Startup Series: Made of Air
Today's guest is Allison Dring, CEO and co-founder of Made of Air, which makes carbon-negative materials using biochar for the built environment and consumer goods.
Biochar is a carbon-rich material from burning biomass such as wood or crop residue. We’ve loosely covered this topic with startups like Climate Robotics, but Made of Air is taking a different approach. The company uses biochar powder mixed with bioplastics to create a moldable, functional material embedded with captured carbon. Made of Air is helping to drive the net-zero economy by using its material in various products, including fashion accessories, brand facades, and building materials.
The way we approach seemingly routine aspects of building design, such as accent textures on walls, is shifting as we become more aware of the environmental impact of embodied carbon. Allison and Made of Air are leading examples of this transformation in the industry.
In this episode, Allison and Cody have an interesting conversation about current building materials and how the built environment is thinking about decarbonization. They also discuss how carbon-negative materials can complement other emissions reduction practices in buildings. Finally, they delve into the end-of-life process for these buildings and what materials would need to look like to ensure that carbon stays sequestered.
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Cody Simms
Allison Dring / Made of Air
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Episode recorded on November 7, 2022.
In this episode, we cover:
[2:11] Systemic failures in the built environment
[4:31] Why we should be paying attention to embodied carbon right now
[6:22] New regulations in Europe for building emissions
[8:45] Allison's background as a trained architect and how she met her co-founder
[14:10] Allison's approach from a climate perspective with carbon capture at the forefront
[18:10] An overview of Made of Air's process
[21:27] Use cases for Made of Air's material, including fashion and the built environment
[25:17] The company's role in customers' manufacturing process and impact on Scope 3 Emissions
[29:19] The green premium question
[32:40] Made of Air's production footprint and plans to scale
[36:00] Biochar's end-of-life and permanent sequestration
[39:15] The financial side of the business
[42:10] Who Allison wants to hear from and how to work with Made of Air
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Jason Jacobs:
Hello, everyone. This is Jason Jacobs.
Cody Simms:
And I'm Cody Simms.
Jason Jacobs:
Welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms:
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs:
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms:
Today's guest is Allison Dring, CEO and co-founder of Made of Air, which makes carbon negative materials for the built environment and consumer goods by incorporating biochar into their materials mix. Biochar is essentially the process of burning biomaterials such as wood or crop residue down to the point of there being pretty much only carbon remaining, like a natural wood lump charcoal powder. Made of Air then incorporates that biochar powder with bioplastics into a moldable and functional material that has captured carbon embedded directly into it.
Allison and I have a great conversation about how the built environment is thinking about decarbonization and building materials today and how carbon negativity can be applied to a building that compliment other emissions reduction practices that a building may pursue. We also talk about what the end-of-life process for these buildings and materials would need to look like to ensure that captured carbon stays actually captured. The way we approach things is seemingly routine as accent textures on a building's walls is all changing around us as we recognize the impact of embodied carbon in our world. Allison and Made of Air are a great example of this transformation. Allison, welcome to the show.
Allison Dring:
Hi, Cody, great to be here.
Cody Simms:
I want to start right in. I've heard you say something in the past, which is that there is systemic failure in the built environment, and we're just going to jump right into that. I want to hear you explain where you think the built environment has gone wrong over whatever, the last 60 years or more.
Allison Dring:
Absolutely. I'm happy to do that. We are diving in as a raw materials company that will feed the built environment at product level, so this is something that we take very seriously. This is one of the reasons why I jumped in with Made of Air. The built environment has what we call an embodied carbon problem. I think the best way to look at this is, most people are aware if they're working in a climate space or any kind of sustainability of the impact of the built environment in global emissions, it's about 40%. It's a huge chunk.
You even hear politicians talking about it and nobody talks about buildings, but 40%'s a lot. I think where you tend to go mentally when you hear that number is "Oh, it's energy. It must be like how well buildings are insulated or what the operational maintenance looks like, the energy emissions." For a large part, it is. What's not well known, which is starting to become more and more of a concern is a good chunk of that, so 11%, are associated with the emissions attached to the materials, and this is what's referred to as embodied carbon. It's not as much as the operational energy, but I can tell you why it's more important to pay attention to this right now.
