Measuring climate reduction; math or magic? #56

Happy Monday! In this week’s issue, we chat with CEV’s David Miller about figuring out the future potential of carbon reduction technologies.

While the math is directional, the logic holds; ~150 start-ups have gone through their common methodology to evaluate their reduction potential. This helps add some clarity to the murky business of climate prognostication, and ultimately augurs some much needed benchmark for how to think through impact.

In this week’s deals, vegan silk polymers, flexible batteries and vintage e-comm lead the pack. In news, TK Elon drops crypto for climate, sovereign wealth funds double their investment in forestry and renewables, SoCal does a warehousing deep clean, and Martha’s Vineyard tilts towards offshore wind.

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Through the looking glass: Simplifying emissions reductions calculations

The 416.71 ppm question in climate tech is predicting CO2 equivalent reduction potential. The catch? Estimations are extremely challenging, particularly for early stage technologies where a technology company’s success results in an entirely different future state world.

Regardless, taking a best guess at measuring potential impact is often a precursor for acceptance into climate accelerators and the portfolio of climate tech funds. As such, a few organizations have ventured to put a number on measurement. Some of these groups include:

🏗️ CRANE – a modeling tool to assess the emissions reduction potential of early climate technologies, backed by Prime Coalition and Rho AI.

📊 Catalyzed Emissions Reduction Framework – a project in development with CDP and Breakthrough Energy Ventures to quantify the climate value of investments.

🧮 Columbia SIPA’s carbon accounting – a new initiative to study measurement and accounting methodologies for early-stage GHG-reducing technologies.

✨ And now… Clean Energy Ventures’ (CEV) Simple Emissions Reduction Calculator (SERC) which will help startups and investors to easily estimate the carbon dioxide equivalent (CO2e) reduction that their technology, or portfolio, can prevent. While the platforms listed above offer deeper analysis once an investment decision has been made, SERC screens new companies and attempts to set a common standard for evaluating climate impact.

To learn more about SERC, we chatted with David Miller, Co-Founder and Managing Director at Clean Energy Ventures:

CEV has been investing in climate-positive startups since 2005. Reflecting on their investment process, David noted that, when assessing impactful climate technologies, the CEV team was making subjective evaluations. For example, assuming that improved solar panels inherently have a positive climate impact without hard metrics to back up their gut feel. After raising their 2019 $110m institutional fund, CEV launched SERC.

🎁 Developing SERC: “SERC is a simple, standard way to screen companies on their emissions reductions potential.” David said. “State funding agencies, accelerators, other VCs, and companies themselves are all interested in measurement, so we open-sourced the tool to hopefully help set the standard.”

✔️ Ease of use: SERC is purposefully simple to use, and only requires answering six questions. The two primary pieces of information: 1) tons of reduced GHG per unit and 2) number of units sold at scale. On the back end, CEV baselined to S-curve adoption – assigning number of units sold to the y-axis and time to the x-axis. The calculator then takes the area under the curve to measure cumulative emissions.

🎯 Setting a target: “We developed SERC to identify companies with the potential to reduce 2.5 gigatons of CO2e by 2050,” David said. “CEV decided on the 2.5 cumulative emissions threshold because it’s feasible at the company-level and has significant potential to move the needle on climate at the portfolio-level.”

Over 150 startups have already used the SERC tool, and CEV identified some non-obvious high potential mitigation technologies as a result. For example, one company innovating filtration at the energy-water nexus actually has significant second order knock-on GHG effects from eliminating the need for transporting water.

SERC’s main goal, David said, is to help answer: “What would the world look like 30 years in the future with and without this technology?” Venture is the business of predicting the future - these tools will hopefully clean the looking glass.

To learn more about SERC, check out Clean Energy Venture’s blog post.

Deals of the Week (5/10-5/16)

🌾 Inari, a Cambridge, MA-based biotech focused on increasing crop yields, raised $208m in Series D funding from Flagship Pioneering, Alexandria Venture Investments, Investment Corporation of Dubai, Banque Pictet, Rivas Capital, G Squared and Pavilion Capital.

⚡ AddEnergie, a Quebec City-based EV charging network, raised $40m in additional Series C funding from Energy Impact Partners and MacKinnon, Bennett & Co.

🐛 AMSilk, a Munich, Germany-based supplier of bio-based silk, raised $35m in funding from Novo Growth, Cargill, E.R. Capital Holdings, and existing investors.

⚡ Voltus, a San Francisco, CA-based DER platform, raised $31m in Series C funding from Activate Capital, NGP, Prelude Ventures, and Ajax Strategies.

🌾 Groundwork Bioag, a Mazor, Israel-based producer of mycorrhizal inoculants which increase crop yields and improve soil carbon sequestration, raised $11m in funding from Ibex Investors, ProDelta, Future Foodways, and existing investors.

👚 Thrilling, a Los Angeles, CA-based e-commerce platform for second-hand stores, raised $8.5m in Series A funding from Prelude Ventures, Defy, Congruent Ventures, Urban Us, Closed Loop, Phoenix Rising and DLA Piper Venture.

