This is Dana Perkins and you're listening to Switched on the b and EF podcast, and today we're bringing you a special show focused on the b and EF Pioneers Program. Each year, BNAF Pioneers awards outstanding early stage companies in climate tech that could make a real difference in decarbonization or biodiversity. We'll start today's show by speaking with Benjamin Caffrey, co chair of the Pioneers Program. Benji, thanks so much for joining us today.
Thanks for inviting me again. It's great to be here.
So before we talk about BNF Pioneers and the challenges and the interviews that we're going to get into with a few of this year's winners, why don't you explain to everyone listening what BNAF Pioneers is.
So.
BNF Pioneers Program, it's basically our way to reward exciting climate tech innovation. We have been running it for fifteen years, so it's our fifteen years anniversary and it's basically innovators competition and every year we'll try and pick three unsolved climate innovation gaps to focus on, and we'll have a
force category that we call the Wildcards. So any other innovative climate technology, and we look at how innovative and original these ventures are, and we'll also look into basically the momentum they have and how successful they could be, and very importantly the impact that they have are there on climate, on biodiversity. So kind of these are the three criterias, and we'll go through the process and celebrate the winners at the end.
So we've been doing Pioneers for as long as I've been at BNF, so we've reached a milestone anniversary this year, so fifteen years of doing Pioneers. But in addition to that, you know, what are some of the ways that you measure the successes maybe not necessarily of pioneers, but of the companies themselves, And what are some of the you know, facts, We love a good figure on the show, So what's a fact and figure that might illustrate that for us?
So in fifteen years, we have one hundred and fifty two winners, alumni winners, and they have been quite successful. They have raised cumulatively more than twenty billion dollars of the years, one point three billion actually in the last year, which wasn't an easy one for venture raising. And they
have had a lot of success story. Around forty percent of the Pioneers at an exit, so either through an M and A or going to the public market, and a similar amount of them and another thirty to forty percent are still going and raise money in the last few years, so really good success rate.
And today we're going to feature a wild card because there's always something that we just can't leave on the table, So we will feature a wildcard today in true being a fashion. But what is the formal challenge that we're also going to feature a couple of winners from on today's show.
So one of the challenges for this year was creating the next generation of zero fuels, and we'll focus on the winners from that challenge, and as you said, our biodiversity winner from the wildcard category.
So there are no shortage of climate tech areas that need innovation of the mom and we're looking ahead to our next set of Pioneers challenges, So can you tell us what those three are? And of course there'll be a wildcard, But what are the three challenges that we are actively receiving applications for right now?
So next year challenges are both super important and super interesting. The first one is that around making light industry more sustainable, so looking anything from textile to semiconductor industry and how they can decarbonize. The second one is all innovation around storage, and the third one is innovation around climate adaptation.
So if you or someone you know would fit as an innovator in one of these categories, you can apply and learn more about pioneers by going to about dot BNF dot com forward slash BNF Pioneers, and you'll also be able to see previous challenges and learn about some of the winners from previous years, including some of the people we're going to feature on today's show, which then brings us to those we're going to hear from today.
So we will be speaking with Nicholas Ball, who's the CEO of x Fuel, Mike DeCamp, president and CEO of Covercress, and Dimple Patel, CEO of Nature Metrics. So let's get into our first conversation, which is with Nicholas Ball, the CEO of x Fuel. Now x fuel have pioneered a technology that converts biomass waste into a low carbon drop in fuel. Let's talk to Nicholas about how they've gone
about that. I am joined today with our guest from x Fuel, Nicholas hi th So we're here to talk about x fuel, but before we get into the solutions from the company that you know, you are here to tell us more about let's talk about transportation broadly and really what attracted you to it, but really the scale of the problem with decarbonizing transport, which is certainly something
BNF is watching closely. But you know from your perspective, why is transport such an important sector for us to before focused on.
Yeah. Absolutely, I think it's one of the most let's say important sectors because it's one of those blind spots that people are not quite thinking about as much as they probably should. So, you know, transportation emits. I think it's over eight giga tons of certwo COO per year.
It's about fifteen percent of global emissions and growing. But I think what people don't realize, and this came out of the idea that the oil consumption for shipping and aviation specifically, and you probably are aware that's the hardest to abate. Let's say, sectors within transportation is actually protected to increase over sixty percent by twenty fifty with the current policies
in place. So this is a huge problem. And really it comes down to the fact that there aren't solutions that are either viable, so you know, not electrication or things like that, or they're simply not dropped in and of course they're too expensive typically what we'd find with liquid fuels. But yeah, that's the main issue in transportation.
Well, so that industry issue is there. But why you what drew you to this space?
Yeah, so I have a mixed background in general. My background is a blend of kind of academia, industry, and a general personal commitment to sustainability. I have kind of a strong foundation in science and engineering, you know, PhD from Peer College, so it's a very different area and the more technical side. From a personal level, you know, I grew up in the Mediterranean, I live in the Mediterranean.