Cody Simms:
Allison, when we hear that, I think most people who live in the climate space immediately go to, "Oh yeah, of course, cement." I'm curious how much of that is cement relative to other things like aluminum, plastics, et cetera. I don't know if you have the numbers off the top of your head, but even just qualifying that might be helpful.
Allison Dring:
Yeah, I don't have the numbers off the top of my head for that. I can tell you that there's a breakdown in the builds environment in a building between a structural component and a non-structural component. It's like, numbers vary. It's, but 75% I would say is structural 25% to non-structural parts, so you have materials emissions attached to both, in terms of what the breakdown is between concrete and the rest, I wouldn't have that offhand.
Cody Simms:
Cool. Yeah, it makes sense. But anyway, continue on because I think we all inherently know of some of the really hard challenges around concrete and cements, but I think what we're going to talk about today are some of the other aspects of the built environment that maybe have gotten overlooked.
Allison Dring:
Yeah, for sure. I can just start by saying why is it so important to pay attention to this embodied carbon problem right now? A lot of that is around the very few years we have left to make better decisions around buildings. When you hear about emissions attached to energy, it's urgent, but we also have time and buildings have long life cycles, 10, 20, 30 years, can be 100 years that a building is in place. We have a lot of time to make better decisions about energy efficiency. We have a better view on it. As the technology develops, I think there's a lot of opportunity there. I think where most of the concern is coming in with embodied carbon is that a lot of those decisions attached to the materials, those emissions attached to the materials need to be made at the front end. When a building is being built or renovated, we don't have a lot of time to get those decisions wrong. If we make a wrong turn with the building materials that we're choosing, it can be 50 years of those emissions are attached to.
Cody Simms:
So even longer term than the mistake of powering the HVAC with natural gas, which may have a 20-year life cycle, like you're talking about these carbon materials that we're having to go produce to build these buildings are going to be there for a while. So with this long-term embodied carbon problem in these buildings, what's the driving factor in getting developers to think differently right now? We are seeing a lot of regulation around the use of fossil fuels for powering heating and cooling in buildings, power and heating more directly in buildings. I'm curious on the built environment structural side, are you starting to see regulatory changes there or are you seeing it being more driven by free market ESG concerns, total carbon accounting at the building level?
Allison Dring:
Yeah, we are seeing regulations come in. Especially in Europe where our company is, regulations are taken very seriously. We're starting to see mention of embodied carbon in that space. So traditionally, they're really checking the energy efficiency of buildings. There's been a lot of precedent for that. I think what we're seeing in the last couple years is at the EU Parliament level, at member states level, we're starting to see regulations check whole emissions of buildings and embody carbon is playing a big part. We check in regularly with very large architecture companies in Europe, some of the top 10 global architecture companies. A lot of them sit in London, we're checking in with them. On the walls of their offices are the actual breakdowns of embodied carbon per material, per product. This is something that they're talking directly to their customers about who are developers in the space.
The reason why they're doing this, they want to comply. They're competing for building sites often in the city centers. Sustainability matters a lot there. They're thinking about leasing their buildings. It used to be a question of, "How much can I get if I bring sustainability into my building?" Now it's, "How can I rent my building without it? So there is this correlation between that it's very much market led and they're also concerned about compliance over the next 20 years. So no building developer wants to get into this thinking, "That feels like the regulations are going to tip toward embodied carbon. I don't want to be out of compliance. I'm going to have to reinvest in a big way in the next 20 years. That's not really what I'm up for." So we are seeing a lot of the developers coming in line, and there's a little bit of trophism too. They want to see that these buildings that they're bringing to life are really standing for something, if they're going to be sustainable, if they want to be sustainable at every level, and the materials are a big part of that.
Cody Simms:
Interesting. Starting in dense metro areas where real estate is highly competitive and you're trying to find every edge to make your building be more appealing, I guess, both to potential businesses that want to move in as well as to potential residents on the multi-family side, how in the world did you start thinking about this? You're an American in Berlin. Walk us through your background in terms of how this became your focus.
Allison Dring:
Yeah. Well, I'm coming from the built environment. So in my career, I'm a trained architect. I lived many years, so yes, I'm American. I went to grad school in London. I came right out of that into the London architecture scene. I was always sitting a little outside of the profession. I can't say that I was ever a practicing architect. What I always imagined was that the built environment was made of, it was a sum of parts, and these parts had different roles to play. The way I saw it when I was leaving grad school was that the built environment, and I say that because it's not just about buildings, it is about the how they're connected to each other, the urban landscape. What I was seeing was that we didn't have an architectural typology or any built system that could respond to climate.
