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what we're talking about fundamentally is reducing the overall amount of carbon dioxide CO2 in the atmosphere. And a big part of that is finding ways to stop adding carbon dioxide to the air in the future, like with clean alternatives to fossil fuels. But another part of the equation is to remove CO2 that's already been released. And this is where direct carbon capture technology comes in.
Back in November of 2023, the first commercial direct carbon capture facility in the US opened in California. And it uses a new method that's fast, relatively inexpensive, and it can be scaled up pretty quickly. The company behind the facility is called heirloom, and its co-founder is Shashank Samala. Even though the company was only launched in April of 2020, by the end of this decade, Shashank says heirlooms technology could start to make a meaningful dent in removing CO2 worldwide.
Shashank's background in business began in 2013 when he was just 22 years old. He co-founded an electronics manufacturing company called Tempo Automation, which built circuit boards used in everything from rockets, to medical devices, to consumer electronics. But even though Tempo had contracts for major clients like NASA, after a while, Shashank found himself wanting to focus on something bigger.
Several years into starting the business, I realized that I wanted to work on something that had a much more profound impact on society generally. And I found that I could just wake up in the morning, be motivated, and think that I would be doing this for the rest of my life. So that's when I started thinking about what's next, and what are other problems I could help contribute to.
I guess in the year after you left your job at Tempo Automation, you joined an organization to be an entrepreneur and residents. And I think this is a climate policy organization. Tell me about what you started to think about during that year.
Yeah, so really during some of my last years at Tempo, I was spending my nights and weekends thinking about specifically climate. I grew up in Southeast India, so a lot of the things I was reading about where the worst impacts of climate are faced by the world's most vulnerable people that resonated with me. And I knew I wanted to work in climate.
So during that journey, I learned about the importance of carbon removal. So, you know, some friends of mine had started this organization called Carbon 180, which is all about finding pathways both from policy and a technology perspective to make a dent in this carbon mobile problem.
So it was really a chance for me to go in and sort of think from 30,000 feet. And I was specifically interested in technology methods. So I spent a lot of time talking to scientists, latest research, building cost models, understanding which pathways and most promising.
Let's talk a little bit about the challenge we're facing, right? And we've talked about this in the show before, but it would be helpful if you could outline it a little bit, which is global carbon emissions have not been reduced to the targets that have been set in previous years and they won't be.
But in order to mitigate the worst effects of climate change, we have to not only burn less carbon and release less carbon in the atmosphere, we have to remove it from the atmosphere. We can't do just one or the other if you do both, right? Exactly right. We can just reduce emissions anymore. It won't be enough to stop climate change if you've emitted too much. And you know, you can reduce emissions you've already emitted.
So we have to start removing some of that carbon from the atmosphere by some I mean in the tune of billions of tons of CO2 per year. And so the idea is that eventually when this can be scaled up, it will start to have a significant impact on carbon levels in the atmosphere.
Exactly. You know, when you think about the overall decarbonization formula, right, you have to decarbonize every single part of the economy. You have to decarbonize electricity by going from fossil fuels to solar and wind and you know, hydro and so forth.
You have to decarbonize agriculture, shipping aviation, steel, concrete, etc. And in this formula, there is a few sectors that are hard to debate. So because some of those sectors will be slow to decarbonize, we need to complement them by removing carbon from the air. So you started to look at carbon capture, carbon removal as a possible service solution. And you have a, I mean, you had a background in computers and design robotics.
So, but from an engineering standpoint or perspective, this is a different problem to solve. So how did you even start to go about thinking about, you know, how to make this work? Yeah, that's a great question. So my background coming in was manufacturing and robotics and automation. And this problem set is mostly chemical engineering, process engineering, something that I hadn't done professionally.
You know, a lot of it was me relearning high school chemistry and and brushing up on fundamental thermodynamics and you know, heat of reactions and so forth. So, you know, I wasn't the expert in them. I didn't have my PhD, but I do think the fact that I came in from a third party perspective gave me the chance to evaluate all these different methods and approaches in a very unbiased way.
Right. So, you know, for me, because I come from manufacturing, where, you know, which is then margins and you really have to know where the sense and dimes go. You know, always evaluating each of these approaches through a robust cost model that I built from the ground up. So yeah, it's a, it was fun, just really learning a lot of the science.
So all right, let's talk about carbon capture because there are on this technology has been around for some time, you know, and essentially I think what most of us think about and carbon capture is I'm like giant, you know, sort of let's just imagine like a shipping container with huge fans on top of these containers and they suck in air. And they essentially filter out the carbon, which is then, you know, pumped underground and there's a company we've done on the show.