I have a love for nature, for the environment, and I never really had a clear way of joining those two parts of my life until I actually met my
CTO and our CEO. Originally, I actually was a founder in the company, an investor founder, i should say, so, I was an investor in that respect, and I just saw the developments of the technology go on and on and realized that I could really make a difference and be part of the team and support them and the development of the technology and the commercialization of it specifically.
So it was actually out of I would say luck that I got to transition into a sector that I love and I'm passionate about, but never really had a firm footing it, And so like a lot of us, I actually started learning about it more and more during that phase, during the investment phase and being part of the board and then moving onto the management team about four years ago, and combine my technical business acumen as
well as a sustainability and love for that. I met my co founder's CEO, who was very passionate around technologies that can disrupt the status quob So the technology has been developed over a number of years in our company, but his essentially frustration came out of the core belief that low carbon fuels will have to be drop in and economically competitive with fossil fuels to really achieve any
significant market share and actually have an impact. And I brought into that and I still do right, I think that still is the case, and of course now we have policies and changing, but my I think love for the fact that we can disrupt this market and it's so right for disruption because there are just so few options and solutions brought me into the sustainability side and actually developing this company.
So tell us more about kind of your solution and technologies.
Well, we've you know, we spent a number of years of developing a kind of wide range of different technologies for the industry. We've developed one which focuses more on on ligno cellistic biomass. I should probably mention that all our products are aiming to be drop in solutions, and maybe I should unpack what that really means. Drop in solutions mean that we produce a fuel that meets the current fossil fuel specifications and can be inter changed with
current fuels without requiring any infrastructure or deployment. And so that's a really important point for us because we think when we speak to customers, you know, if they have to deploy other kind of infrastructure or capex, that that's
a big barrier to entry. But we've essentially developed technologies in this space working with different waste materials, and we focus solely on waste to be able to bring down the cost of them and develop them a wide ramage of different technologies to achieve that.
We'd love to hear more how your technology is different than what I've been tried so far?
Yeah, and also what you have tried so far. I mean, how many things did you have to get wrong in order to get it right?
Yeah, well, we were still trying to get things right. I should say that I think we all are right. So there's no bullet proof solutions here. But we've developed two different technologies and we have to plants deployed on
this already. But one technology really focuses on waste from the let's say agriculture industry and forestry, and she basically ligmicellarsy biomass, and the intention here is to bring essentially a drop in fuel from ligma cellar sig materials and waste oils and produce a fuel for the shipping industry. But at the same time, I think what's beautiful about this particular technology is that we also produce biochart and it has a lot of additional benefits from greenss, gas
savings and such. The other technology we developed is more of a kind of second step to this, which is what we call clear or chemical liquid refining CLR. And this is more of a refining, cracking, and essentially deeply sufturization technology. And don't want to go to technical unless some of your listeners are technical, but essentially we can take you know, contaminated and low quality hydrocarbon liquids and tenement to very high spec marine road in aviation fuels.
And we've been using this more and more with different applications, and not just a bolt onto our mech technology, but as a standalone technology which can create some pretty impressive fuels from both the technology perspective but also from an economic perspective stainability perspectively.
I mean, I'm sure plenty of our listeners are very technical, but I'm going to zoom way out because one of the things we really try and do on this show are explainers, and biochar is one of them. So we actually had a biochar producer as a previous Pioneers winner. But for those who are not familiar with biochar, would you explain what that is?
Biochart essentially the paralysis nature of any biomass or igno cellosic biomass and turning it into a form which would permanently store the carbon within it. So in using that in different materials or in the forresterry industry, or if you're essentially bearing it in a low oxygen ambient, you can assure that the carbon that is within that would be locked away, so it can be used in other materials.
And there are forms within or let's say, materials within biochart which can be used in other industries, and that can include graphine and other things. But in this particular case, what we're using it for is for the carbon sequestration
benefits of the process. And excitingly enough, where I think the one of the only technologies that can produce for talking about mechia can produce both a drop in transportation fuel and biotart at the same time, which allows us to allocate these savings to our fuels themselves and achieve some carbon negative fuels some pretty exciting steps in the future.
You mentioned feedstock just before. I mean, how important is to secure enough feedstock? Is that an issue at all? And kind of diversity of feedstock that you could use it is.
A huge problem for a wider impact perspective, So you keep in mind right currently the low carbon fuels make up two percent of all essentially liquid fuels in the market today, and of that all of them are practically biofuels. I think it's ninety five or ninety eight percent is biofuels. The reason why we haven't scaled is obviously economics, but
also the scalabilities. You say, so securing these feedstocks is critical from that perspective, but from a company that is growing and market opportunity, there are plenty of opportunities, especially working with ligno cellusic waste and biomass waste in general, there's a lot of that material around. Our other technology does focus on other feedstocks, which kind of gives us a bit more let's say, flexibility in terms of what we can use now as.
A drop in fuel, you've removed the need to actually spend money by the purchaser and your client in retrofitting or buying different ships and equipment on their end. But are they getting the same energy density from the fuel that you're providing, And really what I'm asking is so they have to refuel more often or less often or.