At the time, for me, one of the focuses that I took on was air pollution and thinking about why buildings weren't able to interact with this micro-climate happening around them. So the beginnings of my career were really addressing at product level how buildings could better do that, and what it led me into was into manufacturing really. It really pulled me onto the factory floor where I started to see how products are made, how materials are sourced, what manufacturers could and could not do for sustainability. I spent a lot of time questioning that. What we found out in those value chains behind those products was that materials were the real kingpin. When it comes to sustainability, there's only so much you can do at either end. Right in the middle where materials are sourced is really where we can have a big unlock and also, where our carbon budget can fall to pieces.
Cody Simms:
Then how'd you meet the rest of your team that helped you decide to, "Let's go build a company in this space?"
Allison Dring:
So I've been working with my co-founder, Daniel Schwaag, who also comes from the built environment space. So we were already working on this way back when. So right out of grad school, we started working on building products that could do more for the climate, pairing them with climate technologies and bringing them to life. So we'd already had a history of being in the space, understanding what the needs were, really in understanding what manufacturing looked like from the inside. I think it was really born of that. We started working at material level. Right around this time, we started paying attention to carbon capture. So around 2008, 2010, all of us started hearing about CO2 as a resource. They used to be referred to as mega eco engineers.
I don't know if you remember that, but that was the title given to anyone thinking about globally what we could do and then any crazy idea was acceptable, and one of those crazy ideas was biochar. So at the time when we were hearing about carbon capture, the very, very first, I think, Dr. Klaus Lackner, at the time was starting to publish on the topic of taking CO2 out of the air as a gas. What we found with biochar that was interesting was it was a nature-based solution. It was also already a material. For us, that was an attractive way to start thinking about resources moving from fossil to not just above ground, but coming from the air. This was an exciting idea that we started to prototype over the years and you know how it goes. It takes a few years in the lab and we finally pulled it into what we thought was a scalable material and formed the company in 2016.
Cody Simms:
Well, now is the time when we will dive deep into biochar. That's, to me, one of things that's really interesting about your approach. We talked to and meet lots of companies innovating in the materials space. I have to say personally, it can be hard to discern the approach if it's purely some form of new manufactured material or process or biomaterial or this, that and the other, because it feels like how do you assess if one thing is going to be more successful than the other? I feel like with what you are doing, you're taking a known practice for carbon sequestration, which is biochar. We had another CEO on the show recently, Jason Aramburu of Climate Robotics, which makes biochar in the field as an agricultural input and he was talking about how biochar has been around for millennia. They found evidence of biochar in indigenous land practices from thousands of years ago.
So this is a known thing, but you're approaching it in a different way and that you're now embodying it into built environment materials. So I am super interested to understand how that process works for you. I guess A, why did you land on biochar as being the answer here as opposed to just looking at another biopolymer that you could use to replace the carbon-intensive materials that you're trying to displace? Is it true, and I'm assuming it is, that with biochar you're not only creating essentially a biodegradable material, but it's one that has carbon embedded into it inherently in a way that can ultimately be sequestered when the building is end of life. All right, that was a lot. I just threw a lot at you, but I think you can riff on it from there.
Allison Dring:
Absolutely. Yeah, I'll riff on that. I know Jason. I just saw Jason just in Hawaii, so it was great to connect with him. Yeah, this is a great question. When we got into this, we weren't really thinking about, "How can we make a biomaterial?" We were thinking about, "How can we get carbon capture in at material level?"
Cody Simms:
That's definitely a different lens. That's a different lens than most companies in the sustainability space are thinking about because you're actually coming at it from a climate perspective, even as much as from a sustainability perspective.
