David Crane is back, with a climate-tech SPAC

October 8, 2020 by  
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David Crane is back, with a climate-tech SPAC Heather Clancy Thu, 10/08/2020 – 01:45 One of the hottest 2020 trends in raising capital is infiltrating climate-tech investing.  As of mid-September, the stock market had welcomed at least 82 initial public offerings this year by special purpose acquisition companies (SPACs) — organizations that collectively raised more than $31 billion. Last week, former NRG Energy CEO David Crane joined the frenzy.  Crane was instrumental in leading NRG into renewables and other clean energy sectors and was ousted in late 2015 after its stock tanked. (Disclosure: Crane is a former GreenBiz editor at large, and you can read his body of work here .) As of Monday, his new company, Climate Real Impact Solutions (CRIS), had raised more than $230 million for the purpose of merging with a company focused on solving the climate crisis.  “Over the past decade, American entrepreneurs have brought forth a wide array of exciting products and services which are clean, green, smart and affordable,” Crane said in a statement. “We have formed Climate Real Impact Solutions to help those entrepreneurs gain access to the capital, the connections and the talent they need to take their businesses to the next level while amplifying their climate impact.”  The public markets have this appetite for companies that want to change the world. The “we” in that statement includes high-profile clean energy veterans: former Green Mountain Power CEO Mary Powell (the chairperson), ex-Credit Suisse energy group executive John Cavalier (CFO) and onetime GE vice chair and GE Ventures lead Beth Comstock (chief commercial officer).  A SPAC , also known in financial circles as a “blank check” company, is a corporate structure created with the mission of merging with another firm — usually within a two-year timeframe. After the merger, the acquired company becomes listed.  Why would a startup do this? You can think of it as an alternative for a late-stage venture capital round, Crane told me last week when we chatted about the venture. It’s of interest to companies that feel capital-constrained, and the current uncertain state of the economy has galvanized interest.  There isn’t as much scrutiny on the company going public as there would be with a traditional IPO, which is why SPAC-enabled deals are a controversial topic right now. One of the most vivid examples of what could go wrong is the hoopla surrounding Nikola Motors, the electric truck maker. The company’s founder, Trevor Milton, resigned in September after being accused of fraud and sexual misconduct. Quite a few next-generation transportation companies have used SPACs to go public this year, including EV maker Fisker and autonomous vehicle sensor company Velodyne Lidar. Even former Uber executive Emil Michael is getting into the act: He registered plans for a $250 million SPAC late last week. Crane told me he actually considered creating a SPAC three years ago but decided the market wasn’t ready. But now, investors are far more interested in startups looking to raise capital that have strong environmental, social and governance (ESG) stories. “The public markets have this appetite for companies that want to change the world,” he said. What is CRIS looking for? A SPAC can only buy one company but the team plans to evaluate carbon removal and avoidance businesses. There’s a long list of categories that fit that bill, including ones where Crane and company have a lot of expertise in their background: distributed generation plays (such as rooftop solar), utility-scale renewables ventures, energy storage startups, renewable natural gas, energy efficiency service providers and green energy retailers, electric vehicle infrastructure or decarbonized fuels. There’s also a chance the company could focus more on organizations removing carbon from the atmosphere, such as a reforestation, regenerative ag or carbon capture company, although those startups tend to be at an earlier stage given the dynamics of carbon pricing, Crane said.  CRIS plans to use both traditional financial evaluation methods and “climate-focused environmental metrics” to make their decision, and you can expect the CRIS crew to be actively involved with mentoring and supporting the acquisition target’s management team. The CRIS board also includes Mimi Alemayehou (Black Rhino Group), Richard Kauffman (former New York energy and finance czar) and Jamie Weinstein (managing director of PIMCO, which helped organize co-sponsors for the offering). I’m eager to see who CRIS targets, aren’t you? Pull Quote The public markets have this appetite for companies that want to change the world. Topics Climate Change Finance & Investing Climate Tech Featured Column Practical Magic Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off NRG.com Close Authorship