The same No, That's it's a fantastic question, and it's something that we see with other alternative fuels, where you would typically have half densities or something like that. In our case, we meet the sophistications for the fuels themselves, which actually have the same energy densities as the current fossil fuels. So this is what we aim for and would essentially have the same fueling needs in using our products, and we think that's really important. And also being able
to use it and handle it. A lot of the operational site, a lot of the bunkering side is a lot simpler when you're using a product that they already familiar with. So that's something that we are proud of and something that we think is it critical, especially for industries like the shipping industry. You may not be aware
of this. In the shipping industry, many let's say companies in that industry don't actually own their own fleets, so they actually have very little power in actually doing any infrastructure changes or retrofitting to ships because they don't even own them. They're leasing them. So this is a problem we see often, and the fact that they can use a product which can be interchange in their current fleets without any problems from their fleet owners, that's a big win.
So can you tell us where you are on the kind of journey of developing the technology is kind of where you are now and where you are heading.
Yeah, So we essentially build two demonstration plants quite quite large scale at this stage, and we're now developing our first commercial facility. We're going through a round of investment to support that and also have the let's say backing sort of speak of shipping companies alike who are interested in the product and wanting to off take that. So
we're now going through this process. Right now, We've got our grenice gas savings validated for these products, which gives a lot of confidence in the market, and we're looking to scale up production essentially about technologies. It's an exciting step right now in our company.
So you can't say we've got our greenhouse gas savings validated without telling us what those savings are.
Yeah, So of our demo plant, in our mech technology, we've actually got certification already ICIC plus and I see you to say formed certification for validating green ass gases. Keep in mind that fuels are generally in the regulated markets, especially in the EU, and so we have to meet those kind of regulations. The validations have shown for our mech fuels can achieve up to one hundred and forty
five percent green ass acid, which is a very high number. Essentially, what this means is if you use our fuel, you are not only contributing to carbon avoidance, but you're actually contributing to carbon removal. So you're doing good. You're actually removing carbon and sort of speak from an accounting perspective, you're removing carbon from the atmosphere and using our fuels, we believe that's one of the most sustainable fuels out there in terms of the green ass gas savings perspective,
So that's exciting. And with our clear product, which is really where we're going to market with and what we're starting out with first, it is lower benchmarks up to eighty five percent green as gas sevings. But really the intention with this product and this technology is to focus
on affordability. So we're really looking to bring a product to market that does not cost any ship owner any more than what they're currently essentially paying for in this typical product that we produce, which is marine gas oil. So that's something that I think will disrupt the market entirely, providing a product that can compete with fossil fuels and
still have certified greenass gass that are meaningful. That's where I think you have real impact is combining those two elements economics with sustainability.
So what kind of scale do you need in terms of production to be able to offer it at the same price plus the environmental bonus? And yeah, and how are you going to go about financing it? I mean, one of the challenges we see for climate deep tech is kind of moving to first of a kind large production where you need kind of bigger amounts, maybe too big for the early VC buckers, but still too risky for the banks. What's your solution.
Yeah, I think, I mean in general and climateech and sustainable fuels, that is definitely one of the hurdles for us.
You know, we can achieve significantly the cost price of the product itself significantly below fossil pricing at a scale that is around what our first commercial proNT is, which is around what we call a C two, which is around fourteen thousand tons product per year, which is very small in the market, but it gives us an idea of the scale that we're starting out with our first module. To actually back these projects, we're using a combination of
obviously equity dollars, you know, benure capital. The return on the money and the efficiency of capital that we have on these projects is so high that we don't need to raise that much to actually deploy these kind of single modules, but to scale things up even further, and that's obviously our plan. We have pipeline projects with large
shipping companies and others that we're working on. We're looking to obviously leverage the fact that we're using a modular plant, so we have our first module deployed and then going to banking and essentially an infrastructure funds and showing that multiple modules has actually no risk in what we've already done before. So that that's one, let's say, strategy, and the other strategies, of course leveraging ship owners and shipping companies that want the product, especially when they want it
affordable product which doesn't exist in the market today. And the way to leverage that is say, well, if you want the product, you need to support the project financing, and that's also something we're in discussions with so they may get discounts on the product in supporting on project financing, but that allows us to deploy larger projects in the short term until we get to bankability.
Well, because you've said that this is a drop in fuel first of also works with the existing infrastructure in the ships. It's going to be cost equivalent, so not at a hefty greenium premium that we so often find actually with the lower carbon solutions, at least when they're initially starting out, and then as things scale sometimes you get the inverse effect, as we see in many places with wind and solar technology and the energy sector for example.
But you know what's the catch essentially, like, what is going to stop this from being widespread and everywhere? I mean policy would certainly spread forward, but in even cost you would think that most companies would adopt it. So how is it not going to be absolutely everywhere?