Allison Dring:
Absolutely. We very much consider ourselves a climate company first, and we deliver for the climate through materials, not the other way around. It's a great question. We never aimed to create a biomaterial. We thought about it in terms of, "We need to scale up rapidly this proven method of carbon sequestration, which is biochar. We need to look at methods to scale this up." We were sitting on something that had intense demand for this kind of scale up. In the built environment, you can make one product, and it is extreme volumes that happen on the product level on the other side. You make one panel and per project, you're selling 1,000 square meters of that panel. It's a different scale, and the decision makers involved are few compared to other markets. So those decision makers need to be informed and they need to understand what the sustainability aspects can do for their building. I think we saw a great opportunity to bring carbon sequestration into that conversation. It hadn't happened before.
This was always our aim was to talk about carbon, not about biomaterials. That's really why the company right now is focused on the functionalization of biochar. We use different polymers, we work with different binders. We're somewhat agnostic when it comes to that. We like to work with biopolymers. They have a great climate profile, but what we're really focusing on is functionalizing the biochar and finding pathways to get it into material compounds that manufacturers can use. So that's always been our push. I think we end up in a biomaterial space, and that's great. I think we are unique in the sense that what we have is a permanent form of carbon in our material. I think a lot of biomaterials are working with plants, bringing reeds, bringing fibers into it using a biopolymer. At the same time, it's great as a way to knock out of fossil material. It doesn't have the same performance as our material does in terms of permanence, so we actually have a permanent form of carbon capture that can last a long time.
Cody Simms:
I think of you all as having both the avoided emissions of not using fossil fuel-based materials, but then, the sequestration benefit and the capture benefit of using an actual carbon-based material. I'm curious, as you've thought about, and I want to come back to how you're using biochar, but as you've thought about the carbon credit potential inherent in your materials, does it tend to be more on the direct capture from a credit perspective or on the avoidance side of things or a little bit of both?
Allison Dring:
Oh, that's a tricky question. I think in terms of carbon credit, and maybe you can correct me if I'm wrong in this, I'm not an expert on carbon credits. We are using them. Our material qualifies for them. I think it's attached to our emissions, our negative emissions.
Cody Simms:
Okay. So the actual direct carbon capture side of your-
Allison Dring:
Yeah, I don't think it's an avoidant. I don't think it's the delta in that case. It is negative emissions. What methodology applies to ours is the fact that we are able to take the material which is filled with biochar into a use case that has a long life. We bring it into a building that has a 50-year lifetime and we are generating a carbon credit based on that.
Cody Simms:
So in terms of how the Made of Air material is made, are you doing the direct prioritization of the biochar? You're producing the biochar in-house yourselves and then mixing it with some form of binder and basically turning that into a granule that somewhat works like a plastic? Is that what your process looks like at the simplest level, I guess?
Allison Dring:
That's it. Yes. We work with char suppliers. We are somewhat char agnostic, so we're able to work with a lot of different types of biochar. We will produce on-site from next year, but we do see that in order to scale this up, we need to work with other partners. There's a lot of biochar being produced here in Europe, so really just being able to focus our technology on the processing and bringing in biochar as big a scale as we can.
Cody Simms:
I assume there's some heat involved obviously in the paralyzation, but then also presumably, in the actual alchemy of mixing the biochar with the binder. Do you have a process for how you do that as well to ensure proper emissions management there?
Allison Dring:
Yeah. In our production line, biochar is an exothermic reaction, so you're right in the paralysis step, what we get is the heat explosion. This is not easy to explain always, but I like to use the campfire analogy. You don't need a lot of heat to start the fire, you just need the match and then suddenly you have a heat explosion. It's the same thing in biochar. So we collect a lot of heat in that step and we're able to take it through our production line. So every time we need heat, we're using it there. At the end of our production line, we do have an excess of heat, and this is great. So we are energy positive in our process. We can convert to electric and sell back to the grid. We can also sell the heat on to partners, so manufacturers nearby that use heat, that surplus can go to them.
Cody Simms:
We're going to take a short break right now so our partner, Yin, can share more about the MCJ membership option.
Yin Lu:
Hey, folks. Yin here, our partner at MCJ Collective. Want to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019, and has since then grown to 2000 members globally. Each week, we're inspired by people who join with differing backgrounds and perspectives. While those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change.
Some awesome initiatives have come out of the community. A number of founding teams have met, nonprofits have been established, a bunch of hiring has been done. Many early stage investments have been made, as well as ongoing events and programming like monthly Women in Climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. So whether you've been in climate for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and then click on the Members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms:
All right, back to the show. Talk about some of the use cases that the materials are then being fabricated into. Where's there been demand in the market?
