: Yeah, I guess just to add to that, Ross — when you’re coming at it like our team has a lot of experience commercializing, you know, complicated machines in renewable clean tech, in climate technologies. But when you start as a project, I mean, one of the things that we saw was that, you know, in order for us to scale up carbon removal or any of these climate technologies, there’s a need for project developers in the ecosystem that are technology agnostic and really are thinking about how do you create the deployment model and the scalable model and the repeatable, bankable solution that can get these technologies deployed in the market and scaled up. And it kind of gives you a freedom to focus on solving the problem the most efficient way possible.
And so, you know, just to build on what Natalie said, we looked at all of the different ways that you can create carbon removal, and how we can create this network of repeatable, scalable projects. And pulp and paper is an obvious one. I mean, pulp and paper mills, as you probably know, are the largest point source of biogenic CO2 in the world — really significant scale, of hundreds of mills worldwide that all produce that. You know, when you make pulp and paper, the mills themselves burn all of the residual biomass waste in these gigantic boilers to make, you know, steam and heat and power to run their mills, and in many cases exporting power to the grid.
In the United States, the majority of the mills are located in the Gulf Coast, which is, you know, co-located with some of the best saline aquifer geology in the world for carbon storage. And the mills themselves, you know, have been in business — they’ve been in operation for decades. So they’ve got well-established biomass supply chains. So we’re really retrofitting these existing mill operations. They have the ability to generate the kind of energy, steam, power, provide utilities for carbon capture systems on site very efficiently. So there’s just a whole bunch of advantages that make this application, you know, one of the most efficient pathways. Now, it’s still super complicated to put these projects together, and that’s where the skill sets that we’ve put together in the company really come to bear, as we kind of look at creating this new value chain.
Natalie Khtikian: Yeah. And I will also add that Jon had experience selling power plants into the pulp and paper industry. And so that’s how the idea came about, and that’s how he kind of saw the opportunity that other people had missed.
Ross Kenyon: I do love seeing further types of role specialization happen, where for the longest time in carbon removal, I think we had assumed that tech developers would also be project developers, and that the same people at the same company would do both of those things, even though those skill sets are very different ones. I don’t know that they should be co-located at the same company or with the same personnel.
Natalie Khtikian: That’s not how we’ve done it. Oh, you can jump in, Jon.
Jonathan Rhone: Yeah. Yeah, I was going to say, I’ve done that, and it’s challenging. I mean, they’re really different mindsets. You know, one is focused on commercializing, you know, product-market fit and technology, and kind of connecting science with technology and applications and creating a solution. The other one is all about, you know, the skill sets required to deploy and replicate and scale up. And those are, you know, things like business model innovation, partnerships, supply chain, transactions, and then, you know, access and deployment of a lot of capital.
And I think Natalie and I both agree that one of the things that we believe is that in order to address, you know, the CDR scale-up requirements and drive down costs, we need to get to the point where we’re leveraging a lot of private capital. So CDR projects need to get to the point where they’re fully commercial and bankable, and we can leverage the capital resources in the private project finance market. That’s really essential for scale, as far as we see, Ross, and that’s part of what we’re trying to do.
Natalie Khtikian: Yeah. I think early on in the CDR space there was rightly a big focus on technologies that were pretty low in the TRL scale, and the potential catalytic impact of those technologies. And that is where people should have been focused. But the truth is that there are ways to deploy CDR at scale now, and that can be just as catalytic, because when you do something over and over again, you bring down the cost of it. And so that’s why Jon says business model innovation. And that is — like, I can’t say enough how critical that is to this market, and to truly achieving carbon removal on a time scale that’s important or relevant for the environment.
Ross Kenyon: Are you able to mostly take off-the-shelf or nearly off-the-shelf technology for your projects? At that point, then, are you not engaged in technology development to the extent that most others are?
Jonathan Rhone: I would say that, you know, as we look at — so the technologies that are really important to us, Ross, are post-combustion carbon capture technologies, right? So that’s the category of technologies that we deploy, and because we’re capturing CO2 from stack emissions in these gigantic recovery boilers. And so when you look at that category of technologies, there’s a whole ecosystem out there. There’s liquid amine technology, there’s non-aqueous solvents, there’s solid sorbents, there’s cryogenic technologies, there’s hot potassium carbonate, there’s membranes. And they’re all, you know, at different stages of development and commercialization.