Climb works that does this in Iceland. This was not the model you were thinking about, right? Yeah, that's right. So for me, I didn't have any existing mental model for how to remove carbon from the air. For me, what really matters? Most was cost and scalability. So I was looking at each one of these approaches from from that perspective. So there are many different ways that people were trying to pull carbon from the air, but the CO2 in the air is very dilute.
You're pulling one molecule of CO2 out of every 2500 molecules. So fundamentally, it's an expensive gas separation problem. So the traditional way folks have gone about it was basically to build a novel material artificially. But the problem was not whether you could capture the CO2. The problem was the cost of making that material.
And because the supply chains don't exist, you often had to use these exotic hard to find materials. So, you know, if you ever wanted to pull billions of tons from the air, the infrastructure wasn't just wasn't there. It would have been massive and expensive. So we came at it from a different perspective, which was, you know, how do we enhance nature? How do we, you know, are there things that we can borrow from nature, you know, basically for free to solve the same problem?
We're going to take a quick break, but when we come back, heirloom comes up with a more natural solution to the carbon removal problem. One that could be low cost and massively scalable. Stay with us. I'm Guy Ross, and you're listening to how I built this lab.
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There is no shortage of business and leadership podcasts, but few explore solutions to solving the world's most complex issues, which is why I recommend if then, the new podcast from our friends at Stanford Graduate School of Business. If then features in-depth conversations with Stanford GSB faculty professors about their cutting-edge research around topics like AI, sustainability, and power all framed around an if-then statement.
Like the recent episode, if we want to get people back to the office, then we need to find the right reasons to do it. As you can imagine, this leads to insisive and sometimes surprising takeaways. So don't wait, follow if-then wherever you get podcasts, and tell them I sent you. Welcome back to How I Built This Lab. I'm Guy Ross, and I'm talking with heirloom co-founder and CEO Shashank Simala.
heirloom technology takes CO2 from the air in order to reverse some of the climate effects from centuries of burning fossil fuels. Alright, so I mentioned Climax, which is another carbon removal company that operates in Iceland. But the technology that they're working with, I guess you decided to take a somewhat of a different approach, because of course, from what I understand, for that kind of model to work at scale.
You need to cover the Sahara Desert, and these shipping containers sucking air out constantly filtering it out. And even then, part of it feels like a drop in the bucket. You know, it's a drop in the ocean, I should say. It's like you're removing just a tiny bit of carbon from the atmosphere, but by and large, that has been the model for decarbonization. I think in general decarbonization and carbon removal both have to be done in a distributed way all across the world.
It will all seem small in any given location, but collectively, they will amount to billions of tons. I mean, that's how we emit today, CO2. Like, if you think about that question, what does society actually make billions of tons of, like in mass? Like, can you think about a few things? I mean, I would think cement, for example, construction material. Yeah, so it's three things. It's cement, steel, and fossil fuels. Those are the only three things that we make billions of tons. Exactly.
I mean, just think about that. Even food or rice. Like, there's in the millions or hundreds of millions. But when you think about doing things at a billion ton scale, which we have to remove carbon from the air, like you have to have this mindset of cost and scalability through and through. And that basically, if you have that lens, you end up filtering out most things that you see. So as you started to look at what you could possibly do, tell me what you landed on.
Because the model that you ended up, and you found out this company not very long ago, the model is not about sucking air from the atmosphere. Yeah. So I mean, we're still sort of removing carbon from the atmosphere, but sort of not in the most traditional way. Yeah. So the first hypothesis was, if you want to remove billions of tons from the air, whatever the sponge you use has to be abundant and very, very cheap and close to free as possible.
And in that journey, we found that carbonates, you know, magnesium carbonate and calcium carbonate are some of the most abundant materials on the planet that also have something called alkalinity, which is the ability to be very thirsty for CO2, if you will. So we found that limestone specifically is, you know, you can get this stuff for like 30, 40 bucks a ton. There's trillions of tons of limestone across the world.
There's 4% of the earth's crust. And we picked this and we realized that, okay. limestone is available. It is cheap. We can use this as a sponge and we realized that, like even that wasn't enough. We needed to figure out how to enhance it, how to give it superpowers, how to supercharge it, to remove carbon much faster than it naturally would.
It's just to clarify, because obviously I'm not a scientist, but I'm assuming when you talk about limestone, you're essentially talking about it behaving like a sponge. Like you would a dry sponge in water, except you put the limestone, you know, you just stick it outside and it naturally absorbs carbon. Yeah. So limestone by itself is a sponge already with water. Right. So the first thing that we do effectively is give it superpowers by first baking it in a kiln.
