The Exchanges

Q So what are the other bottlenecks in the engineered space?

A So there's three things that keep me up at night about the engineered pathways, and it is not cost. We're going to innovate, the cost will come down. But there's three things that keep me up at night. The first of those is human capital. We probably have enough engineers, but they're not in the right place yet, and they're not trained. We certainly don't have anybody else. We don't have specialty welders or electricians. We don't have the people who will permit these projects. We don't have tax equity lawyers who know what I'm talking about. We, we do not have the full complement of business and worker skills to deploy. And until we do, we're going to be rate limited by human capital first. If you know something about Carbonville today, You can change jobs every six months for a higher salary because there's no people out there. Thing two is infrastructure. You're not moving electrons. You're not moving memes. You're moving molecules. So you need the infrastructure to do that. And some of that stuff like transmission grids, some of that stuff like ports that can ship and receive and move CO two and biomass. Some of that are pipelines, whether they're hydrogen pipelines or CO two pipelines and CO two storage sites, that infrastructure largely doesn't exist. And it's hard to deploy until we have more of it. The last thing that keeps me up at night is the permitting. And permittin…

AI assessment note: “The first of those is human capital... Thing two is infrastructure... The last thing... is the permitting.”

Q I think it's important to take a step back here and talk about why we are discussing carbon removal. So this is a 10 gigaton problem. We need to take 10 gigatons of carbon dioxide out of the atmosphere. How big is that challenge?

A Right. So it's enormous. Uh, and it's exactly why we started the company. Our co, our founder, Jonathan Goldberg, Realized that the carbon removal market will necessarily be the biggest market of all human history, and he wanted to be in it, so he started the company. Just for comparison, all of the oil and gas that has moved around the world is about five billion tons. That is the minimum amount of CO₂ removal that the IPCC says we need. It might be as big as 10 gigatons. The cumulative volumes are between three hundred billion and a trillion tons, ok? That, just again for comparison, a trillion tons is twice what we have emitted over human history, ok? It's a big number. And it is, like, 500 times bigger than, like, one country's emissions. It's huge. And so, even if we zero out emissions everywhere, we still have to do emissions removal, and that is independent of the job of reductions. We have to reduce everything we can as quickly as we can. Very few people actually debate that. But the point is, we must now do removals as well, and the volumes are huge. And the prices today are low. So, we actually have to figure out a way to create the supply, slowly get the prices to a point where they're useful, And deliver the projects we want. It's tough business.

AI assessment note: “all of the oil and gas that has moved around the world is about five billion tons”

Q So let's talk about one of the first choke points, which is just cost. Um, at the scale that we're seeing these engineered solutions, what are the ranges of costs, uh, per ton of CO₂ removed?

A So before I answer that, let me step back a little bit. Right now, the nature-based solutions that are good are the lowest cost. They are ranging in price between, say, 20 and 35 dollars for the good stuff. We've seen those prices inching up. It's not crazy to imagine they'll be in the 50 dollar range soon. As land gets scarce, as the good opportunities get snapped up, we expect the cost of nature-based solutions to increase. Conversely, today, the technology solutions are very expensive. Direct air capture, say, is on the order of 600 dollars a ton. A good biochar project might be on the order of 150 dollars a ton. A good biomass with carbon capture project might be between 153 hundred dollars a ton. As those deploy, those costs will go down. So there will be some point in the future where there's cost parity between the nature-based solutions and the engineered pathways. That is inevitable, but I don't know if that's in 2030 or in 2040 or in 2050. Nobody knows. So in the near term, we actually have to grow supply in all of these systems. We need more of these engineered pathways and hybrid pathways like biomass with CCS, but we also need to scale up the nature-based solutions because that's what's cheap and available today. And Uh, at our company, we are build portfolios for our customers where there's a blend of all of this stuff that manages risk, that manages price, and th…

AI assessment note: “Direct air capture, say, is on the order of 600 dollars a ton.”

Q There's a lot more cash coming into Carbonville through the form of government investment. The Inflation Reduction Act will bring in, you know, record amounts of, record amounts of government investments in this space. What are we seeing? How transformative could it be?

A Unquestionably, hugely transformative. The incentive stack that is in the Inflation Reduction Act is unparalleled by any nation, anywhere. That is driving investment in the U.S. US in a hugely important way. Before that, the, uh, Infrastructure Investment and Jobs Act Which is also transformative, is creating a bunch of that infrastructure I was talking about. And it also includes big grants for things like hubs, where you can co-locate a lot of this stuff and save on infrastructure costs and train a workforce. Those two pieces of legislation are hugely transformative. And frankly, I've been to meetings now where other nations come to me and said, is there a way you can get the U.S. to reduce its incentive stacks? It's kind of making us look bad. So, uh, Our response to that is, you could up your game, you could add incentives, and we'll see how all this goes.

AI assessment note: “Unquestionably, hugely transformative. The incentive stack that is in the Inflation Reduction Act”