Startup Series: Vesta

Carbon

Nov 3

Today's guest is Tom Green, CEO and Co-founder of Vesta.

The ocean is one of nature's largest carbon sinks, as it absorbs upwards of 30% of cumulative human emissions. Vesta is tackling the dual problem of shoreline erosion due to sea level rise and carbon emissions reduction with olivine sand that speeds up the ocean's natural carbon cycle. They call it coastal carbon capture, and it's one form of the broader category of carbon dioxide removal (CDR) solutions known as enhanced rock weathering. The olivine sand that Vesta deploys into the ocean accelerates the natural carbon cycle dramatically, creating a form of permanent and durable carbon sequestration.

Vesta also has a very unique corporate setup. They started their journey as a non-profit research group that has continued on as a 501(c)(3) called Coastal Carbon Capture Impact Fund. Vesta – the for-profit public benefit corporation that Tom is CEO of – emerged later as a way to pursue scaled commercial projects leveraging the non-profit research. And the two orgs continue to work together, though they have separate governance structures and economics.

Tom and Cody have a great chat about the many stakeholders at play in the projects they consider, from local communities and scientists to the impact on various types of sea life itself, and the ecotoxicology studies that Vesta produces. They also talk about the nature of olivine and how Vesta sources it, plus how the company determines what shorelines are a good target for coastal carbon capture. If you’re interested in carbon removal generally or nature-based solutions, this one's for you.

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Episode recorded on September 27, 2022.

In this episode, we cover:

[3:22] Tom's background and how Vesta has evolved
[6:36] The ocean's role as a carbon sink
[11:26] Distinction between geoengineering and nature-based carbon dioxide removal
[13:08] Vesta's origins
[15:54] An overview of olivine and its role in Vesta's CDR approach
[25:10] How Vesta partners with the dredging industry to work more efficiently
[29:41] Coastal engineering and optimizing for carbon removal
[32:43] Vesta's history as a non-profit and separate public benefit corporation (PBC)
[36:00] Philanthropy and project finance
[44:26] How Vesta engage with various stakeholders, including local communities
[49:20] Why Tom decided on coastal carbon removal
[53:41] Pricing for Vesta's carbon credits and how they plan to decrease with scale
[55:02] Vesta's seed financing and future plans for building their business

Jason Jacobs (00:01):
Hello everyone, this is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:05):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:15):
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.
Jason Jacobs (00:26):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:40):
Today's guest is Tom Green, CEO and co-founder of Vesta, which is tackling the dual problem of shoreline erosion due to sea level rise and carbon emission reduction with an olivine sand that speeds up the ocean's natural carbon cycle. They call it coastal carbon capture, and it's one form of the broader category of carbon dioxide removal solutions known as enhanced rock weathering.
(01:02):
The ocean is one of nature's largest carbon sinks, and it's already absorbed upward of 30% of cumulative human emissions. The olivine sand that Vesta deploys into the ocean accelerates this process dramatically creating a form of permanent and durable carbon sequestration. Tom and I have a great chat about the many stakeholders at play and the projects they consider from local communities to the impact on various types of sea life itself and the ecotoxicology studies that Vesta produces. We talk about the nature of olivine and how Vesta sources it, and we talk about how Vesta determines what shorelines are a good target for coastal carbon capture.
(01:39):
Vesta also has a very unique corporate setup in that they started their journey as a nonprofit research group that has continued on as a 501(c)(3) called Coastal Carbon Capture Impact Fund. Vesta PBC, the for-profit public benefit corporation that Tom is CEO of emerged Later as a way to pursue scaled commercial projects leveraging the nonprofit research. The two groups continue to work together, though they have separate governance structures and economics. My tech brain thinks of this a bit like the climate tech version of open source software, a public good and a commercial instantiation of that public good that's set up to invest in growth via commercialization. I learned a lot from Tom about the intricacies of coastal carbon capture and hope you do too. Tom, welcome to the show.
Tom Green (02:21):
Thanks, Cody. It's a pleasure to be here.
Cody Simms (02:23):
Well, I am so interested to understand the whole area that you're focused on in terms of the ocean's role in our carbon cycle and in particular, the ocean's role as a carbon sink. It's not lost on me that the ocean is a very large carbon sink, but thinking about using the ocean as a business model for climate change is something that, me with my background in software-based business models doesn't naturally jump to mind. I'm really interested to learn from you what that looks like and how that will evolve as you go. But maybe start with a bit on your background and a bit on how the company has evolved because as I understand it, the company has this really unique evolution in that it began its life as a not-for-profit and a sort of in addition to that evolved into including a for-profit business in the climate tech space.
Tom Green (03:22):
Happy to. I trained as a biologist originally. When I was studying science, it was already clear, this is 23 years ago, it was already clear that the climate was heading for crisis and that we would get to the point that we're at now, and I think maybe it's happened a little bit faster than some people thought it would. At the time, I actually wanted to work in climate, but there was no climate tech ecosystem. There was no MCJ or climate investors really. And so, I put a pin in that for a while and spent about a 20-year career working in variety of things from financial services to tech, to consulting, and then took a bit of a career break and took a step back and reflected on what impact I wanted to have in the world.
Cody Simms (04:11):
I mean, Tom, actually, before you even go into that, I think it's really important to name some of the places you were because some of our listeners who don't work in climate at all often wonder how in the world can I start working in climate and you worked at places like, I think, Capital One and Bain and LendingClub and places that definitely were not climate companies as far as I understand it.
