May 21, 2025 • 41 mins
With emissions hitting record highs, carbon dioxide removal is shifting from theoretical climate solution to commercial necessity. In this episode of ESG Currents, Bloomberg Intelligence Director of ESG Research Eric Kane speaks with AirMyne’s co-founder and COO, Mark Cyffka, and its CCO, Jan Huckfeldt, about the startup’s low-cost, scalable approach to direct air capture (DAC). They discuss why simplicity and heat efficiency are critical to scaling DAC, how waste heat from data centers can fuel removals and what sets the company’s liquid-based system apart from legacy approaches. The trio also unpacks why investors should care now despite high prices and the policy frameworks necessary to unlock the emerging market’s full potential. For more insights, click here to register for BI ESG’s June 4 virtual conference, COP 29.5.
This episode was recorded on May 8.
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Episode Transcript
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Speaker 1 (00:09):
ESG has become established as a key business theme as
companies and investors seek to navigate the climate crisis, energy transition,
social mega trends, mounting regulatory attention and pressure from other stakeholders.
The rapidly evolving landscape has become inundated with acronyms, buzzwords
and lingo, and we aim to break these down with
(00:32):
industry experts. Welcome to ESG Currents, your guide to navigating
the evolving ESG space, one topic at a time, Brought
to you by Bloomberg Intelligence, part of Bloomberg's Research department
with five hundred analysts and strategists working across all major
world markets. I'm Eric Caine, director of ESG Research for
(00:53):
Bloomberg Intelligence, and today we're talking about carbon dioxide removal
or CDR. We know, of course that reducing CO two
emissions is the top priority in addressing climate change, but
we also know these efforts have not been successful thus far,
with twenty twenty four setting another record for global emissions.
As such, there's widespread recognition that emissions reductions must be
(01:16):
coupled with removals, including direct air capture, in order to
achieve long term climate goals and today, I'm pleased to
be joined by Mark Sifka, who is the co founder
and COO of Airmine, and Jan Huckfeld, who is chief
commercial officer for Airmine, a company that is developing a
rather unique approach to direct air capture. Mark and Jan,
(01:38):
welcome to the program.
Speaker 2 (01:39):
Hey, Eric, thanks so much for having us. It's a
pleasure to be here.
Speaker 3 (01:42):
Thank you so much.
Speaker 1 (01:44):
So let's jump right in. Curious to hear from you
what is Airmine's approach to direct air capture and how
does this ultimately differ from other technologies that are in
use or being developed.
Speaker 2 (01:56):
Well, first, thanks for the opportunity to talk about Airmine
and direct air capture. And i'd say, you know, at
a high level, direct air capture is only going to
matter at industrial scale. And what I mean by that
is that we can have DAK technologies, and there's such
a flourishing of CDR and DAK technologies taking place today,
(02:16):
but the only ones that are going to matter in
terms of a climate impact or an economic impact are
going to be the ones that have a path to
get to the large scales where we're talking about millions
of tons and beyond. And so Airline's approach to DAK
is really grounded in building the simplest, most scalable, and
then ultimately lowest cost DAK approach in the world. And
(02:41):
the reason we designed around this strategy really comes from
the DNA of the team and my co founders, Sued Deep.
He spent years at Honeywell in industry inventing products that
have reached industrial scale, and I got to spend time
with him. This was more than ten years ago when
I was working at Honeywell with too Deep learning to
(03:03):
scale technologies and then got to do that when I
was working in chemical companies years later. And one of
the big lessons from getting to scale these technologies is
that simplicity wins. And you're thinking about, how can you
design a system that has the supply chains, the energy requirements,
(03:23):
the equipment and chemicals that you use. How can you
get complexity out so that when it comes time to
turn the scale up, that you have all of the
pieces d risked and ready to go. And that's Airmind's
DNA in a nutshell, and the way that our technology
works at a really high level. Just to set some context,
I think a lot of your listeners will be familiar
(03:44):
with direct air capture and some of the main technology
players out there. But at the simplest level, airminds technology
is that we use a liquid that's cycling through an
air liquid contactor, and that liquid has air blown against
it with a fan, and that air contains carbon dioxide
which absorbs into the liquid, and then we have chemicals
(04:07):
in the liquid that react with that carbon dioxide. And
then once that carbon dioxide is stored in the liquid,
we send it to what we call a regeneration column
or a stripping column, and that is the area where
low temperature heat, usually provided by steam, is performing the
reverse reaction and driving the CO two off of the
(04:28):
capture chemistry, which is then free to go back into
our absorption system. And so what it means is that
airmine is a liquid DAC process and a low temperature
thermal DAC process, and that's really unique. There's only a
handful of folks in the space that are approaching it
that way. But I think maybe we'll get into a
little more later why we think that's the most scalable approach.
Speaker 1 (04:50):
Absolutely, and you mentioned the term scale a number of
times in that answer, and obviously I think that's the
pivotal question when it comes to carbon dioxide removal direct
air capture. The amount of removals necessary obviously depends depending
on whose scenario you're looking at, but I think a
(05:12):
lot of people often kind of refer to the Intergovernmental
Panel on Climate Change as the benchmark, and they suggest
that we'll need ten billion metric tons of removals per
year by the year twenty fifty. That's compared to only
twenty four million tons of carbon removals sold to date,
(05:34):
so historically, not just this year or last year, but
ever so obviously a huge jump in scale and mark.
You started to allude to, you know, the idea of
a liquid approach, and one that is, you know, requires
low temperatures as being you know, key to scaling. So
(05:54):
I wonder if you could elaborate on that a little
bit and then also talk about any potential, you know,
contraints that you see in ultimately achieving the type of
scale that we're talking about. Oh.
Speaker 2 (06:05):
Absolutely, So let's just take a step back and let's
say we're not even talking about DAC anymore, but we're
just talking about any high volume, ultimately low price context.
Because if DAK is going to matter, the costs have
to come down, and so we're talking about these high
volume processes that aren't really that unlike what you'd see
(06:27):
in like a refinery or chemical manufacturing. And so when
Airmine was looking at how are we going to scale
a technology, any technology to that level, Let's look to refineries.
Let's look to the chemical manufacturing that we know and
that Sudeep and I knew from our background, and pull
out those like chemical engineering one oh one fundamentals that
(06:51):
allow you to take something to scale. And so what
I'd say at a high level, there's really about four
of them, and the first, the first lesson is anytime
you're designing an industrial process, you want it to run
twenty four to seven non stop. And in technical language
we call that a continuous process. A lot of other
dock approaches, I would say, use more of what we
(07:13):
call a batch process, meaning that the CO two comes in,
it sticks to the you know, sorbent, and then when
the sorbent is full of CO two, you have to
stop the process in order to release that CO two
back out. And so when that process is stopped, your
line is down effectively, so you're wasting money, you're not
utilizing that capital equipment. So we want to have a
(07:35):
process that's designed to be continuous, all the time running.
Another lesson would be that if you go to any
chemical plant, like any chemical engineer who's actually spent time
in the field will tell you that they would much
much rather move liquids and gases through pipes than moving
solids around like on conveyor belts or through other means,
because with solids you have dust, you have like you know,
(07:58):
you need these giant conveyor belts which are very expensive
and can break down. It just becomes expensive to move
solids around a plant. So if there's any way you
could design a DAC process, from our perspective, liquid has
a lot of advantages because now you can just use
pipes and pumps to move that liquid around your plant.
There are other advantages to a liquid too, but from
an industrial standpoint, pipes and pumps just makes it so
(08:19):
much simpler to design a low cost, large scale plant.
I think the third element of it comes down to
supply chains. So if you're going to build a refinery,
that means you've got to go out to either a
bank or you're convincing you know, your CFO that you
need a lot of money to build a massive facility,
and so when they go through their checklist of you know,
(08:41):
where is the risk in allocating that money, they're going
to look is are you using any equipment that's going
to fail? Like are you using any chemicals that you
know have a supply chain risk? And we have to
think about DAC from that angle too. I think that
so much of the work that's been done in DAC
really derive from material science innovations in university labs. And
(09:03):
the problem is that even if you invent a material,
and it could be a membrane, it could be a sorbent,
whatever you have here, the second that it works, now
your next problem is you've got to place a phone
call to someone who can ship, you know, Pallette quantities
of this to the wherever site you're going to deploy.
