1 00:00:00,040 --> 00:00:02,760 Hey, thanks for listening to Reversing Climate Change. 2 00:00:02,920 --> 00:00:06,120 I'm your host, Ross Kenyon. Before we get going, I'd love to 3 00:00:06,120 --> 00:00:07,560 tell you a little bit about our sponsors. 4 00:00:07,560 --> 00:00:10,120 They make the show possible. I would love it if you could 5 00:00:10,120 --> 00:00:13,480 listen for just a minute while I tell you about Phillip Lee LLP 6 00:00:13,480 --> 00:00:16,200 and our bionics. If you work in carbon removal, 7 00:00:16,280 --> 00:00:19,120 you very well may have come across Phillip Lee LL PS work. 8 00:00:19,440 --> 00:00:22,760 I originally saw Phillip Lee give a presentation about some 9 00:00:22,760 --> 00:00:25,840 of the common provisions within off Take agreements, and I was 10 00:00:25,840 --> 00:00:28,400 impressed by the quality of their scholarship and their 11 00:00:28,400 --> 00:00:31,600 work, and I'm happy that we're able to stay in touch and 12 00:00:31,600 --> 00:00:34,080 finally do this together. I think the law is an 13 00:00:34,080 --> 00:00:37,080 underrepresented part of what happens within carbon removal. 14 00:00:37,320 --> 00:00:39,840 We assume it's the background, we assume it's the mechanics. 15 00:00:40,200 --> 00:00:43,280 It actually takes a very smart and creative person to be a good 16 00:00:43,280 --> 00:00:44,760 lawyer. I think if you've ever had a bad 17 00:00:44,760 --> 00:00:47,040 lawyer, you know that there's quite a big difference between a 18 00:00:47,040 --> 00:00:49,360 good and a bad lawyer. And what's good about Philip 19 00:00:49,360 --> 00:00:52,760 Lee, beyond the good experience that I've had personally, is 20 00:00:52,760 --> 00:00:55,880 that they're also just the largest legal team dedicated to 21 00:00:55,880 --> 00:00:58,480 the financing and development of carbon projects globally. 22 00:00:58,760 --> 00:01:01,560 They actually were awarded Environmental Finances, VCM Law 23 00:01:01,560 --> 00:01:04,720 Firm of the Year for each of the last two previous years. 24 00:01:04,920 --> 00:01:07,280 They have offices in the US, Europe and the UK. 25 00:01:07,560 --> 00:01:10,200 If you have business law needs around nature based carbon 26 00:01:10,200 --> 00:01:14,040 projects or engineered ones if you're working with sustainable 27 00:01:14,040 --> 00:01:17,240 aviation fuels and the integration with Corcia, 28 00:01:17,520 --> 00:01:21,200 anything to do with the VCM generally, Article 6 of the 29 00:01:21,200 --> 00:01:24,880 Paris Agreement, the CRCF that's coming out of the EU now. 30 00:01:25,400 --> 00:01:28,240 Get in touch with Phillip Lee. If you're working in this space, 31 00:01:28,640 --> 00:01:31,440 you really do need a good eye to the law. 32 00:01:31,800 --> 00:01:34,840 These projects need legal care. There's a lot of structuring 33 00:01:34,840 --> 00:01:37,640 that takes place. It's really not turnkey at this 34 00:01:37,640 --> 00:01:39,480 point still. And there's a lot more 35 00:01:39,480 --> 00:01:42,160 innovation and creativity that's going to be needed to make sure 36 00:01:42,160 --> 00:01:44,560 that the legal infrastructure that supports carbon removal is 37 00:01:44,560 --> 00:01:47,440 there. So link is in the show notes, go 38 00:01:47,440 --> 00:01:50,760 check out Phillip Lee, our other sponsors, our Bionics. 39 00:01:50,840 --> 00:01:52,840 Our Bionics is great. They've been on the podcast 40 00:01:52,840 --> 00:01:54,720 before. I did a show with Lizette Week, 41 00:01:55,160 --> 00:01:57,200 which I'll link to in the show notes too if you want to go 42 00:01:57,200 --> 00:01:58,480 listen to that show I did with Lizette. 43 00:01:58,960 --> 00:02:02,040 Our bionics is working on forestry in the Baltic states of 44 00:02:02,040 --> 00:02:04,240 Europe. Europe used to be much more 45 00:02:04,240 --> 00:02:07,200 heavily forced it. The great majority of forestry 46 00:02:07,200 --> 00:02:10,639 projects take place in the global S, which is generally a 47 00:02:10,639 --> 00:02:12,720 good thing. But we also do need forestry to 48 00:02:12,720 --> 00:02:15,720 take place in the EU and in Europe as well. 49 00:02:16,040 --> 00:02:18,440 Our bionics has put out some great research recently about 50 00:02:18,440 --> 00:02:21,480 the state of afore station projects, about the bottlenecks 51 00:02:21,480 --> 00:02:24,840 in the industry, why the high quality credits are selling out 52 00:02:25,160 --> 00:02:28,280 far ahead of issuance, what that means for people who want to be 53 00:02:28,280 --> 00:02:31,640 buying carbon removal credits for forestry but cannot. 54 00:02:32,160 --> 00:02:34,400 It's a really important set of questions that are Bionics 55 00:02:34,400 --> 00:02:37,000 addresses with Grace. I would recommend you checking 56 00:02:37,000 --> 00:02:39,120 out their work and also just checking out our box in general. 57 00:02:39,120 --> 00:02:42,360 If you want to support forestry, give our bionics a look. 58 00:02:43,000 --> 00:02:46,280 Link is in the show notes there. Thanks for listening and now I 59 00:02:46,280 --> 00:02:49,280 will go into the show itself. Thanks for your time. 60 00:02:49,400 --> 00:02:59,240 Here it is. OK, today you people are getting 61 00:02:59,240 --> 00:03:01,880 your money's worth. This show was originally pitched 62 00:03:01,880 --> 00:03:05,200 to me at least partially in reference to Ernest Hemingway's 63 00:03:05,200 --> 00:03:09,400 The Sun Also Rises. I told today's guest that I 64 00:03:09,400 --> 00:03:13,000 would do the intro and a Hemingway ask voice. 65 00:03:14,200 --> 00:03:17,560 It's really more Midnight in Paris than Hemingway himself, 66 00:03:19,480 --> 00:03:23,080 but all right, a little bit theatrical, but today's intro in 67 00:03:23,080 --> 00:03:28,760 the style of Ernest Hemingway. My name is Ross Kenyon. 68 00:03:29,120 --> 00:03:32,560 This is my podcast. It is about men and women who 69 00:03:32,560 --> 00:03:35,560 fight with risk in finance and carbon and time. 70 00:03:36,040 --> 00:03:39,040 It is about the struggle to make something real in a world that 71 00:03:39,040 --> 00:03:42,720 often feels unreal. You must rate it five stars on 72 00:03:42,720 --> 00:03:46,520 Apple, five stars on Spotify. To give less is weakness. 73 00:03:46,720 --> 00:03:49,720 To give more is impossible. Write a review. 74 00:03:49,960 --> 00:03:52,520 Tell the truth. The truth will be seen, and it 75 00:03:52,520 --> 00:03:56,080 will endure. If you have courage, subscribe 76 00:03:56,520 --> 00:04:00,800 $5 each month on Spotify. You will hear more of the show. 77 00:04:01,240 --> 00:04:04,200 You will hear it without the dull rattle of automated ads. 78 00:04:04,560 --> 00:04:07,760 You will hear the bonus talks, the private talks, the talks 79 00:04:07,760 --> 00:04:12,280 that are for those who pay $5 buys you that $5, Buys you the 80 00:04:12,280 --> 00:04:14,760 clean cut of the blade without the rust. 81 00:04:15,680 --> 00:04:17,320 This show is about carbon removal. 82 00:04:17,519 --> 00:04:21,040 It is about men who build projects, who take risk, who try 83 00:04:21,040 --> 00:04:24,400 to make wheels turn. Some wheels are strong, some 84 00:04:24,400 --> 00:04:26,840 wheels are broken. Many people do not know what 85 00:04:26,840 --> 00:04:31,120 makes a project live or die, but Ryan Covington of Philip Lee LLP 86 00:04:31,120 --> 00:04:33,480 knows. He knows bankability. 87 00:04:33,720 --> 00:04:36,880 He knows the weight of debt. He knows the steel on the ground 88 00:04:36,880 --> 00:04:38,560 and the paper on the banker's desk. 89 00:04:39,160 --> 00:04:42,800 We speak of buyers and sellers, of risk and of courage, of 90 00:04:42,800 --> 00:04:44,880 whether the market will turn away or lean in. 91 00:04:45,280 --> 00:04:48,080 It is not a small thing. It is not a game. 92 00:04:48,400 --> 00:04:51,440 It is the work of years and the measure of what kind of world we 93 00:04:51,440 --> 00:04:54,040 will have. This is a good talk. 94 00:04:54,480 --> 00:04:57,080 It is a true talk. You will learn from it. 95 00:04:57,520 --> 00:05:00,160 You will feel it. That is why we are here. 96 00:05:00,560 --> 00:05:08,720 That is why the show begin. Ryan, thank you for being here. 97 00:05:09,760 --> 00:05:11,680 Pleasure, pleasure. Appreciate you having me. 98 00:05:13,000 --> 00:05:17,200 Yeah, first of all, Jack Hughes have an accusation against you? 99 00:05:17,200 --> 00:05:19,280 How dare you tell me how to use bankability? 100 00:05:19,880 --> 00:05:22,880 I want to use it in however weird way I want to define it. 101 00:05:23,280 --> 00:05:25,720 I want to use project finance in ways that are disconnected from 102 00:05:25,720 --> 00:05:27,960 historical experience. Why do you deny me this? 103 00:05:30,040 --> 00:05:34,520 That is a that is a great. That is a great question. 104 00:05:34,520 --> 00:05:38,240 I think it gets right to the heart of the issue, which is 105 00:05:39,840 --> 00:05:45,200 there seems to be within the carbon removal space, a couple 106 00:05:45,200 --> 00:05:49,320 tendencies. One of the tendencies is a 107 00:05:49,320 --> 00:05:53,080 desire to reinvent the wheel when the wheel works perfectly 108 00:05:53,080 --> 00:05:55,120 fine. And there's. 109 00:05:55,120 --> 00:05:57,080 What about like a? Smoother wheel that's more 110 00:05:57,080 --> 00:06:00,280 elliptical than a purely spheroid object. 111 00:06:01,720 --> 00:06:05,720 Perhaps, but I think the wheels that sometimes come out are 112 00:06:06,440 --> 00:06:10,840 oblong shaped or have a lot of right angles and they don't 113 00:06:10,840 --> 00:06:14,680 exactly operate that well. So if if there is a better wheel 114 00:06:14,680 --> 00:06:18,920 invented, I'd be more open to the tendency to reinvent. 115 00:06:18,920 --> 00:06:23,720 But I I think the outcome often times is a rather opt to shape 116 00:06:24,000 --> 00:06:27,200 to carry on the metaphor here. So we got 1 tendency in the 117 00:06:27,200 --> 00:06:31,680 space, which is let's reinvent the wheel for some reason. 