Allison Dring:
Yeah. We've had such an exciting period. We're working right now in trials with customers. We have everything you can think of, honestly. It behaves like a plastic, the materials in thermoplastic. So we've been working in injection molding lately, and we're working with some pretty exciting customers. Like H&M, for example, we're doing some trials with them across a lot of their accessories, so this has been really great. We've already delivered a project with them. We did a pair of sunglasses with them, so I've established a great relationship. The materials go into anything from buttons on shirts to clasps on backpacks to all kinds of things like jewelry and sunglasses and apparel. That's something that we're looking at in injection molding. In the builds environment, we are working on facades, a lot of panelization of materials, so facades is a natural first one for us. We think it's really great. We've already worked with Audi, for example, delivering the material as a facade panel for their dealerships.
That's been really fun. We're using their design to do it, so it's kind of unique in that way. But we know that the material behaves very well. It has very good UV stability. It's very formable. It offers a great face to a building, so that's really where we're starting. We have a great commercial partner in that our first commercial agreement is with a Dutch company here called Altura. We've had a great partnership with them so far in developing the material into a facade product that's going to be ready, I think end of next year is where we're targeting that. But you can imagine in terms of use cases, it's pretty dizzying. As a materials company, we look at anything and everything. So in the builds environment, you can think about all the paneled applications around you, whether it's the facades or the interior paneling, the ceilings, the floors, the doors, the kitchen cabinets, the closets, all of these sorts of things.
Cody Simms:
So it's basically anything non-structural or non-load bearing, I guess. Is that the right way to think about it?
Allison Dring:
That's it, yeah. Non-load bearing, infill, fit-outs, retail, that kind of thing, so very high emissions attached to those applications. A lot of times we're knocking out materials like aluminum, which has one of the worst climate profiles in the built environment. High-pressure laminates that are using phenolic resins, we're able to replace that. So the impact is really high when you can take out those materials and replace them with a carbon negative one.
Cody Simms:
Do you have any data on the swing of tons of CO2 differential?
Allison Dring:
Yeah, I can do it in per ton. If you're working with aluminum, you're generating 11 to 14 tons of CO2 per ton. Our material brings in negative two tons per ton of material. So that swing is, you can look at like a 16 ton of CO2 differential. When it comes to square meter, this is also interesting. A lot of the incumbent materials right now and facades are 100 to 200 kilos of CO2 per square meter. When it comes to ours, we're at -20.
Cody Simms:
Wow. Just to back up on all the different use cases, 'cause we started the conversation by my line of questioning focusing on the built environment, but you also obviously are serving other plastic-related use cases as well. You mentioned sunglasses as an example. How far down the product development cycle does Make of Air go in each of these different use cases? So is your job, "Hey, we deliver you some pellets and then you take them to your injection molder and do the thing?" Or are you going more deeply into the manufacturing process? I guess maybe to add an additional layer to that question, do you see that changing as you continue to scale and move out of proof of concept land into scale?
Allison Dring:
Yeah, there's a lot of handholding in the beginning both ways. We're learning a lot about our customers, they're learning a lot about us. We are brand new. We are not just a biomaterial that comes along, we're doing a very different thing for customers. When we work with big consumer brands, what we're actually helping with is scope 3 emissions. It's not just about being more climate friendly, it's actually about delivering impact deep in their supply chains that are emissions that are typically hard to abate. So we are not only having a, "How does this material fit the part?" Conversation, but we're having a conversation about, "How do these emissions help you counteract emissions somewhere else in your supply chain?" So we are constantly working very closely with those customers to do it. But that being said, as we grow, we will step back. There's a certain amount of work that we have to do to get the material to work in the part, but we are seeing that as we grow the applications, we're getting further back in the value chain.
So right now, we do deliver on granules. We do a lot in terms of helping companies to onboard the material, but as we scale up, especially in the built environment, our processing technology really focuses on biochar. So what we're really looking to do in the next 10 years is to take that technology and expand it. So while we're working in polymers, right now, we would eventually sell the material as a filler, and that would be the ingredient that would ... you can imagine it as the decarbonizing agent of so many different kinds of materials. That's really how we see the future of our product development is in not just working in polymers, but we can work with all kinds of compounds. So we can bring biochar in this carbon from the atmosphere. We can bring it right into the building at all levels. So we wouldn't just be limited to the non-structural applications, we would look at steel and concrete and everything else that's going that way. So Made of Air is focused on that technology, the decarbonization aspect of it.
