Windfall Bio’s Methane-Eating Microbes on a Mission
Josh Silverman is the CEO and founder of Windfall Bio, which transforms methane into nitrogen-rich organic soil nutrients using naturally occurring methane-eating microbes. With a strong background in biotechnology, Josh has founded multiple successful ventures in the field, raising over $300 million in equity financing and generating a cumulative exit value exceeding $1.7 billion.
After co-founding Calysta, a cellular agriculture company that converts methane into sources of protein for livestock and other food ingredients, Josh turned his attention to other ways to tackle the problem of atmospheric methane, which led him to start Windfall. Carbon dioxide removal (CDR) gets the bulk of attention in the greenhouse gas removal space, but methane is responsible for a significant portion of the planetary warming that we are experiencing. Methane is up to 80 times more potent than CO2 from a heat-trapping perspective and is significantly more diffuse than CO2 in the atmosphere, making it challenging to capture or remove it once released.
While there are growing sources of anthropogenic methane released via natural gas infrastructure, livestock, rice cultivation, as well as landfills and waste processing, there are also significant naturally occurring pockets of methane released in the oceans and arctic tundra, which are likely to only increase on a warming planet, a case study in feedback loops leading to climate change tipping points.
Josh and Cody dive into the problem of methane, as well as Windfall's solution and how Josh has grown the business. They also cover Josh’s background and experience in the space. The MCJ Collective Venture Fund is a proud investor in Windfall, and we’re grateful to Liron Gitig at EDF for introducing us to Josh as part of EDF's Climate Tech Convening event in the fall of 2022.
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Episode recorded on Aug 8, 2023 (Published on Aug 17, 2023)
In this episode, we cover:
[03:41]: CO2 vs. methane attention and short-term impact
[06:03]: Methane breakdown into CO2 over time
[07:18]: Sources of methane: natural and human-created
[09:16]: Challenges with methane release and feedback loops
[11:49]: Diffuse methane release sources like rice farming
[12:58]: Connections to biological CDR solutions
[14:46]: Windfall's work with methane-eating microbes (MEMS)
[18:24]: Energy value and economics of methane capture
[20:36]: Windfall's digester use on farms for methane reduction and fertilizer production
[25:18]: Potential for branding "Low Greenhouse Gas" ag products
[26:37]: Market for methane removal
[28:05]: Decrease in natural MEMS despite methane increase
[30:53]: Josh's biotech background and methane work
[34:20]: Windfall's branding and company status
[35:27]: Where the company stands today, scaling, and low technology risk
[37:01]: Windfall's patented natural MEMS
[38:58]: Scaling MEMS for diffuse methane sources
[41:27]: Following and connecting with Windfall
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Cody Simms (00:00):
Today's guest on My Climate Journey Startup Series is Josh Silverman, CEO and founder at Windfall Bio. Windfall transforms methane, a powerful greenhouse gas, into nitrogen-rich organic soil nutrients via a naturally occurring methane-eating microbe. Josh has deep roots in biotech, having founded multiple successful businesses in the space, which have collectively raised more than $300 million in equity financing and have generated more than $1.7 billion in cumulative exit value to date.
(00:35):
After co-founding Calysta, a cellular agriculture company that converts methane into sources of protein for seafood, livestock, feed, and other food ingredients, Josh turned his attention to other ways to tackle the problem of atmospheric methane, which led him to start Windfall. Carbon dioxide removal or CDR may get the bulk of attention in the greenhouse gas removal space, but methane is responsible for a significant portion of the planetary warming that we are experiencing, by some estimates, up to 25% or more. This is due to methane's high warming potential.
(01:13):
It's up to 80 times more potent than CO2 from a heat trapping perspective, and methane is significantly more diffuse than CO2 in the atmosphere, making it that much more challenging to capture or remove it once released. Lastly, while there are growing sources of human caused or anthropogenic, methane released from places like natural gas infrastructure, livestock, and rice cultivation, as well as landfills and waste processing, there are also significant naturally occurring pockets of methane released in the oceans and arctic tundra, which are likely to only increase on a warming planet, a case study in feedback loops leading to climate change tipping points.
(01:57):
Josh and I dive into the problem of methane, as well as Windfall's solution. We talk about how he's building Windfall as a business, and we talk about his background and experience in the space. Our MCJ Collective Venture Fund is a proud investor in Windfall, and I'm grateful to Leron Gidig at EDF for introducing us to Josh as part of EDF's Climate Tech Convening event in the fall of 2022. I've been wanting to dive deeply on methane on the pod and this discussion with Josh covers a lot. But before we start, I'm Cody Simms.
Yin Lu (02:32):
I'm Yin Lu.
Jason Jacobs (02:33):
And I'm Jason Jacobs. And Welcome to My Climate Journey.
Yin Lu (02:40):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (02:45):
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. Josh, welcome to the show.
Josh Silverman (03:00):
Hey, Cody, thanks for having me.