Well, the main herder we have for the cheapest product we have and we're using it as more of a Trocian course, so to speak, to build market share in our company and then be able to provide other options to the industry. But the main issue there is scalability for this first let's say, cheapest product, there's only so
much for example, shipping waste that we're looking at. We are looking at other wasts that they're in the same category that we could do it a lot good, but for us to make a big difference across the market, well, and you've got to remember, you know, this is a multi trillion dollar market, right, so us doing successfully or doing well is still only going to be a fraction of the market. You know, this is going to take a humongous effort across all players, both oil and gas
and innovation and startups to actually move the needle. So the catch is for the cheapest product is that, yes, there is a limit to how much we can do and produce. For our subsequent product, which is from our mech technology, the scalability factor is not an issue, but they will be a premium and the question is is it too high or is it will it be enough?
At this stage, we're very close or pretty much the same as the mad competitor, which has a limitation on scalability which would be kind of hbos and hefas basically from use cooking oil. We're a similar cost factor as that technology using Ligno celebrity, So we are getting that, but that technology is still on the development and we hope to be able to kind of unlock the scalability question in the future.
That's where then policy can certainly move things forward. And I'm thinking in the shipping industry, so sulfur has been one of those things that's been more heavily regulated. Is there a difference there as well, and is there any environmental benefit from a sulfur standpoint.
It's a great question because we've only just started looking at from that perspective. So the technology we do have in theory can desulfurize high sulfur fuels. I mean from a greenhouse gas perspective, there isn't much benefit because you know, at the end of the day, if you're taking fossil high sulfur fuels, of course there is limited benefits there. But from an air pollution perspective and from a general kind of environmental perspective, there is any benefits to that.
And so that is something we're kind of getting asked a lot by, as you can imagine, because that has a huge, wide applications across the world for desulfarizing kind of heavy sulfur fuels. It's not our priority and it's not really our focus at the moment, but it does our technology does have that application, right, it can be used for something like that.
Nicholas thank you very much for joining today and talking to us not only about the shipping industry, but you know we could spend much longer also talking about decarbonizing aviation. So how x fuel is tackling decarbonizing hard to abate transport.
Thank you so much.
Next we'll hear from Mike to Camp, president and CEO of Covercress. Covercress have converted a common winter weed into a novel crop that can be used for everything from animal feed to biofuels. Mike, thank you very much for joining on.
Switched on today, Hidiana, It's so great to be here.
So tell us more about covercress. I mean, my understanding the feedstock is, you know the type of weed you'll see on the side of the road driving in the US, and how you guys kind of managed to bring it into a really good feedstock for buyfield.
Yeah, Benji's that's exactly right. I mean, it would not be uncommon. So when you come to visit, if it's the right time of the year, I will point out to you pennycrest growing in a ditch somewhere along the side of the road, and you can see the weed version of what we started with. But let me give credit where credit's due. Actually, so this concept started with
the USDA. There's a gentleman there, researcher, doctor Terry Isbel, who was tasked in the mid two thousands by the USDA thinking through what are other agriculture based feedstocks that could be used to make renewable fuels. So we had gone through a big cycle with corn and corn going to ethanol, and that put a lot up became clear. While it was a great opportunity for farmers to have a new outlet for their corn crops is a feedstock
for making fuel. It put a lot of pressure on that crop right relative to our food and feed needs and looking for alternative sources, and doctor Isabel quickly identified pennycrests. And there are probably two main reasons pennycrest rose to the forefront of all the different crops he was looking at. One is it's a winter crop, right, so it grows
during a fallow period here in the Midwest. It grows in between a corn and soybean rotation, so there's no new land that's needed right, So right away that's a plus. If you're trying to do something from a sustainability standpoint, then you don't want to displace the acres that are already being used for your main crops. It's great to be able to use that same land that's otherwise sitting idol. So that's one, and then second is the oil content.
So Pennycress has a very high oil content. We're about thirty percent of the seed is oil and the rest of it's the meal protein side. And just to put that in perspective for the listeners, if you think about soybeans, soybeans are about twenty percent oil. So soybeans are a very important oil seed. They are using in a lot of different markets. They're a big contributor as a feedstock
source for renewable fuels. So having, you know, fifty percent more oil means a lot right in the production of anything. If you can that fifty percent more efficient supply source,
that's a real positive thing. So that's what caught doctor Isbel's attention, and then through various public and private partnerships, cover Cress, which was founded in twenty thirteen, started to move that forward from the idea stage identified with the USDA into initially going through our product development research stage to see if we can really make this a product make this a true crop, and then where we are today in terms of actually being in a commercial market.
Can you talk a bit about the technology and the innovation that really goes into this. Because the pennycress has an element to it that is then genetically modified that makes it basically the crop that is actually being used in this capacity. How did that come about and what are really the big differences?