Tom Green (04:32):
Definitely. Well, I think, and yes, you named the main places I worked and I think the thing that I was focusing on was working in places where I felt like I could learn as much as possible. I think a lot of the skills that come from those kind of environments are transferable if you are willing to dive in and go back a little bit to square one on some of the knowledge and just learn and be a sponge. I will say that having studied science has really helped me to come up to speed and to do this role.
(05:05):
I took that step back and reflected and basically my feeling was this climate crisis is the biggest problem the world is facing, likely the biggest problem humanity has ever faced. If I'm not going to be working on that, then what am I doing here? Feeling into that, I basically decided that I was going to find something to do in climate and came across my co-founders who were exploring a range of different ways to help out. We zeroed in on CDR, carbon dioxide removal as an area that at this point is very much needed.
(05:42):
I'm sure most of your listeners already know, some people get concerned about the "moral hazard" of removing carbon dioxide from the atmosphere and ask the question, "Well, shouldn't we reduce emissions?" 30 years ago, that would've been great if we could have followed that path of simply reducing emissions, but we didn't. And so now, we have an extra trillion tons plus of carbon dioxide in the atmosphere. We have a crisis on our hands that is not a future crisis. It's here today. You have tens of millions of people displaced by flooding in Pakistan right now, for example.
(06:17):
And so, we need to do CDR. CDR had attracted less investment and less attention than emissions reduction. Emissions reduction, a lot of the technologies have already been developed and now it's a question of political and public world to make them happen, whereas CDR is much more of an open field where we actually still need to develop things.
(06:36):
Then we zeroed in on the oceans, and this is maybe a moment to talk about what you were alluding to before around what is the role of the oceans in carbon removal. There are a couple of different ones, and I think it's important for everybody to understand what role the oceans play in carbon removal. There's a long-term carbon cycle called the carbonate-silicate cycle, and this is nature's way of turning atmospheric carbon dioxide into rock. 99.9 plus percent of the carbon on the planet is stored in rocks and the oceans are how it gets there.
(07:15):
The way this works is that rain falling on certain types of rocks causes these rocks to dissolve a little bit and carbon dioxide dissolved in that water actually ends up being used by animals like corals and shell forming out animals in the form of calcium carbonate in those shells and skeletons. When those animals die, they form marine sediment which settles down onto the ocean floor and hardens into limestone and is then subducted into the earth's crust. That's extremely powerful way of sequestering carbon dioxide in a long-term basis.
Cody Simms (07:54):
Diving in with a sort of obligatory tipping point question there as we are facing things like coral reef die-back and the like, is there a point at which it actually starts to damage the long-term carbon cycle?
Tom Green (08:09):
What you're referring to there is coral reefs are in trouble. There are estimates that suggest that all coral reefs will be gone by the end of the century and potentially 90% will be gone by 2050. That is certainly not good news for many reasons, including the impact on the long-term carbon cycle.
(08:28):
The reality is that this is a very slow cycle that happens over geological time. And so, that's good for what it's been used for, but it's not very helpful for our current purposes. What we need is accelerated ways of removing CO2 from the atmosphere. Now, before I dive into how we accelerate that long-term, that portion of the long-term carbon cycle, I'll just note that the oceans have played a pretty major role in interacting with the changes to the climate. They've absorbed 90% of the extra heat and they've actually absorbed 30% of the extra carbon dioxide, but not in this long-term storage way. They've absorbed it as carbonic acid, which is purely dissolved carbon dioxide in the water. Carbonic acid, that's what makes your fizzy drinks fizzy. We're effectively turning the ocean into a fizzy drink.
Cody Simms (09:19):
The oceans are getting hotter and they're getting more acidic, which presumably also, I don't know how the heat might influence their ability to continue to absorb CO2 at the same rate, but I assume the acidification does impact that for sure.
Tom Green (09:35):
Well, the acidification is a form of absorption of CO2, but unfortunately in absorbing this, they've become 30% more acidic than they were before the industrial revolution, and that is contributing to collapse of marine ecosystems. That's a really challenging situation for the oceans.
Cody Simms (09:54):
Another tipping point I assume is in addition to the carbon cycle you laid out, the ocean also has algae, whether macroalgae like kelp and things like that, or microalgae or phytoplankton or all of these other forms of sea life that I believe also absorbs CO2. Yet, I assume this acidification process is starting to also damage them in addition to the coral reefs that we talked about. Is that a correct assumption?
Tom Green (10:21):
For sure.
Cody Simms (10:22):
I'm definitely not a marine biologist here.
Tom Green (10:25):
The oxygen we breathe comes from plants and about half of that comes from plants in the ocean, whether it's macroalgae or phytoplankton and so on. The worse the health of the oceans becomes, the more at risk that is. That's like as we damage the Amazon rainforest, then that reduces the ability of that rainforest to absorb CO2 and turn it into oxygen, same thing in the oceans. That's another problem.
Cody Simms (10:54):
You all have been working on this accelerated solution to this, which it doesn't get positioned as, now I'm going to say it, what many assume to be a climate bad word of "geoengineering," but that's essentially what you're doing. You are building a model that transforms how our coastlines work in terms of materials that flow from land to sea and into atmosphere. Am I wrong to think of it that way?
Tom Green (11:26):
Well, I want to address the G word, and there are different definitions of geoengineering. What I think is most helpful is to distinguish between solutions which redress the imbalances that we've created in the atmosphere itself. And so, whether that's planting trees, reducing emissions, building a direct air capture plant, or doing what we do, which is called coastal carbon capture. Fundamentally, what we're doing there is we are trying to reverse the excess CO2 emission situation in the atmosphere.