And the problem is is that for these advanced materials,
those supply chains don't exist. And I worked in the
(09:24):
chemical supply chain industry. I know how hard it is
to convince someone to build a new chemical plant to
make something, especially in an uncertain market where I think DAK.
You know, there's a lot of things that are still unknown.
And so for airline every design decision we made was
grounded in is this equipment that's available today, are these
chemicals that are available today? Is there something that a
(09:46):
bank or a regulator or an insurer is going to
look at and say no, I don't like the risk there.
And we stripped those out intentionally. And you know, it
ties your hands a little bit when you're doing your design,
but it helps you a lot when you get to
that point when it's time to turn it on. And
the last piece of it is I think, just really simple.
But it's important to say when you're designing a chemical process,
(10:08):
you want it to look simple, meaning that you want
the fewest steps possible, because every step in a chemical
plant is an opportunity for waste or like it's an
opportunity for your efficiency to go down because no process
is perfect in the field. So what you want to
have is the fewest steps, simple equipment, simple chemicals, and
you know a liquid process ideally that's running twenty four
(10:31):
to seven. So that was the design guidance that we
had from day one. And there's only two other things
that I think are important to mention that maybe you're
a little bit DAK specific, and this gets into things
like energy and chemistry. But for energy, and I think
we might talk about this a little bit more, but
we wanted to design a DAC process that runs on
low temperature heat. We'll talk a little bit more about
(10:52):
like why the sourcing of that heat. I think it
benefits our approach. But the fundamental engineering reason is that
a lot of chemical plants they run on steam. They
are designed to move huge amounts of heat from one
place to another via pipes and steam is a beautiful
mechanism that's been done for decades to do that, and
so for a DAK plant, if you can power it
with steam, that's very practical. And then for sourcing reasons
(11:14):
we'll talk about more. There's there's advantages there. And second
is that the chemical that we use and the chemical
that we think makes the most sense for a DACK
approach is to get a little bit technical for your audience,
there are two main types of chemicals out there. There's
inorganic chemicals and organic chemicals. And the way I'd break
this down is organic chemicals or like the complex chemicals
(11:35):
that have carbon in them, long carbon chains, large functional molecules,
and then you have inorganic chemicals, which are basically salts,
and it's important to bring up that we think that
inorganic chemicals are a much stronger chemical platform en rich
to build DAC because those organic chemicals they break down,
(11:56):
you know, like things in the air, like air will
oxidize certain things, or chemicals will degrade. And you can
imagine if you're using really sophisticated molecules to capture CO
two from air that are designer molecules. One they're expensive,
Two they break down. And a lot of the DAC
processes that we're talking about they use energy, they use heat,
they use things that break down molecules, So why not
(12:18):
use inorganic salts that don't degrade, that are cheap to
begin with. And so apologies for going into depth there,
but those really were the design criteria we used at
the beginning and have stayed more or less constant as
we've tried to build this really scalable platform that we
believe is going to allow you to reach those economies
(12:39):
of scale faster than anybody else. And that's where the
cost benefits of air Mind's approach really kick in.
Speaker 1 (12:44):
Now it's super interesting and definitely no need to apologize
about going into the details. I appreciate the details very much.
It's fascinating, certainly. I think it helps our listeners actually
understand what's going on, so very much appreciate that. So
you mentioned energy, of course, and the idea that you
know your system is designed to utilize low temperature heat steam.
(13:07):
Curious if you could expand on that, maybe compare you know,
your energy usage in the airline system versus what you
might see in traditional deck and then you know, going
forward you mentioned obviously the overall intent is for it
to be low costs. That's my understanding that energy and
the energy intensity of other deck systems is one of
(13:28):
the things that contributes to such a high cost when
we look at a kind of per Ton costs for removal.
So maybe you know, as part of the answer, if
you could also talk about, you know, ultimately how that
impacts your projected you know cost per ton.
Speaker 2 (13:43):
Certainly, and it's that is the question at the heart
of all DAK, right, is how are we going to
get the energy to power this and what type of
energy makes sense to rent it? And so when we
were thinking about what DACK would be the most scalable,
I would say the first and most fundamental decision was
that we want to be able to use whatever energy
(14:04):
is available with the fewest restrictions, so that wherever we
put our site, we're not going to be technically limited
in the type of energy we have to source. That's
pretty abstract, but it just means that, like, if we're
putting it in an area where solar energy solar electricity
is cheap, we want to be able to use that.
If we're going to put it in an area where
there happens to be geothermal, we want to be able
(14:25):
to use that. Or you know, in a world where
maybe DAC gets coupled with thermal industrial processes and they
have waste heat that we can use, or data centers
things like that, we want to be able to use
that too. And so it's just this this framework to
say that, because DAC is energy intensive, let's pick that
energy source which is the most flexible, and that is
(14:46):
low temperature heat. And so to get into a little
of why that is, if you have electricity, like folks
have you know an electric oven at home, or you
know an induction heater you know, to cook, Electricity converts
into heat with really high efficiency. And so if you
have electricity, that's great. Now, if you're talking about using
(15:07):
like geothermal or some of these other thermal sources. Those
do not convert into electricity with high efficiency. And that's
a really important concept. Most geothermal plants, when you're talking
about electricity, they're only maybe ten percent efficient fifteen percent
efficient on a good day at converting that heat into electricity.
And so what if you could use that heat directly
(15:30):
rather than having to go and convert And that's true
for any low temperature heat that you find in the world.
It's it's harder to turn it into electricity. It's very
easy to use it as heat. And so one I
think that for designing a low temperature thermal approach, you
just have fewer restrictions. You can imagine there are other
(15:50):
dock approaches out there that I think are talking about.
We want to have an electric only dock approach because
that's the cleanest. We can go to our life cycle
analysis and say that we used you know, clean electrons.
Therefore we have a really good emissions profile for our technology.
And I would agree electricity is a beautiful energy input
to use for DAK. The challenge is like our DAK
(16:14):
company is going to be able to outbid all of
these hyperscalers to try and get that clean electron into
their dock facility when the margins on DOC have to
come down so low that you're basically in a poor
leverage position to outbid people who might be using these
electrons for very high value applications like AI. And so
in a world where we want dak to scale fast,
(16:36):
I think using as little electricity as possible in your
approach is really a strategic lever that helps you. And
then there's another element of this just to bring up,
is that other I'd say, you know pioneering dock companies
out there, they use a process that relies on a
step called calcination, and that calcination step they'll require temperatures
(16:56):
of nine hundred C or more. And if you're talking
about dock approaches that use a high temperature approach, that
ties your hands too, because now you have to either
use electricity to run sort of novel heaters, like most
industrial heat at nine hundred C is not typically done
with electricity, and so those folks who are going electric
(17:17):
have to find a relatively less proven and less scaled
way to get that heat into their process, or you
have to use fossil fuels, and I don't have any
inherent objection to using fossil fuels to power DOC. The
problem is that you have to be able to make
sure that it truly is net negative, and it just
gets a lot harder to run that process on fossil
(17:38):
fuels in a way that actually accomplishes that. It's not impossible,
it's just really hard. And so now just to sum
it all up, low temperature heat. It gives you that
flexibility of where you source your energy, and it allows
you to run on i'd say broadly more decarbonized energy
that allows you to have a cleaner process at the
(17:59):
end of the time. But it's this question of where
we get that energy to scale dec It's a really
important one and it's something that I think gets oversimplified
a lot in sort of the LinkedIn chatter and in
the way that this is discussed, and so it's really
great to get a chance to talk about it here.
Speaker 1 (18:15):
Absolutely. So maybe just to follow up on one point
that you made, there's so much focus right now in
the ESG space, in the climate space on the fact
that AI is driving increased energy to demand, and obviously
we're meeting that through additional fossil fuel generating capacity. You
(18:37):
know largely you alluded to the idea of potentially using
the waste heat from data centers to potentially power or
provide the heat for your system. Is that Did I
get that right? Because to me, that's just like a
beautiful synergy that I had not thought of.