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AMD’s energy-slashing feat

July 17, 2020 by  
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AMD’s energy-slashing feat Heather Clancy Fri, 07/17/2020 – 01:00 It isn’t often I have the mindspace to proactively follow up on every commitment proclaimed by the companies I cover. But I recently paused to catch up about one that has particular relevance as more companies act to address their Scope 3 emissions reductions, those generated by supply chains and customers: AMD’s bold pledge back in 2014 to improve the energy efficiency of its mobile processors — the components used in notebook computers and specialized embedded systems, such as medical imaging equipment or industrial applications — by 25 times by 2020. Not-so-spoiler alert: The fact that I’m bringing it up should be a big hint that the company has delivered. In fact, AMD overachieved the goal, delivering a 31.7 times improvement with its new Ryzen 7 4800H processor. In layperson’s terms, that means that the chip consumes 84 percent energy, while taking 80 percent less compute time for certain tasks. For you and me, that means batteries last longer. For companies buying entire portfolios of devices based on these processors, they will see their electricity consumption reduced. (The specific reduction you’d see by upgrading 50,000 laptops would be 1.4 million kilowatt-hours.) Consider this perspective from tech research analyst Bob O’Donnell, president of TECHnalysis Research: “Lower energy consumption has never been more important for the planet, and the company’s ability to meet its target while also achieving strong processor performance is a great reflection of what a market-leading, engineering-focus company they’ve become.” Indeed, when I chatted with Susan Moore, AMD’s corporate vice president for corporate responsibility and government affairs, she told me it took “a full company focus and a lot of innovation” by the AMD engineering team to make the goal happen. Note to others attempting the same sort of thing. Although the company had pretty good visibility into what it would be able to pull off early on during the six-year period, there were plenty of questions marks, and it took unwavering support (and faith) from AMD CEO Lisa Su to keep true, Moore said.  Actually getting there took some very specific design changes, outlined in a blog by AMD Chief Technology Officer Mark Papermaster. Here are some of them: Investments in new semiconductor manufacturing processors (specifically 7 nanometer technology) Changes to the real-time power management algorithms The integration of the central processor and graphics architecture into a common “system on a chip” (among other architecture changes) Changes to the interconnections between the components (its proprietary approach for this is called the Infinity Fabric) Moore said close collaboration with customers (such as the original equipment manufacturers using AMD chips for their computers) was also critical. “A large part is the ability to sit down with likeminded organizations,” she noted.  Plus, disclosure. AMD decided to declare its progress year to year. (Here’s the report card from 2018, for an idea of how it shared the information.) “That was definitely a risk, but we thought it was very important that is was something that we talk about along the way, so we did measurements every year,” Moore said.  I wish every company were that transparent. Topics Information Technology Energy & Climate Energy Efficiency Featured Column Practical Magic Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Courtesy of AMD Close Authorship

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To B or not to B? More tech companies should ask themselves that question