(12:02):
When I think about geoengineering, I think about things like solar radiation management, where we're actually pulling on other levers to try to, for example, reduce the amount of sunlight that is hitting the earth or being absorbed by it. And so, the class of solutions that I would call geoengineering would be those ones. We think of ourselves as a nature-based carbon dioxide removal solution and it's nature-based because we're accelerating this natural geological process.
Cody Simms (12:31):
That's super helpful and a good distinction between, hey, we're trying to undo the damage that's been done versus we're trying to simply play defense and block it out, which I think is how most geoengineering solutions have been positioned to date.
Tom Green (12:46):
Exactly.
Cody Simms (12:48):
Now, maybe explain the origins of Vesta. We talked a little bit about the macro environment. I'd love to understand how the company came to be in terms of the nonprofit research arm that you have and now the for-profit entity so that we can start to talk about what the actual solution looks like that you're deploying.
Tom Green (13:08):
For sure. Well, I'll say that along with many ideas that people are trying to bring to the climate crisis, this idea had actually been sitting out there for a while. It was first proposed in 1990 in a letter to nature. Since that time there's been a fair amount of research that has come out of universities around the world looking at different aspects of-
Cody Simms (13:34):
Who wrote the original letter? There has to be an interesting words and story there, I assume, or if not then hey, good to know.
Tom Green (13:41):
Well, actually, I'll point to somebody called Olaf Schuiling who didn't actually write the original letter but was really somebody, he's known as the godfather of enhanced weathering. He was the one who stuck his neck out a lot and he recently passed away, unfortunately, but someone who stuck his neck out a lot proposing that this really could be a workable solution in the face of a lot of skepticism. But there's been, at this point, a decent amount of serious research coming out of academic institutions into the various different aspects of how this works. It's probably time for me just to say what it is, because I think we're overdue that.
Cody Simms (14:21):
Sure, there is, I guess before we name it, there's a huge research center I think in the UK that's focused on this. For those who want to go really deep under this topic, maybe you could help point them to that resource.
Tom Green (14:33):
I'm not sure if you're referring to the Leverhulme Centre.
Cody Simms (14:36):
Yes. That's it.
Tom Green (14:38):
But they focus on terrestrial weathering.
Cody Simms (14:40):
Good distinction. We'll get into that distinction.
Tom Green (14:42):
Rather than ocean weathering. Anyway, this is how it works. What we do is we take an igneous mineral called olivine. It's a silicate mineral. We dig it out of the ground, we grind it into sand, and we transport that sand to the ocean in coastal areas. Once the sand gets into the ocean, it gradually dissolves in the water, helped by the wave action. And so, this is an important point. The natural free wave energy of the ocean actually helps the sand to grind down and to dissolve.
(15:18):
As it dissolves, it adds alkalinity to the ocean water. We already talked about ocean acidification, this counteracts that process of ocean acidification and in doing so, it causes the ocean to absorb more carbon dioxide but not as carbonic acid. We absorb it as a molecule called bicarbonate, which you may be familiar with as baking soda. In summary, the way the process works is we grind up a mineral called olivine into sand and spread that sand in the ocean in coastal areas.
Cody Simms (15:54):
Where does the olivine come from?
Tom Green (15:57):
Olivine is found all over the world. It's actually, if you talk to a geologist, what they'll tell you is that olivine is one of the most abundant minerals on the planet. It actually is present in very large deposits all over the world and doesn't have too many uses today, which is a great thing because we are going to need a lot of it if this solution is going to scale. It's found all over the world.
Cody Simms (16:20):
Is it the same as the sort of gemstone peridot? Is that correct?
Tom Green (16:23):
Yes. Peridot is an example of olivine. Peridot is the gemstone form of olivine and some people know it as one of the 12 birth stones. It's this green mineral.
Cody Simms (16:36):
It's abundant throughout the world. You presumably, in order to set up your business, need to find mine deposits of it somehow. Is it a byproduct of the mining industry typically in some way, shape or form, or where are you finding it hanging around that you can crush it and turn it into sand?
Tom Green (16:55):
Well, it has some uses today and so it is being mined for its own sake. In addition, it is often co-located with precious metals like nickel in deposits. And so, in mining, there's this thing called tailings. Tailings are the waste of mining. When you dig through some rocks to find the rocks you're really looking for, the excess is called tailings and there are a lot of olivine tailings lying around in mines all over the world. As you can imagine, that makes us pretty happy because what we want to do is use that excess byproduct that nobody has any other use for and turn it into sand and use it to help fight climate change.
Cody Simms (17:40):
Let me ask a sort of obvious, at least to me, question that comes from that, which is nickel I believe is a heavy metal. If you're diving into the residue of nickel mining to find olivine, is there any risk that you're depositing heavy metals into the ocean?
Tom Green (17:58):
There is some nickel in olivine. The concentration of nickel in the tailings that exist is much, much lower than in the rocks that are actually being extracted in order to harvest the nickel from those.
Cody Simms (18:10):
By design, I guess. You're particularly wanting to remove the valuable nickel, but there's certainly still got to be some residue.
Tom Green (18:17):
There is still some. This is one of the key questions in our research agenda is fundamentally, we want to help fight climate change, but we don't want to do that if it's going to cause other damage to the environment. And so, we've done what's called ecotoxicology testing where we actually expose marine organisms to olivine and therefore to the nickel and see how it affects them. We've done that at much higher concentrations than we expect to see in field deployments. So far what we've found is that there hasn't been any effect on these marine organisms.
(18:56):
Having said that, and we can talk a little bit about where we are in our process in a moment, but we have a pilot field deployment live, and at that deployment, we are doing extensive ecological monitoring and we're also starting small. This is a technique which if everything looks good, we hope to be able to scale and really bring it to large scale, and that's one of the things we're most excited about with this is that it is a process that's fundamentally very scalable and has a potential to get to billions of tons of carbon dioxide removal per year.
