On this episode we’re joined by Sebastian Manhart, a tech entrepreneur and policy expert who is serving as the Senior Policy Advisor at Carbonfuture, a purveyor of high-quality CDR credits based in Germany.
He is analyzing the growth of CDR policy worldwide and has recently published “CDR Policy Maturity” across all 50 U.S. states. This comprehensive report maps each state’s progress based on factors like specific CDR targets, funding incentives, and legal frameworks.
We’ll hear about what states are leading the way, the role of federal policy in pushing things forward, and the challenges of public acceptability.
Sebastian also fills us in on a new CDR trade organization in Germany, which will work to focus the world’s fourth biggest economy on drawing down co2 and his gives insights on some recent industry gatherings he’s attended.
Join Radhika and Sebastian as they talk about the explosive growth of CDR policy throughout the U.S. and Europe.
On This Episode
Resources
Article about California’s SB 308
Sebastian’s Posts on the DAC Summit and the CDR Summit
Subscribe to Climate Workers Anonymous
My other show, Reversing Climate Change
Books referenced in the podcasts, at Bookshop
Full Transcript
Announcer: You’re listening to Carbon Removal Newsroom, a weekly show about current events in the world of carbon removal, from technology and innovation to policymaking and job growth. Brought to you by Nori, the carbon removal marketplace.
Radhika Moolgavkar: [music] Welcome to the June 20th episode of Carbon Removal Newsroom. I’m Radhika Moolgavkar, Head of Supply and Methodology at NORI. Today we have Sebastian Manhart, I don’t do it quite with the German accent, a tech entrepreneur and policy expert who is serving as the Senior Policy Advisor at Carbon Future, a purveyor of high quality CDR credits based in Germany. Hi Sebastian, thanks for joining us today.
Sebastian Manhart: Thank you very much for having me and that pronunciation was perfect.
Radhika Moolgavkar: Thank you. So Sebastian’s work involves working with policymakers on the future of voluntary and compliant carbon markets and advocating for high quality carbon credit measurement and verification. I heard him speak at Carbon Unbound last month and he has a wealth of information. So he is watching and analyzing the growth of CDR policy worldwide and has recently published CDR policy maturity across all 50 states. This comprehensive report maps each state’s progress based on factors like specific CDR targets, funding incentives, and legal frameworks. Today we will talk to Sebastian about the trends and observations he’s discovered about state-level CDR policy, We’ll hear about what states are leading the way, what states may be lagging, how federal policy is pushing things forward, and the challenges of public acceptability.
But first off, we’re going to start in Germany because that is where Sebastian’s from. And apparently, a new CDR trade organization is being built by him, which already has 30 founding members. So can you tell us a little bit about this? I haven’t heard about it.
Sebastian Manhart: Yeah, we’ve kept it in stealth mode beyond Germany. But basically, the premise is that Germany is the fourth largest economy in the world, and it has a huge influence domestically, but also in Europe. I worked for the German Chancellor under Angela Merkel for two years, and I saw what happens when Germany wants to go in a certain direction. And the other thing we saw was under a green minister in November, we saw a U-turn on carbon management policy. We went from basically carbon management, for example, the transport of CO2 being banned in Germany to deals being struck with Norway in the Netherlands on transport and storage of CO2.
And that definitely sparked my interest. And the more I looked into it, the more I also saw not just a quite fertile policy environment, but also an incredible startup environment. And so I just started a stakeholder process. I involved more than 100 folks, anyone who really wanted to. And what came out of it was a clear desire to have an industry voice, to push wide open this door that is just a little bit open right now. And work on very specific things such as the 2035, 4045 targets in Germany, embedding a CDR target there.
But also they’re working on a dedicated CDR strategy and making sure that, you know, is technology agnostic, adopts a portfolio approach, high quality standards and so on. And yeah, we got this going. And two weeks ago, I opened it up for... Founding members. We have more than 30 now across all CDR pathways and we’ve raised over 200,000 euros already in funding. And so we’re very excited to launch it this summer and hopefully get going very quickly to it. We’ve got two years left in this government and realistically the last year’s election year.