Cody Simms (03:01):
Josh, you and I had the pleasure to meet last fall sometime at an event organized by EDF. And at the time, the panel that we were doing was focused on CDR, carbon dioxide removal, and you were a very vocal member, both of the panel and of the audience of saying, hey, there are some other greenhouse gases out here that don't start with a C that matter a lot.
(03:25):
I obviously really enjoyed the story you said. And ultimately, our venture fund at MCJ even ended up investing in what you're doing. Share a little bit more about why greenhouse gas emissions other than just carbon dioxide are important to pay attention to.
Josh Silverman (03:41):
Thanks, Cody. And just to be very clear, carbon dioxide is very important to get rid of. I'm all in favor of carbon dioxide solutions in addition to other things, but the problem has been mainly that so much effort has been focused on CO2 that basically nothing else is going on. What we see carbon dioxide has a very long half life in the atmosphere. When we look at CO2 solutions and we look at global warming on a large timescale, hundreds of years, then nothing else really seems to matter.
(04:10):
But when we care about global warming targets by 2030, 2040, 2050, short-term approaches become very, very important. Because if we don't meet those, we're not going to be around to see the benefits of the 100 year plus window. In the 1980s and whatever, when the first global warming was coming out and people were starting to make projections like 100 year windows and 200 year lifetimes, this all seemed like very reasonable timeframes, because it's all, oh, warming effects are all in the future.
(04:37):
It's our grandchildren's responsibility. We can worry about it later. Obviously we're not in that situation anymore and we need to be looking at things that can have immediate impacts on the climate today and things that can change and impact our lives right now, which again will buy us time for these other long-term strategies to go forward. What that does is really point you towards some of the short-lived climate gases, things like methane and nitrous oxide, which have very large outsize effects on warming, but they happen over a much shorter time window.
(05:07):
Again, those are things that allow us to have big impacts today and can have the biggest impacts then. But when I say they've been really overlooked, and when you look at the amount of funding and effort going into carbon dioxide solutions, it's something like 98% of all funding today for climate solutions is going towards CO2 removal solutions, not other things.
(05:26):
2% of funding is going towards things like methane, whereas methane is, depending on which models you're looking at, the actual warming of the atmosphere today, something like 30 to 50% of the actual physical warming of the atmosphere today, is being caused by methane. Huge disparity in the amount of funding attention and interest going towards these short-term climate issues versus what's actually causing the problems that we're running into today.
(05:51):
We keep looking at these very long-term solutions and missing all of our short-term goals and seeing short-term warming completely out of control. Again, there's a complete mismatch now in where we are versus where we want to be.
Cody Simms (06:03):
I imagine that's because when you're looking at emissions levels historically and you're trying to measure changes, because carbon dioxide stays in the atmosphere for so much longer, everything ends up getting normalized to this CO2e or carbon dioxide equivalency scale. And correct me if I'm wrong, but eventually methane breaks down into primarily CO2 in the atmosphere after its time heavily blanketing the earth in its short-lived span in the atmosphere. Is that correct?
Josh Silverman (06:33):
Right. Yep, that's correct. Methane breaks down through oxygen chlorine radicals in the atmosphere and eventually turns into CO2. Those carbon molecules are still warming the planet for a long time. Again, if we can remove that, we still have long-term benefits in addition to short-term. But the effects in the short-term are massively amplified because every ton of methane today that goes into the atmosphere is worth 86 tons of CO2 over a 20-year period, whereas historically how we've valued it is looking at a 100 window and then it's only 20, 25X versus CO2.
Cody Simms (07:08):
And in terms of sources of methane today is primarily coming from a combination of agriculture, energy, and waste, I guess, landfills, et cetera. Is that right?
Josh Silverman (07:18):
Yeah, and that's the real challenge with methane is it does come from many, many different sources, and it comes from both manmade and natural sources. What's actually really interesting, we've seen methane going up dramatically in the atmosphere and CO2 has gone up. The levels have basically doubled over the last 30, 40 years. But methane has gone up four or 5X, so it's increasing and it's increasing much faster than CO2 has been increasing. You can actually look at the isotope ratios of the methane in the atmosphere to figure out where it's coming from.
(07:49):
10 years ago when people saw these increasing levels in the atmosphere, the first speculation was, oh, it's coming from oil and gas. We're using a lot more natural gas in our power system. We must have a lot more leakages, and that's where it's coming from. But if you look at the isotope ratios, it's actually mostly coming from natural sources. You see it's coming from wetland emissions and things like termites. Termites is actually one of the larger sources of methane into the atmosphere.
(08:13):
That is just termite mounds. They do a lot of anaerobic digestion and breakdown of wood pulp, and it produces methane as a byproduct. What we're seeing is both an increase in the biological emissions of methane from normal sources, but also a loss of the methane capture. While biological systems like to produce methane, they also naturally like to eat it. Soils are a great sink of methane out of the air as a way to remove that methane from the atmosphere.