Yeah, maybe, Dana, just one correction. I think it's really important. Right when we use the word genetically modified, there's really two terms that are used when a plant is altered. So genetic modification which is something that monsanle bear today, cortivas and genta, a lot of others I've used for a long time now, and that's actually where you're taking foreign DNA and serting it into a plant to create an outcome. Right, So that's genetic modification. The other one
is gene editing. Gene editing is much different. Gene editing is really similar to breeding. So with gene editing, what you're doing is you're going into the DNA and you're able to knock out a function, so you're not changing the DNA, you're not putting any foreign DNA in you're knocking out a function in that DNA using a technology called crispur and in our case we use Crisper cast nine.
So when Covercrest was founded, we're all x Mon Sandle people have a lot of experience not only in what it takes to bring a new technology to the market in the form of a plant material in our case right taking pennycrest, turning it into cover Crest, but also all the regulatory framework that it takes to get that forward. And we knew it'd be very difficult if we went the gene modification route, so we were focused on gene editing. So the two technologies we worked with to change the
composition of Pennycrest to turn it into cover crest. First was traditional breeding, So we using traditional breeding methodologies right where we went out and we have. We started with over eight hundred different accessions or lines of pennycrest that we had accumulated throughout the United States and some from outside the United States, and just started planting those plants, identifying what those traits are, and then looking for those
that perform well and then making crosses. Right just traditional breeding to start to improve really two aspects. How can we improve yield, and how can we improve the maturity of the plant. The second technology that we brought in was the gene editing technology, and in there we were looking to do really three key things. One, we wanted to change the composition of the seed that make it work better for animals, So we really needed to reduce
the fiber content. So we have an edit where we lower the fiber content of pennycrest that turns our pennycrest seed, which is a dark black seed into a very light yellow golden color seed. That happens through a s thinning of the seed coat. We've improved the oil, We've eliminated in a healthy aspect in the old called urusic acid, we've eliminated that, which again was really important for animal feed purposes. And then Pennycrest is part of the Braska
family of plants. And if you think of things that we eat as humans, mustard, broccoli, garlic, those are all brassicas they have a compound called glucascentilate that have this strong taste profile for animals. Having a high glucocentilate level makes it difficult sometimes for them to feed on it. They're not attracted to it, so we had to be able to lower the glucoscinilate level, which are specific lucascinolates called sinnegrin.
So if I'm a farmer and I'm listening to this, I said, hey, yeah, I'd love to try that. What as a step that I need to do? I mean, is there any additional equipment or pre treatment I need to kind of implement into my cycle or how does it look from the farmer point of view?
Let me answer that two ways.
I think.
One what's really important and one of the things that are a lot of the experience that those of us that came out of monsand brought to cover Crest was a realization that if we're going to introduce something as novel as cover crests right a new crop, even though we're offering a farmer a new opportunity which should get them excited, we had to take a different approach than a lot of what Big eggs done in the past, and that's pushing too.
Much risk on the farmer.
So really, first to get started with a farmer, a farmer's got to understand that they get a trial period on this. They get a chance to see how does this working with covercrest. How does this fit into their cropping rotation? That's the number one and that's kind of the contracting system that we have. But then if you're past that and the farmer says, okay, I like that, Mike, I'm happy to give this a shot. Now, how do I do it right? What are the agonomic practices to
do that? The great news is that it's nothing different from what they do today. So a farmer, after let's say a corn harvest, will do a slight vertical tillage of their ground to break up the cornstover. Well, at that time they can seed covercrest. So they're able to just piggyback onto an activity that they're already doing. There's no new activity to actually get cover crest seeded. While covercrest grows over the fall. In the winter, there's nothing
that a farmer needs to do. Crop starts to develop, relying on mother nature to bring a little bit of moisture, and then when we get to the early spring, we do ask the farmer to do a little bit of a fertilization. In the spring, we need about fifty pounds of nitrogen just to give the crop what it needs to be able to fully produce, and then when we get to harvest, the farmer uses his combine and then on the front end they use a traditional soybeing head.
If you've ever seen a soybean harvest versus a corn harvest, it's a rolling head that cuts it like grass almost. It's that same technology that already exists.
So no new.
Equipment that a farmer needs.
Well, so let's talk about why a farmer might want to embrace cover cress. What's the financial opportunity for them? I mean, is it a big one and are they super motivated to really seize this or is it sort of on the margins.
