Startup Series: Syzygy Plasmonics

Apr 13

Today's guest is Trevor Best, CEO and Co-founder at Syzygy Plasmonics. Syzygy is rethinking how chemicals are produced and pioneering a new technology that energizes chemical reactions via light. Their photocatalyst technology came out of the lab at Rice University. Toward the end of 2022, the company announced a $76 million Series C financing led by Carbon Direct Capital and a number of significant strategies in the energy, oil and gas, and automotive sectors.

During the episode, Trevor and Cody delve into various topics, including Trevor's background, traditional petrochemical methods of chemical production, and the fortuitous discovery that led him and his co-founder to commercialize their cutting-edge technology at Syzygy. The discussion also covers the various chemical pathways that Syzygy is currently pursuing, such as zero-emissions hydrogen, low-emissions hydrogen, syngas, and methanol.

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Trevor Best / Syzygy
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Episode recorded on March 6, 2023.

In this episode, we cover:

[2:46] Trevor's background and Syzygy's origin story
[7:37] The relationship between fossil fuels and the chemical industry
[9:48] Other emerging alternatives in the space
[11:39] Origins of Syzygy's photochemistry technology and its implications
[20:59] Syzygy's decision to focus on hydrogen pathways
[24:32] An overview of dry reforming
[27:40] The company's business model
[30:14] Sygyzy's scale-up progress and plans for the future
[36:47] How Syzygy balances adding new capabilities to its reactors
[42:09] Trevor's thoughts on the future and where Syzygy needs help

Cody Simms (00:00):
Today's guest on the My Climate Journey Startup Series is Trevor Best, CEO and Co-Founder at Syzygy Plasmonics. Syzygy is rethinking how chemicals are produced and is pioneering a new technology that energizes chemical reactions via light. Their photocatalyst technology came out the lab at Rice University, and toward the end of 2022, the company announced a $76 million Series C financing led by Carbon Direct Capital and a number of significant strategics in energy, oil and gas, and automotive sectors.
(00:35):
Trevor and I talk about his background, how chemicals are traditionally made via petrochemical means, and how he and his co-founder met and discovered the technology that they decided to commercialize at Syzygy. We also talk about the initial chemical pathways that Syzygy is pursuing, including zero-emissions hydrogen, low-emissions hydrogen, and send gas and methanol.
(00:57):
After our recording concluded, Trevor showed a picture to me of his current reactor, which is astoundingly about two-feet tall. It's such a shock to see it compared to the gigantic chemical factories that I picture in my mind when I think of chemical reactors. I can't help but draw parallels to what computers looked like in the 1950s as compared to the power of a smartphone today. We truly live in amazing times.
(01:22):
I'm Cody Simms.
Yin Lu (01:23):
I'm Yin Lu.
Jason Jacobs (01:24):
And I'm Jason Jacobs, and welcome to My Climate Journey.
Yin Lu (01:30):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (01:36):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
(01:49):
And with that, Trevor, welcome to the show.
Trevor Best (01:50):
Hey Cody, it is great to be here.
Cody Simms (01:54):
So it's exciting we're getting a chance to talk. Right now, we're recording this in early March. You're at CERAWeek, which is a huge event for the energy industry as I understand it. Maybe give us the quick update on what's going on with CERAWeek for folks who haven't heard of it.
Trevor Best (02:08):
Yeah, so CERAWeek is one of the world's leading conferences for energy, especially recently has been a hub for focus on energy transition and clean technology, like hydrogens, carbon capture and utilization are key themes here. And it attracts world leaders, it attracts executives from a lot of the energy companies around the world so they can really understand what's happening in the market and what's coming. It's put on by IHS and S&P Platts, which are two of the most respected market intelligence firms on global commodities. It is the example of energy conference around the world every year.
Cody Simms (02:46):
Well, awesome. And it seems like you're a perfect person to be there. You have an entire career in this sector. So maybe walk us through, from what I could tell online, it looks like you're a Texas kid working in Texas energy and have kind of continued to grow your career out from there, but maybe walk us through your background and how you've ultimately ended up building Syzygy.
Trevor Best (03:11):
I would love to. So going way back in the day, 1985 when I first hit the world, the story starts in West Texas. So I grew up in Midland, Texas. If you've ever seen the movie Friday Night Lights?
Cody Simms (03:21):
Friday Night Lights? I organized a lecture series in college and had Buzz Bissinger come to the university and give a talk. He's the author of the book that the show is based on.
Trevor Best (03:29):
That is amazing. So the book and the show is based around Permian MOJO and my school, Midland Lee, we were actually the maroon team, so we were the team that never lost. They literally made a book and a movie about the year we lost in football.
Cody Simms (03:46):
Oh, wow.
Trevor Best (03:47):
Yeah, we were the undisputed champions. We won State, the championship, three of the four years that I was in like freshman and high school.