118 00:06:31,960 --> 00:06:39,080 And then the other tendency is we typically look to the wrong 119 00:06:39,640 --> 00:06:43,640 parties, the wrong market participants to define different 120 00:06:43,640 --> 00:06:47,320 standards. And one of the biggest ones that 121 00:06:47,320 --> 00:06:50,760 we somehow found ourselves in looking to the wrong parties to 122 00:06:50,760 --> 00:06:55,480 define is bankability, right? Bankability, we can get into 123 00:06:55,600 --> 00:06:59,520 what it is, but it's a standard that's applied to much more 124 00:06:59,520 --> 00:07:01,920 mature markets. It's something that's in energy 125 00:07:01,920 --> 00:07:05,440 and infrastructure. It's a project wide assessment 126 00:07:05,440 --> 00:07:08,040 that's undertaken by third party funders to decide whether they 127 00:07:08,040 --> 00:07:10,840 want to deploy debts there. There's a tried and true way of 128 00:07:11,280 --> 00:07:15,200 assessing that across energy and infrastructure markets and large 129 00:07:15,200 --> 00:07:19,800 scale deployments. But because of the absence of 130 00:07:19,800 --> 00:07:23,080 true third party financing within carbon removal 131 00:07:23,080 --> 00:07:29,400 specifically, we found ourselves looking to a few disparate 132 00:07:29,400 --> 00:07:32,600 voices to, to tell us what bankability is or to kind of 133 00:07:32,600 --> 00:07:35,360 fill the void for a lack of threshold. 134 00:07:35,360 --> 00:07:38,080 And those participants are the ones that we're very well aware 135 00:07:38,080 --> 00:07:40,720 of. It's, it's the large tech buyers 136 00:07:40,720 --> 00:07:44,520 often times that are establishing market norms or 137 00:07:44,520 --> 00:07:47,080 terms. They're not necessarily telling 138 00:07:47,080 --> 00:07:49,160 us what is bankable. They're not telling us what 139 00:07:49,160 --> 00:07:52,040 terms will unlock third party financing. 140 00:07:52,040 --> 00:07:54,960 They're telling us what they require to transact for their, 141 00:07:55,320 --> 00:07:58,520 their optics. So I think we've then this is 142 00:07:58,520 --> 00:08:01,520 the second tendency I've talked to is I think we equate 143 00:08:02,080 --> 00:08:10,520 negotiation leverage or or market cache or the the volume 144 00:08:10,520 --> 00:08:16,080 associated with a particular voice as a as a proxy for 145 00:08:16,480 --> 00:08:19,320 understanding these terms when we when those are the voices 146 00:08:19,320 --> 00:08:21,600 that we should be listening to necessarily for determining a 147 00:08:21,600 --> 00:08:24,320 very clear objective standard that's undertaken. 148 00:08:26,600 --> 00:08:30,760 Do you think the big buyers that have enough market power to 149 00:08:30,760 --> 00:08:33,960 dictate terms like this, have they done something wrong? 150 00:08:33,960 --> 00:08:36,280 Is this within the bounds of normal commercial activity? 151 00:08:36,280 --> 00:08:39,640 Is this just what happens in a monopsonistic environment where 152 00:08:39,640 --> 00:08:42,440 buyers call the shots? What has led to this? 153 00:08:42,440 --> 00:08:44,480 And is this an OK city of affairs for our level of 154 00:08:44,480 --> 00:08:47,640 maturity, or do we make some terrible wrong turn here that's 155 00:08:47,760 --> 00:08:52,360 very unique. Yeah, lots to unpack there. 156 00:08:53,320 --> 00:08:56,280 I don't think buyers have done anything wrong. 157 00:08:56,360 --> 00:09:00,280 And in fact, I think buyers are being asked to do too much 158 00:09:00,280 --> 00:09:03,800 frankly. And I think that's we're relying 159 00:09:03,800 --> 00:09:07,640 on the wrong profile of participants to send market 160 00:09:07,640 --> 00:09:13,040 signals and to provide catalytic capital because of the absence 161 00:09:13,240 --> 00:09:16,480 of true third party funders entering the space, right. 162 00:09:16,960 --> 00:09:20,560 And so I think the buyers have found themselves propping up the 163 00:09:20,560 --> 00:09:24,920 voluntary carbon market at least through pre purchases, through 164 00:09:24,920 --> 00:09:30,080 off takes along with kind of catalytic pre purchases and and 165 00:09:30,080 --> 00:09:33,680 they're being asked to kind of fill the void and dictate and 166 00:09:33,680 --> 00:09:36,840 continue to prop the space up. I think so it's nothing that 167 00:09:36,840 --> 00:09:41,400 they've done wrong. And I think because of that 168 00:09:41,400 --> 00:09:44,680 immense role that they're playing in the space to send 169 00:09:44,680 --> 00:09:48,240 really important demand signals and to send signals to the third 170 00:09:48,240 --> 00:09:53,480 party financiers that this is a durable sector, that this is a 171 00:09:54,360 --> 00:09:57,680 sector where there is demand. I think we should one applaud 172 00:09:57,680 --> 00:10:00,120 their efforts and applaud the big buyers that are sticking 173 00:10:00,120 --> 00:10:02,800 their necks out to make long term commitments in the space. 174 00:10:03,400 --> 00:10:08,600 I think there's a end of that conversation though, which is 175 00:10:08,600 --> 00:10:11,960 that we should be engaging more with and and we are at Phillip 176 00:10:11,960 --> 00:10:16,000 Lee certainly doing so engaging with large historic 177 00:10:16,000 --> 00:10:19,800 infrastructure funders, large commodities traders, large 178 00:10:19,800 --> 00:10:23,080 institutional lenders as well who have very clear cut 179 00:10:23,080 --> 00:10:24,960 standards that they have to get through their investment 180 00:10:24,960 --> 00:10:27,480 committees and other sectors to define what's bankable. 181 00:10:27,480 --> 00:10:30,160 We're engaging with them to figure out what you actually 182 00:10:30,160 --> 00:10:33,160 need to see in the projects to unlock that third party 183 00:10:33,160 --> 00:10:35,720 financing that's sorely missing from the space. 184 00:10:36,160 --> 00:10:39,680 And I think if we bring in that profile of player more into the 185 00:10:39,680 --> 00:10:42,880 conversation, we just say, we actually ask you the queries of 186 00:10:42,880 --> 00:10:45,560 the world, what do you require? What do you want to see or the 187 00:10:45,560 --> 00:10:48,360 JPM, the JPM of the world, what do you require? 188 00:10:48,720 --> 00:10:50,400 What do you require? What do you want to see? 189 00:10:50,680 --> 00:10:52,840 I think we're going to get a very clear answer to what that 190 00:10:52,840 --> 00:10:54,560 is, which which we can talk about a bit more. 191 00:10:54,560 --> 00:10:59,520 I. Think we're all looking for how 192 00:10:59,520 --> 00:11:04,240 to attract financiers like that into carbon removal. 193 00:11:04,240 --> 00:11:07,280 And there's been some nibbling at it, like the Standard 194 00:11:07,280 --> 00:11:10,280 Chartered support for some of these deals with undo. 195 00:11:10,280 --> 00:11:12,280 And there's a couple of these things that are happening within 196 00:11:12,280 --> 00:11:16,600 climate tech broadly. But I have to think that if 197 00:11:16,600 --> 00:11:20,760 there is money to be made here, people are going to come and 198 00:11:20,760 --> 00:11:24,600 make that a reality because that's just how business people 199 00:11:24,640 --> 00:11:26,040 work. Like there's something to happen 200 00:11:26,040 --> 00:11:31,120 here, but there's some question about is there technology risk, 201 00:11:31,120 --> 00:11:33,800 policy risk? Are the ticket sizes too small? 202 00:11:33,960 --> 00:11:35,880 Like a lot of institutional money, the deals just aren't big 203 00:11:35,880 --> 00:11:38,600 enough at the stage of maturity for carbon removal to even catch 204 00:11:38,600 --> 00:11:41,240 their attention. Some of that is changing now, 205 00:11:42,160 --> 00:11:45,840 but is there even enough here to attract, you know, people who 206 00:11:45,840 --> 00:11:49,040 would finance bridges or major infrastructure projects? 207 00:11:49,880 --> 00:11:53,760 100% valid. There is. 208 00:11:54,280 --> 00:11:56,080 If we're talking about engineered carbon removal 209 00:11:56,080 --> 00:11:59,440 specifically, we're looking at tech efficacy risk. 210 00:11:59,440 --> 00:12:02,040 You know, does the tech actually do what it says it does at the 211 00:12:02,040 --> 00:12:04,840 level it says it can? We're looking at project 212 00:12:04,840 --> 00:12:07,760 execution risk. Can the tech developer that's 213 00:12:07,760 --> 00:12:11,320 wearing a project developer hang actually wind up a contract with 214 00:12:11,320 --> 00:12:13,840 an EPC that can de risk the project properly? 215 00:12:13,840 --> 00:12:15,600 Can they get through pre feeded feed? 216 00:12:15,920 --> 00:12:18,440 Can they line up their transportation and storage 217 00:12:18,720 --> 00:12:21,600 arrangements in a way that are actually commercially viable and 218 00:12:21,680 --> 00:12:23,200 bankable for the word of the day? 219 00:12:24,760 --> 00:12:27,440 There's a question of is there proper government incentives? 220 00:12:27,440 --> 00:12:30,240 Is there a compliance market driver that's going to be the 221 00:12:30,240 --> 00:12:32,320 unlock? There's all kinds of questions 222 00:12:32,600 --> 00:12:38,240 within ECDR specifically that are keeping capital on the 223 00:12:38,240 --> 00:12:40,520 sidelines. So, so I think the question is 224 00:12:41,080 --> 00:12:47,440 not whether there's sufficient level of need right now for the 225 00:12:47,440 --> 00:12:49,480 third party financing. I think there is which we can 226 00:12:49,480 --> 00:12:52,040 talk about. I think there's also a question 227 00:12:52,040 --> 00:12:57,360 of what can you do now to establish the pillars necessary 228 00:12:57,360 --> 00:13:01,520 for the space that would unlock third party financing for the 229 00:13:01,520 --> 00:13:05,200 commercial wave of deployments that need to occur before 20-30 230 00:13:05,440 --> 00:13:07,000 and throughout the 20 thirties, right. 231 00:13:07,000 --> 00:13:11,080 We can't just wait until 2029 and say, hey everybody, 232 00:13:11,600 --> 00:13:13,960 commercial scale deployments are starting to come online. 233 00:13:14,200 --> 00:13:16,760 Let's rework all those off takes that you signed that actually 234 00:13:16,760 --> 00:13:19,880 can't attract third party financing or hey, those are 235 00:13:19,880 --> 00:13:22,920 really lovely carbon transportation storage 236 00:13:22,920 --> 00:13:25,480 agreements. No funder would ever deploy cap, 237 00:13:25,560 --> 00:13:28,320 would ever deploy financing on this project because of the way 238 00:13:28,320 --> 00:13:30,080 that you structured your arrangement. 239 00:13:30,080 --> 00:13:33,120 The the risks are unknown, the liability's too extreme. 240 00:13:33,120 --> 00:13:35,680 The project risk is allocated to project developer too much. 241 00:13:36,000 --> 00:13:40,000 There's all kinds of things that could come up, but you can't 242 00:13:40,000 --> 00:13:43,280 rewrite and then speed up through the process. 