It's hard to say. I would say it's definitely not on the margins. Right, we're introducing a third crop and what used to be a two crop rotation, right, so now they have a farmer has the opportunity to earn three cash crops in two seasons where they otherwise whatever and just too write. So plant corn get paid on your corn, plant cover crest, get paid on your cover crust. Plant soybeans get paid on your soybeans. That middle piece did not exist before cover crest, So that's really exciting
for a farmer. What we've done for a farmers, we've said, hey, look we want to share the risk. So first off, we're not going to ask you to take the marketing risk. We're not selling you this seed and hoping that you have success planting it, growing at harvesting it and also selling it to a market. We know that's not going to work. Our customer, truly is the downstream user of
the covercrest crane, right. The farmers are our partners, and so we contract with that farmer to grow a cover crest crop and then at harvest we pay the farmer. So the farmer that gets the farmer super excited, which again I think moves it away from it being a marginal opportunity. They know they don't have marketing risk. And then if you just think about the economics from a revenue opportunity, it's around two hundred dollars an acre of revenue. And we do talk about revenue at the top line
because I think it's it's just too difficult. Every farmer is going to look at their operating spences a little bit differently. But if we look at it and we say, hey, it's a piggyback trip on plan, So there's some activity you're already doing, so that's generally cost neutral. Your first cost would be that application of fertilizer that I mentioned in the springtime, and what we're going to do with
the farmer. What we do in our contract is we actually before that happens, we scout those fields to make sure that there's an adequate stand that we think this is going to be the type of crop we want to bring to harvest, and if it's not, then we're not going to have the farmer waste the money to fertilize it. What we'll do is we tell the farmer, hey, you know what, we're not going to take this to harvest.
You go ahead terminate this when you field it's the right time in your system to terminate it, and we're going to pay you twenty dollars an acre. And so now the farmer is an essence, gotten a free cover crop right for participating with us. But if we do take that to harvest and they do incur that cost, you know, maybe that's twenty to thirty dollars an acre for that fertilizer application. That's something that the co op is doing for them. And then they have harvest and
at harvest. They're getting out there. Like I said, they're combined and they're doing the harvest activity, which man's maybe forty fifty sixty dollars an acre. It just depends on the farmer. So if you just want to use a round number of one hundred dollars in operating costs against two hundred dollars of revenue, you know, it's one hundred dollars round number of gross profit opportunity potentially for the
farmer before they even plant their first soybeans. So that's really what gets them pretty excited.
How does a cover cress cost compare with other feedstock?
I would look at it this way.
And what's interesting about this, and I hesitate a little bit, Benji, is you know, as a guy that's focused on the upstream component of working with farmers to get this crap to market, I've been drinking from a fire hose on all the downstream aspects of these markets that we ultimately kind of feed into. Cover crests oil is a derivative of soybean oil. So that's how we would be priced. We start with grain, right, That's what we produce is a grain. That grain then gets crushed and two products
are created, the meal and the oil. That's thirty percent oil content round number. And then the balance is the meal content, the protein content, and there's some things that are there's some volume that's lost obviously in that processing aspect a couple points, but just to keep it easy, thirty and seventy. And then that meal then component has a market to be fed to animals. So there's a premium to the oil value because there's more oil that's
created from cover crests than say, from soybeans. But if you look at the meal component, our nutritional profiles at a discount to soybeans. We don't have a strong of a nutritional profile in terms of amino acids and other aspects that of soybeans were closer to canola, so we would trade it a bit of a discount to soybean meal. End of the day, you've got to put those two together to think of the total value proposition for cover crest.
So a bit of a premium for on the oil side, but all the pricing and the costs, you know, the pricing and ultimately then when we can move back upstream to farmers based on what we can get paid through our relationships and whether that's with our current partners Bungy and Chevron or other partnerships will continue to develop.
So, Mike, tell me about innovation. We know that in farming it is inherently iterative from one season to the next. But the problems associated with emissions and the real need for biofuels, and also just the need generally to think about crops going a growing planet. Is agriculture up to the challenge and what signs are you seeing that this is a real moment for agricultural innovation.
I would say wholeheartedly agriculture is up to the challenge. There's a famous quote that goes, you know, if agriculture goes wrong, nothing else can go right. So I think that's the way I think of all this. And there's just so many aspects to what's happening in the market.
In terms of innovation. There are a lot of activities, a lot of technologies coming to market where we're able to grow our crops more efficiently right use of better resources, whether that's the nitrogen that's used for the fertilizers that are used to grow our crops. There's technologies that are pinpointing on how to use fertilizer in a spot application right instead of broadly right, So more efficient use of fertilizers. There are new natural fertilizers of me in use, so
we can reduce our alliance on synthetic fertilizers. There's a big market for biological right. How biologics can be used and applied so to help with activity that happens in the soil, creating stronger environment for the growth of microbes and other activities that help improve not only the health of the soil, but how efficient a plant can grow. You know, we have precision add tools around planting more efficiently.
If there's irrigation that's being used on crop land, how can the use of that water be done more efficiently. There's a lot that's going on on the robotic side. Labor's a big issue in farming, and so how can we introduce robotics and autonomous vehicles to help farmers continue to be more efficient on all the land that they're farming.
There's drones, So how can drones be used for not only a lot of the things that used to be done by tractors in terms of applying inputs, whether that's seed or chemistries, but also what can be done in terms of doing imaging right, there are companies out there using drones to image a field to the point where you could say, hey, there's that specific spot in the field that looks like it has some kind of fungus pressure and the drone can apply a little bit of
fungicide right on the spot. So, you know, I think there's just this burgeoning ad tech industry and innovation that's coming that are bringing you know, new tools to farmers to help them be more efficient user land more wisely and then really ultimately would in a lot of ways help to cut down on some of the emissions that are coming off of the farm as well.