From our vantage point, to initiate this market, we’re really focusing on the technologies within post-combustion carbon capture that are the most developed, and that is the liquid amine category technologies. I mean, capturing — you know, look, liquid amines have been used for decades in capturing pollutants in stack emissions, and they have more recently been modified and adapted to capturing CO2. So these are companies like, you know, Mitsubishi Heavy Industries, Shell Cansolv, Fluor, BASF, Honeywell, and SLB Capturi. And, you know, there have not been hundreds of these applications by any stretch, but they are at the point where they are commercially proven, and we are adapting them into the pulp and paper application.
So, and you know, I would also say that there’s some really exciting technologies that are at an earlier stage of development in post-combustion carbon capture that, you know, have the potential to bring down costs, improve efficiency, and provide more versatility in terms of applications. But we’re starting in the amine solvent category.
Natalie Khtikian: Yeah. When you think about, like, proving out a technology — you asked, like, how much are we engaged in proving out technology? And I’m going to simplify this a little bit because I’m not one of our technical people, but basically there are two different ways that you need to de-risk a technology for large-scale deployment. And one is the engineering scale-up: so has it been built as big as you need to build it? And the second one is a process pilot: so that is, does it work on my specific application? And what you need to test there varies based on the technology.
So in the case of liquid amines, it’s chemistry meeting chemistry. So you have to kind of test, do liquid amines work on a specific flue gas that you’re running your process on, right? And how well do they work? What does that do to your economic model? And so at that level, we absolutely are engaged in testing and scaling up technology — and I’m sorry, not scaling it, but testing at that process level. And we actually have run a mobile test unit very successfully for a 1,000-tonne-per-year unit that just concluded recently. And I think that’s just been a huge accelerant to our business, and a real proof point that our financial model makes sense.
Ross Kenyon: It’s surprising to me you don’t describe yourself as being technical. Don’t you have a terminal master’s in oysters?
Natalie Khtikian: I do. I do have a master’s in oyster microbiology. But I don’t — I don’t think it’s actually that relevant.
Ross Kenyon: You don’t think so? It’s too bad.
Jonathan Rhone: I think Natalie, you should apply for project engineering. That was pretty good. I like your explanation. That was awesome.
Ross Kenyon: Yeah, I’m also very attracted to business model innovation because I’m just a commercially minded person. I don’t think I can compete personally on innovating on tech. I don’t think that’s what I’m best at. But I’m also looking for ways of making the financial and business layers make more sense, or just fit a bit more snugly with a place that still has sort of tenuous product-market fit.
Overall, I like the focus on project development as differentiated. Now you’re seeing that with groups like Deep Sky — you know, your provincial neighbors here. And then also, like, residuals-focused biochar project development. I suspect we’re going to see a lot more people get into this space who are experienced in delivering renewables and deploying those in the field and trying to bring those skills out, or anyone who’s just actually put steel in the ground doing basically anything — getting people like that into this, rather than scientist-turned-cofounder kind of people who are, you know, going through tech transfer offices out of universities and going that direction. But we’ve seen a lot of that. But we need some of those, like, one-to-two people, and not just the zero-to-one, I think. So go ahead, Natalie.
Natalie Khtikian: Yeah. I mean, when you look at the BECCS space in particular, about probably half — a little bit more than half — of the companies that are deploying large-scale BECCS projects are project developers. The other half are emitters. So, and in our case, we are project developers working with existing emitters. So yep, we agree.
Jonathan Rhone: Yeah, I would say, Ross, that, you know, we certainly like the tech developers. We’ve got a lot of people in our company who’ve commercialized technology. But we love steel in the ground. We love the pouring concrete and fabricating steel and putting machines to work in some of these applications. That’s kind of embedded in our DNA as a company.
Ross Kenyon: Is there any ability that you have to forecast out and just wildly speculate about what future business and financial layer innovations might be possible within carbon removal? Because there are further specifications here that may actually take place, of people becoming more and more specialized, or breaking it out functionally in different kinds of ways.
Jonathan Rhone: I’m not sure if I’m going to answer your exact question, but I think our view is that business model, financial model innovation is kind of open-field running, honestly. You know, you think about it — what we’re doing in pulp and paper is we’re creating a completely new value chain by retrofitting these, you know, existing pulp and paper mills that have been operated for decades making pulp and paper. And we’re creating a new joint venture entity, partnering with the pulp and paper companies to capture the CO2 using new technology that has been developed and deployed in other markets like the cement industry and coal-fired power plants, bringing it to pulp and paper, and then capturing the CO2, concentrating it.