Cody Simms (03:56):
Trevor, somehow I feel like if you would let me, we would have an entire hour-long pod episode on high school football.
Trevor Best (04:01):
Oh, we definitely could. I didn't play football, but having grown up in Midland, high school football is like what happens there.
(04:08):
And so given I didn't play football, I did theater and debate and things like that. My main goal was to get out of the desert. And I immediately after, went to Lubbock, Texas, Texas Tech, Red Raiders, definitely not out of the desert. And then after that, I maybe over-corrected and I went and lived in China for a year. It was a little bit too far out of the desert. Came back after a stint in China and got a job with the energy industry.
(04:35):
I was a business major, but whenever I joined the energy industry, I got very technical. I started doing projects for ultra-deepwater equipment and actually became a quality engineer a few years into the industry.
Cody Simms (04:48):
Ultra-deepwater equipment, is that mostly focused on offshore drilling given the industry?
Trevor Best (04:52):
Yeah, like Deepwater Gulf of Mexico. So at Baker Hughes, my main job was to make sure that we didn't have another Deepwater Horizon-type incident and make sure that the equipment quality in Deepwater Gulf of Mexico was really good and we didn't have any failures, et cetera. So very, very technical.
(05:10):
While working at Baker Hughes, I met my co-founder, Dr. Suman Khatiwada, and we both were very much drinking the clean energy Kool-Aid all last decade. And so after a few years, we decided to strike off on our own and find some really cutting-edge tech that could have a huge positive impact on the world.
Cody Simms (05:29):
And let's go there. So Syzygy, as I understand it, maybe you can also explain the name to us, has taken a focus on the chemical industry in particular. Let's, maybe after you explain the name to us, walk through the relationship between chemicals and fossil fuels as a starting point.
Trevor Best (05:47):
Would love to. So focusing on the name, this is back in 2017, and as with a lot of good stories, it starts with a case of beer. And Dr. Khatiwada and I are like, "Okay, we found this really amazing technology. What do we call this?" Our technology is based around photocatalysis, so we use light instead of combustion heat from combustion to drive chemical reactions.
(06:07):
So we're playing around with the word light, like helios energy, or sun, anything to do with the sun, all that stuff. And there was an eclipse happening around this time, and when we were reading about the eclipse, we saw this word syzygy, and what it means is the near-straight line configuration of three planetary bodies or gravitational bodies. A perfect example is an eclipse: the sun, the moon and the earth line up. And when that happens, that's a syzygy. And we are like, "Oh my goodness, this tech that we found, this is the alignment of energy because it impacts the energy industry, technology because this is cutting-edge science and technology, and sustainability because it eliminates emissions." And so where energy technology and sustainability line up, you get syzygy, and we were like, "Brilliant."
Cody Simms (06:53):
Oh, that's great.
Trevor Best (06:53):
Yeah, we stuck with it and it has been in our DNA since then.
Cody Simms (06:58):
And you get to correct the pronunciation of every single person you speak to from that moment forth.
Trevor Best (07:03):
No one pronounces it correctly. It's okay. People remember it once they know it, but if you ever spring it on someone, they're like, "Scizza za za?" But hey, we love them. But yeah, it's in our DNA, and we even do stuff like this. So these are my sneakers.
Cody Simms (07:19):
Oh, nice. He's holding up a pair of Chuck Taylors with the logo on it. That's great.
Trevor Best (07:22):
Yeah. So we love it.
(07:24):
But yeah, going back to what is it that we found and how does it impact the chemical industry? And you asked specifically about the relationship between fossil fuels and the chemical industry. Let's dig into that, if you're ready.
Cody Simms (07:37):
I'd love to, yeah. I mean, obviously the phrase petrochemical exists, and I guess the question I have is why is it that the growth of chemical production really has been aligned with the growth of the oil and gas industry over the last 100 years?
Trevor Best (07:52):
Yeah. So there's really two functions that the oil and gas industry serve in chemicals, and that is feedstock and energy. So if you kind of take a step back and you look at planet Earth and the total $1 trillion chemical value chain, what you'll see is that a couple raw materials, petroleum, natural gas and air, these feed in as the raw material feedstocks for the chemical value chain, and from those are made all the intermediates. These are things like hydrogen, methanol, ammonia, the aromatics, the olefins, et cetera. And then those intermediates ultimately get built into all the products we use: fuel, which is how all products and people get around the world; fertilizer, how we all eat; raw materials for plastic; construction materials; car parts, et cetera.
(08:38):
So one way that the oil and gas industry feeds into this is just from the feedstock perspective. The other I mentioned is energy. So to actually drive these productions-
Cody Simms (08:48):
And I guess just to break it up, so I mean, obviously oil and gas are hydrocarbons, so they're part-hydrogen, part-carbon in terms of their chemical chain.
Trevor Best (08:56):
Yeah. And this is what fuel, fertilizer, plastics, et cetera, this is what it's all built out of, hydrogen and carbon.