June 25, 2020 by  
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To B or not to B? More tech companies should ask themselves that question Heather Clancy Thu, 06/25/2020 – 02:00 Fifth Wall, the biggest venture fund dedicated to funding disruptive ideas in real estate and retail, this week revealed that it has become a Certified B Corporation (B Corp) — a move that requires it to embed concerns about equity, inclusiveness and sustainability into its portfolio. The disclosure caught my attention not just because it’s a relatively unusual move but because it’s the second company from the tech world that has made such a gesture: WeTransfer, the well-known file sharing service, also has adopted similar changes to its business model.  For Los Angeles-based Fifth Wall — whose portfolio includes sustainable footwear company Allbirds and “gear for good” company Cotopaxi (both B Corps), smart-bike firm Lime and a slew of other startups that beg my attention — the adjustment reflects that reality that buildings and real estate account for an estimated 40 percent of raw materials consumption and 30 percent of total greenhouse gas emissions.  “We recognize that today’s announcement is a small step and that there is a lot more work to be done,” said Fifth Wall co-founder and CEO Brendan Wallace in a statement. “As a member of the venture capital and technology ecosystems, we’re hopeful this commitment will be shared by our peers and ultimately catalyze an industry-wide shift in mindset.” The catalyst was the $200 million Carbon Impact Fund that the firm announced earlier this year — and that is preparing to launch in collaboration its limited partner base, which includes big names such as CBRE, Cushman & Wakefield, Hines and Marriott.  “What needs to be done is a collective action problem,” wrote Fifth Wall partner Tyson Woeste in a blog about the fund. “By convening the world’s largest and most forward-thinking real estate leaders in this alliance, we can collectively take responsibility and bold, proactive actions to identify, develop, and adopt critical new technologies to reduce the industry’s GHG footprint.” Keep in mind that the fund was announced before the COVID-19 pandemic sent shock waves through the real estate world. As the economy restarts, many believe that the sector is in for a massive reboot, as companies reconsider the safety and necessity of mammoth corporate campuses and begin allowing a chunk of their workforce to work permanently from home. “Over the next few years, sustainability and decarbonization issues will be a dominant theme for every company in real estate and the technology companies that support the industry,” Woeste noted this week. We believe in accountability for the products and technology we put into the world, and we will strive to push our peers to transform our industry into a more responsible one. Right now, there are an estimated 3,300 Certified B Corps. When I spoke with WeTransfer CEO Gordon Willoughby about why the Amsterdam-based company decided to join their ranks, he said the move created more supervisory clarity. WeTransfer appointed its first non-executive chairperson, British businesswoman Martha Lane Fox, as part of the shift, which took about six months to pull off. “We believe in accountability for the products and technology we put into the world, and we will strive to push our peers to transform our industry into a more responsible one,” he said in a statement. To be clear, many of these policies aren’t yet baked into WeTransfer’s strategy. For example, Willoughby told me that the company is in the process of setting renewable energy policies — that plan will include recommendations for sustainable energy suppliers for employees who work at their homes.  One of the more intriguing policies it already has adopted, however, is a 20 percent discount on advertising rates for other B Corps. Considering that half of WeTransfer’s revenue comes from ad sales, that’s not a token gesture. The company’s original file-sharing service serves about 50 million monthly users, with more than 1 billion files sent per month. Are these two companies outliers? I prefer to think of them as the leading edge. After all, Danone, the world’s largest B Corp , has proven that it’s possible to make the shift, although it certainly won’t take just six months. Here’s hoping. This article first appeared in GreenBiz’s weekly newsletter, VERGE Weekly, running Wednesdays. Subscribe  here . Follow me on Twitter: @greentechlady. Pull Quote We believe in accountability for the products and technology we put into the world, and we will strive to push our peers to transform our industry into a more responsible one. Topics Corporate Strategy Standards & Certification Technology Venture Capital Featured Column Practical Magic Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off WeTransfer CEO Gordon Willoughby Courtesy of WeTransfer Close Authorship

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To B or not to B? More tech companies should ask themselves that question