(19:29):
But at the same time, we're not starting with billions of tons. We're starting with hundreds of tons in order to make sure that we really build a robust scientific understanding of how this works at a small scale so we can understand the carbon removal at a small scale. We can understand the ecological effects at a small scale. Because we reduce ocean acidity, there could be some benefits there to marine organisms, but then also, there could be some risk as well. Nickel is probably the one that people talk about the most. And so, we're monitoring all of that very carefully.
Cody Simms (20:01):
I mean, I would presume, I don't know, and you'll correct me I'm sure if I'm wrong, that to build a business in this space, you have to be really good at two key things in addition to the environmental monitoring that you're doing, which is one, you have to be good at logistics, you have to be good at transporting and sourcing these materials, this olivine material from these nickel tailing pools or wherever you're sourcing it from, because you're needing to then get it to a body of water. Then two, you need to be good at measuring its effectiveness as a carbon sink and in terms of identifying any potential deleterious effects like you mentioned in terms of ecotoxicology, et cetera, on sea life.
(20:46):
I definitely want to talk about the latter part on measurements, both of the carbon impact as well as the sea life impact and how that looks for you. But let's start on the transport and logistics side. The "big boring side of the business," which is last I checked a truck full of sand was very heavy, so how you're actually getting this stuff from point A to point B as a business in a scalable way.
Tom Green (21:12):
Well, I'll start by saying I wish there were only two things we had to be good at. One of the challenging and really fun things about this is that there are so many different aspects to it. From a scientific perspective, there's the geochemistry, there's the ecology, there's what's called the geomorphology, which is how does the sand move in a coastal environment. There's the coastal engineering, how do we actually deploy the sand? Then of course you've got things like the permitting, how do we get permits to do this? That's something that we've now done in the U.S.
(21:46):
There's quite a few different aspects to it. In terms of the logistics, we work with partners to organize the supply chain. As you can probably imagine as a startup, we are not in the mining business nor are we buying ships. We work with supply chain partners to source the olivine, to grind it, to ship it, and then to deploy it. It gets deployed typically from barges in the coastal environment.
(22:12):
Actually, one of the things that I mentioned before is the scalability here. Yes, the sand is heavy, but actually, deploying a million tons of sand in the ocean is not so different from deploying a thousand tons. It is fundamentally, in many ways actually, easier. A typical bulk carrier is at least a 75,000 ton capacity. It gets a lot cheaper on a per ton basis to transport larger amounts than smaller amounts. That I think is something that is quite distinctive about this model compared with more engineered technological approaches to carbon removal. When you are scaling up a plant from 1X to 10X to 100X, the set of engineering challenges that you have to deal with at each level of scale are fundamentally different and new each time. Whereas, the set of engineering challenges we have to deal with each time are actually much more similar to one another. And so, it creates a very scalable process.
Cody Simms (23:13):
We're going to take a short break right now so our partner Yin can share more about the MCJ membership option.
Yin Lu (23:20):
Hey folks, Yin here, a partner at MCJ Collective. Want to take a quick minute to tell you about our MCJ membership community, which was borne out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and has since then grown to 2,000 members globally. Each week, we're inspired by people who join with different backgrounds and perspectives. While those perspectives are different, we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change.
(23:49):
Some awesome initiatives have come out of the community. A number of founding teams I've met, nonprofits have been established, 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. Whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (24:22):
All right, back to the show. On the deployment into the ocean, I saw a news article that you had signed a partnership I think with a large dredging company. Is that what that is for? Basically how sand gets deployed into the seabed?
Tom Green (24:39):
Yes. We signed a partnership with a company called Great Lakes Dredge & Dock, which they started in the Great Lakes, but now they're actually the U.S.' largest dredging company. And so, they do a lot of this work. This is probably a good moment for me to mention coastal nourishment. With sea levels rising and storms getting stronger and stronger, and of course we're seeing this all the time at the moment, we're now in hurricane season, shorelines are eroding and coastal homes, coastal habitats, and coastal assets are all at risk.
(25:10):
And so, in the U.S. alone, 60 million tons of sand are moved each year to protect coastlines and restore eroded beaches. And so, what we've been doing is actually working with that industry. Even though we're doing something that's very new here, we're actually working with a very old industry and partnering with that industry so there are established processes for how you deploy sand in the coastal environment and there are established mechanisms for permitting that kind of activity. And so, we have, by fitting in with this industry and partnering with it and working with it, we've been able to find ways to, I think frankly work more quickly, more efficiently than if we had been just trying to do this from scratch.
Cody Simms (25:58):
We'll definitely get on the permitting, because you mentioned that was one of the areas your business you've had to get good at. The second one you mentioned besides logistics was I think related to what you were just talking about, which is understanding the flow of surface water, understanding the movement of sand, understanding I assume through software and technology that you're building where you should be deploying this olivine sand in terms of having maximum effectiveness as a carbon sink, but also in terms of having presumably the appropriate effectiveness on the shoreline itself.
Tom Green (26:34):
Exactly. Where to deploy is this quite complex multi-parameter optimization problem that includes things like oceanographic factors like the wave energy, the temperature of the water, the specific geomorphology of that coastline, but also other factors like what country are you doing it in, what is the permitting environment there or the openness to doing carbon removal. Then you've also got logistical factors such as where is the olivine coming from, the transportation distance. Obviously the further we ship the olivine, the more carbon is emitted in the process of doing that. Now, our LCA suggests that this process is roughly 95% efficient. For every ton of CO2 we emit in the supply chain, we remove about 20 tons. But of course we want that ratio to be as favorable as possible. And so, logistical factors also feed into where we decide to deploy.