243 00:13:43,640 --> 00:13:45,720 At the point in time when commercial scale deployments 244 00:13:45,720 --> 00:13:50,280 come on, those deployments take years to actually develop, to 245 00:13:50,280 --> 00:13:52,800 get through early stage development, to actually get 246 00:13:52,800 --> 00:13:56,200 through built to then get into operation, which you know, fit 247 00:13:56,200 --> 00:13:59,240 COD and be in operation. These are long term 248 00:13:59,440 --> 00:14:03,000 infrastructure heavy projects. What have we relied on today? 249 00:14:03,720 --> 00:14:07,520 It's, it's really two, maybe 3 forms of financing. 250 00:14:08,000 --> 00:14:11,200 One, it's venture capital funders, right? 251 00:14:11,200 --> 00:14:17,320 Traditional VCs, maybe climate VCs, maybe a climate hardware 252 00:14:17,320 --> 00:14:20,520 VCs, but they're typically have played in the market where 253 00:14:20,520 --> 00:14:23,080 they're looking at off the shelf climate hardware tech. 254 00:14:23,080 --> 00:14:26,000 They're not looking for capital intensive infrastructure 255 00:14:26,240 --> 00:14:28,400 intensive projects and how to finance them. 256 00:14:28,400 --> 00:14:30,760 That's not their space. So then that goes to the second 257 00:14:30,760 --> 00:14:33,000 one. Well, there's the large 258 00:14:33,080 --> 00:14:38,240 corporates that are either playing and Beck's themselves 259 00:14:38,240 --> 00:14:40,560 doing large scale Beck's projects himself, you know, 260 00:14:40,760 --> 00:14:43,320 cement players. Other industrials are similar. 261 00:14:43,640 --> 00:14:48,480 You got the energy majors that are doing a model like OXY that 262 00:14:48,520 --> 00:14:52,960 you know owns 1.5 in carbon engineering and bought Holocene, 263 00:14:53,080 --> 00:14:56,560 Holocene as well. And they're, they're doing on 264 00:14:56,560 --> 00:14:59,560 balance sheet financings essentially to actually get 265 00:15:00,120 --> 00:15:03,880 their projects deployed to to a large extent or they're 266 00:15:03,880 --> 00:15:07,320 providing the equity financings at the the same VCs are Co 267 00:15:07,320 --> 00:15:09,280 participating in rounds or project level debt. 268 00:15:09,640 --> 00:15:12,520 So we've got these two, we've got VCs that are actually 269 00:15:12,520 --> 00:15:16,200 providing some money, but it's fickle like all VCs, it's market 270 00:15:16,200 --> 00:15:20,160 trends and it comes and goes and it's not committed for large 271 00:15:20,160 --> 00:15:23,320 scale infrastructure. It's just not as much as we've 272 00:15:23,320 --> 00:15:25,400 seen large rounds happen in the space. 273 00:15:25,760 --> 00:15:28,160 It's not going to be there when we need the dollar figures that 274 00:15:28,160 --> 00:15:30,040 we need to actually get commercial scale deployments 275 00:15:30,040 --> 00:15:31,400 done. It's dollar figures. 276 00:15:31,400 --> 00:15:34,920 We need to get pilot scale deployments done, not commercial 277 00:15:34,920 --> 00:15:37,560 scale, true commercial scale deployments done. 278 00:15:38,160 --> 00:15:41,280 You've got corporates that can do it either on balance sheet or 279 00:15:41,280 --> 00:15:43,640 three Subs. And then the last group is just 280 00:15:43,640 --> 00:15:46,680 this mismatch that we're relying on government's incentives and 281 00:15:46,680 --> 00:15:49,880 grants, catalytic funding and grants through players like 282 00:15:49,880 --> 00:15:53,600 Breakthrough that are helping. But again, there's significant 283 00:15:53,600 --> 00:15:58,200 funding that's being supplied, but it's it's to help these 284 00:15:58,200 --> 00:16:01,440 project developers through this period where they're dual 285 00:16:01,440 --> 00:16:05,800 tracking tech de risking at the same time as project de risking, 286 00:16:05,880 --> 00:16:08,240 right? And it's to get a pilot done, to 287 00:16:08,240 --> 00:16:10,640 get an off take done. And when we say pilot, because 288 00:16:10,640 --> 00:16:14,640 again, we're talking about the space using these terms that 289 00:16:15,000 --> 00:16:17,680 either can sound really small or really big or really important 290 00:16:17,680 --> 00:16:20,920 or really not, right. But pilots, when we're talking 291 00:16:20,920 --> 00:16:25,720 about a pilot, this is a for DAC, for instance, this is 500 292 00:16:25,720 --> 00:16:29,320 to 5000 or 10,000 tons per annum that you're actually trying to 293 00:16:29,360 --> 00:16:33,280 remove, right? Small commercial scale is 20,000 294 00:16:33,280 --> 00:16:37,320 to 50,000. Those are the projects to date 295 00:16:37,320 --> 00:16:39,440 that are being financed in the way that I'm talking about. 296 00:16:39,760 --> 00:16:43,440 We need to now move very quickly to a stage where we're at 297 00:16:43,440 --> 00:16:48,520 commercial scale which is 100K to 500K tons removal capacity 298 00:16:48,840 --> 00:16:52,640 for projects coming online IN202820292030 and throughout 299 00:16:52,640 --> 00:16:55,680 the 20 thirties. So that the orders of magnitude 300 00:16:56,000 --> 00:17:02,080 of of removal capacity is directly correlated to the 301 00:17:02,080 --> 00:17:06,280 orders of magnitude of dollars capacity that we need to unlock, 302 00:17:06,280 --> 00:17:08,160 capital capacity that we need to unlock. 303 00:17:08,599 --> 00:17:13,079 And who theoretically, if we can solve for that huge set of 304 00:17:13,200 --> 00:17:16,520 issues that you previewed up top, who can unlock that 305 00:17:16,520 --> 00:17:19,200 capital? I would like to think it's the 306 00:17:19,200 --> 00:17:22,680 project financiers who have a way of deploying capital against 307 00:17:22,680 --> 00:17:25,560 projects that are banks on future cash flows, right? 308 00:17:25,839 --> 00:17:28,920 That's what project financing is, limited recourse. 309 00:17:28,920 --> 00:17:33,240 Third party financing banked on future cash flows generated by a 310 00:17:33,240 --> 00:17:36,200 specific project and secured by the assets of that project. 311 00:17:36,560 --> 00:17:41,200 It's not VC financing, it's not pre purchases. 312 00:17:41,520 --> 00:17:44,320 It's not corporate balance sheet financing. 313 00:17:45,040 --> 00:17:47,800 It is third party debt financing. 314 00:17:47,800 --> 00:17:50,280 That's limited recourse. The nature that's banked on cash 315 00:17:50,280 --> 00:17:52,040 flows generated of a specific project. 316 00:17:52,680 --> 00:17:55,480 That's how simple the concept is. 317 00:17:55,840 --> 00:17:59,600 But instead we equate project financing with everything else 318 00:17:59,600 --> 00:18:02,120 I'm talking about. So people then say, Ross, they 319 00:18:02,120 --> 00:18:06,240 say, well, wait a second, there's capital that's going 320 00:18:06,240 --> 00:18:08,000 into the space. The optics really aren't the 321 00:18:08,000 --> 00:18:09,800 issue. That's stopping more capital 322 00:18:09,800 --> 00:18:12,920 from coming because the CS are contributing and corporates are 323 00:18:12,920 --> 00:18:15,000 interested in. There's some corporate 324 00:18:15,000 --> 00:18:18,080 strategics that are deploying more capital, but that's not who 325 00:18:18,080 --> 00:18:20,680 we're targeting. That's not the form of capital, 326 00:18:20,680 --> 00:18:23,560 the form of financing we're targeting for commercial scale. 327 00:18:23,560 --> 00:18:26,320 We're targeting something very specific, which is project 328 00:18:26,320 --> 00:18:29,320 finance or project finance if you want to, if you want to be a 329 00:18:29,320 --> 00:18:32,560 banker. I I flopped between the two 330 00:18:32,560 --> 00:18:35,520 pronunciations, but finance definitely sounds a little bit, 331 00:18:36,280 --> 00:18:38,960 I don't know, snootier. My nose is up a little bit when 332 00:18:38,960 --> 00:18:39,760 I say it that way. I. 333 00:18:39,920 --> 00:18:42,360 Was going to say it depends on how full of myself I feel that 334 00:18:42,360 --> 00:18:44,600 day as to whether I say finance or finance. 335 00:18:45,000 --> 00:18:48,880 Yeah, fair enough. I think in that second category, 336 00:18:49,000 --> 00:18:52,720 defined broadly enough, are the big joint ventures of someone 337 00:18:52,720 --> 00:18:55,040 like CO280. They did a show with them not 338 00:18:55,040 --> 00:18:59,440 long ago, spent a lot of time on how to actually structure deals 339 00:18:59,440 --> 00:19:01,960 and mechanics of them, and they've been very successful 340 00:19:01,960 --> 00:19:05,280 making joint ventures work. Is that an example of the second 341 00:19:05,280 --> 00:19:06,880 category? Is it something else? 342 00:19:07,480 --> 00:19:09,800 Are they as as good as it looks in that episode? 343 00:19:09,840 --> 00:19:11,360 Is it not the right fit for lots of people? 344 00:19:11,360 --> 00:19:13,720 Sorry, I I'm not really asking you one question at a time, am 345 00:19:13,720 --> 00:19:15,160 I? But you can take it any way you 346 00:19:15,160 --> 00:19:17,960 want. But they're, they're a really 347 00:19:17,960 --> 00:19:21,120 interesting model and I think it's a model that's going to be 348 00:19:21,240 --> 00:19:24,160 actually a, a pretty key unlock for the space. 349 00:19:25,440 --> 00:19:29,360 My understanding of CO280 is there what's called like a tech 350 00:19:29,360 --> 00:19:32,440 agnostic project developer, meaning that it's not relying on 351 00:19:32,440 --> 00:19:35,440 kind of that dual tracking or don't have to do the dual 352 00:19:35,440 --> 00:19:37,760 tracking of tech de risking at the same time as project 353 00:19:37,760 --> 00:19:40,280 execution. And they're focusing heavily on 354 00:19:40,280 --> 00:19:41,960 wearing that project developer hat. 355 00:19:42,120 --> 00:19:44,880 And by doing so, this is very similar to Deep Sky out of 356 00:19:44,880 --> 00:19:49,280 Canada on the DAC side. In doing so, what they're, what 357 00:19:49,280 --> 00:19:52,280 they're doing is they're saying I'm going to rely on third 358 00:19:52,280 --> 00:19:56,160 parties who have longer histories of developing carbon 359 00:19:56,160 --> 00:19:58,760 capture technology or carbon removal technology. 360 00:19:59,240 --> 00:20:03,200 I'm going to go through all the effort and pain of structuring 361 00:20:03,200 --> 00:20:07,480 my entity in a way that's actually financeable from third 362 00:20:07,480 --> 00:20:10,040 party debts or venture capital or similar. 363 00:20:10,520 --> 00:20:14,040 I'm going to worry about all the kind of key participants that we 364 00:20:14,040 --> 00:20:17,480 need for EPC and O&M and and similar. 