Whether pandemic or climate crisis, you better get your data right

June 25, 2020 by  
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Whether pandemic or climate crisis, you better get your data right Paolo Natali Thu, 06/25/2020 – 00:30 According to polls, it was  mid-March  when most of us in the United States understood the severity of COVID-19. At the same time, we collectively were searching for data to drive lifesaving decision-making. Close all business and keep people inside homes? Or allow some degree of freedom? What would be the exact growth curve of virus cases, and most important, how could we flatten it? By early April, a consensus had emerged around the role of accurate data, even if it could not help contain a first wave of infections. This lesson on the importance of actionable data did not go unnoticed for those of us working on industrial decarbonization. With growing consensus on the gravity of the climate crisis, countries and companies are adopting carbon reduction targets. If we are to learn from the pandemic, there’s one critical element for any effort to have a chance of success. Less catchy than a target reopening date, and perhaps more like an immunologist telling you to get tested: Do we have the right data to act upon? Pressure is growing to take action The question is relevant because there is mounting pressure to take action against the climate crisis. Pressure to make emissions visible has been around for a while: Consumers want to know how much carbon is embodied in the products they buy. Investors are concerned about the viability of long-term assets in high emissions sectors at risk of being hit by negative policy or market developments. For example,  one chocolate bar  could emit as much as 7 kilograms of CO2, equivalent to driving 30 miles in a non-electric car. Alternately, if the cacao is grown alongside agroforestry or reforestation, the same bar could have zero or even negative emissions via the trees removing carbon dioxide from the atmosphere. If consumers knew the difference, would they pay a premium for the climate-smart chocolate? A company’s financial accounts are used to make reasonable decisions about how that company will do in the future. Alas, to date the same isn’t true of carbon performance. This year, Larry Fink, CEO of BlackRock, the world’s largest asset management company, made thundering news in his  annual letter to investors , touting, “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance.” Since then, the asset manager  backed two proposals  at the annual general meetings of both Chevron and Exxon, related to the manner these companies conduct themselves in relation to Paris Agreement targets. Earlier in the year in Australia, investors at both Woodside Petroleum and Santos passed annual general meetings motions to  adopt a “Scope 3 ” (indirect emissions) reduction target. This trend of shareholder and consumer scrutiny has strengthened in recent months, and most S&P 500 companies — in fact, 70 percent of them — already make climate-related disclosures to the reporting platform CDP (formerly the Carbon Disclosure Project). Translating demands into dollars Yet, to date, there is no way to exactly translate these demands for action into dollar figures. You walk around trade conferences (or, more likely these days, Zoom workshops) and everyone is asking: What’s the premium that a consumer is willing to pay for low-carbon products? Is a bank really willing to decline loans for an investment that fails to fulfill certain sustainability standards, for example as pledged by the 11 global banks that signed the  Poseidon Principles  for shipping finance in 2019? If the European Union agrees on a border price for carbon, what should it be? All of this pricing talk begs the question: How can we have such discussions without clear metrics that everyone can stand by? A company’s financial accounts are used to make reasonable decisions about how that company will do in the future. Alas, to date the same isn’t true of carbon performance. For a start, while financial accounts are reported via one of two standards — U.S. Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) — a variety of methods can be used for carbon accounting (CDP accepts 64 of them). While financials make the performance of a chemicals company comparable to an iron ore miner, the carbon accounting metrics differ in a way that is difficult to reconcile. This becomes a problem for an automotive company, which needs to combine the performance of both to make an accurate declaration about the carbon content of a product that has over 30,000 parts. It is also a challenge for a fund manager who needs to combine stocks of different sectors, and has a fiduciary duty to use financially material metrics to do so; or for a commercial banker who lends money to different asset classes, and needs to determine the amount of “climate risk” involved in each investment decision. From the perspective of the climate crisis, we still haven’t figured out how to attribute the right price to something nobody can see, such as the amount of noxious gases emitted by a factory in a land far, far away. Remember the core of the