Right. So yes, effectively we pull the water out of a sponge and it turns into calcium oxide, which is lime. And lime is very thirsty for CO2. And that is what we effectively expose to the air to pull CO2 from the air. All right. So just to understand the air balloon technology, because again, it's a different method from some of the other carbon capture companies. You're heating up limestone in order to turn it into calcium oxide and then what happens?
So when you bake limestone in the kiln, the output, the lime is super thirsty for CO2. Like it wants to be naturally stable by pulling carbon from the air. Right. So that property is what we take advantage of by taking thin layers of lime and placing them on craze. So imagine very large baking trays. Right. And we stack these baking trays vertically to, you know, 20, 30, 40, 50 feet. And you effectively have a very tall baking rack with trays with thin layers of lime.
And as the air passes through, basically gobbles up that CO2. And in a few days, it turns into calcium carbonate, which is limestone, which is exactly what you started with. So that's how we captured this CO2. All right. So you've got this technology to remove carbon from the atmosphere. And it's a different way of doing. It's using limestone. And let's talk about the business side of this, right. I know you've raised about a little over $50 million to get this off the ground.
And tell me how the business model works, what you sell and how you make, how you essentially make money. Yeah. So, you know, today our customers are corporations with carbon net zero targets. And soon corporations with compliance requirements to become net zero. So today we have customers like Microsoft and Stripe Meta who are buying remolals from us to help them reach net zero.
So they've made commitments to be net zero. They pay you money to remove carbon from the atmosphere to reduce their output, their output emissions. Exactly. So, you know, for a company like Microsoft, which has a lot of emissions from, you know, things like running data centers, they're buying as much renewable energy and decarbonizing as much as they possibly can. And what it realizes is that the last 30, 40% of the emissions they have to remove from here.
And that's why they come to us and they buy carbon removals. So let's talk about the opportunities here. I mean, right now, this is not required. These are just companies making voluntary decisions. There's no cap and trade system in the United States. And there's some unlimited version in Europe. But tell me where you see this opportunity headed. I think in general, if you want to remove billions of tons of CO2 from the air, there has to be compliance markets in a very large way.
Not just in Europe, but also in the US and basically every other country. But in the short term, you're exactly right. There's lots of corporations who either have net zero targets or see compliance targets coming down the pipe and are getting ready to buy removals.
So actually just came off from a call with the customer who's a shipping company. And they basically told us that to send ships into an out of Europe, they have to buy carbon removals and have to reach a set of emission targets year by year for the next 10, 20 years. So what we are seeing is that actually I think there's a really good survey that Boston Consulting Group that on the demand for carbon removals.
What they saw is that just from the voluntary carbon markets, there's a massive shortfall in the projected supply of carbon removals in 2030. So how big is the potential for this market? Well, at least to avoid the worst impacts of climate change, if you have to remove anywhere from 5 to 10 billion tons of CO2 from the air. So if you think about the overall climate math, we emit 50 billion tons a year.
And if we can get 80 to 90% of the way through with decarbonization and reduction, you're left with 5 to 10 billion tons that you have to remove from the air. So we think that in a medium to long term, the carbon price is likely going to be in the 100 to 200 dollar per ton mark. And at that cost for 5 to 10 billion tons, we were talking about a trillion dollars worth of carbon removal industry. Right now it's about 600, some say it's high as a thousand dollars per ton to remove carbon.
So the costs are really prohibitively high in some cases. But the goal is to get it down to a hundred dollars ton. Right, I mean, that's really the magic number, right? And that's really the lens that we've taken from the beginning, where it actually gets it to a hundred bucks a ton. At the end of the day, what we're doing is just putting a bunch of rocks and a bunch of trays.
That's why we think that going for simplicity and scalability, and if you ever want to reach billions of tons, it has to be affordable by society. You cannot be 500 or so hundred bucks a ton, it has to be much slower. And I think that's really how you get to make a lot of impact in the world. It has to be incredibly accessible. When we come back after the break, Shashank's plans to build carbon capture facilities all across the United States and eventually the world.
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Welcome back to How I Built This Lab. My guest today is the co-founder and CEO of the direct carbon capture company, heirloom. Right now, you've got a facility up and running and I think it's the first commercial facility in the US. This is the first direct capture facility in North America that captures and stores CO2 from the air. It's small.
But what we think it is, it's a blueprint of what we think the carbon removal that scale looks like. There's lots of things that we learned along the way. Actually putting steel in the ground and building projects is very different than building prototypes and experimenting with science in the lab. Obviously both are important, but that's why we learned this year. This is Tracy, California. How much carbon is it operating now as we speak?