So we’ve got one year left. And so we want to get a lot of stuff done. And yeah, if any of the listeners want to get involved as either as a member or as a philanthropic funder or as a corporate sponsor, please do get in touch.
Radhika Moolgavkar: Well, congratulations. I feel like Europe’s been on stealth mode for the CDR industry in general. It felt like a couple of years, I didn’t hear a lot about coming out of the EU. And then there’s just been this huge spike recently. So Is that because there’s been changes in policy or do you just think that the EU was just a little slower to start? I know that startups sometimes don’t flourish as well in the regulatory markets of the EU.
Sebastian Manhart: I think it has several reasons. First, I think Europeans are not as good at selling as Americans. So when we do the same thing, I think more people will hear about what you guys are doing than what we’re doing. And the second thing is that, frankly, In America, when it comes to CDI, you know, it’s the big bang. Let’s throw money at it. Let’s get stuff off the ground. In Germany, we’re debating, we’re negotiating, we’re discussing, we’re talking about certifications. It’s just not as sexy, maybe. And so I think those two are the reasons.
But on the long run, I think we need both, right? And I’m glad to hear that what Europe is doing is getting more and more attention.
Radhika Moolgavkar: Absolutely. I was always shocked because I heard more from Israeli companies than I heard from EU companies in my role. I was like, that is so strange to me. One other question about this. You were talking about CO2 pipelines. Do you get the same pushback across jurisdictions and across Germany that the US does about a fear of having pipelines running through people’s towns or is that more widely accepted? In your part of the world.
Sebastian Manhart: I would say it’s way worse. Germany has a huge historical trauma from nuclear waste transport. And as soon as there’s the transport of anything that could be harmful, it triggers all sorts of alarm bells in the public. And CO2 is kind of the next example. And actually, there was a huge pushback years ago around the transport of CO2 because of this association in people’s minds. And it’s quite brave for Green Minister to try to overturn that. But that’s what we’re seeing now. And this time around, it seems to have less resistance than the last time.
Radhika Moolgavkar: Well, that gives us hope that maybe we’ll be able to do the same thing in the US because we’re certainly seeing a lot of pushback through the Midwest, North, the Dakotas, things. As yeah, as you would know from your studies. So that is a great pivot to the US state policy report. You know, just curious why you even chose to write this report and why you chose to focus on the US and CDR legislation within our country.
Sebastian Manhart: Yeah, I mean, honestly, we do a lot of work on federal policy. And the reality is that in this Congress, there’s quite limited opportunities when you’re working on CDR. You know, there’s the Crest Act, which is bipartisan, maybe some good work on the farm bill, but there’s not that much else. And so when you still want to get stuff done in the next two years, and you’ve already heard rumors about interesting stuff happening in certain states, I was like, okay, instead of just following the rumors, let’s do a systemic analysis to understand where should we devote our resources, where should we focus.
For Europe, we’ve analyzed 31 EU countries, and that helped us, that really helped us understand who are the movers and shakers, and where should we focus. And so we did the same here. And from the beginning, our idea was, let’s build an asset for the CDR community that we can maintain. So yeah, interesting takeaways.
Radhika Moolgavkar: Well, they always say in this country, right, where California goes, the rest of the country follows. So hopefully California is going in the right direction. You talked in the report about pioneer states. So I know that California is one of them. But can you describe California and the other states and what they’re doing right? And if they’re doing anything wrong, too, like things you might improve on?
Sebastian Manhart: Yeah. So, yeah, you already mentioned California. And again, California. California on its own would be, I think, the third or one of the largest economies in the world. It’s ridiculous. And so it’s great to hear that California is actually leading the way. I would say especially their 15% emission reduction, sorry, emission target for CDR, not reduction, CDR. We are, is a huge step forward, amounting to 75 megatonnes of CO2 per year by 2045. That is amazing that you have a state actually setting this clear target. And the SB308 legislation that I know a lot of folks are working So we’re really keen for what California is doing.
The second one that I would call out is New York. It has the Carbon Dioxide Removal Leadership Act, which essentially sees procurement of 10,000 And again, that public procurement is so important, especially agnostic to technology. And so really excited about what we’re seeing in New York. Other states that I think are worth giving a shout out are New York. New Jersey, Massachusetts, Maryland, Colorado, they all have respectively developed dedicated CDR policies, and hopefully they’ll join California and New York very soon. One thing that I think stood out in terms of what led to the emergence of these policies Leading states.