Cody Simms (09:03):
And historically, they've been made through refining, right? So they're made by separating things through heat, by burning aspects of the material or material around them in order to generate heat. Is that correct?
Trevor Best (09:14):
Bingo, you got it. So all these intermediate molecules are made using catalysts in the presence of a lot of heat and pressure, and that heat and pressure is generated using combustion. So they're burning some kind of fuel source, something like natural gas, and they burn tons of it to power these chemical reactions.
(09:31):
The energy required to power the chemical value chain is actually responsible for about a gigaton of CO2 every single year. So burning fuel to power those chemical reactors, one gigaton every year, so it's whole percentage points of human emissions.
Cody Simms (09:48):
So help me understand the different alternatives. Obviously, you're building something new and novel with this photocatalyst-based system, this light-based system that you mentioned, and we talked about how the sort of incumbent methodology is this traditional thermal catalyst, which is using heat, large amounts of heat to convert feed stocks into chemicals. There's also, as I understand, it's biofermentation emerging with Solugen. Anyone who wants to dive into that can go into the archives and listen to our interview with Solugen. There's electrochemical or electrolysis-based chemical production. We've also had the Twelve founders on the show in the past who talk about how they're using electrolysis to break materials into feedstocks, into alternative materials.
(10:35):
Are there any other big new emerging areas that we should make sure we're aware of?
Trevor Best (10:40):
Yeah, I mean, that's pretty spot on. You've got thermal chemistry, which is the majority of it today. So if you see any big refinery or chemical plant, it is operating using thermal chemistry. The kind of new entrants, the ones that have a lot of potential, biochemistry like you mentioned with Solugen, electrochemistry like Twelve and others that are using modified electrolyzers to do different chemical reactions, and then you have companies like us doing photochemistry.
(11:09):
What is, I think, most interesting about Syzygy is photochemistry has historically lagged development of all the others. It was a materials science thing. You just could not find materials that were able to use light very effectively. And so this whole field of science with photochemistry was just really non-viable pretty much up until us. And so with Syzygy, we are bringing an entire new field of science into the foray and into the fight on climate change.
Cody Simms (11:39):
So explain it, explain how the company began and what the origins of this technology you said you all discovered along the way looked like.
Trevor Best (11:48):
Yeah. So my co-founder, Dr. Suman Khatiwada, and I, we had done a lot of R&D work in the energy industry at Baker Hughes. We got very comfortable developing new products and getting them into the market. And so we took that experience and we made a framework, we called it TMI, a joke on too much info, but it was a technology market and impact. And we actually went on a search and we were looking at all kinds of things coming out of different universities, Berkeley, MIT. He was a Rice alum, so of course we were paying attention to Rice, and we found this paper that described this new photocatalyst. The paper was interesting, and he got us a meeting with the professors.
(12:28):
And the paper was, I mean, it was interesting, but if you started doing comparisons against what was out there in the market, it had a ways to go. And when we were meeting with them in their office, they were like, "Oh, hey, we have this data and we haven't published it yet. Check this out," and this data was just off the charts when we compared it to previous photocatalysts. I mentioned photocatalysis hadn't really been able to compete. We were seeing increases in catalyst activity of 100 to 1,000 X, and whenever you're looking at something that's like a 100 to 1,000 X improvement, it raises your eyebrows. And then we're like, "Okay, how does this compare against refinery catalysts and things like that?" We were seeing increases of 15 to 30 X versus what was out there in the market, and that was the first data point that was like, okay, there is something very unique happening here.
(13:20):
Rice University had worked for, Professor Halas and Nordlander, our co-founders, they had worked for about 30 years in this field called nanophotonics and ultimately plasmonics. And they had just been honing this tech for three decades and had done some exploratory work and didn't really anticipate how good it would perform.
(13:43):
The real work of Syzygy though isn't on making the catalyst. That was already done by Rice. The thing is now we had this really incredible material. No one had ever made a reactor to deliver light as efficiently as you possibly can to that catalyst and really been like, "Hey, what are the industrial applications of this?" And tried to make an industrial reactor around it. When we started crunching the numbers on it, they looked very compelling, so we decided to start the company.
Cody Simms (14:10):
Did the professors at Rice follow through on this research with the assumption that it could be used in chemical manufacturing? Was that an initial hypothesis of theirs or was it simply, hey, is this technically possible and then we'll let industry think through the industry implications?
Trevor Best (14:26):
Yeah. I mean, they know that there could be implications, but they're much more fundamental. So they aren't like, "Let's go create something that outperforms a refinery catalyst by X amount." They're more of the, "I wonder what happens if..." The technology had previously been adapted to actually fight cancer, so you can inject these really specialized nanoparticles into cancer and hit it with a wavelength of light that passes through your skin and it will heat them up and burn out cancer from the inside. It's really wild. I think it just made it through clinical trials and it's now starting to get deployed into the market.