Speaker 2 (18:54):
It's a beautiful synergy. It's as simple as that. I
think you could look at data centers, you could look
at refineries, you could look at any industrial facility that
say you drive by on the highway and you see
a big industrial facility, I guarantee you they have waste
heat and there. It's not as simple as saying we're
(19:15):
going to couple DOC to every source of waste heat.
You need a big source of waste heat that's on
all the time in order to really couple it to
dock in a way that is practical to run that
twenty four to seven continuous cycle that we were talking about.
But one thing I would absolutely agree with is that
if you can find ways to power dock that utilizes
(19:35):
all of this heat that we waste already in a
practical way, that is a path forward, one of the
paths forward for this industry. To start to get the
traction it needs and answer that energy question. Ultimately, I
think there is going to be enough energy to power
dock that uses waste heat and other types of electricity
or heat that are otherwise underutilized. But it's an important
(19:57):
part of the puzzle and certainly helps to get buy
in from let's say the companies or the industrial partners
that make that heat, because now they have an avenue
to participate in decarbonization through DAK. That is something that
they're looking for, these avenues to get involved. And what
a beautiful synergy if you can make that story, you know,
complete close that.
Speaker 1 (20:17):
Loop absolutely, And it's my understanding that you know, one
of the major barriers, if not the biggest barrier for
you know, those partners to engage or for others to
engage in carbon removals and you know DACK removals in particular,
is the cost of a removal ton. So I was
(20:38):
wondering if you could maybe walk us through what your
what you anticipate your costs to be, and how that
compares to you know, what we're seeing in the market currently.
Speaker 2 (20:48):
Yeah, of course, and that that is you know, the
other important question here is how cheap or low cost
can DAC get. And I would say that for a
lot of DAK technologies, Airmind included that these are early
days in the sense that we are able to build
small systems. Some folks are doing you know, a few
tons of years, some are doing a little more than that.
(21:09):
But then when you're starting to do the math of
you know, at scale, at a commercially relevant scale, where
you're talking about building the plant, where is the cost
going to get? I would say that for Airmine, we're
aiming to be the lowest cost back on Earth. And
what I mean by that is that we look at
the folks who are doing pioneering DAC work today, and
when we look at our process data and our process
(21:31):
fundamentals and you know, the publicly available information that we
see about the technologies that are out there, that everyone
on our team is fully aligned that ours makes a
lot of sense and is going to be cheaper than
what's out there now. Exactly how much cheaper I think
we're we're pretty excited to find out. And in terms
of you know, the floor, I would just say maybe
(21:52):
a lot of folks talk about, you know, is THATK
going to be below one hundred dollars a ton, and
this is sort of an area that is again commonly discussed,
and I think at a at a level of complexity
that maybe doesn't really match the reality of you know,
running these processes. I'll be honest that I'm pretty skeptical
that DAK is going to get to one hundred dollars
a ton, But I do think that DAK is going
(22:13):
to get into that price target, say like at large
scale in the future, somewhere between call it one hundred
and fifty and two hundred dollars two hundree hundred fifty
and SA two hundred fifty three hundred dollars a ton.
I think DAK can get there. And it's it's a
little tricky to bring up that price point. That's still right,
That's still a high price compared to some of the
(22:34):
other nature based approaches and kind of the forestry solutions,
But that is that is the beauty of DAK is
that with DAK, this is the highest quality removal you
can possibly get. You can weigh the CO two, you
know exactly how pure it is, and that now you
have a resource that you can either sequester or you
(22:54):
can turn into useful products. Which is really strategically important
for a lot of regions that are thinking about this.
So at the end of the day, I think that
for air Minds technology specifically, it's that inherent simplicity and
scalability that get us to a big plant faster that
really drive that cost down for us, and the fact
(23:14):
that we're able to use whatever the lowest cost energy
in any region would be. Plus this sort of reality
that if you are running a DOC process, that there
is value to that credit to the corporations and organizations
that are building carbon removal portfolios where they want some
of the high quality, highest quality removals on one side,
(23:37):
and maybe lower cost ones and open systems too. And
it's just going to be an ecosystem and a portfolio
approach that grows with time and we'll have to see
where these technologies go and what the cost profiles can
actually hit.
Speaker 1 (23:50):
Very interesting.
Speaker 4 (23:51):
Taking a quick break here to invite you to Bloomberg
Intelligences mid year Virtual Conference COP twenty nine point five Innovation,
Accountability and the Path to Brazil. Online only event will
be held Wednesday, June fourth, at eight thirty am Eastern Time.
Tune in to hear from leading experts in public and
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tackling the climate crisis, the challenges in the current geopolitical moment,
(24:15):
and a look ahead at COP thirty and Bella in Brazil.
The event is opened all on The link to register
will be in our show description.
Speaker 1 (24:22):
So you mentioned the idea of sequestration. Obviously that's the
other piece of the puzzle or potentially, as you also
mentioned the use of the carbon dioxide, so wanted to
hear a little bit more about ultimately, you know how
Airmine envisions that part of the process, the sequestration or
the ultimate use of the CO two.
Speaker 2 (24:43):
I think that for large scale DAC, in order to
get the costs and sort of the logistics and everything
in a place where we're talking about the volumes that
DAC needs to get to, sequestration is i'd say very
important because with a pipeline you're able to move large
(25:04):
volumes at a low cost, and with the injection in
locations that have the appropriate safeguards, and you know, the
insurance mechanisms and the regulatory mechanisms. I think the economics
just work out there. And the flip side of this though,
is that sequestration is one important piece and that is
where you know, we see it going. But the other
(25:27):
part of where I think there's a real opportunity is
with dak As I mentioned, it's the only carbon removal
method where at the end of the day you've got
you know, tons of highly pure carbon dioxide gas sitting there.
And let's look back to the history of natural gas.
I don't know how many decades when when we'd get
(25:48):
natural gas out of you know, an oil well or drilling,
it was just flared or vented, like we didn't do
anything with it. But it was at that moment once
folks started to capture it that you know, the gears
start turning and the people who are looking at these
systems say there's money to be made and there's value
in that product. And obviously carbon dioxide it's a different situation,
(26:11):
it's a different molecule, it has different uses, it has
different economics than natural gas. But I think in a
world where there is this broad consensus among most of
the governments of the world that we're going to need
something like a massive decarbonization effort, and that we're going
to need to be turning on large volumes of both
point source capture and direct air capture. That there's an
(26:34):
economics narrative of using that CO two for something valuable
that I would say we see in certain regions of
the world as being more strategically aligned. Say if you're
in a country that doesn't have the geological sequestration resources,
say compared to like the United States, or there's parts
(26:55):
of the world where there's a lot of good sequestration.
But if you're in an area of the world that
doesn't have that, you can still have an economic flywheel
of using CO two to benefit your society and drive
circularity and drive decarbonization that aligns with the industrial skills
of you know, the industry in your country already. And
so I would say with DAK, the thing that makes
(27:16):
me excited is, you know, it feels a little strange
to say this, but we don't know, we don't know
where this is going. It could go more towards sequestration,
it could go more towards utilization, and it really depends
on some forces that are outside of what DAK can control.
But what's nice is that and what's exciting is that
DAK has such an important role to play in either
of those scenarios that only it can fill. And that's
(27:39):
what keeps us really excited to keep working on this
problem and drive that cost down and prove the scalability
because you just look at the world and you it's
this is going to turn on one day, and it's
just a matter of how are we going to get
there and how do you kind of play this strategically
to benefit the most folks.
Speaker 1 (27:56):
Very interesting your last point there about you know, this
is going to turn on one day, it's just a
question of how we get there. I think leads well
into my next question, which is kind of based around
an article that the Wall Street Journal ran a couple
of weeks ago. The title of the article, probably a
little bit contentious, was it could be a two hundred
(28:20):
and fifty billion dollar market, but almost no one is interested.
The article obviously is about, you know, the carbon removal market,
and I don't necessarily agree, but the author, you know,
cites a couple kind of key points to defend his
argument that nobody cares, one of which is that there's
(28:43):
a lack of current comparability between carbon removal credits. You know,
perhaps compared to other commodities, like you know, a ton
of copper, which is pretty comparable, or a barrel of oil.