And it’s kind of a combination of three factors. The first is the role of local CDR startups. It’s surprising how often you ask someone, why did you, a policymaker, why did you start supporting Biochar or DAC or whatever? And the answer is, I went to see a facility and I fell in love with it. And so I think the role of CDR startups cannot be underestimated. It’s just really important. And we see in those days where there’s more or more proactive ones, you see more movement. The second one is when you have evangelists in government.
And because it’s a small industry, It’s enough to have one legislator really pushing. I was on the call with Ruby Dixon from Colorado just two days ago, and it’s a good example. It’s one person who happened to stumble up on CDR, and she’s like, okay, we’re going to turn Colorado into a CDR leader. And chief is finding allies and pushing it ahead. And you see similar trends in different states, right? And the third one, shout out to the Open Air Collective. There’s no state where I’ve discovered progress on CDR where Open Air Collective did not have their fingers all over it.
So I’m really impressed by just the results of this kind of grassroots activist movement in CDR. But yeah, those three are kind of really important factors in all the states that I saw as leaders.
Radhika Moolgavkar: It’s really interesting. I’m always struck that a country as vast as the U. S. has the ability to mobilize grassroots advocacy like that because the states are still relatively small. I know. I mean, it’s just a very interesting dichotomy that I think is a bit of a myth, but actually you can also see working in this situation. So describe some of the states maybe that are Not as forward thinking around CDR and in what you think we need, we as a community within the CDR group or within the CDR community need to think about and how do we mobilize there when maybe we don’t have the best political environment always too.
Sebastian Manhart: It’s a good question, right? I mean, the obvious one that really stood out to me was Florida because it’s a wealthy state. It’s a big state, but it’s really far behind. It has almost no climate policy whatsoever. Another one was Texas, but we’re seeing change there. And maybe that’s one of the themes is that we’re seeing laggards turning into potential leaders through the embracement of DAC, of direct air capture. So there’s an interesting turning point there. My honest recommendation is, I don’t know, maybe I’m a bit tactical when it comes to these things.
I think it’s easier to turn Kind of a good state on CDR into a great state than to turn a state that doesn’t have any climate policy into a good CDR state. So I almost feel we have to be quite tactical where we focus. But there are some exceptions. And I do think especially direct air capture has provided an opportunity for countries that were really focused on oil and gas and didn’t want to have anything to do with climate to potentially embrace more CDR. Yeah.
Radhika Moolgavkar: Yeah, I mean, Right. Texas, Wyoming, North Dakota, they all have a lot of storage. So they probably all want to get in the game when you think about the billions of dollars being spent by the federal administration. Yeah. So that brings me to my last question around this, which is, did you see trends in which states are interested in which types of methodologies? Was it just linked sort of, as you mentioned, to the startup environment? Are there other factors that drive which... They choose to embrace like Washington State sort of into biochar right now.
I think that’s because we have a large agriculture sector, but what are your thoughts about that?
Sebastian Manhart: So first a quick disclaimer that my analysis primarily focused on industrial or engineered carbon dioxide removal. I did look a little bit nature-based, but that was not the primary focus. What stands out is clearly direct air capture Is the dominant technology. And that comes down heavily to the tech hubs program and the 45Q tax credit. Like we can really see a change in states attitudes. And, you know, you already mentioned some examples, but Michigan, Wyoming, Texas, like states that weren’t really on the CDR map that now with these programs want to leave, leave their mark.
We see biochar removal as a close second, I would say. There’s quite a lot of states that are actively researching and developing biochar projects from Iowa, Virginia, Tennessee, Minnesota. You also mentioned Washington. There are quite a few that are doing really interesting work on biochar. Even I was speaking to Colorado. Filling oil and gas wells, often oil and gas wells with biochar. Like there’s really interesting applications of biochar there. And some coastal states are exploring ocean-based CDR, but it’s still, I wouldn’t call it dominant. It’s more on the fringes. And most states have not settled.