And then we’re sending it over the fence to a CO2 pipeline that’s going to a storage site. And there’s a long-term offtake contract with a midstream company to finance, own and operate that transport and that storage contract. And then we’re connecting that joint venture to revenue contracts, long-term revenue offtake contracts. And then we’re trying to align all the incentives amongst all the parties involved in this new value chain to make sure that everybody’s financial and economic needs are met, and environmental needs are met. And it’s a really interesting process.
And one of the most important things for us in this business model innovation is, you know, these are new assets that are partly owned by CO280, our company, and partly owned by our pulp and paper companies. And you know, they have the potential to really transform the economics of the underlying pulp and paper company, because they are profitable, they’re project financed, but they’re also financed off the pulp and paper company’s balance sheet. So there’s a whole financial aspect to how our pulp and paper partners think about the business model from their perspective.
So I think that we think that actually the deployment of these big machines in industry is going to create some really interesting new value chains, new business models, new financial models that ultimately, you know, a hardcore project lender can look at and go, that makes sense. I understand how you’ve allocated risk across the value chain. I understand the economics, I understand the technology risk, I understand the revenue risk. And I’m ready to deploy hundreds of millions, if not billions, of dollars of capital into deploying this and replicating it. And I think that’s one of the most exciting things that we’re doing, and one of the learnings that we have from our experience on that. Natalie, if you’ve got anything to add to that — but that’s my thought about your question.
Natalie Khtikian: It’s hard to look ahead in a crystal ball. I think, honestly, I think that it will depend on how the market develops. So you can make parallels to the power industry and how different energy technologies have developed. But when solar and when PPAs first came out, they were not, like, something that folks required at all for kind of their sustainability goals or for anything. And they were purchased by some early movers. But that market then developed to a place where clean energy is seen as basically kind of like table stakes for operating. And it’s sort of something that, like, everyone has to buy in order to achieve their goals.
And there’s a variety of ways that that happened. But carbon has not yet had that moment. We are still at the stage where we’re selling to first movers in different categories, and we’re seeing a lot of great traction in the market, which is very exciting. You know, we’re getting RFPs, there’s new folks entering the market, and there’s really strong leadership obviously by Microsoft, Google — the Frontier members are our partners — JPMorgan are absolutely fantastic. So big, strong leaders, and other folks entering the market. I’m feeling very hopeful about the CDR market these days, actually. But generally, it hasn’t reached a point yet where it’s become sort of a necessary good, or something that, like, everyone has to buy. And so I think that the ecosystem will develop differently if it stays in this state or if that changes.
Ross Kenyon: Yeah, they’re good answers. I’d like to follow up on pretty much all of it. I think a good place to follow up is how JV structuring works, where I think there are people listening who almost certainly know about how deal mechanics work. But I think we should maybe start at the beginning of why a joint venture structure might be a good vehicle for a deal like this. I think people listening may just think you go to a company and you’re an epiphyte on them. You know, you’re a remora to their shark, essentially, and they just, like, let you be there because they’re nice, or they don’t really care, or they’re a customer of yours in some way. Like, this sort of joint sharing of responsibilities and revenue — I think it’s confusing to people who don’t have a corporate background or MBA background. Maybe we should explain how this works?
Natalie Khtikian: Can I give you a soft answer and then pass it over to Jon for the real answer? So I think it really comes down to partnership, right? Like, and the value that you can provide to those partners. So a joint venture aligns us very closely with our pulp and paper partners. Like, we have the same goal. We’re 50-50 and everybody is pulling in the same direction, and that’s critical to getting big projects to happen, especially in new value chains. Like, our projects are not first-of-a-kind. They’re using existing things that have been done before, but there are new components to the value chain that haven’t been put together necessarily before. So it takes everybody being aligned and pulling in the same direction.
Jonathan Rhone: I think that was a real answer. That was a great answer. I’ll just add to that — I mean, part of it is, you know, JVs are very common in the energy world, and particularly the oil and gas world. These are large-scale projects. You know, you think about a typical project for us at a pulp mill, Ross — it would be 800,000 tonnes a year to over 1,000,000 tonnes a year of CO2 that we capture. So when you look at the complete, you know, carbon capture technology system plus balance of plant and CO2 compression and all the equipment to form a complete system, we’re looking at sort of seven, $800 million of total project capital.
And so then, you know, that capture plant has a whole bunch of other transactions that are required in order to make it work. There needs to be a deal with the mill to provide the flue gas and utilities and the operations. There’s — I’ve talked about the offtake contracts for CO2 transportation, storage and revenue and tax credits and all that kind of thing. So the idea of a joint venture is, you know, the mill has the facility — the pulp and paper company has the facility, they’ve got the flue gas, they’ve got all the infrastructure. And then we’re bringing a lot of knowledge about how to select technology, how to piece together this whole project. There’s a lot of work streams required to kind of put the mechanics together, and then how to finance it.