(15:01):
And so same kind of thing, they're like, "I wonder what happens if we take a traditional catalyst and put it on the outside of these nanoparticles that have been very precisely made to be near-perfect light harvesters."
Cody Simms (15:15):
So we talked about the different alternatives. We'll stay away from biofermentation and Solugen. There's a whole MCJ episode on Solugen you can go listen to if you want to, same with electrolysis and Twelve and electrochemistry.
(15:27):
Let's understand the difference then in a traditional thermal catalyst and sort of the photocatalyst method that you all now have harnessed. What does it actually look like and what does it actually do?
Trevor Best (15:40):
Yeah, so I'll tell you a little bit about some of the implications to the reactor and then I'll actually describe our reactor and how it works.
(15:47):
So when we are looking at the implications, first off, if I mentioned catalyst activity, so much higher catalyst activity. Basically what this means is you need less catalyst to make the same amount of product. So if a typical refinery needed, let's say, one kilogram of catalyst to make one kilogram of product, for us, about 15 times higher activity, one kilogram of catalyst will make about 15 kilograms of product. So basically, more product per unit of catalyst.
(16:15):
This means smaller reactors. Smaller reactors means less footprint, less steel on the ground. That was what originally attracted us to it. Then we realized like, "Oh hey, we don't have any open flames." We also noticed no open flames, no emissions, but that also changed the inside of the reactor. Since you don't have open flames, you don't need to build things out of nickel and chrome. Our primary construction materials are aluminum and glass, which helps to just really-
Cody Simms (16:47):
Interesting. So I'm hearing you say almost the initial driver was, hey, these are going to have less CapEx because they're smaller, they use cheaper materials, you can build them faster. And then, oh, by the way, there's also this giant reduced emissions benefit to it as well.
Trevor Best (17:01):
Well, I mean, the emissions, we were looking for ways to do that. All of this plays in together, so there's the emissions benefit, there's the CapEx benefit, and then probably the most surprising one was the efficiency benefit and what we saw, whenever you look at a traditional thermal reactor has burners and is powered by a flame, it's actually very difficult to get that energy in the flame to the catalyst. And basically you have these convection and conduction effects is that heat has to pass through the metal wall and propagate through the catalyst bed. It's usually 40 to 50% efficient in a big refinery or chemical plant. And then they get the whole plant up to high efficiency through a lot of heat exchange.
(17:40):
When you're using light, it's actually quite different. The catalyst is contained inside quartz. Quartz is transparent. The energy in the light comes out of the emitter and passes straight through the quarts directly into the catalyst bed. It allows us to focus the energy in the catalyst bed in a completely different way because heat from a flame and light from a light source just operate very differently, so we can actually deliver energy more effectively to the catalyst bed.
(18:09):
And when we started looking, we found LED lights, that you could use LEDs and get up to 75% efficiency in terms of electron to photon, and that's actually higher efficiency than you can get out of a chemical burner. And we've found some light sources recently that can get into the mid-90s on efficiency, like electron to photon, and so it's a more efficient energy delivery mechanism.
Cody Simms (18:35):
And so is the technological advancements of light sources over the last decade as well, including the development of low-cost LED, also a driver of why now for your company and your technology?
Trevor Best (18:48):
Oh, absolutely. We would be toast if it wasn't for advancements on the lighting side.
Cody Simms (18:54):
Super interesting to hear cascading implications of new technology development. And so what does it mean to focus energy out of a light beam? How does that actually work?
Trevor Best (19:03):
Yeah. So we feed in electricity and that electricity goes to the light source, like et's use an LED as an example right now. And then that light, it gets turned into a photon, it comes out of the LED, it passes through the containment, so the quartz, and hits the catalyst directly.
Cody Simms (19:21):
And the catalyst would include what? What's in the catalyst?
Trevor Best (19:24):
So the catalyst has two parts. One is these plasmonic nanoparticles. If you want to look it up online, you can look up "antenna reactor photocatalysis." Then if you look up "antenna reactor Rice University," a bunch of our papers will come up. Those nanoparticles are the light harvesters. And then on the outside of those nanoparticles, we actually embed traditional catalysts, so the transition metals and their oxides that are used for catalysis in the refineries.
(19:50):
And so it's basically taking a traditional catalyst and turning it into a photocatalyst by embedding it on these light-harvesting nanoparticles.
Yin Lu (19:59):
Hey everyone, I'm Yin, a partner at MCJ Collective, here to take a quick minute to tell you about our MCJ Membership Community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast.
(20:11):
We started in 2019 and have grown to thousands of members globally. Each week, we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community, a number of founding teams have met, several nonprofits have been established, and a bunch of hiring has been done. Many early stage investments have been made as well as ongoing events and programming like monthly Women in Climate meetups, idea jam sessions for early-stage founders, climate book club, art workshops and more.