365 00:20:17,680 --> 00:20:20,480 I'm going to actually vet those third party tech enablers for 366 00:20:20,480 --> 00:20:23,360 the projects. I'm going to line up the key 4 367 00:20:23,360 --> 00:20:25,880 point. Strategic relationships with 368 00:20:25,880 --> 00:20:29,720 industrial players or energy majors or large land owners are 369 00:20:29,720 --> 00:20:32,920 similar. The feedstock supplies, optics, 370 00:20:33,280 --> 00:20:35,760 theoretically what they can do is say, I'm going to be the one 371 00:20:35,760 --> 00:20:38,880 that sits at the center of all these projects and can map out 372 00:20:38,880 --> 00:20:41,720 how all the relationships work, which goes exactly to the 373 00:20:41,720 --> 00:20:45,440 conversation we're having today, which is what is bankability, 374 00:20:45,560 --> 00:20:47,920 right? Because what CO280 theoretically 375 00:20:47,920 --> 00:20:51,880 can say is, well, hang on a second, I need to make sure my 376 00:20:51,880 --> 00:20:55,400 projects are bankable because I'm the project developer and I 377 00:20:55,400 --> 00:20:58,160 need to attract third party financing or capital for these 378 00:20:58,160 --> 00:21:01,160 projects, right? So ACO 280 would have to then 379 00:21:01,160 --> 00:21:05,440 say, OK, well, bankability is a project wide, wide assessment 380 00:21:05,760 --> 00:21:07,640 that a lender's going to go through and they're going to 381 00:21:07,640 --> 00:21:11,200 say, have I identified all the project risks? 382 00:21:11,640 --> 00:21:13,960 Step one, have I identified all the project risks? 383 00:21:14,440 --> 00:21:18,480 So they're wearing a hat 368° view and they have the 384 00:21:18,480 --> 00:21:20,680 responsibility to actually identify all of them. 385 00:21:21,120 --> 00:21:24,600 The second thing that COA CO280, not a client. 386 00:21:24,600 --> 00:21:28,480 So can't tell you if they're too cute or not, but what ACO 280 387 00:21:28,480 --> 00:21:30,840 could do is actually mitigate the risk. 388 00:21:30,920 --> 00:21:33,760 So they can say I've identified the risk. 389 00:21:33,920 --> 00:21:38,240 Here's the ones that I've dealt with by relying on third parties 390 00:21:38,240 --> 00:21:42,080 or insurance or other mechanisms to actually de risk that issue. 391 00:21:42,080 --> 00:21:44,200 I've engaged with local governments, local communities, 392 00:21:44,200 --> 00:21:46,480 whatever it is, environmental consultants. 393 00:21:47,320 --> 00:21:51,480 The third step is I now have to go, OK, I've identified 394 00:21:51,480 --> 00:21:53,160 everything. I've mitigated what I could. 395 00:21:54,000 --> 00:21:56,680 There's some that's leftover and not going to allocate that 396 00:21:56,680 --> 00:22:01,240 project risk in a way that a funder can actually say, OK, I'm 397 00:22:01,280 --> 00:22:03,680 comfortable with the level of project risk that says with 398 00:22:03,680 --> 00:22:07,520 project developer. I'm comfortable that your carpet 399 00:22:07,520 --> 00:22:10,600 transportation storage provider is wrapping you sufficiently, 400 00:22:10,600 --> 00:22:13,640 for example. And because I'm so comfortable, 401 00:22:13,640 --> 00:22:15,600 I've gone through this project wide assessment. 402 00:22:16,080 --> 00:22:20,280 I can now decide to give you debt and be confident that 403 00:22:20,280 --> 00:22:23,120 you're going to repay it. And not only am I confident that 404 00:22:23,120 --> 00:22:26,520 you're going to repay it, but an ultimate downside scenario. 405 00:22:26,800 --> 00:22:30,160 I actually can say I'm comfortable in my level of 406 00:22:30,160 --> 00:22:33,200 protection by way of the recourse I have via the security 407 00:22:33,200 --> 00:22:36,080 package that's given. I'm not saying that's what CO280 408 00:22:36,080 --> 00:22:38,320 is doing currently. I can't again speak for them, 409 00:22:38,720 --> 00:22:42,040 but that's what a project developer is faced with doing. 410 00:22:42,240 --> 00:22:44,680 They're faced with mapping this whole world. 411 00:22:45,120 --> 00:22:48,920 The joint venture concept that you're talking about is a 412 00:22:49,160 --> 00:22:53,840 critical step in this process because you are leveraging 413 00:22:55,120 --> 00:23:00,120 industrial players with key knowledge that can that have 414 00:23:00,120 --> 00:23:02,600 built projects that understand infrastructure, that understand 415 00:23:02,600 --> 00:23:06,600 risk, that understand this bankability assessment that's 416 00:23:06,600 --> 00:23:08,880 going on. You're speaking similar 417 00:23:08,880 --> 00:23:12,000 language. So you are de risking for your 418 00:23:12,000 --> 00:23:16,880 funders, either VC or hopefully soon project financiers, you're 419 00:23:16,880 --> 00:23:19,360 de risking the process. So it, it's an example of that 420 00:23:19,360 --> 00:23:22,440 second bucket that you're talking about, but it's one that 421 00:23:22,920 --> 00:23:27,480 it's one that can evolve into a more a, a broader, more 422 00:23:27,480 --> 00:23:32,280 impactful unlock for the space. If you can leverage those J VS 423 00:23:32,560 --> 00:23:36,600 into ultimately project codes, SPV structures that are set up 424 00:23:36,600 --> 00:23:39,120 to do one single project, then you can unlock that debt 425 00:23:39,400 --> 00:23:41,440 assuming that we've controlled for all those other variables. 426 00:23:41,440 --> 00:23:45,160 So it is an example of where the space is going. 427 00:23:45,200 --> 00:23:48,640 It's not an example, as far as I understand it, of this kind of 428 00:23:48,640 --> 00:23:53,000 true project finance model where debts being deployed against a 429 00:23:53,000 --> 00:23:55,400 specific project. But it's a really important step 430 00:23:55,720 --> 00:23:58,480 in this process that we're going along as a space collectively. 431 00:24:00,120 --> 00:24:03,360 I've been cheering on the differentiation between project 432 00:24:03,360 --> 00:24:04,960 development and tech development. 433 00:24:05,200 --> 00:24:07,880 I might infer from your comments you were also cheering this on. 434 00:24:08,000 --> 00:24:09,360 Usually. Usually. 435 00:24:09,920 --> 00:24:11,360 Yeah. Why do you think it took us so 436 00:24:11,360 --> 00:24:13,280 long? Those things were Co located for 437 00:24:13,400 --> 00:24:15,440 years and years. And once it happened, I started 438 00:24:15,440 --> 00:24:17,400 seeing people focus on this and like, well, the same thing 439 00:24:17,400 --> 00:24:18,960 happened. Obviously people who work in 440 00:24:18,960 --> 00:24:21,440 forestry are project developers and they're not all foresters. 441 00:24:21,720 --> 00:24:24,040 And why did it take us this long to just become project 442 00:24:24,040 --> 00:24:28,160 development people? Yeah, I think one of the biggest 443 00:24:28,160 --> 00:24:31,040 impediments to the space in terms of its growth and what's 444 00:24:31,040 --> 00:24:35,360 held it back is actually the reluctance to embrace more 445 00:24:35,360 --> 00:24:38,680 delineated and sophisticated roles on projects in a manner 446 00:24:38,680 --> 00:24:40,640 that more traditional industry has done. 447 00:24:41,320 --> 00:24:45,960 I think that's hat in terms of why we haven't embraced it just 448 00:24:45,960 --> 00:24:49,600 yet. And obviously Oxy via 1.5 has 449 00:24:49,600 --> 00:24:53,040 they've they've set up a project developer and they bought tech 450 00:24:53,040 --> 00:24:55,000 from third parties and that's their model. 451 00:24:55,000 --> 00:24:56,360 So there are some that have done. 452 00:24:56,360 --> 00:25:03,160 So I, I think that I think one of the issues is that the tech 453 00:25:03,160 --> 00:25:06,560 enablers are so close to the their actual underlying tech. 454 00:25:06,560 --> 00:25:10,320 No surprise that they're seen as the ones that can best de risk 455 00:25:10,320 --> 00:25:15,320 it and they're de risking it via deployments, pilot deployments, 456 00:25:15,320 --> 00:25:19,640 which is largely what we have. And so we've and they were being 457 00:25:19,640 --> 00:25:21,760 venture capital finance. So I think there's this 458 00:25:21,760 --> 00:25:25,720 assumption that let the tech developers develop the tech, see 459 00:25:25,720 --> 00:25:28,920 how it plays out in reality and we don't have to worry about all 460 00:25:28,920 --> 00:25:31,920 these other kind of larger participants who have built 461 00:25:31,920 --> 00:25:35,760 these projects as much. Maybe we get AEPC involved in 462 00:25:35,760 --> 00:25:38,560 the pre feed stage for some kind of engineering support. 463 00:25:38,840 --> 00:25:42,160 But for large part we just need to get this out into the wild 464 00:25:42,360 --> 00:25:44,360 and see how it performs and we go from there. 465 00:25:44,760 --> 00:25:47,760 That is a model that is more acceptable or more 466 00:25:47,760 --> 00:25:52,360 understandable at pilot. It's way less understandable 467 00:25:52,360 --> 00:25:54,720 when you actually jump to small commercial scale or true 468 00:25:54,720 --> 00:25:59,240 commercial scale. You can't, you can't in earnest 469 00:25:59,400 --> 00:26:02,280 develop. You can't in earnest I think 470 00:26:02,280 --> 00:26:05,160 dual track that unless you have a very sophisticated 471 00:26:05,400 --> 00:26:07,560 infrastructure that's built internally to do project 472 00:26:07,560 --> 00:26:09,480 development. And it's very clear that that's 473 00:26:09,720 --> 00:26:12,680 one whole business vertical is project development and another 474 00:26:12,680 --> 00:26:14,880 one it's tech enabling. And that's a completely 475 00:26:14,880 --> 00:26:17,880 different vertical when you try to get people to speak the same 476 00:26:17,880 --> 00:26:19,320 language. I think that's where we've had 477 00:26:19,320 --> 00:26:21,320 issues. And I think quite honestly, 478 00:26:21,320 --> 00:26:24,480 this, this gets to kind of the interface with like off takes. 479 00:26:24,480 --> 00:26:28,720 Even as we've used the off take in this model of tech enabler 480 00:26:28,720 --> 00:26:31,600 and project developer, even we've used the off take as a 481 00:26:31,600 --> 00:26:35,080 market signal. But who are we signalling to? 482 00:26:35,600 --> 00:26:38,360 We're signalling to VCs and corporate strategics that might 483 00:26:38,360 --> 00:26:42,440 be interested. We're saying, look, my tech is 484 00:26:42,440 --> 00:26:45,160 validated, not my project execution capacity. 485 00:26:45,440 --> 00:26:50,640 Now my sophistication as a project developer, my tech is de 486 00:26:50,640 --> 00:26:56,400 risk sufficiently that I got a large buyer to commit to an off 487 00:26:56,440 --> 00:27:01,400 take and therefore venture capital firms that are getting 488 00:27:01,440 --> 00:27:04,120 hundreds of decks of project developers or tech enablers. 