So curious ultimately to hear how you would address that
(29:04):
criticism that you know, this market is just too difficult
because the removal credits are ultimately not comparable.
Speaker 3 (29:11):
Eric, I think there is there are some truths to it, right,
It is certainly not a commodity. And and so we
are Mark mentioned that earlier. I mean, we have common
dogs that removal from trees all the way to direct
air capture. And you have a number of new technologies
(29:33):
coming up from from biohr and backs and an hardswethering
and and ocean capture and and all of this and
and ultimately the as as humans on this planet, we
will probably need all of those and and and they
are they are not directly comparable. And I also don't
(29:55):
think it is it is helpful to talk of commodities
in this respect. I would rather think of the challenge
is more like making financial investments. Financial investments, you you're
looking at a portfolio, and you want to make sure
that you have the right a risk mitigated portfolio. You
(30:17):
want to have the portfolio at at at different costs
and and qualities. And direct Aculture is within this portfolio
the highest quality. It is measurable, it's it's it's permanent,
it is it is additional. It has probably the lowest
risk in terms of standing up to future regulations. It
(30:42):
is the lowest rik risk in terms of reversal, and
it is it is not limited like other common dogs
that removal technologies by by the availability of biomass. Now
for for companies to to get their hats around, say
(31:04):
they are they're formidable companies experts who help these these
companies to actually navigate that space and and and put
together a portfolio. And you have you have companies like
Common Direct, you have companies like QO eight who can
actually help companies and and they make that despite the
(31:26):
the difficulty at first sight to actually navigate that space,
they do it really well. So I don't think this
is a real barrier. It's of course it's a matter
of education, But ultimately I think this this shouldn't be
a barrier.
Speaker 1 (31:39):
Interesting and you mentioned the idea that you know it
should be treated more like a traditional investment. I guess
one of the other barriers as I see it is
the fact that dack credits, removal credits right now are
so expensive. And you know, to the points that that
market made earlier, it's designed to hopefully decrease over time
(32:03):
in price. So what, in your opinion, is the incentive
for investors to buy now knowing that, unlike other investments
where they hope the price is going to go up, ultimately,
the hope here is that the price of removal credits
goes down. It goes down quite dramatically over time.
Speaker 3 (32:21):
Yeah, that's that's that's a that's a core question of
this market, unfortunately, Eric, And you know, for me, there
are three points. First, I think you know, the advice
is to start small and and learn and and and
ultimately it is about doing the right thing. We don't.
(32:42):
We have to by all means avoid that this is
going to become a hockey stick. You you mentioned earlier,
we need tens of of geekatons of carbon docs that
removeal and and high quality carbon docs that removeal and.
If you look at where our our budget is moving,
(33:05):
it is very likely that we will need to deal
with and overshoot and much even higher amounts of garden
dogs that removal by twenty to fifty. So this capacity
cannot be built within a few years, and therefore it
is really important that the companies and governments are doing
(33:27):
the right thing and starting now and enabling enabling the
growth of this industry. And then I think that that
is a very important argument as a company, you want
to start now to also get access to future, to
this future market. In the moment regulation kicks in, this
(33:49):
is going to be a seller market simply because there
is going to be a shortage of capacity and companies
can in that market ones having purchased through agreements like rofos,
getting access to future capacities and having a right of
(34:12):
first offer or first refusal, they can they can secure
the access right, and so it's it is really important
that that we we get over this hunch of delaying
delaying purchase. Coming back to the first point, you know, small, small,
small start is better than none.
Speaker 1 (34:34):
Interesting mentioned the idea of governments having to do the
right thing. I'm curious to hear ultimately, what policies or
market structures you think need to be in place to
better support curbon removals at this point.
Speaker 3 (34:50):
Yeah, I think here I can think of four points,
and the governments need to play a very important role here.
Number one, of course, is regulation. We need to get regulation,
We need to what we need to move towards the
compliance market at the right speed. But this has to
has to happen, and it needs to be clearly visible
(35:11):
and transparent to to corporations that this is coming and
at what time it is coming, so that these companies
can actually ramp up. That's number one. Number two, we
need to have clearer standards of what what is allowed,
what is not allowed, what is a good quality carbon credit?
(35:31):
And and then government purchases. When you when you look
at at different renewable industries, government purchases make a massive
difference and and so it would be good if we
had more governments to to actually lead lead the growth
of this this industry. And and finally, when when when
(35:56):
building or when when working on these large infrastructure projects,
it is very important that we get to an accelerated
permitting process because these can delay those projects by years,
(36:16):
and again this industry cannot afforded.
Speaker 1 (36:21):
So maybe looking ahead a little bit at Airmand's roadmap,
we've discussed the technology. I think you know as you
described that the advantages are are quite clear. Just wondering
if you could describe kind of where the company is
in terms of having operational facilities.
Speaker 2 (36:39):
Of course, So I'm speaking to you now from our
facility in Berkeley, California, and this is where we have
our prototype systems. Our largest system is operating on the
order of you know, the single digit tons per year,
and we are now at a point in our company
where we have gotten the engineering data and we have
(37:01):
gotten feedback from DAK experts around the world that this
is one of the most if not the most promising
DAK technology that's out there today. This is a really
exciting time for us. We're all, you know, eager to
see what happens next. And in practical terms, what happens
next is that we would put our technology outside in
the field where you have you know, the wind and
(37:21):
the rain and all of these conditions that I would
say the DAK pioneers in this space have helped everybody
understand really affect the economics and challenges of scaling DAC.
But that's that's the part where I think, you know,
I'm really excited for Airminds technology because we have this
inherent simplicity to the design, and we've thought about a
(37:43):
lot of these challenges early on, so there's not going
to be you know, finicky materials that have issues in
terms of durability when you, you know, expose them to the
cycling of you know, the heat and the cold and
things like that. And so the other thing I would
say is whereas airline going, so we are going to
scale as quickly as we reasonably can because that's where
(38:05):
the economics of DAC start to get exciting. I think
that if you're talking about when do plants start getting economical,
I would say, you know, just for your audience, I
would call from at least the way that I think
about it, or we think about it, about one hundred
thousand tons per year is the size of a DACK facility.
Where you start to cross over that barrier from something
(38:26):
that is more like a demonstration to something that is
actually like commercially viable that's operating at the economies of
scale where this starts to make sense. And for airline,
I think that we're just in this beautiful position to
get there faster and more quickly than others because of
the scalability that we baked into what we're doing. And
(38:50):
maybe also just to say that, you know, if you
look at the team Yon myself Sude, we have others
on the team that really come from large corporation and
that's a bit unique in the DAK space too, that
I think we see where this is headed, that it's
going to be the large corporations of the world, the
large entities that are going to have to make the
(39:12):
decisions that drive back to that next scale that we're
talking about. And knowing how those companies work and how
sort of what the CEO is thinking about, the CFO
is thinking about, how the different structures of these organizations
work and make decisions and who they partner with, makes
us feel like we're, you know, in a strong position
to take a good share of this market as it grows.
(39:35):
So I would say, you know, we're we're really excited
about Airline's trajectory, and I've really appreciated the chance to
get to talk about it with you today.
Speaker 1 (39:43):
Absolutely, So, maybe just as a concluding question, if you
had to, you know, expand that roadmap and think about
where Airline will be in maybe five to ten years,
do you have a sense you know, I know other
companies have kind of pledged to remove a certain number
of tons. Do you have any goals that you've set.
Speaker 2 (40:01):
Or I would distill it to this. I think in
five to ten years, Airmine is going to be the
lowest cost DAC on Earth, and that's that's the goal.
It's it's hard at this moment in time when there's
so much uncertainty in you know, in capital markets, in
geopolitics of how quickly DAK is going to turn on.
But I think I can pretty confidently say that Armine
(40:23):
is on a trajectory where our cost profile and our
scalability position us, you know, as one of the best
that's out there, and that just opens doors for the future.
Speaker 1 (40:32):
No, that's great, well, Mark and Joan really appreciate you
taking the time to chat with us today. It was fascinating.
Speaker 2 (40:38):
Thank you, hey, Eric, really appreciate it, and thanks to
you and your team for hosting us.