(20:45):
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Cody Simms (20:59):
And then you are doing this and we're going to get into the products you're both using as feedstock and what you're ultimately producing, but you're doing this in order to basically do a chemical transformation from feedstock into output material. Is that correct?
Trevor Best (21:12):
That's correct. So you put something in, you transform it into something else.
Cody Simms (21:16):
Let's go there. So the first product you have really been honing in on is hydrogen. It sounds like you have a couple of different pathways for hydrogen, including zero-emissions hydrogen and a low-emissions hydrogen. Maybe walk us through, from your perspective, why you focused on hydrogen to start, and then let's talk through each of those different pathways.
Trevor Best (21:37):
Yeah. So back in 2017 when we were first getting stuff off the ground, we saw that this technology had a lot of potential. The catalyst itself is highly adaptable and is a very broad platform. And so we had to pick something to focus on and we saw that if the decarbonization was actually going to happen, hydrogen must also happen. Like energy carrier, no carbon atom attached to it, used as feedstock, hydrogen had to happen. So that was why we started working on hydrogen back in 2017 before it was the darling child that it is today.
(22:09):
Our two pathways, we can make hydrogen from ammonia, so this is ammonia splitting where you're feeding in ammonia and you're splitting it to hydrogen and nitrogen, and the other pathway is plasmonic steam reforming. So this is very similar to traditional steam reforming, just minus the combustion and a lot of the emissions.
Cody Simms (22:27):
So traditionally, you've taken methane gas and you run it through a process called methane steam reformation that turns it into hydrogen, which is the... Gosh, remind me on my colors of hydrogen. That is considered blue hydrogen, is that correct?
Trevor Best (22:41):
Yes, typically considered blue hydrogen. I am not a huge fan of the colors. We like to do lifecycle carbon assessments and look at the overall carbon intensity because I got to be honest, I am not sure what color photocatalytic hydrogen is. We tried to grab yellow because it's yellow like the sun, but someone else already had it.
Cody Simms (23:00):
Amazing, the rainbows of hydrogen. So in this case, you are able to take a GHG, like methane, and you're able to transform it then into... What's it creating? Hydrogen and where's the carbon atoms turning into? Carbon monoxide?
Trevor Best (23:15):
Yeah. When you do steam reforming, you ultimately end up creating hydrogen and CO2. So the difference between our process and a traditional blue hydrogen from steam reforming is in a traditional blue hydrogen plant, there are two CO2 streams. One comes from combustion and it is very dilute because you're burning a lot of fuel to power the process, and the other stream comes from the process gas itself. Since you're using methane, methane has that carbon atom attached to it.
(23:40):
So when you use our process, you completely eliminate the combustion emissions. This is about 40% of the total emissions, and because that stream is more dilute and there's things like NOx and SOx in it as well, it's actually much more expensive to deal with. We've seen that it can be up to 75% of the carbon capture CapEx is that stream alone. And so when we eliminate that, we eliminate a lot of the CapEx and a lot of the energy needed to do carbon capture, and doing carbon capture on the other piece, the more concentrated process gas, not as expensive, and so we can basically take the emissions benefits of blue hydrogen and drop the cost by about 20%.
Cody Simms (24:21):
And you're not needing to put some kind of carbon capture technology the way a steam reactor might have to do it. Is that correct? Is that what I'm hearing you say?
Trevor Best (24:29):
You would need to, but about half as much.
(24:32):
So what I think is potentially very interesting is actually the third reaction as well, and this is dry reforming, and what this is CO2 plus methane to synthesis gas, and once you have synthesis gas, you can go to synthetic fuels or methanol. We are very interested in this because that CO2 and that methane are both very potent greenhouse gases. Depending on the sources of your CO2 and methane, this can actually be one of the most carbon-negative reactions possible. And speaking about the steam reforming reaction, how it makes hydrogen and CO2, we absolutely see the potential to chain these together and take the CO2 from the blue hydrogen and go turn it into a low-carbon methanol using the second process. And so kind of rethinking about how all these different molecules interact to create different kinds of molecules needed in the value chain without letting any emissions go into the atmosphere.
Cody Simms (25:29):
Interesting. And that would then turn into methanol being used for either transport use cases or does that turn into potentially aviation fuel? Remind me the use cases for methanol in particular.
Trevor Best (25:42):
Yeah, so if you go the Fischer-Tropsch route, you can get to things like sustainable aviation fuel. We actually have a field trial right now in North Carolina at Research Triangle Institute with RTI where we're taking CO2 and going to sustainable fuels.
(25:55):
Now, the methanol route, you do need to get into lifecycle assessment and really understand what you're doing with it. The methanol, interesting candidate for shipping fuel, interesting candidate for a lot of other things though as well. It can be used in methanol to olefins and ultimately get to plastics and things like that. Methanol can serve as a feedstock to make a lot of the other molecules in the chemical value chain, and so not just fuel. I think it's only about 30% or so of methanol goes to become fuel.