Cody Simms (27:30):
How far offshore are you typically deploying?
Tom Green (27:33):
We have one deployment that is now live. We performed a pilot deployment in the Hamptons in Long Island, 650 tons of olivine sand. That sand was actually placed on the beach. There was an existing planned beach nourishment project, which the local town of Southampton did. We talked to them and they became excited about what we're doing and decided to add olivine to this project. And so, in that case, we deployed on the beach. In future projects though, we plan to deploy more in the nearshore environment. It's more scalable and it's more efficient to do that. But in this first project we were really focusing on for the first one, measurability, and the way to maximize the measurability of that particular project was to do it on the beach.
Cody Simms (28:24):
You mentioned wave action being an important part of the cycle earlier on. I'm presuming the target zone for you is somewhere along the surf break. Is that typically where you would ideally deploy?
Tom Green (28:37):
We want to deploy in areas where there is some natural motion of water. So between the beach and an area called the depth of closure, which is the coastal engineering term for the place where there is limited movement of water. The exact place where we deploy and how far out depends very much on the specific location. We have models that we build for each location that enable us to optimize where we place the olivine, balancing the efficiency of carbon removal with any potential shoreline protection benefit that may come from placing the olivine.
Cody Simms (29:19):
Talk about any technology that you all have developed that aid you in making those recommendations?
Tom Green (29:27):
Well, so far, there's a lot of modeling work that we've done. People have thought a lot before about how to put sand in the coastal environment.
Cody Simms (29:36):
I was going to say that's not a climate problem, that's just a general coastline management problem, right?
Tom Green (29:41):
Yeah. That's a well-established part of coastal engineering, but what people hadn't thought about before was how to do that with olivine, which is by the way different and has a different density and so on, but also how to do that in a way that instead of optimizing for building up a new beach, optimizes for carbon removal. It turns out that the ways you do that are actually quite different. And so, we've built proprietary models that enable us to figure out the best ways to deploy in any given site. That's one set of developments that we've created.
(30:11):
There's also of course site selection, and I touched on that a little bit, but thinking about the geospatial analysis combined with permitting and country analysis component with the logistical analysis. Then something that you touched on before and wanted to dive into, we haven't quite got to yet and maybe now's a good moment is the measurement. Something that we are very focused on is how do you measure the carbon that's being removed from the dissolution of olivine? And so, we're still at a relatively early stage. We have one pilot deployment live, and we have our team has been developing the ways to measure it and experimenting with different ways to most effectively measure carbon removal in this process. And so, that's something that we are still developing.
Cody Simms (30:59):
Are there any existing known methodologies for this or I'm guessing you all are on the front end of trying to work with the carbon marketplaces to determine what those even would be? Is that a correct assumption?
Tom Green (31:14):
Ocean alkalinity enhancement is a field that a lot of people are very excited about, including those who the carbon credit registries and so on. We're also very much at the leading edge of that. And so, what we have done is we have established a basic framework for how this is going to work. From a scientific perspective, what we're doing here is adding alkalinity to the ocean water.
(31:40):
And so, there are ways to measure that and there are ways to measure and calculate how that alkalinity converts into CO2 removed, but there's a lot of devil in the details. What kind of sensors do we use? How do we deploy them? What is the spatial resolution needed? Exactly how do the models work, and so on. We've got the basic framework in place and there's a lot of alignment on how that framework looks, but there's also a lot of devil in the details.
Cody Simms (32:07):
Is the business model of Vesta to sell carbon credits? Is that the business that you're building? If so, is everything up to that point essentially a cost center for the business, or are there other points of monetizing beach restoration, et cetera, that you also can support the business with?
Tom Green (32:29):
We started as a nonprofit, by the way. Should I just take a moment and dive into that?
Cody Simms (32:35):
Yeah, please do. I think we've touched on that a couple times but haven't dived into it. Now's a great time to paint that history.
Tom Green (32:43):
In terms of history, we actually started as a nonprofit. We launched on Earth Day 2019. The reason we were a nonprofit was because we hadn't determined what the business model would be yet, and because what we wanted to do was really foster open source research to start to develop this field.
(33:02):
About a year ago, so in late 2021, we were ready to transition to a for-profit company, and that is a form of company known as a public benefit corporation or a PBC. A PBC is a company that can focus more on its mission than profit. We have put in place actually a hybrid structure that enables us to have both that for-profit company, the PBC, and also a nonprofit, a 501(c)(3), which is a separate fund. The 501(c)(3) fund enables funding to go to a foundational research that's charitable in nature, that's in the public benefit, and that'll be published open source.
(33:46):
It's very important for that to happen because it fosters the kind of transparency we need in this emerging field, and it enables philanthropists to fund important climate research. At the same time, in order to bring this kind of solution to scale, clearly we're going to need a business model. Nothing can get to the kind of scale we need to get to without that.
Cody Simms (34:10):
That's not a non-controversial statement. I should add, those of us in climate tech sort of, I think, take that as truth, but 15 years ago, the climate movement definitely did not embrace that statement. I just want to acknowledge that. That to me is a signal of the changing tides, to use a pun, of how much the climate tech movement is shaping the narrative around how we ultimately solve for climate change.
Tom Green (34:35):
Agreed. In order to have an impact at a planetary scale, we're going to need to move around billions of tons of rock and remove billions of tons per year of carbon dioxide from the atmosphere. That's going to take tens of billions of dollars per year. In order to see that kind of capital flowing, we're going to need a economic model which can actually work. That's just not going to happen through philanthropy alone. We need to be realistic about that.