Speaker 1 (40:42):
Wonderful. So as reminder to our listeners, you can find
more information on all things ESG by going to our dashboard,
bi's pace ESG go on the Bloomberg terminal, and if
you have an ESG quandary or burning question you'd like
to ask bi's expert analysts, please send us an email
at ESG Erents at Bloomberg dot net. Thank you very
much and we'll see you next time.
ESG has become established as a key business theme as
companies and investors seek to navigate the climate crisis, energy transition,
social mega trends, mounting regulatory attention and pressure from other stakeholders.
The rapidly evolving landscape has become inundated with acronyms, buzzwords
and lingo, and we aim to break these down with
(00:32):
industry experts. Welcome to ESG Currents, your guide to navigating
the evolving ESG space, one topic at a time, Brought
to you by Bloomberg Intelligence, part of Bloomberg's Research department
with five hundred analysts and strategists working across all major
world markets. I'm Eric Caine, director of ESG Research for
(00:53):
Bloomberg Intelligence, and today we're talking about carbon dioxide removal
or CDR. We know, of course that reducing CO two
emissions is the top priority in addressing climate change, but
we also know these efforts have not been successful thus far,
with twenty twenty four setting another record for global emissions.
As such, there's widespread recognition that emissions reductions must be
(01:16):
coupled with removals, including direct air capture, in order to
achieve long term climate goals and today, I'm pleased to
be joined by Mark Sifka, who is the co founder
and COO of Airmine, and Jan Huckfeld, who is chief
commercial officer for Airmine, a company that is developing a
rather unique approach to direct air capture. Mark and Jan,
(01:38):
welcome to the program.
Speaker 2 (01:39):
Hey, Eric, thanks so much for having us. It's a
pleasure to be here.
Speaker 3 (01:42):
Thank you so much.
Speaker 1 (01:44):
So let's jump right in. Curious to hear from you
what is Airmine's approach to direct air capture and how
does this ultimately differ from other technologies that are in
use or being developed.
Speaker 2 (01:56):
Well, first, thanks for the opportunity to talk about Airmine
and direct air capture. And i'd say, you know, at
a high level, direct air capture is only going to
matter at industrial scale. And what I mean by that
is that we can have DAK technologies, and there's such
a flourishing of CDR and DAK technologies taking place today,
(02:16):
but the only ones that are going to matter in
terms of a climate impact or an economic impact are
going to be the ones that have a path to
get to the large scales where we're talking about millions
of tons and beyond. And so Airline's approach to DAK
is really grounded in building the simplest, most scalable, and
then ultimately lowest cost DAK approach in the world. And
(02:41):
the reason we designed around this strategy really comes from
the DNA of the team and my co founders, Sued Deep.
He spent years at Honeywell in industry inventing products that
have reached industrial scale, and I got to spend time
with him. This was more than ten years ago when
I was working at Honeywell with too Deep learning to
(03:03):
scale technologies and then got to do that when I
was working in chemical companies years later. And one of
the big lessons from getting to scale these technologies is
that simplicity wins. And you're thinking about, how can you
design a system that has the supply chains, the energy requirements,
(03:23):
the equipment and chemicals that you use. How can you
get complexity out so that when it comes time to
turn the scale up, that you have all of the
pieces d risked and ready to go. And that's Airmind's
DNA in a nutshell, and the way that our technology
works at a really high level. Just to set some context,
I think a lot of your listeners will be familiar
(03:44):
with direct air capture and some of the main technology
players out there. But at the simplest level, airminds technology
is that we use a liquid that's cycling through an
air liquid contactor, and that liquid has air blown against
it with a fan, and that air contains carbon dioxide
which absorbs into the liquid, and then we have chemicals
(04:07):
in the liquid that react with that carbon dioxide. And
then once that carbon dioxide is stored in the liquid,
we send it to what we call a regeneration column
or a stripping column, and that is the area where
low temperature heat, usually provided by steam, is performing the
reverse reaction and driving the CO two off of the
(04:28):
capture chemistry, which is then free to go back into
our absorption system. And so what it means is that
airmine is a liquid DAC process and a low temperature
thermal DAC process, and that's really unique. There's only a
handful of folks in the space that are approaching it
that way. But I think maybe we'll get into a
little more later why we think that's the most scalable approach.
Speaker 1 (04:50):
Absolutely, and you mentioned the term scale a number of
times in that answer, and obviously I think that's the
pivotal question when it comes to carbon dioxide removal direct
air capture. The amount of removals necessary obviously depends depending
on whose scenario you're looking at, but I think a
(05:12):
lot of people often kind of refer to the Intergovernmental
Panel on Climate Change as the benchmark, and they suggest
that we'll need ten billion metric tons of removals per
year by the year twenty fifty. That's compared to only
twenty four million tons of carbon removals sold to date,
(05:34):
so historically, not just this year or last year, but
ever so obviously a huge jump in scale and mark.
You started to allude to, you know, the idea of
a liquid approach, and one that is, you know, requires
low temperatures as being you know, key to scaling. So
(05:54):
I wonder if you could elaborate on that a little
bit and then also talk about any potential, you know,
contraints that you see in ultimately achieving the type of
scale that we're talking about. Oh.
Speaker 2 (06:05):
Absolutely, So let's just take a step back and let's
say we're not even talking about DAC anymore, but we're
just talking about any high volume, ultimately low price context.
Because if DAK is going to matter, the costs have
to come down, and so we're talking about these high
volume processes that aren't really that unlike what you'd see
(06:27):
in like a refinery or chemical manufacturing. And so when
Airmine was looking at how are we going to scale
a technology, any technology to that level, Let's look to refineries.
Let's look to the chemical manufacturing that we know and
that Sudeep and I knew from our background, and pull
out those like chemical engineering one oh one fundamentals that
(06:51):
allow you to take something to scale. And so what
I'd say at a high level, there's really about four
of them, and the first, the first lesson is anytime
you're designing an industrial process, you want it to run
twenty four to seven non stop. And in technical language
we call that a continuous process. A lot of other
dock approaches, I would say, use more of what we
(07:13):
call a batch process, meaning that the CO two comes in,
it sticks to the you know, sorbent, and then when
the sorbent is full of CO two, you have to
stop the process in order to release that CO two
back out. And so when that process is stopped, your
line is down effectively, so you're wasting money, you're not
utilizing that capital equipment. So we want to have a
(07:35):
process that's designed to be continuous, all the time running.
Another lesson would be that if you go to any
chemical plant, like any chemical engineer who's actually spent time
in the field will tell you that they would much
much rather move liquids and gases through pipes than moving
solids around like on conveyor belts or through other means,
because with solids you have dust, you have like you know,
(07:58):
you need these giant conveyor belts which are very expensive
and can break down. It just becomes expensive to move
solids around a plant. So if there's any way you
could design a DAC process, from our perspective, liquid has
a lot of advantages because now you can just use
pipes and pumps to move that liquid around your plant.
There are other advantages to a liquid too, but from
an industrial standpoint, pipes and pumps just makes it so
(08:19):
much simpler to design a low cost, large scale plant.
I think the third element of it comes down to
supply chains. So if you're going to build a refinery,
that means you've got to go out to either a
bank or you're convincing you know, your CFO that you
need a lot of money to build a massive facility,
and so when they go through their checklist of you know,
(08:41):
where is the risk in allocating that money, they're going
to look is are you using any equipment that's going
to fail? Like are you using any chemicals that you
know have a supply chain risk? And we have to
think about DAC from that angle too. I think that
so much of the work that's been done in DAC
really derive from material science innovations in university labs. And
(09:03):
the problem is that even if you invent a material,
and it could be a membrane, it could be a sorbent,
whatever you have here, the second that it works, now
your next problem is you've got to place a phone
call to someone who can ship, you know, Pallette quantities
of this to the wherever site you're going to deploy.
And the problem is is that for these advanced materials,
those supply chains don't exist. And I worked in the
(09:24):
chemical supply chain industry. I know how hard it is
to convince someone to build a new chemical plant to
make something, especially in an uncertain market where I think DAK.
You know, there's a lot of things that are still unknown.