(08:43):
But due to a number of factors that aren't necessarily very well understood, we're actually seeing a significant loss of methane-eating activity out of those soils. And that's really one of the things that Windfall is trying to focus on is trying to bring that activity back to use completely natural normal process of biology, eating methane out of the air, and trying to leverage that and expand upon that and essentially restore the soils to what they were even just 30 or 40 years ago.
Cody Simms (09:10):
Definitely we're going to spend a lot of time on the eating side and the bacteria that you all have been harnessing at Windfall. But before we do that, just the point you were making about the increase in natural biological methane release, I think that the scary side of that point is as the world approaches some more climate tipping points such as melting permafrost, et cetera, there's the potential for this to accelerate dramatically further. Is that correct?
Josh Silverman (09:37):
That's absolutely correct. The science on this I think is still a little bit controversial, so take it with a grain of salt, but certainly there are reports out there which have tied many of the large extinction events and the large spikes in global warming over the past several million years that have happened have been tied to these positive feedback loops of methane release. Dramatic large releases of methane triggered by increased in temperature, which then increased temperature, trigger more methane release and you get these runaway drivers of climate change.
(10:08):
A lot of the very scary things that are projected in terms of these positive feedback loops are tied to methane, so things like melting permafrost in the Arctic. If you look at the methane hydrates under the ocean, so the methane that's produced by decaying plant matter, when it's under pressure and very cold environments like under the ocean, it will actually form hydrates and just sitting at crystalline form on the bottom of the ocean floor.
(10:33):
But the difference between that sitting there in some concentrated static state and it bubbling up into the atmosphere is the difference of a few degrees Celsius. What we're seeing, like right now, I just saw a report yesterday that the ocean surface temperature is now at literally historic highs. As the ocean warms, the potential for those hydrates in the shallower areas to start releasing, which then dumps a bunch of methane into the atmosphere, which then warms, which then increases the ocean and repeats that over and over again becomes very possible and very scary.
(11:05):
Having solutions in place to capture that methane, even if you don't believe that it's having a major effect on the climate right now, which I don't know who believes that, but let's say that's true, having these technologies in places, fail safes, if we do start to get into these positive feedback loops I think everyone would agree is a very useful technology development cycle.
Cody Simms (11:26):
Josh, I mean, I can imagine, if you look at the anthropogenic or manmade sources of methane release, which I tend to think of as oil and gas infrastructure, cattle, not that cattle are manmade, but the number of cattle out there is certainly a manmade phenomenon, and landfills, those to me feel like areas where some of it's still diffused, but you have a little bit of control over where they happen.
(11:49):
But boy, when we're talking about melting permafrost or ocean release, this seems like an incredibly diffused problem that you can't just install some capture device on top of like you can a cement plant that's releasing CO2. How do we think about this? That terrifies me, frankly.
Josh Silverman (12:05):
No, absolutely. The other one that you didn't mention that's right in the middle of that list is rice farming. Rice is actually, I think, the second-largest manmade source, something like that. It's a very significant number. Again, most people don't think about it because it is so diffused. You flood the rice patty and methane gets produced over these very wide swaths of land and the concentration of methane is very low. If you have a concentrated source of methane, you have a pipeline, you have a well from a natural gas or something, you can just light a match and it takes care of itself.
(12:36):
Methane is very different from CO2 in that respect. It has energy where you can actually leverage that to destroy the methane itself. We all know it. This is why you light your gas stove and the methane is not getting into the atmosphere when you do that.
Cody Simms (12:50):
Or in the case of landfill, it can be captured and actually sold as energy source. It has value to it, I suppose.
Josh Silverman (12:56):
Yep, exactly. It's these distributed sources of methane, very low concentration, low quality methane that's over very large areas, so it's hard for us as humans to capture it and use it. But this is where biological systems come in. Biological systems are really good at capturing and using very dilute distributed sources. Just the example we've talked about many times, all of us are very familiar with the idea that trees can capture CO2.
(13:23):
Right now when we talk about CDR solutions and carbon dioxide capture and removal from the atmosphere, still the single largest segment by orders of magnitude of all carbon credits that are being generated out there today are from biological systems. It's planting trees. The reason it works so well is trees are distributed. CO2 in the atmosphere is distributed, trees are distributed. Biology doesn't intensify. We don't build stainless steel. We don't talk about an 800 degree Celsius 10 atmosphere pressure tree.
(13:51):
We just plant a lot more trees. The output, the tree grows, it does what it needs to do, it takes care of itself, and it produces more trees that then continue to capture more and more CO2. These are positive feedback loops that actually work in our favor in this case. It turns out there are those same types of solutions available for methane. These are, again, naturally occurring organisms that live in the soil. They can eat methane in the same way that trees capture CO2. The difference is because methane has energy, these organisms don't actually need sunlight.