Cody Simms (26:26):
Got it. And methanol is lower emissions content when combusted than traditional fuels are, is that correct?
Trevor Best (26:34):
I've got to be honest, I'm not quite sure how much emissions it makes when combusted. I am most interested in methanol for its ability to be used as a feedstock for other things. If you can decarbonize fuels, great, you know reduce the amount that goes into the atmosphere across the whole value chain including the combustion piece. But if you can decarbonize the feedstocks, like a methanol, and then use that decarbonize foundation to go build other molecules, they are then also decarbonized. Hydrogen can also be a fuel, but it can also be a feedstock.
(27:06):
So we're very focused on what are these building blocks in the value chain and how do you go decarbonize one of those so that that impact spreads up the value chain to other molecules?
Cody Simms (27:18):
That's a good take away and a good reminder that your role is not to refine things into end products, but your role is to refine one feedstock into another useful feedstock essentially. And how does that work for you as a business? You're having to set up these reactor plants yourself, I assume. Are companies hiring you and essentially licensing the reactors that you are building?
Trevor Best (27:40):
We are a chemical licensure similar to a Haldor Topsøe or a Honeywell UOP, where we make the core technology the photolytic reactor and the catalyst, and we then license that technology to partners who go build larger plants out of it. We want to focus on what we do best, which is build chemical reactors. Others do the balance of plant and all the compressors and the piping. We're going to let them shine or they need to shine because they can do that a whole lot better than us.
(28:08):
So to do one of our projects, we need a lot of project partners, like three to five partners to get a project done: us, the technology provider; the EPC who builds the plant; the developer who like finances it; the operator who runs it and makes the molecule; and the offtake, the person who ends up buying the final molecule.
Cody Simms (28:28):
So when I'm ultimately looking at constructing a facility using your technology, what I would have to believe is A, the two key pieces of technology that you mentioned, which I think are the photocatalyst and the reactor, are viable; B, that I have a partner on one end who's able to provide the input feedstock I need; C, that I have a buyer on the other end who is wanting to buy the feedstock that's coming out of the process, the end product, or the multiple that will be coming out in some of the processes you mentioned; and then ultimately, an organization that is funding the project finance of pulling all of this together. And then you, as a business, are participating by licensing the technology into this plant. And are you participating in the unit economics of what is produced through the plant as well?
Trevor Best (29:23):
Yeah, the unit economics are largely determined, for the whole plant, are largely determined by how well the reactor works. Quite similar to a car, you need a whole lot of stuff to make a car drive: a steering wheel, a steering column, an alternator, and all this stuff. But ultimately, your gas mileage is determined by how well the engine works. It's kind of the same thing in a chemical plant. The unit economics where it's coming out of the back end of the chemical plant are largely determined by how well the reactor works.
(29:48):
And so yeah, you have a pretty clear view of what's going on. We are very, very busy because we have to bring all these people to the table and get them to circle up. We're lucky that we have such exciting technology because it helps with that, but it is quite the undertaking and huge kudos to my team. I'm one of the luckiest people on earth. I have an absolutely amazing team who helps get all this together and I just get to go talk about all the awesome stuff they do.
Cody Simms (30:12):
And from a scaling up perspective, I presume you build some kind of pilot facility somewhere to kind of prove that it works, but that pilot facility isn't going to work at a production scale, and that's where you need to go find a project finance partner and presumably, a handful of strategics on each end of those transactions that I mentioned to kind of go into the project with you. Where are you in that process? And for each of the different, we talked about three different kind of chemical input/output relationships that you can have, zero-emissions hydrogen, low-emissions hydrogen and the GHG to value-producing methanol, where are you in the scale up process for each of those today?
Trevor Best (30:52):
Yeah, so before I tell you exactly where we're at today, I'd love to tell you a little bit about the history too.
Cody Simms (30:56):
Yeah, sure. Great.
Trevor Best (30:58):
And so to very quickly sum it up, when we founded this, started in 2018, it was university research. Look at your pinky fingernail. That was the size we were doing this at. Raised less than $1 million, and produced some results that were actually record-breaking for photocatalysis, proved that something interesting was happening here. Raised $10 million, grew to 20 people, built a tiny lab unit that was not much bigger than a coffee cup. Got some really good results out of that, scaled it up, kind of learned how the tech scales, form factors, things like that. Raised $23 million, built a bigger one the size of my head about or your head, if you want to think about how big it is. And that was in 2021.
(31:39):
And from there, we've been really refining the product aspect of this, like reliability, operability. We've built two small pilot plants that use that reactor that's a little bit bigger than your head. These are fully integrated pilot operations.
(31:54):
It's funny because the past year, most of our learnings have not been about photocatalysis. It's actually water pumps. Man, a water pump is a very temperamental piece of equipment. And so learning how the reactor interacts with all the controls logic, you wouldn't think about us as a software company, but we've had to write tens of thousands of lines of code to get all the controls to work well together.