And so for airline every design decision we made was
grounded in is this equipment that's available today, are these
chemicals that are available today? Is there something that a
(09:46):
bank or a regulator or an insurer is going to
look at and say no, I don't like the risk there.
And we stripped those out intentionally. And you know, it
ties your hands a little bit when you're doing your design,
but it helps you a lot when you get to
that point when it's time to turn it on. And
the last piece of it is I think, just really simple.
But it's important to say when you're designing a chemical process,
(10:08):
you want it to look simple, meaning that you want
the fewest steps possible, because every step in a chemical
plant is an opportunity for waste or like it's an
opportunity for your efficiency to go down because no process
is perfect in the field. So what you want to
have is the fewest steps, simple equipment, simple chemicals, and
you know a liquid process ideally that's running twenty four
(10:31):
to seven. So that was the design guidance that we
had from day one. And there's only two other things
that I think are important to mention that maybe you're
a little bit DAK specific, and this gets into things
like energy and chemistry. But for energy, and I think
we might talk about this a little bit more, but
we wanted to design a DAC process that runs on
low temperature heat. We'll talk a little bit more about
(10:52):
like why the sourcing of that heat. I think it
benefits our approach. But the fundamental engineering reason is that
a lot of chemical plants they run on steam. They
are designed to move huge amounts of heat from one
place to another via pipes and steam is a beautiful
mechanism that's been done for decades to do that, and
so for a DAK plant, if you can power it
with steam, that's very practical. And then for sourcing reasons
(11:14):
we'll talk about more. There's there's advantages there. And second
is that the chemical that we use and the chemical
that we think makes the most sense for a DACK
approach is to get a little bit technical for your audience,
there are two main types of chemicals out there. There's
inorganic chemicals and organic chemicals. And the way I'd break
this down is organic chemicals or like the complex chemicals
(11:35):
that have carbon in them, long carbon chains, large functional molecules,
and then you have inorganic chemicals, which are basically salts,
and it's important to bring up that we think that
inorganic chemicals are a much stronger chemical platform en rich
to build DAC because those organic chemicals they break down,
(11:56):
you know, like things in the air, like air will
oxidize certain things, or chemicals will degrade. And you can
imagine if you're using really sophisticated molecules to capture CO
two from air that are designer molecules. One they're expensive,
Two they break down. And a lot of the DAC
processes that we're talking about they use energy, they use heat,
they use things that break down molecules, So why not
(12:18):
use inorganic salts that don't degrade, that are cheap to
begin with. And so apologies for going into depth there,
but those really were the design criteria we used at
the beginning and have stayed more or less constant as
we've tried to build this really scalable platform that we
believe is going to allow you to reach those economies
(12:39):
of scale faster than anybody else. And that's where the
cost benefits of air Mind's approach really kick in.
Speaker 1 (12:44):
Now it's super interesting and definitely no need to apologize
about going into the details. I appreciate the details very much.
It's fascinating, certainly. I think it helps our listeners actually
understand what's going on, so very much appreciate that. So
you mentioned energy, of course, and the idea that you
know your system is designed to utilize low temperature heat steam.
(13:07):
Curious if you could expand on that, maybe compare you know,
your energy usage in the airline system versus what you
might see in traditional deck and then you know, going
forward you mentioned obviously the overall intent is for it
to be low costs. That's my understanding that energy and
the energy intensity of other deck systems is one of
(13:28):
the things that contributes to such a high cost when
we look at a kind of per Ton costs for removal.
So maybe you know, as part of the answer, if
you could also talk about, you know, ultimately how that
impacts your projected you know cost per ton.
Speaker 2 (13:43):
Certainly, and it's that is the question at the heart
of all DAK, right, is how are we going to
get the energy to power this and what type of
energy makes sense to rent it? And so when we
were thinking about what DACK would be the most scalable,
I would say the first and most fundamental decision was
that we want to be able to use whatever energy
(14:04):
is available with the fewest restrictions, so that wherever we
put our site, we're not going to be technically limited
in the type of energy we have to source. That's
pretty abstract, but it just means that, like, if we're
putting it in an area where solar energy solar electricity
is cheap, we want to be able to use that.
If we're going to put it in an area where
there happens to be geothermal, we want to be able
(14:25):
to use that. Or you know, in a world where
maybe DAC gets coupled with thermal industrial processes and they
have waste heat that we can use, or data centers
things like that, we want to be able to use
that too. And so it's just this this framework to
say that, because DAC is energy intensive, let's pick that
energy source which is the most flexible, and that is
(14:46):
low temperature heat. And so to get into a little
of why that is, if you have electricity, like folks
have you know an electric oven at home, or you
know an induction heater you know, to cook, Electricity converts
into heat with really high efficiency. And so if you
have electricity, that's great. Now, if you're talking about using
(15:07):
like geothermal or some of these other thermal sources. Those
do not convert into electricity with high efficiency. And that's
a really important concept. Most geothermal plants, when you're talking
about electricity, they're only maybe ten percent efficient fifteen percent
efficient on a good day at converting that heat into electricity.
And so what if you could use that heat directly
(15:30):
rather than having to go and convert And that's true
for any low temperature heat that you find in the world.
It's it's harder to turn it into electricity. It's very
easy to use it as heat. And so one I
think that for designing a low temperature thermal approach, you
just have fewer restrictions. You can imagine there are other
(15:50):
dock approaches out there that I think are talking about.
We want to have an electric only dock approach because
that's the cleanest. We can go to our life cycle
analysis and say that we used you know, clean electrons.
Therefore we have a really good emissions profile for our technology.
And I would agree electricity is a beautiful energy input
to use for DAK. The challenge is like our DAK
(16:14):
company is going to be able to outbid all of
these hyperscalers to try and get that clean electron into
their dock facility when the margins on DOC have to
come down so low that you're basically in a poor
leverage position to outbid people who might be using these
electrons for very high value applications like AI. And so
in a world where we want dak to scale fast,
(16:36):
I think using as little electricity as possible in your
approach is really a strategic lever that helps you. And
then there's another element of this just to bring up,
is that other I'd say, you know pioneering dock companies
out there, they use a process that relies on a
step called calcination, and that calcination step they'll require temperatures
(16:56):
of nine hundred C or more. And if you're talking
about dock approaches that use a high temperature approach, that
ties your hands too, because now you have to either
use electricity to run sort of novel heaters, like most
industrial heat at nine hundred C is not typically done
with electricity, and so those folks who are going electric
(17:17):
have to find a relatively less proven and less scaled
way to get that heat into their process, or you
have to use fossil fuels, and I don't have any
inherent objection to using fossil fuels to power DOC. The
problem is that you have to be able to make
sure that it truly is net negative, and it just
gets a lot harder to run that process on fossil
(17:38):
fuels in a way that actually accomplishes that. It's not impossible,
it's just really hard. And so now just to sum
it all up, low temperature heat. It gives you that
flexibility of where you source your energy, and it allows
you to run on i'd say broadly more decarbonized energy
that allows you to have a cleaner process at the
(17:59):
end of the time. But it's this question of where
we get that energy to scale dec It's a really
important one and it's something that I think gets oversimplified
a lot in sort of the LinkedIn chatter and in
the way that this is discussed, and so it's really
great to get a chance to talk about it here.
Speaker 1 (18:15):
Absolutely. So maybe just to follow up on one point
that you made, there's so much focus right now in
the ESG space, in the climate space on the fact
that AI is driving increased energy to demand, and obviously
we're meeting that through additional fossil fuel generating capacity. You
(18:37):
know largely you alluded to the idea of potentially using
the waste heat from data centers to potentially power or
provide the heat for your system. Is that Did I
get that right? Because to me, that's just like a
beautiful synergy that I had not thought of.
Speaker 2 (18:54):
It's a beautiful synergy. It's as simple as that. I
think you could look at data centers, you could look
at refineries, you could look at any industrial facility that
say you drive by on the highway and you see
a big industrial facility, I guarantee you they have waste
heat and there. It's not as simple as saying we're
(19:15):
going to couple DOC to every source of waste heat.
You need a big source of waste heat that's on
all the time in order to really couple it to
dock in a way that is practical to run that
twenty four to seven continuous cycle that we were talking about.