coronavirus debate: The number of confirmed cases are better known than the total number of cases. This uncertainty generates debatable data, upon which it is difficult to make decisions that will have an enormous impact on the destiny of societies. From the perspective of the climate crisis, we still haven’t figured out how to attribute the right price to something nobody can see, such as the amount of noxious gases emitted by a factory in a land far, far away. And if the cost of those gases to a community and ecosystem isn’t clearly visible, conversely, how can we measure good interventions so that investors feel confident to put their money toward them? This is particularly ironic because market demand for product sustainability creates a win-win situation for everyone involved: make a plan to increase product sustainability, shape the world to be a better place. In most cases, low-carbon technologies are either readily available, such as in the case of low-carbon electricity and carbon-neutral concrete, or less than a decade away, such as hydrogen-based trucking. But if it’s so easy, why isn’t it happening? And most importantly, what needs to happen? Harmonizing the efforts The current ecosystem of reporting is built on bottom-up efforts that are not harmonized. The previously mentioned CDP has a large database of disclosures. The Taskforce on Climate-Related Financial Disclosures (TCFD) has a widely adopted set of metrics that companies use to report (including to CDP). The Sustainability Accounting Standards Board has — you guessed it — standards solid enough to guarantee “financial materiality,” that is, to allow the analyst in the above example to “buy with confidence” when making investment decisions based on sustainability. The Science-Based Targets Initiative promises to take all this to the next level and link carbon disclosures to the trajectories that companies need to undertake in order to comply with the Paris Agreement. Companies that need to report emissions lament that this is too complex or that it doesn’t allow apples-to-apples comparisons due to discrepancies in the way different methods prescribe calculations. Investors lament that they can’t base financial decisions on current metrics, because they aren’t reliable or standardized. Consumers still have to see eco-labels that are truly credible. It is imperative that emissions accounting shifts from a notion of disclosures (a still image of current emissions) to climate alignment, a forward look into a company’s future emissions. As confusing as it sounds, the good news is that between existing methods, standards and platforms, the elements of a functional system do exist. Despite the gloomy portrait that we often read in the news, of a humankind sleepwalking toward climate disaster due to a selfish inability to act together, this ecosystem actually represents a wonderful testament to the ability of society to recognize a challenge and address it. The importance of climate alignment A few years ago, the Smart Freight Center introduced the Global Logistics Emissions Council (GLEC) Framework, creating a common guidance for logistics companies to report in a unified manner. The GLEC Framework is a guidance that specifies how disclosures need to be made in each of the existing methodologies and platforms. Once a company discloses according to the GLEC Framework, analysts will be able to compare a disclosure made for different purposes using different methods, and trace back what it actually means. It is urgent that this expand to supply chains at large. It is also imperative that the emissions accounting focus shifts from a notion of disclosures (a still image of current emissions) to climate alignment, a forward look into a company’s future emissions. With unified and simplified standards, companies will be able to be easily ranked based on their actual and projected contribution to meeting the Paris Agreement, thus keeping climate change at bay. Why do this? To reap the benefits of being in sync with what stakeholders request more and ever louder. This is only wise, considering that not even a global pandemic and looming economic recession has silenced these requests. According to a recent Deloitte  report , 600 global C-suite executives remain firmly committed to a low-carbon transition. They are perhaps finding opportunity in shifting from risk and need clear data to make their decisions. Pull Quote A company’s financial accounts are used to make reasonable decisions about how that company will do in the future. Alas, to date the same isn’t true of carbon performance. From the perspective of the climate crisis, we still haven’t figured out how to attribute the right price to something nobody can see, such as the amount of noxious gases emitted by a factory in a land far, far away. It is imperative that emissions accounting shifts from a notion of disclosures (a still image of current emissions) to climate alignment, a forward look into a company’s future emissions. Contributors Charles Cannon Topics Energy & Climate COVID-19 Data Collective Insight Rocky Mountain Institute Rocky Mountain Institute Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off