(14:20):
They're able to use methane as their sole source of energy to be able to drive this, and that type of approach of something that scales alongside also in a very distributed way that scales alongside of the distributed nature of the methane, we think that's a very reasonable solution or an approach that can allow us to address a lot of these very diffused sources that would be hard to do through more traditional means.
Cody Simms (14:46):
Well, let's jump right into it then. What is it that you're building at Windfall in order to try to tackle it this way?
Josh Silverman (14:53):
Windfall, we're leveraging these naturally occurring organisms. They occur all over the world in basically all soils and environments around the world, anywhere there's methane, and they're able to pull methane actually straight out of the air and use it as their source of carbon energy.
Cody Simms (15:08):
The term would be methanotroph. Is that accurate?
Josh Silverman (15:11):
That is accurate. That's the scientific term. We've been referring to them as MEMS, methane-eating microbes, as a way to be a little bit more friendly. Nobody looks at a tree and says, "Oh, that's a carbanotroph." It's this complicated technical term for something that's natural, familiar, normal. It's just a tree or it's a plant or it's a bush. These are just normal things. And it's because we can see them, we grow up with them, we can look at them. These MEMS, they live in the soil, but they're microscopic, so people just aren't as familiar with them.
(15:41):
We don't learn about methanotrophy in kindergarten the same way we learn about photosynthesis in kindergarten. It seems like it's fancy and science-based and not normal, but in reality it's a completely normal part of our environment. In fact, when they occur in the environment, they're really the bottom of the food chain. They have evolved to feed everything else. There's actually examples in deep water methane volcanoes where you have methane seeps from geologic sources and is way under the ocean.
(16:10):
There's no sunlight available. The only source of energy coming in is the methane, and you have entire ecosystems that are based on these mountains.
Cody Simms (16:18):
They're like the soil version of plankton basically is what I'm hearing.
Josh Silverman (16:22):
It's exactly what it is. They need to be able to feed everything else. They eat the methane. They also are able to fix nitrogen. They are essentially completely autonomous, and they can use the energy from that methane to pull nitrogen out of the air. They put carbon and nitrogen into the soil and they provide food for plants, other microorganisms, everything else in that environment. That's essentially what we're leveraging is taking these natural microbes and just putting them in situations where now they have more food.
(16:54):
Today, methane in the atmosphere is about two parts per million, which again, way more concentrated than it used to be in the atmosphere, but two parts per million is still a pretty low concentration. When we think about other sources of methane, things like a dairy barn might be about a hundred parts per million, a landfill can produce several thousand parts per million, oil and gas leakages can be in the tens of thousands of parts per million.
(17:19):
For these organisms that normally live in the dirt, see just a few molecules of methane going around in the air, you start putting them in the exhaust stream from a dairy barn or a landfill or one of these other things, it's a smorgasbord. They see way more food than they've ever had. They get really excited. They eat all of it. They're incredibly good and fast at eating this. And again, their output is more bacteria, is more MEMS. They're growing, they're reproducing, which means they eat more and they also create more nutrients.
(17:48):
As they're eating the methane, they're also pulling nitrogen out of the air and they're producing essentially a high quality fertilizer. These are soil nutrients that, again, are the natural normal food for plants and other soil microbiomes. We can then allow people who have access to this low quality distributed methane, something like a dairy barn, and now farmers and other stakeholders can capture that methane and turn it into a valuable product. I think for us, that's the most important thing is that this is actually a value creation process compared to a CDR process where it's an expense.
(18:24):
The main difference here is chemistry, because carbon dioxide is the waste product. It's what you get when you burn carbon. It's the end product. It has no energy. Anything you do to capture it, to transform it, to sequester it, it's always going to be expensive because you're always going to have to put energy into that process. Even again, trees, they capture CO2, sure, but they need the energy from the sun to do that. The benefit with methane, it has energy. It's the highest energy naturally occurring form of carbon.
(18:53):
If you have enough of it in one place, again, you can light a match and you can create heat. That's how all of us, not all of us, but many of us cook our food at home with a gas powered cook stove. The ability to actually use that energy from the methane to be able to create value. If we can allow people who are stewards of the land, farmers, stakeholders who have access to that methane, they can now capture it. They can create valuable products with it.
(19:19):
We can actually create an economic incentive independent of credits, independent of any other markets that will really drive people to help capture that methane. It's a process that makes sense, is economically viable, and is also, by the way, good for climate, as opposed to trying to drive it the other way.
Yin Lu (19:36):
Hey, everyone, I'm Yin, a partner at MCJ Collective, here 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 have grown to thousands of members globally. Each week we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change.
(20:03):
Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established, and 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.
(20:22):
Whether you've been in the climate space 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 click on the members tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (20:36):
If I understand, taking the dairy farm use case as our example here, you would go work with a dairy farm. You would set up some kind of digester infrastructure. You would take the air from inside the concentrated feed operation, flow it through your digester via essentially an exhaust fan. The MEMS would do their job of eating the methane, and then the waste product that they create would be this nitrogen enriched fertilizer that then the dairy farm could then spread out over its feeding operations on site as opposed to needing to buy outside chemical fertilizers. Am I fully grokking?