(32:18):
And ultimately, this gets us to market entry, which we are doing this year. We raised a $76 million Series C end of last year. We've grown to just over 100 people and we are deploying our first industrial units at the end of this year. That industrial reactor will make about 200 kilograms of hydrogen per day, to give you an idea on scale. We should be turning that on over summer and delivering the first ones to the customer at the end of this year. They will be testing single reactors. So these are still very much demonstration operations, but our tech scales modularly, like batteries or solar panels. So once you have that commercial unit, it turns into how many do you want to buy? Do you want to buy one, do you want to buy 10, do you want to buy a 100, et cetera?
(33:05):
Those reactor banks that have multiple of these working together, we anticipate starting to install those in 2024, get about two years of data because the industry's not going to take a big bet and build a multi-billion dollar plant without a lot of data. So we use 2024, 2025 to get a lot of data. And then 2026, we plan on going after the really big national policy-level energy place.
(33:33):
So that's kind of where we've been, where we're going. And right now, we have three field trials. We have one field trial where we're making CO2 to synthetic fuel in North Carolina that I mentioned. We have another field trial in South Korea where we're working with Lotte Chemical and Sumitomo to bring our ammonia-splitting technology, because ammonia is a very interesting hydrogen carrier, into Korea. And we have another project that has not been announced but is out there that we will be doing the same thing in California where one of the large integrated energy majors will be using our tech to test bringing hydrogen into California within ammonia.
Cody Simms (34:09):
Wow. And so if I heard you correctly then with this recent $76 million Series C, which as I understand, was led by Carbon Direct Capital and has quite a few different strategics involved as investors in the round as well, you'll be funding these initial deployments essentially off the balance sheet using this equity capital to get to this proof-point stage where, from there, you're able to go end-to-end on a single stream through the facility you're building, and that will presumably allow you to then go raise more debt-related financing to scale out that tech pathway further for future projects. Is that the pathway? Is that what that looks like?
Trevor Best (34:49):
Yeah. We are quite interested in getting financing for that kind of project, and debt financing is definitely the way to go, but we'll probably be doing one more equity raise. So basically, we're in this prove-it-out kind of stage. So with the $76 million we've gotten, we should be able to pretty much completely de-risk the technology where it is no longer a question on can it scale? What efficiency will it work at at scale, et cetera? And then the next fundraise, probably in the $200 million range or so, would be to actually take the company through positive cash flow and ultimately to IPO, et cetera.
(35:29):
We are exploring a bunch of different business models. That licensing business model I told you about, it's really high margin. So after one more fundraise, we should start generating really, really good returns for our investors. But we're open to other business models, like taking on the debt and building the plant. In fact, I've had a number of people who do project finance reaching out to me while I'm at CERAWeek. So yeah, we're exploring all pathways to get this out there as quickly as possible with as many people as possible.
Cody Simms (35:57):
Got it. Yeah. Because like you said, if you're going a pure licensing model, then you're not necessarily responsible for raising the debt and owning all the CapEx yourself. That would be whoever's bringing the project together and they would be licensing your technology into that facility that they're building.
(36:11):
Super interesting to hear the different options that are potentially in front of you as you all sort through it. And it's also amazing to hear how fast you've grown this from an incubated idea to a company that's building something at scale. Beyond just scaling, on your website, you have a roadmap for multiple other chemical pathways you want to pursue. How do you balance adding new capabilities to your reactor and to your technology stack relative to just getting really good at scaling out one or two of the solutions that you are already working on?
Trevor Best (36:47):
Yeah. So we always have a lot of interesting things kind of working in the background. I'd say it is about a 90/10 split where 90% of the company's time and effort is focused on what I would call Plan A. So Plan A is these three reactions, a reactor of a certain type, et cetera. But 10% of the resources are like what are bold bets we could make? It's working well today, but is there something we could do to make it work, step change, make it work so much better, or develop a new chemical reaction? We're very interested in pneumonia synthesis. We have some very interesting results for ammonia synthesis, but it is not ready to go to market. That one needs to stay in the oven for another year or two.
(37:33):
So yeah, we take about 10% of our capital and we devote it towards those longer-term activities or more high-risk, high-reward activities. And if we find something that's working well, this gets way deep into industry jargon, and if anyone in the energy industry is listening and hears me say this, they're probably going to vomit, but management of change and decision review boards and things like that for how we push that out, there's a whole ECN, engineering change management, process for how you actually roll out those improvements into the reactor that is not nearly as sexy as the technology, but very necessary for controlling this as you bring this kind of tech to market.
Cody Simms (38:16):
And do you see... I mean from what I'm hearing, your technology has the potential to be what I would think of as a horizontal platform, meaning you're able to supply your technology to multiple different kinds of industries for multiple different kinds of use cases, ones that historically maybe needed to build an entire tech stack just for their chemical set. Is that an accurate way to think about it or am I oversimplifying things?