(35:07):
I mean, capitalism has shown that it can move billions of tons of rock around when there is an economic incentive for that to happen. And so, that's the path that's already been forged and that we now need to co-opt for good instead of for extraction and putting more CO2 into the atmosphere.
(35:24):
At the same time, there's really a important role for philanthropy to play here in a couple of ways. One is that there's basic research that needs funding. Sometimes when I talk to philanthropists, they ask me, "Well, how do I know that this money that I'm putting in isn't just a money pit? How do I know you won't need this same amount every year for the next 10 years because I can't afford that?" What I'm able to say is, "Well, actually you are helping to create the foundations of a field here, and at the same time, we're developing a business model that means that this will actually be self-sustaining in the future." That's a powerful message, I think.
(36:00):
The other thing I'll mention in terms of how the philanthropy can play is in the world of project finance. There's this thing that I'm sure many listeners have heard of called the second valley of death. And so, what this is is when you have developed a process and you now need large amounts of capital to invest in infrastructure in order to deploy it, then project finance is the right way to do that.
(36:27):
You have this large upfront cost and then a revenue stream that gets delivered over time. But until you've done it a few times, people won't give you commercial project finance. And so, you're in this catch 22 or second valley of death where you need the project finance to do the deployments, but you don't qualify for it yet. What we are seeing is that philanthropy can actually play a role in bridging that gap by providing project finance style loans to finance early deployments in order to help us bridge that gap and get to the point where we can actually qualify for standard commercial project finance.
Cody Simms (37:04):
I'm so fascinated by all this, Tom, because the governance aspect of building a business in this space isn't something we're always spending time on. We're usually focused on the technology and the business model and the scalability and the cost and blah, blah, blah. And so, I'm super interested to hear a few things from you. I'm going to load you up with questions, tackle them in the order that you wish.
(37:24):
One, do you have to manage conflict of interest between the for-profit business and the nonprofit in terms of what IP you can use, how you can leverage the work that the nonprofit entity is doing? Are you actually technically the head of both of those entities? Two, oftentimes when companies get really big, then they establish a foundation and they start to do good. Oftentimes it's, yeah, they have good intentions, but it's also a nice tax benefit. You guys started the opposite direction, which is you started as the foundation and you've grown the nonprofit from there. I'm wondering what lessons learned you have there should other people who are listening want to follow that same model?
Tom Green (38:05):
Sure. In terms of the structure that we have, so it's important for people to understand that these are two separate entities. I don't have any control over the nonprofit. It's purely an arm's length relationship. The nonprofit exists to further the science of coastal carbon capture and it does not generate IP for the company. There's no sort of conflict of interest there. It enables the open source research to happen through nonprofit funding and then R&D and IP development to happen through for-profit funding.
(38:43):
I mean, in terms of lessons learned, I mean, I think the main one that I would want people to understand is that this is I think an unusual model, but one that has a lot of benefits where there is a genuine charitable purpose that can be advanced through philanthropic funding. And so, for anybody who is in a similar position to us, and I guess the main thing would be in our example, our process involves the commons, it involves the ocean, and there is a great need for transparency and a need for foundational research, and so, given that there is a need for an opportunity for philanthropists to fund open source research. And so, if you're in that situation, then you're welcome to reach out to me and I'm happy to talk more detail about how we put this hybrid structure in place and how it works.
Cody Simms (39:37):
To me, that's so fascinating because you think, I mean, climate change is a commons problem. The crux of the issue is that the externalities of independent businesses have affected the commons of all of us. It seems like whether you're working in oceans and have local coastline organizations that maybe want to fund research or find solutions that could be local to them, whether you're working in forests and you're working with trees and you have similar state or national forests that are trying to fund research-related to forestry work, whether you're working in soils and you have agricultural lands or that local communities that are wanting to fund things, it feels like this model could apply to lots of different climate tech areas where there is still a lot of foundational knowledge to be gathered in order to scale a potential impact through a for-profit arm, I guess not arm, it's a separate for-profit initiative, to be clear.
Tom Green (40:33):
Agreed. An example would be ecological monitoring. It is in everybody's interest in the world that that happened, that we monitor coastal carbon capture deployments from an ecological perspective, and it's in everybody's interest that that is not used to create IP, but is published transparently. And so, that's the kind of thing that, by the way, will be available to, if Vesta competitor comes along and wants to do the same thing, which I imagine will happen at some point, at least maybe when things are a little bit more proven, then that competitor deserves to have access to that same ecological data. And so, it's in the public benefit and it's charitable.
Cody Simms (41:16):
It reminds me of the open source software movement to some extent. You've got WordPress started as an open source project. It ended up becoming a company called Automatic, which scaled WordPress through a web-based application as an example. But anyone could have built that business, the technology was open for anyone to use, which is a really interesting analogy to think about from a climate change perspective. It may not be the software itself that's the open source component. It may be the research IP.
Tom Green (41:44):
Agreed. I think since we're talking about IP and how this spreads, I think there's another aspect that's important as well, which is that what we want to do here is not keep this all for ourselves. We want to develop it and develop the technology and actually license that out to other organizations that want to use it as well. Right now, it's still early. We're still hoping to demonstrate that this works and there are any number of reasons why it might not, but if it does, then creating the roadmap for how to do it will be something that is very useful for the world. We are going to be looking to license that out.