So everything from gene editing to robots and drone technology innovation is certainly happening in agriculture. Mike, thank you so much for joining us today.
Oh it's been great. I appreciate spending time with you, Dana and you Benji and look forward to further conversations.
And next we hear from Dimple Patel, CEO of Nature Metrics, who have embraced e DNA to help measure biodiversity at scale and give governments and businesses the information they need to make better decisions when comes to nature dimple. Thank you so much for joining us today to talk about your business and the pioneering things that you're doing there.
Thank you, thank you for having me.
All Right, well, so let's start at the beginning, and what we like to do is frame the problem. So one of the things that you know we globally are dealing with is biodiversity collapse, and oftentimes, when compared with the climate crisis, people talk about it as something that is going to impact human life much more quickly and something we may want to be focused on more urgently,
and that there's also a very wide funding gap. Can you talk to us a bit about what you see as the problem and then we can get into how nature Metrics is looking to address it.
What I found most startling when I'd started looking into biodiversity with actually the data point that over the last fifty years wildline populations have declined by seventy percent. If we do that again, so if we continue with this trend or biodiversity decline in another fifty years, we will
look wiped down ninety three percent of wildlife population. I mean, that is incredible, And there's fad aboute hundred years, and I think when you look at economic growth and progress and everything that we have achieved since the Industrial Revolution, it has come at such a significant cost. And that's seven hundred billion dollar funding gap that is just to halt and reverse biodiversity loss. But I think we often
overlook is a lot of that damage is irrevertible. When you wipe out a species two extinction that has a very important part in the food system, you cannot bring that species back. And actually the knock on impact we don't necessarily fully understand, but the knock on impacts are going to have implications for our food systems. It's obviously going to impact they battle against climate change, but actually it's going to play out ways that we haven't fully quantified.
And actually that is not just a threat to long term economic growth in business performance, but it is a threat to our survival.
So before we get to how nature metrics fits into a range of potential solutions for this, can you talk about why you were drawn to it, Because we know that this problem exists, but this was a professional pivot for you, and so why did this end up being you know what you are now dedicating your life to.
So I am an economist by background. I did an economic both my undergrad and postgrad, but with a specific focus on development economics. In my family where farmers and rural Indian and so for me there was always an interest in how do we take society and the economy forward? But I had seen play out the real positive there in terms of the implication on the environment, and no I started my career goverment on the training floor, but
very quickly then moved into the entrepreneurial space. So I founded my first business fifteen years ago that was a hospitality so physical operation, and since then I've worked cross tech, data software, really understood the very tools that our disposal, but what never really went away was how do we use business to good when we think about with the challenges that we are facing globally, how do we leverage all of these tools at our disposal and how do
we align indentives in a way that we can actually use this data that we have now had data on everything to drive the decisions that we are making, you know, the multinational level globally, to give it better long term out. And so I've always circled back to where I've first started my study, but now much better equipped to actually bring some of that teeth.
Great, Yeah, what is EDNA, Maybe for our listener, if you can explain a bit more about.
So Indiana or the environmental DNA that refers to the genetic cases that living organisms leave behind in the environment, so that is soil, sediment, water, and even air. But when we analyze these samples, what we're able to do is actually identify the genetic level individual species that are present in an environment. So it's infectively like a stock pa for nature. And what we've found with the DNA
is so somewhat are super easy to collect. You can use your cost any habitat, but it's more cost effective, quicker, and more accurate than alternative methods. So we're able to detect seventy percent more species than traditional methods. And what this means is you're starting with an incredibly rich data set that has a high level of accuracy, It has a full complexity and biodiversity in nature. But when these are your base data sets, you're then able to start
to build competente metrics. You're able to make better decisions in terms of how you should be operating, how you should be treating your soil, why you should be opening the entrances to a mining site. And it just means that when we think about data generation a scale, DNA
is easily deplorable. We've used it in over one hundred and ten countries, but it gives you a really really strong foundation upon which to then manipulate that data and then take the action into decisions that you need a beck fit.
So I could see how NGOs will will use it and so on, but how how would company use it? I know you have some companies as clients. How would they using the data and information?
Yeah, so real mixed. So we have some companies that might be operating in areas of particular content in relation to specific species. So you can use DNA to identify threatened or endangered species. You can actually also use it to detect invasive species, which obviously has a significant impact both in the agricultural space but also increasingly in courts and walkways. We have extractive clients who will use environmental
DNA as part of their environmental impact assessment. So there it forms a much bigger part of kind of regulatory reporting as well as larger pieces that are coming in such as TNFD and CSID. And then Finally, if you are working with land, the quality of your soil is
absolutely acceptable. So what we're now increasingly seeing is much more interested in or help from a bacterial perspective, understanding how they speak to copy on and then also just building more resilience into our supply chains as well.
Do you have any examples of in organization taking these data and then creating a positive impact on biodiversity.