But one thing I would absolutely agree with is that
if you can find ways to power dock that utilizes
(19:35):
all of this heat that we waste already in a
practical way, that is a path forward, one of the
paths forward for this industry. To start to get the
traction it needs and answer that energy question. Ultimately, I
think there is going to be enough energy to power
dock that uses waste heat and other types of electricity
or heat that are otherwise underutilized. But it's an important
(19:57):
part of the puzzle and certainly helps to get buy
in from let's say the companies or the industrial partners
that make that heat, because now they have an avenue
to participate in decarbonization through DAK. That is something that
they're looking for, these avenues to get involved. And what
a beautiful synergy if you can make that story, you know,
complete close that.
Speaker 1 (20:17):
Loop absolutely, And it's my understanding that you know, one
of the major barriers, if not the biggest barrier for
you know, those partners to engage or for others to
engage in carbon removals and you know DACK removals in particular,
is the cost of a removal ton. So I was
(20:38):
wondering if you could maybe walk us through what your
what you anticipate your costs to be, and how that
compares to you know, what we're seeing in the market currently.
Speaker 2 (20:48):
Yeah, of course, and that that is you know, the
other important question here is how cheap or low cost
can DAC get. And I would say that for a
lot of DAK technologies, Airmind included that these are early
days in the sense that we are able to build
small systems. Some folks are doing you know, a few
tons of years, some are doing a little more than that.
(21:09):
But then when you're starting to do the math of
you know, at scale, at a commercially relevant scale, where
you're talking about building the plant, where is the cost
going to get? I would say that for Airmine, we're
aiming to be the lowest cost back on Earth. And
what I mean by that is that we look at
the folks who are doing pioneering DAC work today, and
when we look at our process data and our process
(21:31):
fundamentals and you know, the publicly available information that we
see about the technologies that are out there, that everyone
on our team is fully aligned that ours makes a
lot of sense and is going to be cheaper than
what's out there now. Exactly how much cheaper I think
we're we're pretty excited to find out. And in terms
of you know, the floor, I would just say maybe
(21:52):
a lot of folks talk about, you know, is THATK
going to be below one hundred dollars a ton, and
this is sort of an area that is again commonly discussed,
and I think at a at a level of complexity
that maybe doesn't really match the reality of you know,
running these processes. I'll be honest that I'm pretty skeptical
that DAK is going to get to one hundred dollars
a ton, But I do think that DAK is going
(22:13):
to get into that price target, say like at large
scale in the future, somewhere between call it one hundred
and fifty and two hundred dollars two hundree hundred fifty
and SA two hundred fifty three hundred dollars a ton.
I think DAK can get there. And it's it's a
little tricky to bring up that price point. That's still right,
That's still a high price compared to some of the
(22:34):
other nature based approaches and kind of the forestry solutions,
But that is that is the beauty of DAK is
that with DAK, this is the highest quality removal you
can possibly get. You can weigh the CO two, you
know exactly how pure it is, and that now you
have a resource that you can either sequester or you
(22:54):
can turn into useful products. Which is really strategically important
for a lot of regions that are thinking about this.
So at the end of the day, I think that
for air Minds technology specifically, it's that inherent simplicity and
scalability that get us to a big plant faster that
really drive that cost down for us, and the fact
(23:14):
that we're able to use whatever the lowest cost energy
in any region would be. Plus this sort of reality
that if you are running a DOC process, that there
is value to that credit to the corporations and organizations
that are building carbon removal portfolios where they want some
of the high quality, highest quality removals on one side,
(23:37):
and maybe lower cost ones and open systems too. And
it's just going to be an ecosystem and a portfolio
approach that grows with time and we'll have to see
where these technologies go and what the cost profiles can
actually hit.
Speaker 1 (23:50):
Very interesting.
Speaker 4 (23:51):
Taking a quick break here to invite you to Bloomberg
Intelligences mid year Virtual Conference COP twenty nine point five Innovation,
Accountability and the Path to Brazil. Online only event will
be held Wednesday, June fourth, at eight thirty am Eastern Time.
Tune in to hear from leading experts in public and
private sectors, such as former Secretary of State and US
Climate Envoy John Kerry, as we discuss progress made in
tackling the climate crisis, the challenges in the current geopolitical moment,
(24:15):
and a look ahead at COP thirty and Bella in Brazil.
The event is opened all on The link to register
will be in our show description.
Speaker 1 (24:22):
So you mentioned the idea of sequestration. Obviously that's the
other piece of the puzzle or potentially, as you also
mentioned the use of the carbon dioxide, so wanted to
hear a little bit more about ultimately, you know how
Airmine envisions that part of the process, the sequestration or
the ultimate use of the CO two.
Speaker 2 (24:43):
I think that for large scale DAC, in order to
get the costs and sort of the logistics and everything
in a place where we're talking about the volumes that
DAC needs to get to, sequestration is i'd say very
important because with a pipeline you're able to move large
(25:04):
volumes at a low cost, and with the injection in
locations that have the appropriate safeguards, and you know, the
insurance mechanisms and the regulatory mechanisms. I think the economics
just work out there. And the flip side of this though,
is that sequestration is one important piece and that is
where you know, we see it going. But the other
(25:27):
part of where I think there's a real opportunity is
with dak As I mentioned, it's the only carbon removal
method where at the end of the day you've got
you know, tons of highly pure carbon dioxide gas sitting there.
And let's look back to the history of natural gas.
I don't know how many decades when when we'd get
(25:48):
natural gas out of you know, an oil well or drilling,
it was just flared or vented, like we didn't do
anything with it. But it was at that moment once
folks started to capture it that you know, the gears
start turning and the people who are looking at these
systems say there's money to be made and there's value
in that product. And obviously carbon dioxide it's a different situation,
(26:11):
it's a different molecule, it has different uses, it has
different economics than natural gas. But I think in a
world where there is this broad consensus among most of
the governments of the world that we're going to need
something like a massive decarbonization effort, and that we're going
to need to be turning on large volumes of both
point source capture and direct air capture. That there's an
(26:34):
economics narrative of using that CO two for something valuable
that I would say we see in certain regions of
the world as being more strategically aligned. Say if you're
in a country that doesn't have the geological sequestration resources,
say compared to like the United States, or there's parts
(26:55):
of the world where there's a lot of good sequestration.
But if you're in an area of the world that
doesn't have that, you can still have an economic flywheel
of using CO two to benefit your society and drive
circularity and drive decarbonization that aligns with the industrial skills
of you know, the industry in your country already. And
so I would say with DAK, the thing that makes
(27:16):
me excited is, you know, it feels a little strange
to say this, but we don't know, we don't know
where this is going. It could go more towards sequestration,
it could go more towards utilization, and it really depends
on some forces that are outside of what DAK can control.
But what's nice is that and what's exciting is that
DAK has such an important role to play in either
of those scenarios that only it can fill. And that's
(27:39):
what keeps us really excited to keep working on this
problem and drive that cost down and prove the scalability
because you just look at the world and you it's
this is going to turn on one day, and it's
just a matter of how are we going to get
there and how do you kind of play this strategically
to benefit the most folks.
Speaker 1 (27:56):
Very interesting your last point there about you know, this
is going to turn on one day, it's just a
question of how we get there. I think leads well
into my next question, which is kind of based around
an article that the Wall Street Journal ran a couple
of weeks ago. The title of the article, probably a
little bit contentious, was it could be a two hundred
(28:20):
and fifty billion dollar market, but almost no one is interested.
The article obviously is about, you know, the carbon removal market,
and I don't necessarily agree, but the author, you know,
cites a couple kind of key points to defend his
argument that nobody cares, one of which is that there's
(28:43):
a lack of current comparability between carbon removal credits. You know,
perhaps compared to other commodities, like you know, a ton
of copper, which is pretty comparable, or a barrel of oil.
So curious ultimately to hear how you would address that
(29:04):
criticism that you know, this market is just too difficult
because the removal credits are ultimately not comparable.