Cody Simms:
I suppose biochar has an inherent known carbon credit associated with it. How do you ultimately prioritize which projects you work with in terms of what their climate goals are?
Allison Dring:
Yeah, we're working with first movers. Right now, these are companies that are focused on their supply chains and those emissions. So that's one way that we qualify, "How serious do they take this problem? How urgent is this problem in their view?" So that's one way that we think about it. We are also thinking about the parts. So we don't want to have parts that are overly complex for us to achieve mechanically. We are still, of course, developing our product, so we tend to work with parts that we think we can hit quite easily. Whether it's injection molding or whether it's making panels in the built environment, that's something we look for. We're also thinking about a scalability within one customer. So if they're working with big portfolios, if they're in the built environment and they're already working on a lot of projects, they have a lot of products that are different that we can work into, that tends to lower the barriers there too.
Cody Simms:
It seems like a lot of your customers to date are either luxury goods or you mentioned buildings in highly-competitive urban environments. Both of those use cases, to me, feel like they're willing to pay a little bit of, quote, unquote, "green premium" for lower emissions materials where they can say, "Hey, this building or this product is made with carbon-negative materials, et cetera." How do you feel like you compete on cost with legacy materials? I assume aluminum is pretty darn cheap, and how do you expect that to change over time?
Allison Dring:
Yeah, that's the green premium question. This is the difficult one. Well, of course, the way that we're starting out, our price is higher than a fossil plastic. We are coming in a little bit higher than a lot of the incumbent materials in the built environment like phenolic resin, composites, aluminum, this sort of thing. I think how we're looking at it is we have a product that can get to price parity in the built environment markets within two years. A lot of that depends on how big we can scale it. Sometimes it depends on what materials we pair it with.
So our focus is really on the biochar itself. We can control a lot of the unit economics around that, and our costs will drop significantly in the next year or so enough that we think we can deliver cost parody in the built environment. The great thing is in doing that, we're delivering negative emissions at no extra cost to the building owner. So this is really where we know that those economics are, the green premium's just too hard for people to pay. What we have is a material that can deliver negative emissions to a building without extra costs, so we don't have a green premium on our product within the next two years.
Cody Simms:
You mentioned it sounds like biochar is the heaviest variable on cost today. Is that because there hasn't been yet a heavy amount of demand on the biochar side and you believe as you create demand, you will increase production, which will inherently, presumably lower cost? Is that the basics of the unit economics there on the biochar side?
Allison Dring:
That's it. There's a growing biochar market and it's so exciting to see this. The carbon credit industry has certainly played a role in that, so we're seeing an explosion of biochar companies because there's a great business model in that. I think what we've always thought, even way back when we first started to think about biochar was that the world needs this technology to scale up in a big way. It's not serving the climate at the scale it is right now. The way that we see it, there is a huge demand for sustainable materials in the built environment and in other product manufacturing.
So just connecting the two is really what's needed and Made of Air's position is to be that unlock. The way that we see it is that you can't right now just take biochar and stick it in a material compound and expect it to work in an industrial way. Really, we'd always looked at it that way. "There's something missing. We need to scale this up. We need to connect these dots." Made of Air's error's processing technology, this is really what we are focusing on is taking the char and unlocking that market for it so that it can serve the climate.
Cody Simms:
Partially, I believe, one of the challenges of biochar is just it's heavy to move a bunch of biomass around. Even once you have the biochar, it's a relatively heavy material to move around. What does that mean for you in terms of what your own production footprint looks like for Made of Air over time? Right now, I assume you have a pilot facility you're using to do everything, but as you scale, are you going to need to have production factories around that are your own or are you planning to license those out to other people to build based on your I{? How do you see that changing as you grow?