489 00:27:04,480 --> 00:27:09,600 I want you to lead my, my, my seed or Series A or A Series B 490 00:27:09,600 --> 00:27:13,560 or similar because look, I've, I've got market demand signal 491 00:27:13,560 --> 00:27:18,720 for my project. That's a tech validation largely 492 00:27:18,720 --> 00:27:21,640 because you're proving and you're speaking a language to 493 00:27:21,720 --> 00:27:24,640 both VCs and corporate strategics who might want to 494 00:27:24,640 --> 00:27:28,760 acquire that tech or have access to that tech for their own use. 495 00:27:28,760 --> 00:27:32,040 You're speaking a language that says this tech is ready to be 496 00:27:32,080 --> 00:27:34,320 used. You're not speaking a language 497 00:27:34,320 --> 00:27:39,360 necessarily to say I'm ready to go across multiple 498 00:27:39,360 --> 00:27:43,640 jurisdictions, to interface across multiple governments and 499 00:27:43,640 --> 00:27:49,440 regulatory regimes and talk with multiple funders and different 500 00:27:49,440 --> 00:27:53,840 stakeholders and create a project at a scale that's akin 501 00:27:53,840 --> 00:27:59,200 to developing a solar farm or a entourage for wind farm or 502 00:27:59,200 --> 00:28:01,280 something similar. These are really complex 503 00:28:01,280 --> 00:28:03,720 projects. So I think something that's 504 00:28:03,720 --> 00:28:07,760 happening is that for these dual hat tech developers, project 505 00:28:07,760 --> 00:28:12,400 developers, at minimum, we're seeing a greater emphasis on the 506 00:28:12,400 --> 00:28:15,000 two verticals. Tell me how your tech works. 507 00:28:15,360 --> 00:28:17,360 Awesome. Let's let's let's figure out, 508 00:28:17,360 --> 00:28:19,520 let's DD, let's see if it actually does what it says. 509 00:28:20,080 --> 00:28:23,480 Equally important, who do you have on your team that's come 510 00:28:23,480 --> 00:28:25,120 from traditional energy and infra? 511 00:28:25,240 --> 00:28:28,720 What corporate strategic do you have in your back back pockets 512 00:28:28,720 --> 00:28:32,480 actually help you with this? What industrial player is is 513 00:28:32,480 --> 00:28:35,920 supporting you or giving you access or otherwise interested? 514 00:28:36,120 --> 00:28:40,880 It's a question of who is going to help unlock large scale 515 00:28:40,880 --> 00:28:43,320 deployments, not does your tech work. 516 00:28:43,320 --> 00:28:47,440 So that off take in that context to round that out and appreciate 517 00:28:47,440 --> 00:28:50,360 I'm like very long winded on this, that off take in that 518 00:28:50,360 --> 00:28:55,320 context, it's less important how it fits into commercial skill 519 00:28:55,320 --> 00:28:58,120 deployments. If what we're looking for is how 520 00:28:58,120 --> 00:29:03,520 does this unlock and keep tech developers scaling to enable 521 00:29:03,520 --> 00:29:05,400 them to ultimately reach commercial scale? 522 00:29:05,640 --> 00:29:10,080 That's a different conversation than can the offtake underpin a 523 00:29:10,120 --> 00:29:13,960 financing that unlocks the commercial scale. 524 00:29:14,160 --> 00:29:18,680 So what can help us get there versus what is necessary to 525 00:29:18,680 --> 00:29:20,400 actually get the project deployed? 526 00:29:20,400 --> 00:29:24,400 I. Think that's very astute. 527 00:29:25,160 --> 00:29:27,440 My speculation for why this might be? 528 00:29:27,440 --> 00:29:31,360 I'd be curious of your own as well as I think software 529 00:29:31,480 --> 00:29:34,880 culturally calls the shots and everyone likes the idea of the 530 00:29:34,880 --> 00:29:39,000 20 something or 30 something founder having a dream and then 531 00:29:39,000 --> 00:29:42,240 building the next, you know, world beating brand and for that 532 00:29:42,240 --> 00:29:45,480 happening for carbon removal. But as I've grown more 533 00:29:45,480 --> 00:29:48,760 experience as a business person and within carbon removal, the 534 00:29:48,760 --> 00:29:52,680 teams that I gravitate towards tend to have more age and more 535 00:29:52,680 --> 00:29:55,720 experience and they do have some of that conventional infra and 536 00:29:55,720 --> 00:29:57,120 energy. Like have you put steel on the 537 00:29:57,120 --> 00:29:58,680 ground? Have you made some stuff happen? 538 00:29:58,680 --> 00:30:00,400 You're not just someone who worked in a lab and is 539 00:30:00,400 --> 00:30:02,160 commercializing tech coming out of university. 540 00:30:02,520 --> 00:30:04,520 No shade against that. We need that too. 541 00:30:04,760 --> 00:30:07,120 But if there's some way to differentiate these business 542 00:30:07,120 --> 00:30:10,040 models and say we're a tech developer, we don't want to do 543 00:30:10,040 --> 00:30:13,840 project development, Our goal is to license this to the corporate 544 00:30:13,840 --> 00:30:16,600 strategics in this area and that's our go to market. 545 00:30:16,600 --> 00:30:20,200 Actually, I think if I was diligence in a deal for a VC, I 546 00:30:20,200 --> 00:30:23,200 would treat that much more seriously because they have 547 00:30:23,200 --> 00:30:25,680 acknowledged their limits. Whereas this idea that we're 548 00:30:25,680 --> 00:30:28,320 going to do all this stuff, science, engineering, 549 00:30:28,920 --> 00:30:30,720 commercial, we're good at it all. 550 00:30:30,720 --> 00:30:33,880 And I feel like is there a full stack carbon removal company 551 00:30:33,880 --> 00:30:35,680 like that that can do it? There are a couple who are doing 552 00:30:35,880 --> 00:30:38,160 fairly well perhaps. But overall, I think that 553 00:30:38,160 --> 00:30:42,760 expectation is just like the Iron Man configuration of 554 00:30:42,760 --> 00:30:47,920 business expertise. 100% agree with that assessment. 555 00:30:47,920 --> 00:30:51,800 I think, I think that we're seeing out of hopefully we're 556 00:30:51,800 --> 00:30:55,120 working ton with engineered carpet removal project 557 00:30:55,120 --> 00:30:57,440 developers. We also work on the the fighter 558 00:30:57,440 --> 00:30:59,280 side as well. And I, I think we're seeing, and 559 00:30:59,280 --> 00:31:04,360 we're coaching our clients through that process of being 560 00:31:04,360 --> 00:31:08,800 comfortable with the tech licensing play or manufacturing 561 00:31:08,800 --> 00:31:11,200 play. We're coaching them through 562 00:31:12,440 --> 00:31:15,280 pursuing deployment opportunities where their tech 563 00:31:15,280 --> 00:31:18,160 enabler or maybe project developer at a smaller scale and 564 00:31:18,160 --> 00:31:21,080 seeing which one fits in their business model more, which one's 565 00:31:21,080 --> 00:31:23,400 actually workable, what, what speaks to their skill set. 566 00:31:23,760 --> 00:31:26,200 We're looking at opportunities unlocked in different 567 00:31:26,200 --> 00:31:28,720 jurisdictions and climates and, and situations. 568 00:31:28,720 --> 00:31:32,360 And I think a big one, honestly, that's, that's a key unlock. 569 00:31:32,360 --> 00:31:36,040 And what you're talking about is even if you're a tech developer 570 00:31:36,040 --> 00:31:38,960 that wants to be involved in the project deployment process, 571 00:31:39,360 --> 00:31:43,840 having informing relationships with corporate strategics and 572 00:31:43,840 --> 00:31:47,480 other industrial players to be the unlock is incredibly key. 573 00:31:47,480 --> 00:31:51,240 So to answer or to react to what you're saying, I, I don't think 574 00:31:51,240 --> 00:31:55,440 it's necessarily somebody's 100% figured it out how to kind of 575 00:31:55,440 --> 00:31:58,960 wear all hats and do all things. I think that there's a 576 00:31:59,120 --> 00:32:01,680 realization increasingly that you can't. 577 00:32:02,200 --> 00:32:06,520 And I think it's a question of how do you specifically build a 578 00:32:06,520 --> 00:32:12,320 stack and offering that enables your tech to get out in the wild 579 00:32:12,320 --> 00:32:15,840 and used. And it might be that you're, you 580 00:32:15,840 --> 00:32:18,040 realize that it's through licensing. 581 00:32:18,040 --> 00:32:20,160 It might be that you're a project developer with a 582 00:32:20,160 --> 00:32:22,760 corporate strategic AJV was somebody that actually helps 583 00:32:22,760 --> 00:32:27,760 unlock those projects. But typically the one stop shop, 584 00:32:27,760 --> 00:32:32,880 I can do it all mentality hasn't exactly worked in the space. 585 00:32:32,880 --> 00:32:35,400 And so I think there's a assumption of greater 586 00:32:35,400 --> 00:32:37,760 sophistication and delineation of roles that's coming. 587 00:32:38,840 --> 00:32:42,480 Dang, I would love to just see the numbers for if you're a 588 00:32:42,480 --> 00:32:45,040 company out there and you're listening and you are pursuing a 589 00:32:45,120 --> 00:32:49,000 licensing only tech development carbon removal pathway, I'd love 590 00:32:49,000 --> 00:32:51,120 to hear from you because I'm wondering how those numbers 591 00:32:51,120 --> 00:32:53,440 actually do pencil. Can they justify A venture 592 00:32:53,440 --> 00:32:56,800 capitalist portfolio figures like can that fit inside there 593 00:32:56,800 --> 00:32:58,200 anymore? Because they're going to be 594 00:32:58,200 --> 00:33:01,720 sharing a lot of the upside with the actual deployment people and 595 00:33:01,720 --> 00:33:03,760 that might actually make it harder to receive that type of 596 00:33:03,760 --> 00:33:06,160 funding. In which case what happens to 597 00:33:06,160 --> 00:33:09,560 those licensing only companies? Do they have a go to market that 598 00:33:09,560 --> 00:33:14,240 could be successful? Yeah, the space has already seen 599 00:33:14,240 --> 00:33:18,880 this work, right. I mean, I mean, there are there 600 00:33:18,880 --> 00:33:23,880 are examples of players in the space like Capsule for instance, 601 00:33:24,080 --> 00:33:28,520 that's been a essentially an OEM, the developer of technology 602 00:33:28,520 --> 00:33:32,240 that's carbon capture technology that can be used and de risked 603 00:33:32,640 --> 00:33:34,840 for various projects. So I don't think that this is a 604 00:33:34,840 --> 00:33:42,000 new concepts necessarily Zvanta historically as well in terms of 605 00:33:42,000 --> 00:33:44,040 like developing actual carbon capture technology. 