Speaker 3 (29:11):
Eric, I think there is there are some truths to it, right,
It is certainly not a commodity. And and so we
are Mark mentioned that earlier. I mean, we have common
dogs that removal from trees all the way to direct
air capture. And you have a number of new technologies
(29:33):
coming up from from biohr and backs and an hardswethering
and and ocean capture and and all of this and
and ultimately the as as humans on this planet, we
will probably need all of those and and and they
are they are not directly comparable. And I also don't
(29:55):
think it is it is helpful to talk of commodities
in this respect. I would rather think of the challenge
is more like making financial investments. Financial investments, you you're
looking at a portfolio, and you want to make sure
that you have the right a risk mitigated portfolio. You
(30:17):
want to have the portfolio at at at different costs
and and qualities. And direct Aculture is within this portfolio
the highest quality. It is measurable, it's it's it's permanent,
it is it is additional. It has probably the lowest
risk in terms of standing up to future regulations. It
(30:42):
is the lowest rik risk in terms of reversal, and
it is it is not limited like other common dogs
that removal technologies by by the availability of biomass. Now
for for companies to to get their hats around, say
(31:04):
they are they're formidable companies experts who help these these
companies to actually navigate that space and and and put
together a portfolio. And you have you have companies like
Common Direct, you have companies like QO eight who can
actually help companies and and they make that despite the
(31:26):
the difficulty at first sight to actually navigate that space,
they do it really well. So I don't think this
is a real barrier. It's of course it's a matter
of education, But ultimately I think this this shouldn't be
a barrier.
Speaker 1 (31:39):
Interesting and you mentioned the idea that you know it
should be treated more like a traditional investment. I guess
one of the other barriers as I see it is
the fact that dack credits, removal credits right now are
so expensive. And you know, to the points that that
market made earlier, it's designed to hopefully decrease over time
(32:03):
in price. So what, in your opinion, is the incentive
for investors to buy now knowing that, unlike other investments
where they hope the price is going to go up, ultimately,
the hope here is that the price of removal credits
goes down. It goes down quite dramatically over time.
Speaker 3 (32:21):
Yeah, that's that's that's a that's a core question of
this market, unfortunately, Eric, And you know, for me, there
are three points. First, I think you know, the advice
is to start small and and learn and and and
ultimately it is about doing the right thing. We don't.
(32:42):
We have to by all means avoid that this is
going to become a hockey stick. You you mentioned earlier,
we need tens of of geekatons of carbon docs that
removeal and and high quality carbon docs that removeal and.
If you look at where our our budget is moving,
(33:05):
it is very likely that we will need to deal
with and overshoot and much even higher amounts of garden
dogs that removal by twenty to fifty. So this capacity
cannot be built within a few years, and therefore it
is really important that the companies and governments are doing
(33:27):
the right thing and starting now and enabling enabling the
growth of this industry. And then I think that that
is a very important argument as a company, you want
to start now to also get access to future, to
this future market. In the moment regulation kicks in, this
(33:49):
is going to be a seller market simply because there
is going to be a shortage of capacity and companies
can in that market ones having purchased through agreements like rofos,
getting access to future capacities and having a right of
(34:12):
first offer or first refusal, they can they can secure
the access right, and so it's it is really important
that that we we get over this hunch of delaying
delaying purchase. Coming back to the first point, you know, small, small,
small start is better than none.
Speaker 1 (34:34):
Interesting mentioned the idea of governments having to do the
right thing. I'm curious to hear ultimately, what policies or
market structures you think need to be in place to
better support curbon removals at this point.
Speaker 3 (34:50):
Yeah, I think here I can think of four points,
and the governments need to play a very important role here.
Number one, of course, is regulation. We need to get regulation,
We need to what we need to move towards the
compliance market at the right speed. But this has to
has to happen, and it needs to be clearly visible
(35:11):
and transparent to to corporations that this is coming and
at what time it is coming, so that these companies
can actually ramp up. That's number one. Number two, we
need to have clearer standards of what what is allowed,
what is not allowed, what is a good quality carbon credit?
(35:31):
And and then government purchases. When you when you look
at at different renewable industries, government purchases make a massive
difference and and so it would be good if we
had more governments to to actually lead lead the growth
of this this industry. And and finally, when when when
(35:56):
building or when when working on these large infrastructure projects,
it is very important that we get to an accelerated
permitting process because these can delay those projects by years,
(36:16):
and again this industry cannot afforded.
Speaker 1 (36:21):
So maybe looking ahead a little bit at Airmand's roadmap,
we've discussed the technology. I think you know as you
described that the advantages are are quite clear. Just wondering
if you could describe kind of where the company is
in terms of having operational facilities.
Speaker 2 (36:39):
Of course, So I'm speaking to you now from our
facility in Berkeley, California, and this is where we have
our prototype systems. Our largest system is operating on the
order of you know, the single digit tons per year,
and we are now at a point in our company
where we have gotten the engineering data and we have
(37:01):
gotten feedback from DAK experts around the world that this
is one of the most if not the most promising
DAK technology that's out there today. This is a really
exciting time for us. We're all, you know, eager to
see what happens next. And in practical terms, what happens
next is that we would put our technology outside in
the field where you have you know, the wind and
(37:21):
the rain and all of these conditions that I would
say the DAK pioneers in this space have helped everybody
understand really affect the economics and challenges of scaling DAC.
But that's that's the part where I think, you know,
I'm really excited for Airminds technology because we have this
inherent simplicity to the design, and we've thought about a
(37:43):
lot of these challenges early on, so there's not going
to be you know, finicky materials that have issues in
terms of durability when you, you know, expose them to the
cycling of you know, the heat and the cold and
things like that. And so the other thing I would
say is whereas airline going, so we are going to
scale as quickly as we reasonably can because that's where
(38:05):
the economics of DAC start to get exciting. I think
that if you're talking about when do plants start getting economical,
I would say, you know, just for your audience, I
would call from at least the way that I think
about it, or we think about it, about one hundred
thousand tons per year is the size of a DACK facility.
Where you start to cross over that barrier from something
(38:26):
that is more like a demonstration to something that is
actually like commercially viable that's operating at the economies of
scale where this starts to make sense. And for airline,
I think that we're just in this beautiful position to
get there faster and more quickly than others because of
the scalability that we baked into what we're doing. And
(38:50):
maybe also just to say that, you know, if you
look at the team Yon myself Sude, we have others
on the team that really come from large corporation and
that's a bit unique in the DAK space too, that
I think we see where this is headed, that it's
going to be the large corporations of the world, the
large entities that are going to have to make the
(39:12):
decisions that drive back to that next scale that we're
talking about. And knowing how those companies work and how
sort of what the CEO is thinking about, the CFO
is thinking about, how the different structures of these organizations
work and make decisions and who they partner with, makes
us feel like we're, you know, in a strong position
to take a good share of this market as it grows.
(39:35):
So I would say, you know, we're we're really excited
about Airline's trajectory, and I've really appreciated the chance to
get to talk about it with you today.
Speaker 1 (39:43):
Absolutely, So, maybe just as a concluding question, if you
had to, you know, expand that roadmap and think about
where Airline will be in maybe five to ten years,
do you have a sense you know, I know other
companies have kind of pledged to remove a certain number
of tons. Do you have any goals that you've set.
Speaker 2 (40:01):
Or I would distill it to this. I think in
five to ten years, Airmine is going to be the
lowest cost DAC on Earth, and that's that's the goal.
It's it's hard at this moment in time when there's
so much uncertainty in you know, in capital markets, in
geopolitics of how quickly DAK is going to turn on.
But I think I can pretty confidently say that Armine
(40:23):
is on a trajectory where our cost profile and our
scalability position us, you know, as one of the best
that's out there, and that just opens doors for the future.
Speaker 1 (40:32):
No, that's great, well, Mark and Joan really appreciate you
taking the time to chat with us today. It was fascinating.
Speaker 2 (40:38):
Thank you, hey, Eric, really appreciate it, and thanks to
you and your team for hosting us.
Speaker 1 (40:42):
Wonderful. So as reminder to our listeners, you can find
more information on all things ESG by going to our dashboard,
bi's pace ESG go on the Bloomberg terminal, and if
you have an ESG quandary or burning question you'd like
to ask bi's expert analysts, please send us an email
at ESG Erents at Bloomberg dot net. Thank you very
much and we'll see you next time.
Host
Eric Kane
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