They’re not at the stage where they would focus on a specific type of CDR. So most states are still undecided, I would say.
Radhika Moolgavkar: Well, that’s good because it’s, I think, too early to be that bifurcated or that too much, too many unknowns. Exactly. So then moving a level up in terms of policy, let’s talk about federal policy. You mentioned, obviously, and we’ve all heard about it, 45Q, the DAC hubs kind of influencing how states act. Are there other types of funding or policies that states are taking advantage of right now at the federal level?
Sebastian Manhart: Unfortunately, I didn’t see much evidence of that. So far, I’ve really seen deckhubs and 45Q leading the way and being the only federal policy that has tangible impact on state CDR preferences. And you also see quite a lot of discussion around permitting. And for example, I mean, Louisiana now wanting to join, you know, the ranks of Wyoming, Montana, North Dakota on permitting privacy. But overall, state policy, there haven’t been substantial enough federal policies. And especially at the moment, everything’s been focused on DAC on the federal level. Not everything, but I would say the large majority of impactful federal policy in CDR has been direct air capture.
And so we haven’t seen that much of a downward influence on state policy.
Radhika Moolgavkar: Yeah, I agree with you. And my feeling also is like things like ocean particularly is still too early. And so you’re seeing a lot of funding through the DOE around research, but not enough to like influence state policy, right? Because we’re talking to a lot of research groups who are applying for DOE funding to prove the viability of oceans. And so you can Then see the path where if they’re successful, maybe that develops into another type of policy, but too early for a lot of technologies, probably. So then what’s the opposite?
You know, like, do you see, you know, they call the states the laboratories in this country. And so do you see state policies that potentially could influence federal policy?
Sebastian Manhart: Definitely. And that’s really exciting, I think, because in the next two years, we can see progress on state level in many places in the US. And we can imagine how that can influence the federal level, right? There’s a couple of examples. So first, maybe state to state. I think it’s quite interesting. So if we look at, for example, New Jersey’s Low Embodied Carbon Concrete Leadership Act, LECLA, and that one has already inspired, you know, Connecticut, California, Illinois, Washington, Massachusetts to follow suit. So I think that’s a great example of a state policy that could actually be adopted by a range of states.
And then the one that goes more from state to federal is the Carbon Dioxide Removal Leadership Act. That was actually, you know, first developed for New York State. Open Air Collective. And then it was, you know, it’s the first real procurement bill for CDR in the US. And then it was taken up by Representative Tonko, by Senator Coons, and taken to the federal level. And now we see discussions of that potentially being reintroduced. So this is a great example. So I would really encourage folks to work on state-level legislation. It provides a much lower risk, as you said, kind of a sandbox environment for CDR.
And we can learn from it, we can iterate on it, and we can then introduce it to the federal level and point already to successes at the state level. So I think this is, in the next two years especially, a very promising pathway.
Radhika Moolgavkar: So are you seeing any cross-Atlantic Sharing of policies yet? Or we’re worldwide sharing the policies? Or, you know, is that just too optimistic of me?
Sebastian Manhart: This is really interesting. Historically, we’ve seen quite frequently countries or regions copying, literally copying, copy and pasting European legislation. Like if you think about data protection, the European GDPR, for example, was adopted by a range of legislations. I believe that if we get the carbon removal I haven’t seen as much the other way around. But there are exceptions. For example, Norway is in the process of basically passing a 45Q for direct air capture. And they’ve literally matched it. It’s literally the same amount. So clearly that came from somewhere. So I wouldn’t say it never goes the other way across the Atlantic, but I think it’s more rare.
Radhika Moolgavkar: Yeah, we’re a little more chaotic on this side of the Atlantic, aren’t we? We’re not as focused sometimes. So one thing I like to always ask my guests about, and especially ones who are so involved in policies, how do you think about issues like public outreach and acceptability? We talked a little bit about the pipelines earlier, but I do think this is an area where, in general, CDR has the best of intentions, but may be struggling a little bit to implement it well. So what are your, like, what would be your recommendations to a startup working with communities and the government on how to properly advocate and educate their people they’re working with?