Trevor Best (38:42):
You're on a roll today because you just nailed it again. And what we saw, and actually when you hear me talk about our licensing company, what we saw was that if we wanted to actually make the molecule and sell the molecule, like we want to sell hydrogen, then going back to pulling all those parties together and having to bring on that debt, and we could only do one or two plants at a time, and that's the vertical path. And going vertical would actually take a really long time for us to push the technology out into the market.
(39:11):
But going horizontal and really just focusing all of our work on the photocatalytic reactor and making it work as good as we possibly can allows us to spread out because others partner with us to take on those different aspects for the verticals, and they get to own the vertical while we own the base platform. So as we bring our first product to market and really refine it and get it working well, that 90/10 is going to shift and we're going to start exploring those other pathways and other interesting results we've seen that we haven't had time to yet.
Cody Simms (39:46):
So if I extrapolate out to the future, when I think of chemical production today, I think of these giant facilities with lots of pipes all over the place and big plumes of emissions coming out of them. And I'm thinking of a future where you have these much smaller reactors that maybe attach to some other manufacturing process, so it becomes part of an integrated process that's creating a new product, and they're all over the place. Is that sort of the distributed model that you think the world is moving toward in this area?
Trevor Best (40:20):
So before I answer that, I'm going to make just a really clear distinction. Thinking about the chemical plant and smoke stacks and emissions going everywhere, when you imagine a tech, no smoke stacks. And so that's a very beautiful thing that we like to think about when we think about this. Very simply, no smoke stacks.
(40:37):
So going back to the question on distributed, I think there is a potential for a much more distributed chemical industry. Sometimes changing perception can be as difficult as changing technology. And right now, the industry has been working off of a centralized mentality for 100 years. Our technology could very much help to encourage a more distributed nature, and exactly what you're talking about, just a bolt-on to another process. I don't know if the industry is ready for that yet. We pushed that message really hard in the early days, but you've ultimately got to sell what people will buy, and we aren't sure if the industry is quite there yet. But I think over time, if we start talking-
Cody Simms (41:31):
Nobody in the chemical industry is waking up saying, "Today I want to go buy a distributed version of myself and create lots of smaller versions of me." That's not the current wishlist.
Trevor Best (41:40):
People don't come to us and say, "We realize we could build 100 small plants instead of one big one." That doesn't happen very often.
Cody Simms (41:49):
Okay. Interesting.
Trevor Best (41:50):
Give us time.
Cody Simms (41:51):
Yeah, yeah, yeah, yeah. It makes sense. Well, Trevor, I know you're at CERAWeek and you have a ton of other people to talk to besides us here at MCJ, but curious what else I should have asked today, and then also, where you need help, if anyone who's listening is motivated today by your story?
Trevor Best (42:09):
Yeah. So the question that I love the most is what I think about the future and Syzygy's technology and science is incredible, it's potentially world-changing, but we aren't the only ones. There is, right now... And you know this. At MCJ, you're talking to people like me all the time who are bringing really exciting, cutting-edge stuff to market. I actually have more hope and optimism about the future than I have in quite a while.
(42:38):
We started this in Houston in 2017, and let me tell you, in 2017, if you asked me if the energy transition was going to happen... Whew, man. We had a long way to go. I can tell you, industry is starting to move. Things are starting to change. We have a really energized populace who cares about this. We have a lot of people getting into this, listening to MCJ, like, "How can I help?"
(43:01):
I think it's okay to be a little optimistic about the future. I think that we've got some challenges for sure with climate change. I think that over the next few decades, we're going to get this under control.
(43:10):
And any help? Man, we need the best people on earth. If you are a talented, motivated engineer, just all around good person, please watch our job postings because we need the best of the best. It's not easy changing the world. And if you want to be a part of that, reach out to us, follow us, and keep tabs because we're moving fast and you're probably going to be hearing about us more and more.
Cody Simms (43:35):
Well, Trevor, I so appreciate you joining us today and explaining a bit about what you're building. It's always fascinating to hear of entirely new methods of solving these big global problems that the world needs to be solved. And so thanks for your time today and thanks for helping all of us realize that there are new ways of doing things that are being worked on and that have the potential to make a big difference.
Trevor Best (44:00):
Awesome. Hey, thank you so much, Cody. Thank you to the whole MCJ team for hosting us. You all are awesome. And hit us up if you're ever in Houston.
Jason Jacobs (44:09):
Thanks again for joining us on the My Climate Journey Podcast.
Cody Simms (44:13):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity.
Jason Jacobs (44:22):
If you'd like to learn more about MCJ Collective, visit us at mcjcollective.com. And if you have a guest suggestion, let us know that via Twitter @MCJPod.
Yin Lu (44:35):
For weekly climate op-eds, jobs, community events, and investment announcements from our MCJ venture funds, be sure to subscribe to our newsletter on our website.
Cody Simms (44:45):
Thanks and see you next episode.