606 00:33:44,560 --> 00:33:50,120 So I think there's a model that's proven out and and has 607 00:33:50,120 --> 00:33:53,000 successfully scaled in the space in terms of having that clear 608 00:33:53,000 --> 00:33:55,520 role. I don't think there's AI, don't 609 00:33:55,520 --> 00:33:57,280 think there's a one-size-fits-all to that 610 00:33:57,280 --> 00:34:00,960 approach either. I think there's these approaches 611 00:34:00,960 --> 00:34:04,080 take different forms, right. Essentially carbon engineering 612 00:34:04,680 --> 00:34:08,800 as far as I understand it is serving as the de facto or the 613 00:34:08,800 --> 00:34:13,159 actual R&D arm for Oxy's low carbon Solutions team. 614 00:34:13,480 --> 00:34:15,920 And they're engaging with 1.5, right. 615 00:34:16,400 --> 00:34:20,800 They they've definitely are a you know Oxy sub and directly 616 00:34:20,800 --> 00:34:23,040 linked to it. But their go to market strategy 617 00:34:23,040 --> 00:34:27,000 was were the tech developers were the R&D developers and we 618 00:34:27,000 --> 00:34:30,000 now have the corporate backing of a large, a large energy 619 00:34:30,000 --> 00:34:33,040 player that can help support our scaling. 620 00:34:33,040 --> 00:34:37,400 And I think there's different softer variations of that where 621 00:34:37,400 --> 00:34:42,360 we're seeing clients that are engaging with different 622 00:34:42,440 --> 00:34:49,360 industries for different licensing, partnership, project 623 00:34:49,360 --> 00:34:53,320 deployment arrangements that fit within that industrial players 624 00:34:53,639 --> 00:34:56,880 viewpoint. It could be Co location on site. 625 00:34:56,880 --> 00:35:00,320 It could be with a view towards using their third party 626 00:35:00,560 --> 00:35:02,920 transportation or they're using their transportation and storage 627 00:35:02,920 --> 00:35:04,400 infrastructure that's being developed out. 628 00:35:04,640 --> 00:35:08,600 It could be for access to carpet credits that are generated by 629 00:35:08,600 --> 00:35:10,560 the projects. There's a, a number of different 630 00:35:10,560 --> 00:35:15,120 ways that we're seeing that tech player get their tech out into 631 00:35:15,120 --> 00:35:19,440 the wild that that can be AVC play. 632 00:35:19,440 --> 00:35:22,480 It can't be a corporate strategic play or can't be just 633 00:35:22,520 --> 00:35:25,440 a well, I'm going to scale this up and I'm going to be the third 634 00:35:25,440 --> 00:35:30,000 party de risker for it. I I think, and I think there is 635 00:35:30,000 --> 00:35:32,320 a question now is like I tell a lot of people when they're 636 00:35:32,320 --> 00:35:34,880 looking at the engineer car removal space that right now 637 00:35:34,880 --> 00:35:36,440 we're in the Pruitt phase, right? 638 00:35:36,760 --> 00:35:39,440 All these technologies are at a Pruitt phase where we've we've 639 00:35:39,440 --> 00:35:42,720 gone past the hype phase. That's that's come and gone very 640 00:35:42,720 --> 00:35:45,240 clearly in the space. And we're now in the Pruitt 641 00:35:45,240 --> 00:35:50,360 phase and we're going to see I suspect immense consolidation in 642 00:35:50,360 --> 00:35:54,800 the space over the next two years up to 2027 during this 643 00:35:54,800 --> 00:35:57,320 prudent phase. And I think there's naturally 644 00:35:57,320 --> 00:36:01,040 going to be via that consolidation clearer roles and 645 00:36:01,040 --> 00:36:03,120 there's going to be the winners that come out in the 646 00:36:03,120 --> 00:36:06,440 202820292030 deployment stage level. 647 00:36:06,440 --> 00:36:11,480 So I think there's going to be a natural pressure that's coming 648 00:36:11,480 --> 00:36:17,120 from the top down that's going to that's going to make your 649 00:36:17,120 --> 00:36:21,800 role clear if you don't already have a clear role because of how 650 00:36:22,000 --> 00:36:25,560 much pressure there is right now to stand out and actually prove 651 00:36:25,560 --> 00:36:27,680 that your tech works or that your project deployment strategy 652 00:36:27,680 --> 00:36:32,120 works. Ignore that big comment you just 653 00:36:32,120 --> 00:36:34,120 dropped on us. How dare you say there's going 654 00:36:34,120 --> 00:36:37,000 to be consolidation. We should never face that. 655 00:36:37,520 --> 00:36:40,000 Consolidation's a flight where the right it doesn't sound as 656 00:36:40,000 --> 00:36:41,080 bad when you put it that way. That's. 657 00:36:42,160 --> 00:36:44,320 True. I took a meeting a while ago 658 00:36:44,320 --> 00:36:47,000 with a venture studio and they had a model that I really liked 659 00:36:47,000 --> 00:36:49,160 where this is not unique to them. 660 00:36:49,160 --> 00:36:51,360 This is fairly common, but they pointed it out to me very 661 00:36:51,360 --> 00:36:56,440 clearly that one strategy is to look at what large Agri business 662 00:36:56,440 --> 00:37:00,720 or some other large well capitalized industry has set out 663 00:37:00,720 --> 00:37:02,400 for their goals for the next couple years. 664 00:37:02,400 --> 00:37:05,760 And then just reverse engineers companies for acquisition by the 665 00:37:05,760 --> 00:37:08,440 people that have money. And I would love to see it. 666 00:37:08,720 --> 00:37:11,200 I, I read a lot of decks. A lot of decks come my way for 667 00:37:11,200 --> 00:37:14,960 various reasons and I almost never see anything that's 668 00:37:14,960 --> 00:37:17,440 licensing oriented as their main go to market. 669 00:37:17,760 --> 00:37:19,880 But I also would just love to see, yeah, we just want to be 670 00:37:19,880 --> 00:37:22,760 acquired by like Oxy is the only one who's really bought a lot of 671 00:37:22,760 --> 00:37:24,920 carbon removal stuff today. It's only a couple companies. 672 00:37:25,080 --> 00:37:28,440 So we're just going to design sorbent technology that is 673 00:37:28,440 --> 00:37:31,480 compatible but different. We have IP that we can sell to 674 00:37:31,480 --> 00:37:33,120 them or license them. That's just what we're going to 675 00:37:33,120 --> 00:37:35,000 do. I would be like, all right, this 676 00:37:35,000 --> 00:37:37,680 may be a single or a double if you're AVC, like that's not 677 00:37:37,680 --> 00:37:41,680 going to be some huge portfolio justifying return, but they're 678 00:37:41,680 --> 00:37:42,680 probably going to make money on it. 679 00:37:42,680 --> 00:37:45,400 If you think that that deal gets diligent successfully and 680 00:37:45,400 --> 00:37:47,600 they're on the right track with this, that's a pretty good 681 00:37:47,600 --> 00:37:49,200 thing. I'm wondering, is there anyone 682 00:37:49,200 --> 00:37:50,920 out there with the strategy for that? 683 00:37:50,920 --> 00:37:52,880 Because someone is probably going to figure it out and make 684 00:37:52,880 --> 00:37:55,080 some money doing it. Maybe there's probably just too 685 00:37:55,080 --> 00:37:57,760 much political risk and, and market risk right now facing 686 00:37:57,760 --> 00:38:00,120 carbon removal to feel secure. It's not like doing that for 687 00:38:00,120 --> 00:38:03,480 hardware or consumer goods, but I love that idea. 688 00:38:03,480 --> 00:38:05,520 I'd love to see someone do it. If you're listening and you have 689 00:38:05,520 --> 00:38:07,280 money, feel free to take that idea and run with it. 690 00:38:07,280 --> 00:38:09,360 It's not mine. It's it belongs to the universe 691 00:38:09,360 --> 00:38:11,720 basically. Yeah, I think, I think there's 692 00:38:11,720 --> 00:38:13,840 something that's really interesting that's going on in. 693 00:38:14,640 --> 00:38:17,520 I thought this could be the understatement of the century. 694 00:38:17,800 --> 00:38:20,280 There's something really interesting going on in Trump's 695 00:38:20,280 --> 00:38:21,240 America. You're you. 696 00:38:21,480 --> 00:38:23,960 Are so smart wow I. Love that. 697 00:38:24,040 --> 00:38:25,560 It's something really interesting. 698 00:38:25,560 --> 00:38:30,280 Yeah. There's something that doesn't 699 00:38:30,280 --> 00:38:32,920 get talked about enough within the carbon removal space. 700 00:38:32,920 --> 00:38:36,160 And I think it's difficult to talk about because of the 701 00:38:37,240 --> 00:38:40,880 confidentiality and sensitivity in the current climate that 702 00:38:40,880 --> 00:38:45,040 we're operating is, is that the type of deal structures that 703 00:38:45,040 --> 00:38:50,080 you're talking about are advancing in the background very 704 00:38:50,080 --> 00:38:56,600 quietly for deployments in North America, Europe, Middle East and 705 00:38:56,600 --> 00:38:59,560 elsewhere. And I think there are, I think 706 00:38:59,560 --> 00:39:02,440 there's a tendency, again, if we're going to kind of bring 707 00:39:02,440 --> 00:39:07,560 this conversation back, we look for very clear market signals. 708 00:39:07,840 --> 00:39:11,600 Have you signed an offtake with the biggest buyer in the space 709 00:39:11,600 --> 00:39:16,200 or with Frontier or similar? Have you gone in through your 710 00:39:16,440 --> 00:39:19,280 Series A and who's on your investor deck? 711 00:39:19,640 --> 00:39:22,160 Well, we're not hearing the space because we can't talk 712 00:39:22,160 --> 00:39:25,080 about it. Is the number of footprint 713 00:39:25,080 --> 00:39:29,960 strategic partnerships that are being entered into in the 714 00:39:29,960 --> 00:39:33,840 background and have been entered into even pre Trump that are 715 00:39:34,440 --> 00:39:39,360 going on not necessarily as planned, but with a lot of 716 00:39:39,480 --> 00:39:45,480 interest and sophistication that are going to shape who the 717 00:39:45,480 --> 00:39:47,480 players are that come out successfully. 718 00:39:47,480 --> 00:39:51,080 And I know I'm being very vague here, but I think that if people 719 00:39:51,080 --> 00:39:57,200 are assuming that venture capital is venture capital, non 720 00:39:57,200 --> 00:40:01,280 corporate strategic venture capital is the unlock for the 721 00:40:01,280 --> 00:40:04,200 space and that's the way that we decide whether the space is 722 00:40:04,200 --> 00:40:06,640 doing well or not. What I would say is. 723 00:40:07,560 --> 00:40:10,960 And what we advise a lot of our clients to do is, yes, of 724 00:40:10,960 --> 00:40:12,920 course, you have to get through that if that's part of your 725 00:40:12,920 --> 00:40:16,120 skill up effort. And yes, you need to have VCs on 726 00:40:16,120 --> 00:40:19,240 your table that understand it. But you really need to be 727 00:40:19,320 --> 00:40:26,080 engaging with various industry players who have the capital and 728 00:40:26,080 --> 00:40:30,440 the decades of experience in getting energy infrastructure or 729 00:40:30,440 --> 00:40:34,520 other industrial projects built. And if you're not, you're going 730 00:40:34,520 --> 00:40:38,520 to find yourself in the back of the queue for project deployment 731 00:40:38,520 --> 00:40:42,560 opportunities, project finance availability, and even VC 732 00:40:42,560 --> 00:40:45,680 funding because you're going to have lost out on a ton of 733 00:40:45,680 --> 00:40:48,960 momentum that's being built very quietly behind the scenes right 734 00:40:48,960 --> 00:40:51,800 now. Again, intentionally very vague 735 00:40:51,800 --> 00:40:55,160 and amorphous in terms of what I'm saying. 