Sebastian Manhart: Yeah, and I mean, I think it’s fair to say that, you know, with programs like 45Q or DAC hubs, we’re going to see a sudden surge of the industry, literally an industry that didn’t exist coming out of the woodworks and building, which is great. We need that. But that will have impact on communities directly. I mean, we mentioned pipelines earlier, there was an assessment by the US government that will have to ramp up from 5000 miles to 96,000 miles of pipelines. I mean, you mentioned North Dakota, we know what happens when you’re trying to build pipelines across people’s lands.
Imagine what is that 18 times More pipelines that we have today, that’s going to be a huge challenge. And I will also have to say that I worked for 10 years in global development and I’m a bit jaded when it comes to this topic because I’ve seen this narrative That has existed for decades in that sector around community engagement, about creating value for communities. And at the end of the day, it’s just people pay lip service to it and then don’t do it. So I’m a bit cynical and I believe fundamentally that unless they are financial incentives tied to this type of work, for example, by having that as a key component of any public funding that you get, I doubt that people will do it and do it well.
And I think we’re already seeing the challenges of what happens, right? I don’t know if people follow it in the US, but for example, Planetary, a UK ocean alkalinity company that had massive protests coming out of nowhere for one of their projects. And that can have real costs, that can delay your project, that can stop your project, that can taint your reputation. And so I think my advice is really we need to build out that muscle as a CDR community. We need to learn from other sectors that have been doing this for decades.
We don’t have to reinvent the wheel. Let’s look at renewables. Let’s think about big infrastructure projects. There’s a lot of learnings there. And finally, I want to give a shout out to Carbon 180 here because there are organizations like Carbon 180 that have really been investing Into environmental justice and frontline community acceptability. And I think that is such an important piece of work. So again, I don’t have the answers, but I think we should look to the people who have experience in this, who might be outside of our bubble for the answers.
Radhika Moolgavkar: Yeah, we had Planetary on. So if anyone’s interested in learning more about it a few episodes ago, we had them on to give their perspective on what they learned. It was... Yeah, it was just a story of maybe a little bit being a little naive about the on the ground optics of what they were doing. I think nothing nefarious. And I want to have Carbon 180 on to talk about their MRV platform, which involves like that community outreach. I always like to add my little caveat that it’s got to be meaningful.
You know, I have worked in government as well and community outreach where you check the boxes and it’s just and it’s super technical and you publish things in some esoteric paper. Really is not, it’s not worth the paper it’s written on. So that’s always my little plug and I’m a little jaded too for my time in government as well. So happy for you to join your club. So final question about the state policy report. Is there any other high level takeaways? And what are you thinking about next for your state level work?
I feel like you could dive into the counties of these various, that’s interesting information.
Sebastian Manhart: That’s a good one. So I would say two things maybe that I didn’t touch on enough yet. The first is that we really see, while we spoke about preferences of state, we see pioneer states adopting a portfolio approach and a technology agnostic approach. And this is really promising and really needed. I actually think the US has over-indexed on DAC. It’s great for the world because we’re going to see what happens, right? But it’s a bit of a risky gamble from a climate perspective because we know there’s no silver bullet. We know we need more solutions.
And so I’m very happy to see that California, New York, Massachusetts, Maryland, they are adopting a portfolio approach to CDR. The second one is that we haven’t spoken about cities and actually cities play a really interesting role, you know, from the Four Corners Initiative, which I think is a really great example of kind of city collaborative CDR procurement to specific cities that are, for example, leading on biochar projects, Minneapolis, Park City, Cincinnati, Lincoln. We shouldn’t underestimate that, because that is again something very tangible, where we can get going very quickly.
And that can make a difference too. And so I would not underestimate the cities. In terms of where we go from here, I mean, we’ve published the underlying data. What we plan to do is to update it twice a year. And what I really encourage is any user of this data, of this information to get back in touch with us, like many have already done. We will have missed stuff. There will be new updates. So please send them our way and we’ll keep updating. And also some people who follow me on LinkedIn will have seen we also, we are starting to publish spotlights on specific country, specific states.