Josh Silverman (21:14):
Yep, nope, that's exactly right. The benefit we have is for these types of systems to work, they need to be as cheap as dirt. For that reason, our reactors are dirt because these are soil organisms. They grow in dirt. They're happy in soil. They're happy in compost. Taking the dairy example in particular, one of the things that dairies have a lot of is compost. They're taking the manure from the cows. They're separating that into liquids and solids. They're composting the solids, and then they spread that compost on their own fields to grow feed for the cows.
(21:45):
Most farms are extremely efficient and they capture every little bit of waste that they can, and they make the best possible use out of all the resources they have because they need to be profitable and they need to operate. Today, that methane that they're letting go into the atmosphere, they're not doing it because they want to, they just don't have the right tools to capture it and use it as a resource. What we can do is we essentially give the MEMS to the farmer.
(22:09):
Farmer can actually put the MEMS into their own compost piles, and then vent the gas from the barn over and through the compost pile. Also, on dairy barns, the manure itself produces a lot of methane, so that can be used to capture it. Essentially, the MEMS are growing in the compost. They put that carbon and nitrogen directly into the compost. Now the nitrogen of the compost increases and that's direct value of the farmer. The farmer just spreads the compost like they were going to anyway, because they're using it to grow feed for the cows.
(22:38):
And like you said, they just buy less synthetic fertilizer. They're putting less ammonia on, so it immediately reduces the outlay of cost that they were going to spend anyway.
Cody Simms (22:48):
Is the goal for them that unit economics wise they can come out ahead by buying the MEMS and reducing the fertilizer investment cost on their end, and then any other benefit they might get, such as lower GHG marketing that they can do around the product that they create, et cetera, is just gravy on top for them?
Josh Silverman (23:07):
Exactly. The baseline calculations we're doing right now would basically save 50% on the fertilizer versus buying it as synthetic ammonia if they're using our process. The feedstock, the energy is coming from waste methane that is, again, literally free for them because it's getting wasted today. The one thing every farmer is always going to buy is fertilizer. You never have enough fertilizer. I've never heard anyone who has enough fertilizer. This is something that they absolutely want.
(23:33):
Now, dairies are a great example. We like it because it's very circular. You have methane onsite being produced from the cows. You have generally farming with the feed. There's a nice circular come. You take the methane, you turn it into fertilizer, you use that plenty of other places, things like a landfill, for example, or wastewater treatment facility or those types of things. There's a lot of methane, but there isn't necessarily a lot of demand for fertilizer. They aren't planting stuff themselves.
(23:58):
Those places can now become distributed fertilizer production, and they can sell to farmers that are nearby. There's still an economic incentive for these facilities to now capture their own methane because they can produce a product that is in demand locally, because again, farmers always need fertilizer. The benefit that we're also providing, the fertilizer that we make is not ammonia. Ammonia is very important. We still need lots of ammonia. We're not going to be able to grow enough food for the planet if we're not producing ammonia chemically.
(24:29):
But synthetic ammonia has some downsides to it. It tends to run off. You have a significant amount that ends up in groundwater. You have a significant amount that volatilizes. It turns into nitrous oxide because other microbes in the soil like to eat it and use it for energy, and they produce nitrous oxide, which is also a very bad greenhouse gas. The nitrogen that we produce is organic nitrogen, both in the organic marketing label sense, as well as in the chemistry sense.
(24:57):
It is more bioavailable, more efficient, doesn't run off as much, doesn't volatilizes at all, and has significantly less nitrous oxide production that goes along with it. It's overall a better quality fertilizer in addition to being cheaper and able to be produced domestically without needing to be shipped across the ocean, which many of these synthetic fertilizers are.
Cody Simms (25:18):
Are you seeing an appetite on the ag side for these ag producers to be able to start to also themselves market low GHG product, much like maybe we saw the rise of organics 10, 20 years ago?
Josh Silverman (25:32):
Yeah, no, we certainly see that as a major potential benefit here. What we've seen in overall many consumer trials, consumers absolutely want more sustainable, more eco-friendly, low GHG products. But in general, there's not a willingness to pay for that. And they shouldn't have to. The process should be set in a way that is environmentally friendly. That is something that we can bring to the table. This is something that the farmer can do. They can improve their bottom line.
(25:58):
They can improve their footprint with the environment, and they can improve the environmental friendly nature of the product that the consumers can then incentivize by choosing that product versus others without actually having to pay more for it because the farmer is getting the value in terms of the nitrogen that's being produced. We see this as a great win-win-win scenario where we can align all the incentives for all the stakeholders in the right way.
(26:24):
Again, the reason we can do that is because the methane has energy in it, and this is why this is the unique stakeholder case and why it works here and not necessarily for other types of carbon reduction strategies.