So a lot of it is around a joint venture where you’ve got two parties who are both bringing value into that joint venture. And then you’re sharing the risks and liabilities and the capital exposure in a new entity that is, you know, to a certain extent, it’s got a different risk profile from the underlying mill asset. So you want to quarantine it from the mothership, so to speak. So those are some of the reasons why a joint venture makes sense. And, you know, we found really that it’s not a common business model in pulp and paper. It’s a very common business model in the oil and gas industry, and in midstream, and in exploration deals. So we’re kind of bringing this new business model into this industry in order to develop a new value chain that’s got the potential to really transform the economics of the industry. So that’s the motivation, and that seems to be the right model for this particular use case.
Ross Kenyon: If you could negotiate for 100% of the project equity for CO280 rather than sharing it in a JV, would you prefer that, or do you actually prefer sharing it in a joint venture?
Jonathan Rhone: Oh, that’s such a good question. You know, I think there’s a bunch of ways to answer that. It’s always simpler when you own everything outright yourself. The problem with that, though, is that you not only want to share the upside, you want to align incentives. So what’s really important to a joint venture that’s based at a mill, of a project that we have, is that that mill shares in the financial performance of the entire project, and that that carbon removal project actually strengthens and fortifies the economic performance of that mill.
So it may not surprise you if I said that the projects that we’re working on with our mill partners are going to become the most competitive pulp mills in all of North America, and among the most competitive in the world. Because, you know, pulp and paper is a commodity industry. And so, you know, fixed costs and variable revenue — and a big carbon removal project, these are fixed-price, long-term revenue contracts. So that will return new profitability, new revenue, new profitability, and they will actually help enhance the competitiveness of those mills.
And that’s happening at a time when North America’s pulp and paper industry is under a lot of pressure. There’s a growing offshore competition from Brazil and China. So the industry is looking for ways to strengthen their competitiveness, and this is the most significant opportunity for the industry to do that. So the idea of having a joint venture — we want the mill to be highly competitive. We want it to keep running for a long period of time. That’s good for the capture project. And so we want to share the economic rewards of the project as well as the risks.
Natalie Khtikian: Yep, yeah. Every participant in the project — it’s not just CO280 doing these projects, right? Like, CO280 is sort of like the conductor of the orchestra, but all the other folks are playing in the orchestra, right? And so everybody has to profit. Everybody has to benefit — from our customers, who get a really good price for a very high-quality product, or other value, basically from our customers all the way to transportation and sequestration partners. So everybody in the whole value chain, and the local communities, has to get some kind of benefit.
Ross Kenyon: I like when I hear companies doing that portfolio approach. I’ve heard Deep Sky talk a lot about that too. I think the portfolio product development approach is going to be something we’ll see more people imitate in the future. CO280 has such a clean go-to-market relative to many other carbon removal project and tech developers. What advice might you have for those who are already in flight, or even those who’d like to start new carbon removal companies? You’ve had such a good go of things, I’m sure there’s some lessons. You’re far enough ahead — surely you can share some tidbits of wisdom with your future competitors. What should they do differently, where I think a lot of people get caught in the doldrums? What should they do?
Natalie Khtikian: When you say doldrums, are you talking about, like, the valley of death in a tech scale-up, or is that what you mean?
Ross Kenyon: A bit. I think there’s also just — the environment is heavily monopsonistic and the deals are power law. You either get the big offtakes or you don’t. If you are starting a company now, you should almost certainly be engineering your company to be highly offtake-able. And if you’re not, you’re setting yourself up for a very difficult go-to-market. And I think that’s probably something that you set out with: what do we need to do in order to win the big Microsoft and Frontier offtakes? I imagine that was probably just core to your DNA from the very origins, am I right?
Jonathan Rhone: Yeah, yeah, yeah, go ahead. I mean, well, I was going to say, one of the fundamental principles of our company is that we’re obsessed with customer needs. I mean, that should apply to really any category of technology commercialization, or project developers. Like, at the end of the day, if customers don’t care about what you’re doing, you should probably do something else. So, and we’re constantly trying to understand and align what we’re doing with our customer values. So you know, you think about CDR, and you really have to think about CDR in terms of each different vertical market, right? CDR is different for the airline industry, the shipping industry, than the banking industry, than the tech industry, right?