Allison Dring:
Yeah, we're starting out by owning and operating our own pilot, so we are setting up our first production facility. We'll be online next year. There, we should be producing at around 800 tons. It's hard to contextualize this, but that's not a whole lot when it comes to materials. It's a lot, but it's not a whole lot. So we know that part of scaling up for the climate means scaling up that production capacity. We are not a company that's going to go around owning and operating factories around the world. We are a technology company, so the way we're looking at it is we need to get a lot of joined up partners working on the biomass side. We are in conversations right now with some exciting companies that are doing just that. They're usually in wood waste. They're producing biochar themselves or they're thinking about it and they don't quite know how to valorize that waste stream.
Even if they're producing biochar, they're not sure what to do with it. So where we come in is offering them a licensed technology, a bunch of equipment that can plug into that process, that can take the biochar that they're producing and turn it into a functionalized biochar that becomes a material filler that we can go around then and purchase and bring into our process. I think that's really how we see expanding. We'll have capacity on our own site to do that at about 5,000 tons a year, which is a great jump for us. But we'd like to make a much, much bigger jump in terms of the climate. So that's something that we're aiming toward 2030 is to really expand with partners across Europe and across the globe.
Cody Simms:
Then, you're get to this point where you're generating tens of thousands of tons of new material each year, which is great. One of the questions that I think any carbon capture or carbon devalue product gets is, "Okay, so then this stuff goes in a building. Well, we know the building's not going to be there for 500 years. It eventually gets knocked down. Does the carbon get re-released at that point?" What does end of life look like with Made of Air? And are there agreements that you enter into with the buildings, or sunglasses are a little harder to enter into agreement with every consumer who buys a pair of sunglasses, but agreements you enter into with the product manufacturers around what's going to happen to this stuff when it finally is ready to no longer be of use?
Allison Dring:
Yeah, that's very top of mind for us. So really, a technology angle that we take on it end of life, we're writing a white paper on this topic exactly right now. The thing is, we have several options. We have a fully circular material. This is something that when it comes to consumer products, it's maybe more relevant, but we have a material that you can mechanically grind down and reform. It has many cycles. This is a material that we can keep in circulation if we need to, but we also have other options. We can take it through chemical or pyrolysis recycling. In either of those steps, we can separate the biochar from the polymer binders. We can polymerize the polymers, keep them in circulation, put them to use in other ways. We can also reuse the biochar, that's interesting. It even has different properties perhaps at that point that could be interesting for future use.
But what I find personally the most exciting about this is to be able to take that char at the real end of life and retire it to the ground. When we do that, we have true carbon sequestration. We have the end of the carbon cycle, which started 150 years ago. That is the true end of life for me and for all of us, so I think that's the really important point to make. This is the target that we have at Made of Air is to take that carbon out of the atmosphere and get it back in the ground while putting it to work in between. I think this point doesn't just involve Made of Air. As you are alluding to, this is a bigger thing. How do we get the building owner and the whole custodial chain of building owners to understand that this is a material that needs to go back in the ground?
Right now, there are incentives in place, so one of the ways that we're looking at is carbon credits. We can sell a carbon credit along with the material that goes into a building product, that gets sold to a building owner. That building owner, while they're watching their assets depreciate on a balance sheet, for example, they have an asset attached to a material on that building that's going to appreciate over time. One of the things that will cause a big jump in the appreciation is if they can secure the end of life at the true end of life at the building. So if they were to take that material off the building, demount it, put it through one of these recycling steps, or even just landfill it, if it's a biomaterial, it can go straight in the landfill. In that case, in either of those cases, they would cash in on a bigger carbon credit there.
Cody Simms:
So the thing that you somehow need to get them to agree or recognize or financially avoid doing is frankly, just burning it. As long as they don't do that or they don't just let it sit above ground and eventually re-release, I guess biochar wouldn't re-release carbon in the atmosphere from the ground, would it? It's just you just don't want to burn it.
Allison Dring:
You don't want to burn it, no. That's what we would want to avoid. I think in a lot of those cases, in any of those cases, the great thing about putting it in a building is you have time to think about it. Once you get in a building, you've got at least 10 years to think about what the end of life looks like. There's a lot of companies doing great stuff in digital twins right now, so I think the understanding of the value of those materials has really changed and it's going to change a lot more.
Cody Simms:
There's precedent, right? Bricks get reused, et cetera. There are parts of the built environment that have been reused many times before. In many cases, it feels like we've lost those practices in how we build buildings today. So it's almost some of that might be going back to 100-year-old reuse practices around building materials.