So we already did California last week, Colorado this week, we’re going to have more in the pipeline. But yeah, just just follow. Follow me if you want to kind of see the spotlights on specific states. And that’s really an opportunity to see all the players. I really try to dig out every company and every individual who’s doing great work on CDR so that you can get a much better overview of all the amazing people who are already doing stuff in those respective states. But more than anything, yeah, we hope that this is going to be of use to the community.
And if you want to dive deeper into it or collaborate on it, just get in touch.
Radhika Moolgavkar: I find your spotlights, uh, very helpful and I’ve been telling other people about them. So thank you for putting them together. They’re also nice and visual. So they’re easy to, uh, whoever helps you put them together is doing a very nice job around the visual. My props to them. So yeah, I appreciate it. I know a lot of people appreciate it. It’s really, uh, so moving so quickly, it’s hard to keep up when you’ve got a million other parts of your thinking about. So, um, All right, so we talked a lot about the policy work, but let’s talk some more about it and more broadly.
So I know you are recently at the Climeworks annual DAC Summit and the CDR Summit in Brussels. So you’re putting some miles on yourself and you were in New York last month. How were those experiences at the industry events and what are some of your key takeaways? I know you’ve tweeted about them, but I’d love to hear directly.
Sebastian Manhart: So first, it’s obviously nice to have CDR specific events because I remember until recently we were kind of a sideshow at a CCUS event and that was a bit less fun. So I’m very happy with the CDR events and it’s great to meet familiar faces there that I just know from a screen like yourself in New York, right? And I would also say what I loved in the last ones in Europe was that we actually had quite a lot of US colleagues, you know, Jack Andreasen. Then we had Noah Dijk coming over.
And I think it was great to see US and EU policymakers on the same stage talking about policy. And that’ll lead me to one of the things I want to tell you that kind of I took away from it. But just that kind of cross-pollination, I think, is really, really helpful because it’s so different. And in terms of the key themes, I mean, the first one is just difference between the US and EU. You know, when you have Noah Dice on stage, he just, you know, we need to get steel in the ground, we need to move now, we need to focus on incremental innovation, we need to start learning, let’s focus on the legislation and getting it all right later.
And then, you know, you have Fami Ramos from the commission. You know, we need to get it right from the beginning. We need to take our time. We need to focus on definitions. We’re not going to talk about how it’s going to be used. And for me, that’s fascinating to see those differences. I was kind of aware of them, but seeing them on stage was really, really thrilling. And again, promising for us, because again, I really think we need both. And the second thing that for me was interesting was how all the policymakers, they talk about portfolio approach.
Everyone’s like, ah, we need portfolio approach, of course, tech agnostic. But in reality, we’re so far off it, right? And for me, that’s quite interesting because everyone’s talking about portfolio approach, but in the US, it’s DAC, DAC, DAC. In the EU, it’s DAC, BEX, and increasingly carbon removal, which is now... Being recommended as permanent removal as well in the CSCF and but it’s it’s still it’s very narrow if I think about the whole spectrum of carbon removal. And so for me that contrast between what they were saying and where we actually are was quite striking and especially enhanced rock weathering was just missing from the show right and again this is something that I’m spending a lot of time on now it’s how to.
Give enhanced weathering a higher profile. But yeah, again, this difference between what people are saying and where we are is quite striking.
Radhika Moolgavkar: I think your description of the policymakers just describes the cultures, like the more broad cultures of the countries, right? I mean, that’s how I imagine you all are very, you do your thing, you do it your way, the EU and the US is just like this chaotic place. And I feel like that Is also reflected in our politics, right? I mean, our politics are chaotic over here for sure. And the differences are much broader than as you pointed out, like Cyprus and Norway aren’t as different as Florida and California, which is an interesting commentary as well.
Sebastian Manhart: But don’t give yourself too much of a hard time. European politics, just to have this on record as well, is very chaotic too. And we have our own problems to deal with. So I don’t want to leave it with just what you said.
Radhika Moolgavkar: Yeah, yeah. And you do a lot of talking and we do a lot of, you know, shovels in the ground, whether we’re ready or not. And which way is better? I think a meeting in the middle is a nice thing. So hopefully they rubbed off on one another. Yeah. And I think your other observation about DAC in this country is if you look at the people who have been appointed into key positions, you can see how some of that thinking happens, right? And closed systems are just easier in some way because you can measure them.