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Whether pandemic or climate crisis, you better get your data right

How Stripe’s ‘negative emissions’ team picked its first four carbon removal projects

May 28, 2020 by  
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How Stripe’s ‘negative emissions’ team picked its first four carbon removal projects Heather Clancy Thu, 05/28/2020 – 01:14 Among the many notes to myself about potential follow-up stories lies my scribbled reminder to check in on online payment tech company Stripe’s pledge last year to put at least $1 million annually toward carbon removal activities. Last week, the company knocked that item off my checklist. After a “rigorous” search, Stripe disclosed that it will support four “high potential” carbon capture and storage projects — picked from 24 applications. The action was detailed in a blog by Ryan Orbuch, a member of the internal climate strategy team leading the push. “Our initial priority was working out how we could use our funds to have the biggest impact … Next, we want to make it ‘much’ easier for businesses to make these kinds of purchases, which, we hope, will begin to grow the market for carbon removal far beyond Stripe’s contribution,” Orbuch wrote in response to questions I submitted for this article. We want to make it ‘much’ easier for businesses to make these kinds of purchases. Here’s a rundown of the organizations that Stripe plans to support (presented alphabetically). If you do the math, you’ll see these projects (in aggregate) account for all of the company’s annual commitment. CarbonCure : The Canadian firm is using mineralized CO2 — aka calcium carbonate — in concrete. The CO2 is captured from industrial processes at plants creating things such as ethanol, fertilizer or cement. Stripe is supporting 2,500 tons at a price of $100 per ton. Charm Industrial : The San Francisco-based startup is working on an approach that injects bio-oil captured from biomass into geologic storage. Stripe is the company’s first customer; the project will support the capture of 416 tons at $600 per ton. Climeworks : The Swiss company, which uses renewable energy to capture carbon dioxide from the air, offers a sequestration approach called Carbfix that injects concentrated CO2 into basaltic rock formations. Stripe’s commitment is 322.5 tons, for which it will pay a price of $775 per ton. Ultimately, though, Climeworks has said it is working toward a long-term price of $100 to $200 per ton. Project Vesta : This organization, which hails from San Francisco, is focused on capturing CO2 within the ocean and storing it using olivine, a natural mineral. The idea is to embed the captured carbon dioxide with limestone on the seafloor. This is an extremely early-stage approach, and the company needs to test it for both safety and viability. Stripe’s commitment to help it capture 3,333.33 tons at $75 per ton will help it with both lab experiments and pilot beach projects. The criteria that Stripe used to assess its various options were pretty specific — they’re summarized below in the graphic.  In response to my question about which were the most important considerations, Orbuch said no project was a perfect match nor did the Stripe team expect any to be. It didn’t specifically set out to pick four (although the math worked out well, with roughly $250,000 committed to each.) What stood out was the projects’ particularly high potential as well as the fact that they work toward closing the gap of what’s available for companies to use as part of their carbon removal strategy. He wrote: “One thing that really stood out to us was how few existing projects even attempt to sequester carbon outside of the biosphere. There’s a particularly large gap in non-biospheric solutions (such a large gap, in fact, that we decided that we’d also support R&D for these kinds of projects going forward — to help increase ‘top of funnel’). While sequestration beyond the biosphere certainly wasn’t the only criteria we considered, this one became increasingly important to us.” We’ve been encouraged by how many businesses, including many Stripe users, have expressed interest in purchasing alongside us. Stripe didn’t make the decision about which projects to choose on its own. It consulted a number of advisers from academia (including scholars from Worcester Polytechnic, Heriot-Watt, Harvard and the University of Utah) and NGOs (Environmental Defense Fund and Carbon180).  One thing that intrigues me about Stripe’s interest in funding carbon removal is its potential to help other companies act. How cool would it be, for example, if Stripe could include an option in its online payment service that allows businesses to fund these sorts of projects directly, perhaps as a percentage of a transaction or as a flat rate that customers could add to a purchase? Shopify, another e-commerce merchant platform, has said that it eventually will allow its business customers to do this although it hasn’t offered much detail. When I asked Orbuch how Stripe customers might benefit from the projects announced last week, he basically said to stay tuned. “We’ve been encouraged by how many businesses, including many Stripe users, have expressed interest in purchasing alongside us, and we want to make it as frictionless as possible for them to do so,” he wrote. “More details to come at a later time.” In the call to action in its blog, Orbuch indicated that Stripe would like to create an ecosystem of “funders and founders” that can help it create an ecosystem of carbon removal opportunities to support that vision. Pull Quote We want to make it ‘much’ easier for businesses to make these kinds of purchases. We’ve been encouraged by how many businesses, including many Stripe users, have expressed interest in purchasing alongside us. Topics Carbon Removal Carbon Removal Carbon Capture Featured Column Practical Magic Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Project Vesta is focused on capturing CO2 within the ocean. Courtesy of Project Vesta Close Authorship