So if I take the agricultural space for example, what we have done, particularly if the last kind of clot to eighteen months, is we've been working with client to have multiple farms as part of their supply chain, and they're trying to understand the impact of different fertilizers and treatments on the soil across these farms, not just to kind of inform their own operation, but to work with these small landowners and feed these insights to them in terms of how they can then put the quality of
the soil going forward. And what's been really fantastic about the technology, but also through the platform here, we're able to demonstrate that change over time, We're able to link that changes in bacterial composition to different types of fertilizers and treat so again there's a link from you know, the end us right the way through to the platform and being able to open up that data to admitted stakeholders as need to have access to it.
Do you feel that some of the latest regulation here in Europe, you know, the Corporate Sustainability Reporting Directive and some of the momentum around TNFD is increasing momentum on action in this area.
So what we have seen is the first step of the back of the TNFD launch in particular last September was just a huge beast in terms of awareness around nature.
So our organization to have previously talked about sustainability as a carbon dotport, waste and water now looking at native for the first time and thinking, I actually don't know what I'm fifty doing here, they even know how I can measure it, but I know that somebody is going to hold me to account at some point in the future, so I need to start getting on top of this. And so that was really fantastic because it has really pushed nature up the order prioritization in terms of out
sustainability agenda. I think what is really interesting about CSI in particular is that is the first piece of nature related and the legislation that it's going to have penalties attached to it. So this is not an optional framework for reporting. It is compulsory and there are actually some parts of Europe I think that are actually going to be holding directors of companies liable for not meeting the
requirements of CSUDY reporting. So in becoming what more heavy handed, I think given the time frame that we are looking at in terms of biodiversity decline, it does require slightly more heavy handed approach to make sure that action is accelerated as much as possible. But then outside of that, I think both CSUDY, but particularly the team at TNF Theater doing a fantastic job in terms of actually breaking down what they mean around you know, terms such as
nature positive into smaller steps. They make them a bit more didicial for companies that haven't looked at this perform. They're providing toolkit, lots and lots of educational material, webinars, et cetera. I think, you know, there is a huge educational component to where nature and biodiversity sit within an organization's strategy and sustainability policies. Even though actually band identity is one of the first things that we learn as children, so I think it does have a big role to play.
A lot of it will come down to the implementation. So when we talk about makes day to day is used for reporting the accuracy and the quality of the data that is being reported, because I think what is always a concern with regulation is that they can become quite watered down and actually the quality of the data being comfortable of a tip box out side. But I'm confident that there are enough people that they really want to see this have an impact that we will kind
of post date quality up. There is a quality.
Can you talk a little bit more about the upskilling aspect of it, because you know, what I'm thinking is that you change happens slowly and then very fast. And I think about the initial responsible investors that were literally decades ago looking at their irresponsible investing strategy, and then there was this just huge amount of attention on sustainable
finance in ESG reporting. To your point, we are interned reduced to biodiversity and I certainly remember talking about species extinction when I was a child and endangered species and now very much we're getting up to speed on it quite quickly, and it's necessary for companies to think about it from a metrics standpoint, how long do you think this upskilling process will take and what is happening in practice and how is that happening.
So I think if we go back to what we were saying earlier about alignment of incentives and how we dry decision making an action, you know, anybody running a company is optimizing for both of their share price growth of their companies, and so what you end up with there is an inevitable link between behavior and incentives and
capital and listen where we are start to change. So when you talk about with probable investment, a number of investor are now starting biodiversity as an indication of some of their EESG markets that they look at when they're assessing an investment BMP, who are on our board having chief a biodavert policy where they're going to be assessing their portfolio against the biodiversity credentials in twenty twenty five
as well. I think one of the challenges historically has been the fact that biodiversity has been difficult to measure scales, so the data itself has been Luckily that is not the case anymore, so our focus really is on getting that data into the right how do we use it to influence policy, How do we use it to influence where capital is flowing, where we are providing investment, which projects are being given the opportunity to get off the ground.
And so I think working with financial institutions and government is a really really important part of making sure that we have the incentives in place to make sure that biodiversity is not overlooked. So it's coming together. I think we are still very much at that danger explaining that the data exists, and the good quality data exists, so you don't need to use a proxy for what is
happening on the ground. We can genuinely measure what is happening on the ground, because whenever you are deploying and anti capitals, you do want to have autiful and very viable data that sits behind them, which is something that we can do with DNA. So then there is a big push. I think we have somewhere to go, which is why I think regulation from an awareness perspective is
going to be very very important. But then a lot of it is going to be actually helpful organizations taking their initial samples, getting these kits out into the field, starting to generate their own data so that they can see how that data is then needed to cost their organizations in that decision making as well. But I do think financed intitutions and investors are going to have an important part play in terms of accelerating that option as well well.
I think that's a perfect place to stop, because we want to stop on an optimistic note and on a high. So thank you very much for coming on the show and talking about nature metric solution and how important it is for us to be rigorously approaching biodiversity from a data standpoint so that we can make progress in this space, and for sharing your optimism.
Thank you.
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