Cody Simms (26:37):
And in the case of non-ag, where the benefit wouldn't be in branding or marketing necessarily, so landfill waste, for example, do you see a methane removal market emerging where there are credits bought and sold much like we're seeing in CO2 start to happen?
Josh Silverman (26:55):
Certainly I think it's possible. I think there is one technical problem with credits right now in that today credits are only generated if you have an additional technology. You have to be able to show that the party would not have implemented this technology if it wasn't for the credit that you're giving them.
Cody Simms (27:13):
Right. You're already more cost-effective than the status quo, so it's hard to prove additionality, I guess.
Josh Silverman (27:18):
Exactly, exactly. I certainly see credits as a good short-term opportunity. I mean, certainly to get the technology adoption up and running and why would somebody start doing this, it'll make sense. But we're in the interesting scenario of if we're successful and we meet all our goals and track everything, we destroy our credit market. Because as it becomes profitable and proven technology, then yeah, there's no point in issuing credits because there's nothing to incentivize. They're incentivized by the fertilizer.
Cody Simms (27:45):
Well, it's, to some extent, what we've seen happen with solar over the last few years as well, right?
Josh Silverman (27:49):
Yep, that's exactly how I would see it. There's probably an early stage market that incentives to get the adoption up and running. And then once that technology cost curve comes down, it's self-sustaining. It makes sense to do solar because it's cheaper than the other alternatives. So why not?
Cody Simms (28:05):
You mentioned early on that these bugs that you're using that are natural, they've been on the earth for millennia, millennia, but that they're declining. Why is that happening in a world where methane parts per million has been increasing?
Josh Silverman (28:19):
Yeah, so that's an excellent question. And if we knew the answer to that, then we could probably solve it. There certainly are some things that we can point to, but yeah, it is surprising both in terms of methane in the atmosphere is going up, so they have more food, but temperature is going up. And then generally speaking, bacteria do better when things are warmer and you would expect their activity to go up.
(28:39):
We are seeing net increases of biological methane in the atmosphere. We're seeing net increases from wetlands and emissions and things like that. We know clearly they are not keeping up with the emissions. There's at least some publications that have shown the population of the MEMS in the natural soils has declined pretty dramatically up to 80% in some locations over just the last 30 years. It's a pretty short time window that we're talking about.
Cody Simms (29:05):
Not even necessarily tied with the time horizon of industrialized agriculture, which would've been my hypothesis.
Josh Silverman (29:12):
There's a lot of things we can point to in smoking guns, like the few things that we know. We do know that things like synthetic ammonia do inhibit the MEMS. Natural populations will be decreased if we put ammonia into the soil. We know that things like clear cutting the soil, removing ground cover, removing grasses, that actually decreases the quantity of MEMS there. When we think about industrial agriculture and we think about the rise of high application ammonia fertilizers, that really has only been around for the last a hundred years or so.
(29:43):
This is a relatively recent phenomenon. It could be that. I don't want to point to saying like, oh, we know exactly what the problem is, but we do know that the activity has dropped. There are reports, 80% in some places have died off. I mean, from my perspective, at some point, it doesn't really matter why they're dying off, but it means we should do something to fix it. Again, if 80% of the trees in the Pacific Northwest burn down, which has happened, the states come back and they replant them.
(30:10):
We know that's a problem. They may still burn down again, but we should do something about it. The problem with the MEMS is they're microscopic. When we lose 80%, you don't realize it. 80% of the trees in Oregon disappear. We know that. We can see that, we can fix it, and we can take action. We're not keeping track of the soil in the same way that we have been before. Definitely we see the benefit of I want to go back to the idea that we're producing bacteria in compost, which can then be spread on the field.
(30:38):
Those organisms, when they get spread on the field, they're still alive. They're still going to go out, and they're going to repopulate the soils, and they're going to help bring those populations back in line. Is that going to be enough to solve the problem? I don't know, we'll have to see, but I think it's certainly a good step in the right direction.
Cody Simms (30:53):
We didn't upfront, Josh, establish your own bonafides. You have been working in the biotech space really your whole career. Maybe walk us through your history, and in particular, one of your most recent companies was in the methane space, if I understand correctly.
Josh Silverman (31:10):
Yeah, no, absolutely. Yeah, I've been working in biotech for a long time. We don't have to go through specific years, but I'm a scientist by training biochemistry, PhD. I started off working in therapeutics and drug development, brought several drugs from early stage concept into phase one, two clinical trials, but basically got very frustrated with how long the timeline and how big the investment is needed to get a drug from concept into the actual marketplace.
(31:36):
Phase three trials are big, expensive, and very, very risky, and I'd rather have things that I can get into consumer markets, into commercialization in my own lifetime. I started working into the industrial biotech space. That was right around the time of the big biofuels revolution, and you saw a lot of corn ethanol and cellulose ethanol stories that were coming up. Those didn't really make a lot of sense to me because sugar is very expensive. Fuel is really cheap. Turning something that's expensive into something that's cheap, economics 101 tells you that's a bad idea.