736 00:40:55,520 --> 00:40:59,280 But what I would say is that viewpoint that you're talking 737 00:40:59,280 --> 00:41:03,320 about is ones that very successful project developers 738 00:41:03,760 --> 00:41:08,480 are painstake painstakingly following in the background 739 00:41:08,800 --> 00:41:12,680 very, very quietly rather than kind of putting their hand up to 740 00:41:12,680 --> 00:41:16,360 say what they're doing. And and I suspect that if you're 741 00:41:16,360 --> 00:41:22,320 being strategic and diversify your partners during this period 742 00:41:22,320 --> 00:41:26,360 of uncertainty, especially in Trump's America, I think that's 743 00:41:26,400 --> 00:41:33,440 a huge, huge positive for your chances of kind of coming out 744 00:41:33,440 --> 00:41:36,480 the other side of this pretty good phase in being there for 745 00:41:36,480 --> 00:41:40,040 having your tech deployed or are you building your projects if 746 00:41:40,040 --> 00:41:43,400 you're the project developer hat come commercial scale phase that 747 00:41:43,400 --> 00:41:44,480 we're that we're all looking for. 748 00:41:46,400 --> 00:41:51,360 It was a bit amorphous, but all it really proves is that you 749 00:41:51,360 --> 00:41:53,880 have your JD, I think. She's. 750 00:41:55,000 --> 00:41:56,400 I believe it. Now I don't even need to look 751 00:41:56,400 --> 00:41:57,880 you up. Yeah, it's the. 752 00:41:58,080 --> 00:41:59,400 Most no. The comment proves it. 753 00:41:59,680 --> 00:42:01,640 How do you say the most? Was saying the least right? 754 00:42:02,160 --> 00:42:05,360 Or say the least by saying the most however way which way it 755 00:42:05,360 --> 00:42:06,880 goes. It wasn't that. 756 00:42:06,880 --> 00:42:09,880 It's very sensible advice if people are able to plug into 757 00:42:09,880 --> 00:42:15,480 existing industries that how of farsighted companies that know 758 00:42:15,480 --> 00:42:19,600 that 45 Q and things adjacent to it are going to be OK through 759 00:42:19,600 --> 00:42:22,960 the Trump years and whatever comes after it is likely going 760 00:42:22,960 --> 00:42:27,520 to re enhance carbon removal status and political options. 761 00:42:27,520 --> 00:42:30,320 That's a good thing to do. Or companies that just know that 762 00:42:30,320 --> 00:42:31,560 they need to do it for their own reasons. 763 00:42:31,560 --> 00:42:36,160 Like if Agri business knows that fertility is not improving and 764 00:42:36,160 --> 00:42:38,960 topsoil loss is real, that biotchar can maybe help with it 765 00:42:38,960 --> 00:42:41,960 and drought resilience, then OK, those are good things to be 766 00:42:41,960 --> 00:42:46,320 plugging into right now that do not have the political risk that 767 00:42:46,320 --> 00:42:49,440 just BCM or policy dependence rates for it. 768 00:42:50,040 --> 00:42:52,440 That's almost very commonplace at this point where people are 769 00:42:52,440 --> 00:42:54,400 saying like, are there alternative go to markets here 770 00:42:54,400 --> 00:42:58,440 that we can cotton on to that are not just please can we have 771 00:42:58,440 --> 00:43:00,760 some money, Microsoft, we're really, we're really 772 00:43:00,760 --> 00:43:02,160 interesting. Come take a look. 773 00:43:02,480 --> 00:43:04,440 Yeah. And, and I think honestly, 774 00:43:04,440 --> 00:43:06,440 there's a whole different segment of people that you 775 00:43:06,440 --> 00:43:09,680 should be talking to either directly or through those 776 00:43:09,680 --> 00:43:13,880 partnerships, which is the project financiers, right? 777 00:43:14,200 --> 00:43:17,000 So this isn't a theoretical, we're starting to see it 778 00:43:17,000 --> 00:43:21,560 actually play out in terms of off take conversations, 779 00:43:21,560 --> 00:43:24,040 transportation and storage arrangements and negotiations 780 00:43:24,040 --> 00:43:28,720 and how they're structured. If you're not, if you don't have 781 00:43:28,720 --> 00:43:32,840 visibility into what a lender requires in terms of assessing 782 00:43:33,120 --> 00:43:35,920 the bankability of your project and whether you're off take is 783 00:43:35,920 --> 00:43:40,360 bankable, for example, you're one, you're leaving a ton of 784 00:43:40,360 --> 00:43:44,840 leverage on the table in your negotiation with those limited 785 00:43:44,880 --> 00:43:49,000 significant buyers in the space. And what I'm saying is if third 786 00:43:49,000 --> 00:43:53,680 party funding is a key unlock for your projects, that means 787 00:43:53,680 --> 00:43:57,120 that you should be talking with or have an advisor that's 788 00:43:57,120 --> 00:44:00,240 familiar with or a corporate strategic that has a 789 00:44:00,240 --> 00:44:03,440 relationship with the funder that would actually sit down and 790 00:44:03,440 --> 00:44:06,800 look at your off take and and say, OK, let me look at this off 791 00:44:06,800 --> 00:44:08,440 take. OK. 792 00:44:08,440 --> 00:44:12,880 My first question, how committed or how firm is this offtake? 793 00:44:13,240 --> 00:44:14,920 Are the delivery obligations clear? 794 00:44:14,920 --> 00:44:17,320 Is there certain delivery volumes? 795 00:44:17,320 --> 00:44:20,760 Is there certain, Is there certainty around obligations to 796 00:44:20,760 --> 00:44:23,320 actually take and pay? I'm going to look at whether 797 00:44:23,320 --> 00:44:27,080 you're under delivery regime, shortfall regime is pre baked 798 00:44:27,080 --> 00:44:30,160 and does it actually say what happens in a scenario where you 799 00:44:30,160 --> 00:44:32,960 have interim shortfalls and how do we deal with it or does it 800 00:44:32,960 --> 00:44:37,240 have this really Gray amorphous? Let's agree to agree what 801 00:44:37,240 --> 00:44:40,880 happens in the case of this and what does a replacement credit 802 00:44:40,880 --> 00:44:45,040 mean, even if that's a remedy, right if you're go ahead live. 803 00:44:45,520 --> 00:44:46,880 Oh no, I'm just reacting. Yeah. 804 00:44:46,880 --> 00:44:48,880 Like I, I that is not good enough. 805 00:44:48,880 --> 00:44:52,760 I would be very scared if a contract was past me that's look 806 00:44:52,760 --> 00:44:54,000 like that. Exactly. 807 00:44:54,000 --> 00:44:56,880 So you're looking at if, if you don't, if you don't know that a 808 00:44:56,880 --> 00:45:00,760 lender or a corporate strategic, but especially a lender is 809 00:45:00,760 --> 00:45:03,760 ultimately going to say, I need to be able to pick this up and 810 00:45:03,760 --> 00:45:05,440 see that this is a firm off take. 811 00:45:05,440 --> 00:45:10,680 That you don't have overly broad force majeure regimes or change 812 00:45:10,680 --> 00:45:13,920 in law regimes that are too clunky or you don't talk about 813 00:45:13,920 --> 00:45:16,040 what happens in terms of changing methodology. 814 00:45:16,040 --> 00:45:18,600 How do you plan for it? You need to have certainty 815 00:45:18,600 --> 00:45:20,640 committed and not be able to underpin it. 816 00:45:20,920 --> 00:45:22,920 You want to look at it and say I'm going to pick up this off 817 00:45:22,920 --> 00:45:25,000 take. I'm going to deploy debt against 818 00:45:25,000 --> 00:45:27,600 this. What's your maximum exposure 819 00:45:27,600 --> 00:45:29,440 under this? How do you quantify it? 820 00:45:29,440 --> 00:45:31,720 Can it be quantifiable and how's it allocated? 821 00:45:31,920 --> 00:45:34,480 What is your interim damages regime look like, the remedies? 822 00:45:34,640 --> 00:45:37,040 What's your termination damages regime look like and is it 823 00:45:37,040 --> 00:45:39,040 appropriate? How is it undermined or 824 00:45:39,040 --> 00:45:41,440 influenced by things like indemnification obligations, 825 00:45:41,440 --> 00:45:43,280 Right. These are all questions that 826 00:45:43,280 --> 00:45:47,480 lenders will ask and do ask already within carbon removal 827 00:45:47,480 --> 00:45:50,840 and ask on every single energy and infrastructure project. 828 00:45:51,160 --> 00:45:54,000 They're going to say what's the creditworthiness and what's the 829 00:45:54,000 --> 00:45:56,920 credit support required for this to backstop the obligations of 830 00:45:56,920 --> 00:45:58,880 both the the project developer and buyer side. 831 00:45:58,880 --> 00:46:03,320 And then the last one they're going to say is what does this 832 00:46:03,320 --> 00:46:06,760 off take do? How does it interface with does 833 00:46:06,760 --> 00:46:09,560 it integrate the terms of the rest of the project? 834 00:46:09,560 --> 00:46:12,440 Or is this just an off the shelf template that didn't move and 835 00:46:12,440 --> 00:46:14,600 it's not fit for purpose for this project and it doesn't 836 00:46:14,600 --> 00:46:17,000 account for or pass through all the liabilities? 837 00:46:17,280 --> 00:46:20,280 That framework that I just said the four kind of key questions, 838 00:46:20,760 --> 00:46:25,760 every lender, we'll ask those four questions and have numerous 839 00:46:25,880 --> 00:46:28,440 DD follow-ups to get to the point of it. 840 00:46:28,520 --> 00:46:30,160 And that's for the off take only. 841 00:46:30,160 --> 00:46:34,280 So if you don't have right now project developers, tech 842 00:46:34,280 --> 00:46:39,360 developers, somebody on your team or an advisor or a 843 00:46:39,360 --> 00:46:43,000 corporate strategic or you're not talking with those funders 844 00:46:43,000 --> 00:46:46,720 already to say, please tell me what your requirements are. 845 00:46:46,960 --> 00:46:50,840 And you're not saying back to the buyers that this is what's 846 00:46:50,840 --> 00:46:54,520 needed, then you are going to be behind. 