(42:22):
One of the reasons for licensing it out is because we will also want to make sure that it's always being done in a way that is ecologically safe and responsible. And so, by having something that people need in order to do it, we can hold that back and say, "Well, you get this stuff, but only if you promise to do it in these ways and live up to these principles and engage with local communities, something we haven't talked about, but very, very important to us that we engage deeply with local communities and that we're not doing this to people, but that we're doing it with them, or even better that it's actually projects that are led by the local communities." And so, that is something that we would always do ourselves, but also require other organizations who license our IP to do as well.
Cody Simms (43:10):
I think one of the interesting things about that is so much about building a company that is working on climate, to me, at least, involves rethinking how we do business in general. If you take to that to the extreme, it's theories of de-growth and this, that, and the other. I think there is a role for capitalism in solving climate change as you and I discussed earlier, but it doesn't mean capitalism has to look like 20th century extractive capitalism.
(43:41):
What I'm hearing you say at least is so much of building this business is doing so by engaging all the stakeholders involved in building the company. Some of those stakeholders are the marine life that you are doing a lot of research to ensure you're not damaging, which you can talk more about. I'd love to hear you talk more about that. Some of those stakeholders are people who live in the coastal communities who have a lot of thoughts and ideas for how they should be restoring their coastlands, making their coastlands resilient for climate change, supporting their communities as sea level rise continues to be a problem or this, that, and the other. I'm just interested to hear how that's going for you.
Tom Green (44:26):
We engage deeply with local communities where we do our work. And so, I'll give a couple of examples. Our first deployment was in the Hamptons, which, and everybody feels very sorry for all of the billionaires who live on beachfront property in the Hamptons, but nonetheless, it was important to us to talk to them, to get their perspectives, to hear what they thought about climate change and nature-based solutions like this one, to answer all the questions they had, and ultimately, to make it their decision. If they didn't want to bring coastal carbon capture to their shoreline, then we weren't going to try to force it on them. They chose that they did want to do that. It's been a really good collaboration with a local community there.
(45:09):
At the other end of the spectrum, a project that we're planning for next year is in the Dominican Republic and the local community there is a low-income community, small village. There, we have been engaging actually very deeply for well over a year and involving them in the process through a participatory governance approach. We found them to be very supportive of what we're doing. They see the changes in the weather that we all see and they want to be part of the solution.
(45:42):
Another thing we're doing in underserved communities like that one is putting in place give back programs where we make sure that we help the local community in ways that they co-develop with us. We're not wanting to come in and say, "Well, this is what we think you need." What we do is we ask them what they need and work with local community leaders to establish how we can invest in them. And so, in the Dominican Republic, we have been creating a program for local women to buy sewing machines and get trained in how to use them so they can build businesses themselves and have more economic autonomy. And so, we always want to engage deeply with the local community in what we're doing and also leave it better than we found it.
Cody Simms (46:32):
Thanks for sharing those stories. I think it really helps to paint the picture, and to me again, is so important for companies that are working in the public good to engage everyone who is affected by their potential technologies and it's heartening to hear that that that's been something you guys are taking seriously. I'd love to hear maybe a bit about how you're also similarly working under the water to understand the impacts of your technology there.
Tom Green (47:01):
Sure. When we think about our stakeholders, we have a lot of stakeholders and some of them are the marine organisms that live in the water. And so, we have comprehensive ecological monitoring plans at any site that we do in order to make sure that we fully understand the impact of coastal carbon capture. We see ourselves as building a business, but also as a rigorous scientific research outfit. We have 13 PhDs on staff and we see the scientific community as key stakeholders in our process.
(47:37):
And so, we are committed to doing robust and rigorous research to understand the ecological effects of doing coastal carbon capture so that as a society, we can make the right trade offs so we can understand whether the benefits of doing it are worth the risks and the costs. We are just here to understand it as best as possible. We're really open to whatever that data show.
(48:03):
Sometimes when we think about stakeholders, we have the local communities, we have the organisms that live in the sand. We also have the people, the voiceless people and organisms who have not come into this world yet and who will be inheriting the world that we are creating. And so, we're always trying to keep in mind that stakeholder as well. That's one of the things that gets us going in the morning is that we are ultimately working on a mission here that is all about leaving a thriving biosphere for future generations.
Cody Simms (48:39):
I guess to that point, how did you decide on this particular solution? I could ask that question way up and down the decision tree, but let's just go to the decision tree of enhanced rock weathering. How did you decide to focus on coastal based enhanced rock weathering as opposed to terrestrial or agricultural enhanced rock weathering? We recently had a couple of companies on the pod in Lithos Carbon and Eion Carbon who are doing agricultural rock weathering and got to understand their business model and got to understand the how and why they're focused where they are. I'm curious what led you down the path of working directly with coastlines?
Tom Green (49:20):
As we looked at different CDR solutions, we were looking for something that is permanent carbon dioxide removal that is very scalable and that is cost effective at scale. As we scan the landscape of different solutions, we found that coastal enhanced weathering was the one that was best on all three of those dimensions. As we looked into it more deeply, we found that there were quite a few other benefits as well.
(49:51):
It is highly energy efficient. It requires very little energy input because the ocean does so much of the work for us. It doesn't require any changes in land use or fresh water, so it doesn't compete for these scarce resources. It has co-benefits such as counteracting ocean acidification and adding the coastal resilience. It's got these future proof elements to it. When you put the olivine in the sea, it is then going to remove CO2 from the atmosphere for many years without any maintenance. It just does its work. Actually, the more acidic the oceans get and the warmer the oceans get, the more efficient coastal carbon capture becomes. It's got a little bit of a governor baked in there that the worst things get, the better this gets.