Why are they buying it? What are they buying, and how are they buying it? How are they developing their portfolios? What do they care about? What is their value? What are their value drivers? And that’s been part of our core DNA, Ross, from day one. And we sort of said, look, if the big buyers aren’t interested in buying our CDR, let’s go do something else. So that’s something — I think that would be my number one advice, would be customer obsessed.
Natalie Khtikian: Yeah, I think I totally agree, Jon. I think the other thing is just identifying who your market actually is, right? So if you’re a technology company, then your customer is probably project developers like us. And so figuring out exactly what you can do to attract project developers like us is the best thing to do. So identify your customer, and then be relentlessly focused on value.
Ross Kenyon: How important is it for you to have a sufficient ticket size to be attractive to people who want to make very big offtakes? Because the volumes you’re able to offer are great, and I imagine that companies prefer to do business with one giant ticket for a purchase like this, rather than having, you know, 15 little ones that they have to manage. Is that a true statement?
Natalie Khtikian: You know, I think it depends. So each company has a different size of their footprint, right? And that dictates how much CDR they’re going to buy. So you look at a customer like JPMorgan, and they did a massive offtake with us. It’s kind of the biggest one ever done not by Microsoft, but it is smaller than what Microsoft has done, because they don’t have as big of a footprint to cover for the goals that they set. So when you think about portfolio building, I think it’s really important to think about different scales of those portfolios. And they’re all going to go about them differently depending on the size of their need. But even something that’s, you know, smaller than a Microsoft deal is still a pretty big deal. And, you know, each one is super important, and actually goes pretty differently every time.
Jonathan Rhone: Yeah, just to add to that — I mean, the market is so early stage, Ross. I think our team, our Natalie’s team, the CDR team, commercial team, spends a lot of time with prospective buyers, educating them on how to buy, who are good advisors for them, how to build a portfolio. There is a need, and there’s going to be, you know — we see the beginnings of where there’s going to be aggregators. And I don’t mean startup aggregators, I mean, like, mainstream aggregators, mainstream portfolio builders, who are — who is the main bulk of the market going to go to, to design and deploy and provide a complete portfolio of high-quality verified CDR? That part of the market really has just — is really just starting to develop.
And you know, it’s done in all sorts of other areas of trading. It’s going to happen in CDR, but it’s just not there today. And so when you’re a company like us, you know, it’s really important for us to deal with the big buyers. They have the resources, they’re putting a lot of time, effort, engineering resources into doing due diligence to make sure they’re buying really high-quality CDR that meets their goals. But then we also deal with a lot of the smaller buyers who want to get started, but they don’t necessarily have all the resources that, you know, Microsoft has, or Google has, to understand all of the nuances of these projects. So it’s early, and so we’re supporting that process with buyers kind of across the ticket size spectrum, say it that way.
Ross Kenyon: Natalie, one thing you said caught my ear, which is that you’re actually feeling fairly optimistic about CDR. I’ve been going through — my sine wave is near the trough in some cases here. I’m not feeling great about it overall. Why should I feel optimistic? I’m open to changing my mind. I’m just feeling a little bit down lately.
Jonathan Rhone: Maybe you change his mind, Natalie. Yeah, here’s your chance.
Natalie Khtikian: Yeah. I mean, so I’m not saying it’s easy by any means just to sell CDR. I think that what we found is that price is a component that unlocks the market significantly. So when you’re operating around $200 a tonne, there is more interest and the ticket sizes are larger than at a higher price. That said — yeah, I mean, I cannot say anything about the specific customers that we have signed agreements with, but we do have new customers entering the space. I think that some of the developments in the Japanese market are really hopeful. I don’t think that’s just smoke. I think that there are going to be real buyers out of that market. I think they’re very sincere about achieving climate outcomes in Japan. I think they really care, and CDR is a way that they can do that.
So I think there’s quite a few reasons to be hopeful about it. And I understand the sine curve — I’ve been on that sine curve myself many times, but right now I just happen to be feeling pretty good about it. We also are seeing a big uptake in RFPs. I’m not the only one that’s seeing that. My fellow — yeah, my fellow leaders in the space have seen it as well. And that means that more people are learning how to procure and buy. And I think there’s new entrants into the market, and just the size of the market has grown if you just look at the numbers, so.
Ross Kenyon: Thank you, Jon and Natalie, for being here. Really love what you’re doing, and just glad we were able to have this conversation.
Jonathan Rhone: Thanks, Ross, really appreciate it.