(32:09):
I started looking around there for other types of feedstocks for biology, because biological platforms to make biofuels, to make synthetic bio replacements for petroleum products, that all makes a lot of sense. It just the starting point being something that's food doesn't make a lot of sense. That led to this "discovery" of these organisms in the soil that eat methane and then produce the whole range of normal bioproducts that we make from things like yeast and E. coli and things like that.
(32:37):
I say "discovery" because again, they were known, they were described in the literature, but very few people were actually very familiar with this. It required quite a bit of work to develop these organisms as a platform technology that could then be used similarly to how people use yeast to make ethanol in that type of scale. I started a company based on that idea of using methane as a biological feedstock called Calysta.
(33:03):
Calysta has gone on and raised a couple hundred million dollars and has built, I think, it's the world's largest alternative protein fermentation facility in the world in China that now produces 20,000 tons per year of protein from natural gas of feedstock. And that's a strange thing for many people thinking, natural gas. When we started, the only use for natural gas is you burn it for energy. You can do it. It's still a better energy source than many other sources, so things like coal or whatever, but you still would rather not be burning it if you can avoid it.
(33:36):
The ability to actually turn that kind of cheap abundant energy source now actually into physical products like protein and food that can be used for animal feed or human consumption, that's a huge change in the thinking of many people. Windfall is the extension, the continuation of that. Calysta is great. They're scaling up. They're making protein as they should, but the way that the business model and the technology is set up there, it's really focused on natural gas, and they're using natural gas and they're making products out of that.
(34:07):
The ability to again apply this to very dilute, distributed low quality source of methane is what Windfall is targeted towards, is really something that is much more focused directly on climate-based impacts.
Cody Simms (34:20):
And looking back at the history of companies you've worked on, they all have very biotech sounding names. Windfall very much a kind of almost consumer branded name, and I know marketing has been a big emphasis for you early on. Walk us through the journey of coming up with a name for this current company.
Josh Silverman (34:36):
Oh, well, yeah, we actually got involved with a guy called Nick Schwans, who is great, absolutely the best marketing guy I've ever worked with in that regard. He came up with a name for Impossible Foods, and he's worked on a whole bunch of other really cool facing companies. I think when you and I first met, we were still using the term N3, which literally was just hit two buttons on my keyboard and come up with the name.
(34:59):
But we were really thinking that this is something that we do want to be consumer facing, consumer friendly, and to be able to really communicate the value proposition to farmers and to everyone else. We went through quite a lot of different naming exercises, but the idea that we can actually create value from a waste product, I think, was the thing that we really wanted to communicate most. Being able to turn this waste methane that's otherwise going into the atmosphere and turn it into a windfall for farmers and other stakeholders.
(35:27):
Anyone who has methane that they don't even realize they have today and suddenly they can turn it into a valuable product and get a revenue stream for it and then create that windfall for themselves, that's really what we wanted to be able to communicate and drive with that naming process. Nick is great. I would never have come up with this on my own. I'm terrible at naming. You said all of these other companies I've worked at, I have not named any of them because I am the worst in coming up with names. That's why I got a professional.
Cody Simms (35:53):
Where is the company today in terms of technical feasibility, in terms of commercialization, et cetera?
Josh Silverman (36:01):
We're cranking away. We're making material. We're getting seed culture out to farms. We have paying customers today. We're still small market entry. This isn't large scale commercialization. You can't go anywhere and get a bag of MEMS off the shelf yet, but we are absolutely planning to be scaling up very shortly. We have multiple partnerships that will hopefully be able to start talking about publicly very soon. We're excited. From a technology risk standpoint, these are naturally occurring organisms, non-GMO.
(36:31):
We're not changing them. We're not modifying them. We're just asking them to grow and do what they normally do. When we think about technology risk for trees, what's the technology risk of a tree? Nothing, right? What's the CapEx of a tree? Nothing. You plant it. It grows. It does what it's supposed to do as long as you give it the right food, the right environment, and all of that. That's essentially what we're doing is just trying to find the right home and the right fit for these organisms to be able to do what they're supposed to do and do it in the most efficient way.
Cody Simms (37:01):
Given your long history working in the biotech space, how do you protect your company given that just naturally occurring microbe that you're using?
Josh Silverman (37:11):
You keep saying long history, you're just calling me old in different ways, but that's fine. That's fine. No, no, no, no. IP is absolutely an important part. We've patented the process, the methodology, the composition of the matter that comes out of the backend following that. The organisms individually are naturally occurring and non-GMO, but we don't use a single organism in the mixture. We have a consortia. These are a bunch of organisms that work together in the most efficient way.
(37:39):
They support each other. They promote the growth and stability of that consortia over time and actually make it more efficient to both capture the methane and fix the nitrogen. Multiple patents filed around the entire process, a lot of know-how. The team that we've built are some of the world's experts in methane-eating bacteria know-how in science, but it's a very small field, so it's easy to have all the big fish under the same roof, if you forgive the mixed analogies there.