(50:39):
The scalability is really a very key thing here. There's a trillion tons of olivine in the world. The oceans are very large. We've shown that as a society, we can move billions of tons of rock around the world if there's an economic incentive to do so. And so, at a very fundamental level, we see this as an incredibly scalable solution, more so than other solutions we looked at. Of course, it relies on there being economic incentives.
Cody Simms (51:06):
Yeah, I was going to say, I would say from an agriculture perspective, farmers buy stuff to put on their land. That's a process that already happens. There isn't necessarily an actor who's buying stuff to put in the ocean intentionally today, so you're having to find that economic lever in a different way, I think, right?
Tom Green (51:24):
Yeah. I mean, of course, people are paying to move sand around and protect coastlines, and there is potentially a revenue stream there for us in the future. Although to be clear, we're not earning revenue from that today. The business model, just like many carbon removal companies, relies on selling carbon credits. We sell carbon credits to companies that want to remove their emissions. In many cases, companies are taking responsibility even for their historical emissions, which of course, the only thing you can do for those right now is remove them. You can't not emit them.
(51:53):
What we need to see happen in order for our approach to work at a planetary scale is we need to see governments stepping up and putting a price on carbon and making sure that the economic incentives are there to support carbon removal. But at our current and near future levels of scale, there's more than enough volume in the rapidly growing so-called voluntary carbon market to support our business.
Cody Simms (52:19):
I think you are one of the original Stripe recipients of their carbon removal purchases, is that correct?
Tom Green (52:26):
That's correct, yeah. Stripe, as I'm sure many listeners know, has been a real leader in supporting climate solutions. One of the things that they've done, which is so effective I think, is they have been buying from newer processes and technologies, which are still subscale and are still expensive, but are high quality. That's really where we fit in. We're seeing increasingly other companies jumping into that space and being willing to buy what are currently relatively expensive carbon credits, knowing that we will come down the cost curve and come down the scale curve and the cost will decrease over time. What you'll be left with is this very efficient form of permanent scalable carbon removal.
(53:11):
I want to emphasize permanence. I mean, that's such a critical point here. We need to be taking carbon from the short-term storage in the atmosphere and putting it into long-term geologic storage, whether that's in rocks or the oceans. At a fundamental level, we've taken it out of rocks in the form of fossil fuels and it needs to go back geologically and permanently.
Cody Simms (53:31):
Are you able to share the pricing that Stripe purchased its credits from you and how that relates to where you see the purchase price going over time?
Tom Green (53:41):
At the moment, we are selling credits at $750 a ton and we expect that to come down actually fairly rapidly as we increase in scale. Our long-term target is to get to $35 a ton, which for permanent carbon removal is extremely cheap.
Cody Simms (53:59):
What are the big levers that drive that price decrease for you?
Tom Green (54:04):
A lot of the costs in our supply chain come down pretty naturally as you scale. For example, shipping, if you want to order one ton of olivine from a supplier, that's going to cost you several hundred dollars to ship it. If you order 75,000 tons, then the costs drop by roughly an order of magnitude just from placing a larger order. There are a number of different aspects of our supply chain, and therefore our cost bar, which have those kind of dynamics. As we get bigger, it will get cheaper in a reasonably automatic way.
Cody Simms (54:37):
You all raised a round of seed financing, I think. Sometimes when I search for you, it's hard to differentiate what's the for-profit company and what's the historical nonprofit and the nonprofit as it's evolved, but maybe explain a little bit about the seed financing that you've raised and how you're building the business and where you need help. Listeners are listening and interested.
Tom Green (55:02):
We raised just over 6 million in seed financing from investors led by a climate fund that many listeners may be familiar with called Prime Impact Fund. I know that Johanna Wolfson was on the MCJ podcast not too long ago, so led by them, but also other climate funds and climate-focused super angels. We are extremely focused on only taking money from climate investors who share our ethos and who have a very long-term investment horizon. We're not trying to deliver a quick buck back to investors and sell the company in three years. This needs to and should take a long time. We think that when that's all done, we'll build a big business and deliver returns to investors, but patience is important. Then we've also raised a little bit more than that on the philanthropic side through the Coastal Carbon Capture Development Fund. If anybody out there is interested in donating to that fund, then you're absolutely welcome to do so. It's a great way to support climate action.
Cody Simms (56:05):
And so, it sounds like continuing to scale the business and then talent, are there talent needs that you have that are most critical right now for the company?
Tom Green (56:15):
We're always hiring. One interesting area we haven't really talked about but is an area we're actually going to be hiring in is the policy space. The Inflation Reduction Act came out with a decent amount of good news for carbon dioxide removal. There's also a lot of state policies and essentially funding opportunities for carbon dioxide removal and coastal resilience. We are going to be hiring in that space. If you have expertise there and you're interested, then reach out to me. I'm on the MCJ Slack. In general. I would encourage people to follow us. We're all over social media. Check out our website, vesta.earth and follow the journey.
Cody Simms (56:58):
Tom, I so appreciate you coming on today. Thanks for sharing everything that you're doing with us. It's wonderful to hear the story and the broad impact that you're aiming to have as a major effort in the carbon removal space. Thanks for your time.
Tom Green (57:12):
Well, thank you so much. It's been a pleasure.
Jason Jacobs (57:15):
Thanks again for joining us on the My Climate Journey Podcast.
Cody Simms (57:18):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars, content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change, and our member community to bring people together as Yin described earlier.
Jason Jacobs (57:40):
If you'd like to learn more about MCJ Collective, visit us at www.mcjcollective.com, and if you have guest suggestions, feel free to let us know on Twitter @mcjpod.
Cody Simms (57:55):
Thanks and see you next episode.