847 00:46:54,520 --> 00:46:57,600 You are behind in the process because bringing in those 848 00:46:57,600 --> 00:47:01,240 concepts and bringing those viewpoints is what's getting 849 00:47:01,480 --> 00:47:04,800 projects project finance down. Look, look at what Chestnut 850 00:47:04,800 --> 00:47:09,240 Carbon did in the nature space. They got an actual deal done 851 00:47:09,240 --> 00:47:11,960 with Microsoft as the cornerstone with an off take 852 00:47:11,960 --> 00:47:14,880 that was sufficiently bankable on top of the security package 853 00:47:14,880 --> 00:47:18,120 that was given for it to get JPM to provide debt to it. 854 00:47:18,240 --> 00:47:21,360 That happened in nature and I know that there's project 855 00:47:21,360 --> 00:47:25,400 financing conversations that are going on to bring those players 856 00:47:25,400 --> 00:47:28,120 into the space for engineered car removal specifically. 857 00:47:28,360 --> 00:47:31,560 And how are they doing it? They're leveraging those 858 00:47:31,560 --> 00:47:33,600 viewpoints and those requirements in a way that you 859 00:47:33,600 --> 00:47:40,320 can actually have not leverage or balance in the negotiations. 860 00:47:40,320 --> 00:47:43,720 That's not a realistic expectation, but you can have 861 00:47:43,800 --> 00:47:48,520 the core levers and red flags that you know are going to be 862 00:47:48,520 --> 00:47:50,720 deal killers for you if that's the way that you're going to 863 00:47:50,720 --> 00:47:53,520 finance your projects. So again, to kind of round out 864 00:47:53,520 --> 00:47:55,240 that conversation about who are you talking to? 865 00:47:55,240 --> 00:47:57,320 How do you get ahead? Who's going to come out the 866 00:47:57,320 --> 00:48:03,200 other side? If nobody is actually directly 867 00:48:03,840 --> 00:48:07,960 coming from the funders viewpoint in mouth, then all 868 00:48:07,960 --> 00:48:12,320 we're doing is regurgitating assumptions and guesses as to 869 00:48:12,320 --> 00:48:15,360 what's going to be required rather than saying we know with 870 00:48:15,360 --> 00:48:19,120 certainty what is required on top of all the questions that 871 00:48:19,120 --> 00:48:21,560 used to have thought. So I think that we're seeing 872 00:48:21,880 --> 00:48:24,360 those players engaged more and it just needs to happen at a 873 00:48:24,360 --> 00:48:28,560 higher and higher rate. Couldn't we finance carbon 874 00:48:28,560 --> 00:48:30,760 removal just because it's the right thing to do? 875 00:48:33,520 --> 00:48:37,280 I would love that. I think for the Hemingway quote, 876 00:48:37,280 --> 00:48:40,440 man. But isn't it for you to think 877 00:48:40,440 --> 00:48:41,240 so? Of course. 878 00:48:41,840 --> 00:48:43,200 But isn't it for you to think so? 879 00:48:43,600 --> 00:48:45,720 That's right. That's right, I asked my 880 00:48:45,720 --> 00:48:48,760 beautiful, if naive question, hoping to trigger that. 881 00:48:48,760 --> 00:48:52,880 I didn't take the bait. Yeah, no, yeah, you need to, you 882 00:48:52,880 --> 00:48:55,600 need to run the video back and I can come in eloquently and just 883 00:48:55,600 --> 00:48:58,280 just drop that one, right? But that's painting, right? 884 00:48:58,280 --> 00:49:01,280 That's the that's that's the Hemingway nature of the podcast, 885 00:49:01,280 --> 00:49:03,040 right? Is that even for the most 886 00:49:03,040 --> 00:49:05,480 perfect opportunity, theoretically something 887 00:49:05,760 --> 00:49:07,920 inevitably some ball gets dropped. 888 00:49:07,920 --> 00:49:11,960 No, no pun intended. Yeah, I love that we were we 889 00:49:11,960 --> 00:49:16,480 were talking about the the origins for the show and the 890 00:49:16,480 --> 00:49:17,960 rather literary nature of the show. 891 00:49:18,120 --> 00:49:20,040 It's like the show will sometimes have like a hardcore 892 00:49:20,040 --> 00:49:21,720 business mechanics like we talked about today. 893 00:49:21,720 --> 00:49:23,800 And then they'll be a show that's just like, OK, we're 894 00:49:23,800 --> 00:49:26,680 starting with Dostoyevsky now. This is where this is where 895 00:49:26,680 --> 00:49:30,160 we're going. But you're a Hemingway fan. 896 00:49:30,160 --> 00:49:32,720 We were talking about The Sun Also Rises in the conclusion of 897 00:49:32,720 --> 00:49:33,840 that. Re read it. 898 00:49:33,840 --> 00:49:35,400 I don't think I've read it since high school. 899 00:49:36,200 --> 00:49:39,080 Really enjoyed it, but I don't think I understood it when I 900 00:49:39,080 --> 00:49:41,040 first read it. It's a much sadder book that I 901 00:49:41,040 --> 00:49:44,960 recall. I had the I had the same exact 902 00:49:45,840 --> 00:49:49,000 response. I read that book in high school. 903 00:49:49,000 --> 00:49:55,040 I was 17, living in Belgium, and I had a teacher called Mr. 904 00:49:55,040 --> 00:49:59,720 Novak, and our entire 12th grade English class was called Finding 905 00:49:59,720 --> 00:50:01,680 Hemingway. And so we read the kind of 906 00:50:01,680 --> 00:50:06,240 complete works of Hemingway and then we actually took a trip as 907 00:50:06,240 --> 00:50:11,080 a as a class, a small VP lit class to Paris. 908 00:50:11,160 --> 00:50:14,680 And we did a week going to like the cafes that he rode at and 909 00:50:14,680 --> 00:50:17,200 sat there and rode and drank where he drank. 910 00:50:17,200 --> 00:50:24,760 And, and my reaction was one, why did I think that I had any 911 00:50:24,760 --> 00:50:27,680 understanding of what Hemingway was saying at 17? 912 00:50:27,680 --> 00:50:29,520 I remember vividly being like, I get it. 913 00:50:29,840 --> 00:50:31,520 I really get what he's going for here. 914 00:50:31,520 --> 00:50:34,640 And I just reread it on the lead up to this podcast also. 915 00:50:35,360 --> 00:50:38,120 And I was like, I had no idea what he was saying in the book 916 00:50:38,120 --> 00:50:45,160 about loss and and let down and what could have been and should 917 00:50:45,160 --> 00:50:49,320 have been and how you deal with that let down and whether it's 918 00:50:49,320 --> 00:50:53,040 worth embracing or holding on to hope or letting it go or just 919 00:50:53,040 --> 00:50:58,360 kind of having this Zen like understanding come out of it, 920 00:50:58,360 --> 00:51:00,200 which is just that there's there. 921 00:51:00,200 --> 00:51:03,640 There's a theoretical world that's pretty to think about and 922 00:51:03,640 --> 00:51:06,800 you can understand and appreciate, But but you just got 923 00:51:06,800 --> 00:51:08,600 to give it up or give up the hope along the way. 924 00:51:08,600 --> 00:51:12,280 At some point, which the time to ECDR. 925 00:51:12,720 --> 00:51:15,960 We shouldn't we shouldn't give up the we shouldn't give up the 926 00:51:15,960 --> 00:51:17,840 hope. And we should also not have a 927 00:51:18,240 --> 00:51:25,360 Hemingway like approach where we put concepts of of love or 928 00:51:26,160 --> 00:51:31,840 understanding and these far lofty Platonic ideals that can 929 00:51:31,840 --> 00:51:34,160 never be approachable and are just to give you heartbreak 930 00:51:34,160 --> 00:51:36,880 along the way. So we've got to pivot away from 931 00:51:38,920 --> 00:51:44,600 positives being hurtful, passed to inevitable let down. 932 00:51:44,880 --> 00:51:48,480 And instead we can kind of bridge what is a space that's 933 00:51:48,480 --> 00:51:51,560 full of its fair share of losses, but also some good wins 934 00:51:51,560 --> 00:51:56,280 and say, look, there's a very clear path towards happiness and 935 00:51:56,280 --> 00:52:00,760 love and and Lady Brett and Jake and the ECBR space can finally 936 00:52:00,760 --> 00:52:04,840 run off together and have a few absence drinks and look back 937 00:52:04,840 --> 00:52:06,720 instantly. It's not only pretty to think 938 00:52:06,720 --> 00:52:08,240 about, but we've we've actually done it. 939 00:52:08,400 --> 00:52:10,760 We've actually done it. Go back to Pimple and actually 940 00:52:10,760 --> 00:52:14,160 run this time rather than looking at the bulls from above 941 00:52:14,160 --> 00:52:16,160 a balcony. I love it. 942 00:52:16,160 --> 00:52:17,960 Somehow you pulled it off. I was like, this might be a 943 00:52:17,960 --> 00:52:21,880 little shoe horny, but it it actually all fit together so 944 00:52:21,880 --> 00:52:23,760 nicely. And I also, I oscillate between 945 00:52:23,760 --> 00:52:29,040 having a sort of capital R romantic hope and really 946 00:52:29,360 --> 00:52:34,840 resenting in some ways how mechanical and financial a lot 947 00:52:34,840 --> 00:52:36,800 of carbon removal and climate action is. 948 00:52:37,520 --> 00:52:42,120 And just like respecting and appreciating the activists who 949 00:52:42,280 --> 00:52:44,360 are just like, none of that stuff really matters. 950 00:52:44,360 --> 00:52:46,520 We've sort of lost the plot if that's where our heads AT. 951 00:52:46,920 --> 00:52:52,160 And the dialectic between those 2 is where I tend to hang out. 952 00:52:52,320 --> 00:52:56,760 It doesn't necessarily make me the most contented of person 953 00:52:56,760 --> 00:53:00,080 working in carbon removal, but it does make me think, and I 954 00:53:00,080 --> 00:53:02,400 think maybe that's the most one can hope. 955 00:53:02,400 --> 00:53:04,760 We're also kind of a Hemingway attitude as well. 956 00:53:04,760 --> 00:53:07,280 He didn't strike me as the most contented of men either. 957 00:53:07,800 --> 00:53:11,760 It no, no it doesn't. Ryan, thanks for being here. 958 00:53:11,880 --> 00:53:13,920 I learned a lot. Thanks for letting me ask all my 959 00:53:13,920 --> 00:53:16,560 questions about project finance and bankability and also some 960 00:53:16,560 --> 00:53:18,480 Hemingway. Pleasure. 961 00:53:18,480 --> 00:53:19,920 No. Appreciate. 962 00:53:20,280 --> 00:53:22,600 Appreciate you having me on. Appreciate all the conversations 963 00:53:22,600 --> 00:53:26,760 that you're having in the space through your podcasts and, and 964 00:53:26,760 --> 00:53:29,760 look, these are barely touched on the surface of a lot of these 965 00:53:29,760 --> 00:53:32,240 issues and a lot of people in the space working on the same 966 00:53:32,240 --> 00:53:35,160 thing. So happy to have conversations 967 00:53:35,160 --> 00:53:36,920 with anybody else that's trying to tackle this as well. 968 00:53:36,920 --> 00:53:39,960 And, and appreciate you kind of putting this conversation more 969 00:53:39,960 --> 00:53:43,800 into the mainstream and kind of front and center as people start 970 00:53:43,800 --> 00:53:46,120 to look at a bit more nuance in the space and issues that are 971 00:53:46,120 --> 00:53:49,920 actually stopping projects from getting deployed and capital 972 00:53:49,920 --> 00:53:52,080 actually entering. So appreciate everything you do. 973 00:53:52,960 --> 00:53:53,560 Thank you, Ryan.