And all you’re trying to do is accounting. If you’re really just working towards Paris, you know, numbers, investing in stuff that’s hard to measure is not maybe the most rational decision, so. All right. So as we were talking about DAC, you wrote a new Boston Consulting Group report. You’re all over the place, Sebastian, on making DAC economically valuable or viable. Can you give us kind of a high level summary of what you wrote and what your thinking is around that?
Sebastian Manhart: So that was sparked by when I was at the DAX summit in Zurich, Rich Lesser, who’s the global chair of BCG, actually gave a presentation. And for me, that was super interesting because, you know, I didn’t, and he was really detailed and well-versed. And I was just impressed how much he knew about CDR. And he presented some of the slides from this report that they did on DAX. And I just had to dive deeper because I thought it was fascinating. And so a couple of takeaways, they basically did an analysis of what would it take to get back to three gigatonnes by 2050, which I think is an ambitious goal within a portfolio approach to reach 10 gigatonnes or more, right?
And they basically estimated that from a buyer’s perspective, they did a huge survey, you would need to get to 200, if not $100 per tonne to get those inflection points in buying behavior. So then the next question was, how do we get to that 200 to $100 price tag? And three things. The first one was that learning rates need to increase from 11 to 15%. This might not seem like a lot, but it actually is a huge amount when it compounds over 27 years. And the biggest one for me was the energy costs.
Like they basically just projected how You’re spending more than $100 per tonne just on energy today. And how energy has to drop, energy costs need to drop by 90% or energy usage. And that’s not even taking into account that it should obviously all be kind of renewable excess energy, but just the cost has to go down by 90%. And you need to cut CapEx in half. And then when looking around, I kind of took that and I looked around in Zurich and spoke to a lot of companies. And for me, it’s super fascinating that I see that companies trying to do one of two things.
Either they’re really trying to optimize CapEx or they’re really trying to optimize energy usage and trying to make that kind of their key selling point. Often they might be locked into a technology where they can’t optimize energy. So they go for the CapEx or the other way around. So I think we’re going to see a lot of movement in that in the next five to 10 years. I really think the technology that we’re seeing today will probably not be the ones that we see in 10 years as the market leaders.
But that’s just my personal opinion. And I think they’re going to be a mix of these two factors that I just mentioned.
Radhika Moolgavkar: Yeah, or consolidation. That’s the other thing I’m thinking. There’s going to be consolidation within companies that have optimized on one and companies that have optimized on the other, and they’re going to have to figure out how to join together. And I do know of some DAC technologies that purport to use less energy, less water, and that is like DAC 2. 0, I guess. So it’s going to be a really fascinating five to 10 years in the space. I’m looking forward to tracking it.
Sebastian Manhart: For sure.
Radhika Moolgavkar: Last question for you, Sebastian. You’ve been a fantastic guest. I really enjoyed listening to you. But so but last question is, what’s up for you in the next weeks and months? And what are you thinking about for your priorities as we enter the second half of 2023? So I’m.
Sebastian Manhart: First priority for me is Deutsche Verband für Negative Emissionen, or CDR Germany, Trade Association, getting that launched this summer and starting to gain some serious traction in 2023. The second one is, I mentioned it briefly, but enhancement. Enhance weathering policy. I’m coordinating a small group of six EW companies already trying to kind of align behind common messaging, common priorities, both in the CSCF and also in the US and the farm bill. So I think focusing much more on how do we get a voice for enhanced weathering? How do we create a group of companies that can collectively lobby for the interest?
I think that’s going to be really important. And the third one is, yeah, continue to generate useful content. For me, this is an amazing learning process as well. I learned so much by kind of doing these analyses. And so, yeah, keep doing this for Europe and the US and increasingly the UN will definitely be a focus as we gear up for COP. Yeah.
Radhika Moolgavkar: Well, thank you for your time, Sebastian. It’s been super fun to have you on. I need to have you on more often because you’ve got such a breadth of experience and knowledge. But Really appreciate having you. Thanks so much.
Sebastian Manhart: Thank you so much for having me.
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