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How Stripe’s ‘negative emissions’ team picked its first four carbon removal projects

Using waste carbon feedstocks to produce chemicals

May 27, 2020 by  
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Using waste carbon feedstocks to produce chemicals Elizabeth R. Nesbitt Wed, 05/27/2020 – 14:36 Emerging carbon capture utilization (CCU) technologies potentially allow chemical companies and other manufacturers such as steel companies to convert waste carbon from industrial emissions — in the form of carbon monoxide (CO) and/or carbon dioxide (CO2) — into sustainable, value-added biofuels and chemicals. Using CCU technologies to consume waste feedstocks reportedly can cut production costs; monetize industrial emissions; allow companies to meet CO2 emissions goals; and foster continued development of a circular economy. Moreover, using waste carbon to make chemicals also can reduce manufacturers’ reliance on fossil fuels such as crude petroleum and natural gas, an important factor, particularly for the European Union and China, given the volatility in sourcing and pricing of fossil fuels. Factors driving adoption Technology providers such as LanzaTech (United States) and Avantium (Netherlands), among others, have developed novel CCU processes. The new processes, which reflect scientific advancements in industrial biotechnology and electrolysis, range from fermentation (using proprietary microorganisms) to electrocatalysis and are at varying stages of development (research scale to full commercialization). The extent to which new CCU technologies become commercially successful is based on multiple factors, including proximity of the consuming entity to the source of the waste carbon, and production and energy costs (including the availability and costs of renewable energy; companies predict that increased supplies of low-cost renewable energy will be needed). Government policies also play an important role in the evolving expansion of CCU projects. The extent to which new CCU technologies become commercially successful is based on multiple factors, including proximity of the consuming entity to the source of the waste carbon… Stakeholders and business models Large multinational chemical companies and steel companies are participating in CCU projects (a list showing examples of such projects is provided in the working paper ). Industry sources note that the new production capacity is generally in the form of modular “bolt-on” units that can be added to existing production facilities — such as steel plants, chemical plants, and refineries — that are major sources of CO/CO2 emissions. LanzaTech, one of the first companies to start commercial production of bioethanol using waste emissions, notes that steel mills worldwide produce about 30 billion gallons of waste gas per year and says its process can be used on about 65 percent of global steel mills, potentially producing 30 billion gallons of ethanol annually. The business models used along the value chain vary. Industry sources note that whereas the technology providers likely will license their technologies, the industrial emitters (such as steel companies) likely will use licensing and establish joint ventures (JVs) with the consuming/marketing entities. Many CCU projects underway to date are in China and Europe. Industry sources cite several reasons for this geographical concentration, including the magnitude of available waste emissions; industrial efforts to reduce emissions to meet national targets; funding; and government policies. One source, speaking of the European chemical industry, notes that CCU would allow the industry to both reduce its reliance on fossil fuels and enhance its competitiveness. Another source states that European leadership in development and deployment of clean-energy technologies translates to a global competitive advantage. But the speed of U.S. adoption of such technology may be tempered by several factors, including the relative cost of fossil fuels in the United States. The outlook Using waste carbon from industrial emissions as a feedstock for chemical manufacture appears to be a viable complement to industrial emitters’ ongoing abatement efforts. Many things are in flux: technologies are still being developed and scaled up; government policies are being implemented; business models are being established; funding is still being sought; the costs of installing the new technologies; and the supply and pricing of fossil fuels remain volatile. But steel companies, refineries and chemical companies are increasingly starting to use waste carbon emissions as feedstocks for chemicals and there are significant supplies of waste carbon from global industrial emissions worldwide for companies to use. These CCU technologies are promoting a paradigm shift that has the potential to increase firm-level competitiveness for manufacturers that adopt these processes, while also reducing the environmental impact of these manufacturers. On a sectoral basis, some sources estimate that the market potential for chemical production from waste carbon in industrial emissions, or even reduction of waste emissions in general, could be valued in the billions of dollars. Moreover, given estimates of potential reductions in production costs of about 20 to 50 percent (largely resulting from the feedstocks), chemical producers appear to be able to derive a competitive advantage regarding the pricing of many end products and, to the extent that they are partners in JVs with industrial emitters, they also may be able to increase market share and/or market coverage. Use of waste carbon feedstocks is also likely to allow companies to respond to carbon pricing programs and renewable energy mandates. Steel companies that can gain revenues from byproduct sales derived from their industrial emissions and offset emissions taxes and/or reduce other obligations under new mandates may be able to avoid reducing production in an increasingly competitive and oversupplied global market for steel with thin profit margins. Steel industries that adopt these sustainable technologies might be able to better survive oversupply conditions, carbon pricing programs, and renewable energy mandates than those that do not. These CCU technologies are promoting a paradigm shift that has the potential to increase firm-level competitiveness for manufacturers that adopt these processes, while also reducing the environmental impact of these manufacturers. To the extent that these technologies become widely adopted, they could result in substantial increases in supply of such chemicals globally, with potential disruptive impacts on trade and prices. Disclaimer: Office of Industries working papers are the result of the ongoing professional research of USITC staff and solely represent the opinions and professional research of individual authors. This article does not necessarily represent the views of the U.S. International Trade Commission or any of its individual commissioners. Pull Quote The extent to which new CCU technologies become commercially successful is based on multiple factors, including proximity of the consuming entity to the source of the waste carbon… These CCU technologies are promoting a paradigm shift that has the potential to increase firm-level competitiveness for manufacturers that adopt these processes, while also reducing the environmental impact of these manufacturers. Topics Carbon Removal Chemicals & Toxics Carbon Capture Chemical Recycling Technology Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Shutterstock tonton Close Authorship

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Using waste carbon feedstocks to produce chemicals

Microsoft is building a ‘Planetary Computer’ to protect biodiversity

April 16, 2020 by  
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It’s all about collecting and connecting data, which is part of the software giant’s DNA.

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Microsoft is building a ‘Planetary Computer’ to protect biodiversity

A defense of geoengineering

April 16, 2020 by  
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Fantasy or nightmare? If you look beyond extreme ideas such as space shades, there’s much to like about this fast-evolving category of climate tech.

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A defense of geoengineering

A defense of geoengineering

April 16, 2020 by  
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Fantasy or nightmare? If you look beyond extreme ideas such as space shades, there’s much to like about this fast-evolving category of climate tech.

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A defense of geoengineering

Coronavirus, the stay-at-home workstyle, and cloud energy consumption

April 8, 2020 by  
Filed under Business, Green

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Between video calls, collaboration applications and streaming services, data centers are working overdrive. Here’s some perspective on how much power that requires and why efficiency matters more than ever.

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Coronavirus, the stay-at-home workstyle, and cloud energy consumption

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