(38:09):
There's a lot of detailed know-how that's gone into this, and the organisms and the consortia has been actually optimized over the last two years plus, growing continuously and evolving and improving these things. We are continuing to find new strains, new consortia, especially as we talk about new geographies. Using the example of trees, it's easy to say, well, trees capture CO2, but you don't plant the same trees in Oregon that you plant in Mexico, for example. Each of those different geographies and environments, it has a different optimum.
(38:38):
It has different species that do well to be able to grow most effectively. And then the care and feeding, how you fertilize those, how you treat them is going to be slightly different. All of that know-how builds into the process and is something that we bring to the table to help our partners capture their methane and be as successful as possible.
Cody Simms (38:58):
We established upfront that today there are a handful of slightly more concentrated use cases that you can go after, whether it's concentrated feeding operations in dairy, whether it's landfill and waste. But we said, hey, this methane problem is a very diffused problem, in general. How do you imagine the company evolving over time?
(39:17):
Let's assume that you capture the dairy market. Let's assume you capture the waste market. Those are both humongous markets. If you do, congratulations and fantastic, but there's this even bigger methane problem. How do you see your solution scaling to solve that as the world continues to unfortunately warm?
Josh Silverman (39:33):
Yes. There's lots of places that we can go. The organisms, they pull methane out of the air, so they don't care where the methane comes from. Methane that comes from an oil and gas leaking pipeline versus a landfill versus a dairy barn versus chicken barn versus a swine manure, lagoon, they see no difference. They're able to eat that methane no matter where it comes from. The challenge is really more of an engineering one. How do we get the microbes in contact with the methane more than anything else?
(40:01):
Again, if it's a barn with an existing ventilation system and we can just connect a blower on the back end of that and blow it through some compost, great. That's the low-hanging fruit, if you will. But when we think about things like arctic permafrost, the way we'd approach that is really just going out and spraying bacteria over the ground. Because bacteria normally are living in dirt, they're supposed to be there, they're supposed to be eating that methane.
(40:24):
They're not for reasons we don't fully understand, and I think there's a good strong argument we should go and we should put them back, in the same way that you would go and replant the trees in Oregon if they burned down. Sorry, I keep picking on Oregon. That's top of my mind for whatever reason. But the ability to take these organisms, repopulate soils in very large levels, it's something that is very feasible to do, and it's even easier than planting trees. Spraying bacteria from planes onto soil absolutely is something that can be done over wide ranges very effectively.
(40:55):
Again, one thing bacteria are really good at making is more bacteria. If you put them in those environments and they have enough food, they should be able to grow and reproduce and continue to hopefully form stable populations and pull methane directly out of the air. We can do this again without needing extra CapEx, without needing extra costs, without needing a lot of stainless steel. These are solutions that can scale very effectively because they are inexpensive and are using the energy from the methane itself to drive the process.
Cody Simms (41:24):
Josh, what more should I have asked you?
Josh Silverman (41:27):
I think we've covered quite a bit. No, it's always great to talk to, Cody. Anyone who's listening to the podcast wants to learn more, we have a website, windfall.bio. Certainly, please reach out and we're happy to open conversations with anyone who's interested in learning more.
Cody Simms (41:41):
Any help you need right now, any particular priorities, folks' eyes and ears out there for you that can be on the lookout for opportunities?
Josh Silverman (41:49):
I mean, I think we're always looking for opportunities. And again, methane occurs in so many surprising places. We've had customers in industries and regions that I was surprised at that are coming to us and saying that they have methane that they want to capture. I think that's just getting the awareness out that this solution is here, that methane is not this waste that you should be ignoring. It is something that can create value for you. There should be an incentive for people to start looking for methane that occurs on their sites and finding ways that they can try to capture that.
(42:19):
I think for that, it's just starting to think creatively and realize that, one, methane is a much bigger problem than maybe it's gotten credit for relative to CO2, going all the way back to the beginning of our conversation, but recognizing, most importantly, that now there is a way to capture it and this is something that people should be looking at as ways to improve their own bottom line and with, again, the added benefit of also being good for climate.
Cody Simms (42:43):
Josh, thanks so much for joining us and thanks for all that you've done helping me understand the scale of the problem and for, again, including MCJ along in your journey.
Josh Silverman (42:51):
Nope, absolutely. It's been great and always happy to talk with you.
Jason Jacobs (42:56):
Thanks again for joining us on the My Climate Journey Podcast. At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. If you'd like to learn more about MCJ Collective, visit us at mcjcollective.com. And if you have a guest suggestion, let us know that via Twitter @mcjpod.
Yin Lu (43:22):
For weekly climate op-eds, jobs, community events, and investment announcements from our MCJ Venture Funds, be sure to subscribe to our newsletter on our website.
Cody Simms (43:32):
Thanks and see you next episode.