Yes, it's operating now. The capture capacity is about 1,000 tons a year. It's a modular system. We deployed about 24 units. Next year we are increasing at least by 10X, building another facility. What happens to those limestone panels once they absorbed all the carbon? Yes, so after the limestone absorbs the carbon from the air, we put it back in the oven to heat it up and pull out the CO2. It captures from the air.
That CO2, it's pure CO2. It's over 99%. What we do with it is we compress it. We turn it into a liquid. For this facility, we are specifically storing it into concrete. So concrete has this ability to sequester CO2 permanently. That's what we are doing right now. Starting next year, we are going to be sequestering CO2 underground safely and securely. Tell me about how you build out a model for the business side. What are you depending on?
Obviously, you've got these companies in the US who are buying credits. Can you rely on that alone as a source of revenue? Yes, so just in a short time frame, these markets have gone very, very large. This year we signed a contract with Microsoft. It's about 315,000 tons. It's a multi-hundred million dollar deal. For us, we think that just the voluntary carbon market will be scaling up to hundreds of millions of tons. According to BCG, between 100 to 200 million tons by the end of the decade.
We think that the price is going to coalesce around $300 per ton, given where the supply and demand is. At the same time, the world cannot get to net zero without compliance markets. A lot of this has to be driven by policy. We've seen that a bit with the inflation reduction act, which has something called the 45Q. It gives additional $180 per ton tax credit to companies pulling carbon from the air and putting it underground.
That is happening in the US. It's probably the biggest thing that's happened to a direct recapture. I think that will likely be a stepping stone to what will come next, which are very large compliance markets. Tell me about the scale. How many of these facilities will you have to build to start making an impact? We want to get to a billion tons a year. That's really a goal. The facilities that we're going to build, each facility is going to be around a million tons per year.
We're going to continue to increase the size of the plan, size of the project. Basically, we need to increase the scale by about 1,000x for the size of the plan. Then to reach a billion tons, you need to build 1,000 of those. We're talking tremendous scale and growth in the next 10 to 15 years.
Explain the footprint of these things. How big is it going to be? Where are they going to exist? I've been talking about huge plots of land. 500x500 square miles covered in these things. Tell me what it's going to look like. It's amazing how land efficient these actually are. Compared to trees, these are actually about 5 to 10,000x more land efficient. To remove a billion tons, I talked about a thousand plans.
You need a few Disney worlds. The reason for that is how efficient they are for print wise. We just built a plant that is about 40 foot tall. The next site we're going to build is going to be about 75 feet tall. The one after that is going to be 130 feet tall. How many square feet or acres of land? It's going to be smaller than a golf course, like an 18-hole golf course, or maybe a better way. If you think about a cement facility, it's going to be less than 1,4 of the size of a cement facility.
Where will you build your next facility? The next facility is recently we won this Directorate Capture Hub Award from the Department of Energy. We won about $600 million to build a facility that can scale up to a million tons a year. That is Southwest Louisiana.
Louisiana is where we currently have our sites in to scale in the medium term. We want these facilities all across the world. If you think about where for noble energies cheap and where there is a lot of land, where you can put CO2 on the ground. Directorate Capture can pull CO2 anywhere in the world. We can be very strategic in finding sites to site these facilities. We love the Rift Valley in Kenya, where there is a lot of excess geothermal energy.
If we can start building these in the global south, we can build these in India. There are lots of places in the world where we can find low cost for noble energy, where there is a lot of supply, but not a lot of demand from civilization. When do you break ground on the facility in Louisiana?
We are going to be breaking ground in Louisiana next year. We are actually building multiple facilities in Louisiana, but the one that we are building for the DACUP is a few years away. But there are other ones that we are building as well. As a business, what is your ultimate goal? When you look at metrics, where do you want to be in 5 or 10 years? Within 5 years, our big goal is to get to a megaton, increase the size of this plant to a million tons a year.
The nice thing about our business is it is very clear what impact you can have. It is very much measured in tons of CO2, you remove from the air. It is both a business goal, revenue goal and impact goals are tightly aligned, because we sell carbon models, we sell carbon credits to the customers.
We have this goal to get to a million tons a year in the 2030s. That is going to essentially require us to make these facilities incredibly low cost, incredibly land efficient, and copy and paste these million tons per year facilities all across the world. That is Shishank Simala, co-founder and CEO of AirLume. Thanks so much for listening to this show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show and it is always free.
This episode was produced by Casey Herman, with editing by John Isabella and research help from Carla Estimés. Our music was composed by Rhymteen Erivlui, our audio engineer was Neil Raoch. Our production team at How I Built This also includes Alex Chung, Chris Messini, JC Howard, Catherine Safer, Carrie Thompson, Malia Aguadello, Niva Grant and Sam Paulson. I'm Guy Raaz and you've been listening to How I Built This Lab.
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