Allison Dring:
Absolutely. Yeah, there's a lot going on in that space.
Cody Simms:
Finally, I just want to obviously touch on how you see growing the business from a financial perspective. Do you see this being a business that you will grow through multiple rounds of venture capital? Do you see this being a business that you take in capital to get to a certain amount of scale and then beyond that, it becomes a project finance supported business as you build out different pilot facilities, or do you think that there's not even a huge capital infusion need here? I'm just interested in how you see the footprint of the business growing, and what finances that?
Allison Dring:
Yeah, we're definitely capitalizing through equity right now, and that's really how we see the next stage as well. This is a way to get us launched. We are thinking about how our technology gets operationalized in the next two years. This is really our target is to start building the equipment chains that our production partners would need to be able to expand capacity. So there's some of the target is about bringing all that exciting technology into tangible stuff, a plugin of sorts, a kind of container that biomass companies can use to work with their biochar.
So that is capital intensive. That's still something that we're working on with equity. At the end of this process as we scale up our production, we would have a cashflow positive business, and that's exciting. That's worth doing, but we don't want to stop there. Obviously, we want to keep going, and a lot of this is capital-intensive stuff. So yeah, project finance is certainly part of it. I can't say whether we're going to go that route or go the equity route and keep doing fundraising rounds yet, but I think there's so many exciting business models to explore from it.
Cody Simms:
One thing for folks who want to stay in touch with what you're doing, I noticed you just started publishing a quarterly video update on your blog. I'm super curious what prompted that. I was watching that as I was prepping for our chat today. I thought it was pretty cool and a unique way to hear directly from the CEO on what's going on.
Allison Dring:
Yeah, that's actually come from one of our team members. We do a lot of all-hands in the company, and I'm certainly doing a lot of reporting with our board. I think we just thought this is a way to be more transparent with the public. We're doing some really exciting stuff. Not every climate startup gets to hold the thing in their hands when they've actually achieved it. So I feel like that's something that we wanted to share with the public. I'm happy to hear that that resonates and I'm looking forward to doing the next one.
Cody Simms:
We're all in this learning journey together, so I think the more you're sharing what you're learning as you grow, the more it informs other entrepreneurs who are pursuing all sorts of different projects in and around this space. Allison, what else should I have asked you today that I didn't ask? Where I guess listeners who are interested in helping, what should they do? Where do you need help today, both internally and externally? What else should I have talked about with you?
Allison Dring:
There's probably so many exciting topics around what we're doing. What's been exciting is working with great companies, as I mentioned like first movers that are thinking about their emissions and their supply chains. So we are always looking for exciting use cases. That's something that we have a lot of material to trial. We love putting materials into trials. So if there's anyone out there that's thinking about the product that they have, either they're working on it or they're looking at it right now and thinking, "This could use a really great material," please get in touch with us because we are open and willing to work with companies on a lot of different product applications.
So that's one way that I think that's one way that you could help or that we could help. Yeah, also thought leadership, I guess that's something that we're not hearing enough of. In my opinion, we're not hearing enough about carbon negative about going past carbon neutral. We know that the IPCC is calling for technologies that can do this, that can create negative emissions, and I don't feel like there's enough of a conversation around that. So I guess just being part of that forum is really important for me and for our company.
Cody Simms:
Allison, thank you so much for joining us today. I learned a ton, and I really appreciate all that you're doing and all that you've shared with us.
Allison Dring:
Thanks so much, Cody. It was a pleasure being here. I love your show, by the way. I look through all of the people that you've worked with, that you've spoken to, and it's a really impressive group, so happy to be part of this.
Cody Simms:
Oh, we are just a small part shining a light on people like you who are doing all the work, so we all are appreciative. I just am appreciative every day that I get to learn from folks like you who are out there trying to make a huge difference, so thanks for joining us.
Allison Dring:
Thank you.
Jason Jacobs:
Thanks again, for joining us on My Climate Journey podcast.
Cody Simms:
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem-solving capacity. To do this, we focus on three main pillars: content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change and our member community to bring people together as Yin described earlier.
Jason Jacobs:
If you'd like to learn more about MCJ Collective, visit us at www.mcjcollective.com. If you have guest suggestions, feel free to let us know on Twitter @mcjpod.
Cody Simms:
Thanks, and see you next episode.