🌳 Sylvera, a London, UK-based carbon offset ratings provider, raised $7.8m in Seed funding from Index Ventures, Seedcamp, Speedinvest and Revent.

🏢  Encycle, a San Marcos, CA-based developer of HVAC energy management software, raised $7.5m in funding from Cycle Capital, Turntide Technologies, and Active Impact Investments.

⚡ Rocsys, a Delft, Netherlands-based developer of robotic EV charging solutions, raised $6.3m in Series A funding from Forward.One and Superangel.

🏢 Cortex, a Nashville, TN-based building decarbonization software company, raised $6m in Series A funding from 4490 Ventures.

💧 LAT Water, a Berkshire, UK-based developer of sustainable wastewater treatment solutions, raised $5.7m in funding from IW Capital.

🛰️ Alba Orbital, a Glasgow, Scotland-based company whose satellites aims to provide Earth observations at 15 minute intervals, raised $3.4m in Seed funding from Metaplanet Holdings, Y Combinator, Liquid2, Soma, Uncommon Denominator, Zillionize and angels.

🚧 Pretred, a Lakewood, CO-based startup recycling tires into sustainable construction materials, raised $3m in Seed funding from HG Ventures.

Later-Stage Fundings / New Funds:

🌱 Benson Hill, a St. Louis, MO-based agtech company improving crop yields, will go public via merger with Star Peak II in a deal valued at $1.4B.

In the News

Citing the cryptocurrency’s climate impacts, Elon Musk is backtracking his decision to allow Bitcoin Tesla purchases -  but bitcoin’s energy consumption isn’t news, so why now? (some theories: invalidated RECs, crypto volatility, or just regular Technoking activities).

Four companies, including Shell and Exxon, will receive $2.6B of state subsidies to capture and sequester 2.5 MMTs of CO2 for their refinery in the North Sea, 10% of what the facility produced last year. With the full subsidy, the cost to sequester each ton of CO2 comes to ~$1,040/ton, completely dwarfing the current price to pollute of $50/ton.

Sovereign wealth funds are quietly upping their focus on climate tech, doubling investment in forestry and renewable sectors to $2.3B in 2020 - although still a fraction of the trillions of assets managed by the funds.

TIAA, an asset manager with $1.3T AUM, will refocus their $280B General Account towards renewables, green real estate, and offsets to achieve zero-carbon by 2050

Pressurized rave cave in LA? Canada-based compressed air energy storage (CAES) startup, Hydrostor, will develop 1,000 MW of CAES in California across two projects. The emerging technology compresses and stores pressurized air in caverns that then resurfaces to spin turbines, providing 8-12 hours of energy storage.

Southern California, home to the nation’s largest concentration of warehouses, will force 3,000 warehouses to clean up their emissions and spur electrification of freight trucks.

With the first offshore wind project approved off the coast of Martha’s Vineyard, the Biden administration announced plans to deploy 30,000 MW of offshore wind turbines by 2030, cementing a future for the technology.

A green hydrogen hub might be coming to the US in the near future. The DOE’s Loans Programs Office, headed by our friend Jigar Shah, invited Mitsubishi to apply for a $595m loan to develop a hydrogen electrolysis and storage facility in Utah.

Pop-up

In a new commission from the artist and architect Maya Lin, 49 ghostly cedars have been planted in Madison Square Park as a reminder of the consequences of climate change.

Looking for books to brush up on environmental justice? Start with this list.

Three profiles in environmental justice (EJ): (1) Vanessa Nakate, a Ugandan climate activist elevating her platform on EJ after being erased from a Davos photo, (2) Robert Bullard, the EJ pioneer who first uncovered the uncanny proximity of landfills to Houston’s communities of color, and (3) Shalanda Baker, the first-ever deputy director of energy justice at the U.S. Department of Energy.

How will we scale carbon removal? Our friends at Carbon180 have the solutions in their recently released Congressional Blueprint.

MIT Tech Review dives deep into how the Massachusetts Audubon Society created misleading carbon credits by holding the trees hostage.

Watch out for brown-spinning as companies sell off high-emitting assets to private companies.

The new Ford F-150 Lightning is set to unveil May 19. Bonus? It can power your house in an outage.

Speaking of the F-150, Americans bought 800k Ford F-150 pickup trucks compared to only 300k electric vehicles total in 2020.

Hans Zimmer is also getting in on the EV action. Check out the new driving sound he created for electrified BMW M cars (start at 1:37).

An excellent visualization sorting electric and fuel cell truck models by range, class and region.

Riding off Arrival’s new partnership with Uber (which we covered last week), Bloomberg Green reports that Uber and Lyft’s commitment to 100% EVs by 2030 will likely go unfulfilled. Central to the challenge is sloppy execution and expensive EVs.

The secondhand furniture market is projected to become a $16.6 billion business. These are the movers looking to make it happen.

Still unsure on all the climate techie terminology? Beyond the Buzzwords breaks down climate buzzwords.

Opportunities & Events:

🗓️ Predictive Analytics World Climate 2021: Join PAW from May 24-28th for the first conference on industry applications of machine learning in climate tech.

🗓️ Climate Tech Office Hours: Octopus Ventures and the Green Tech Alliance are hosting 1:1s with 20+ VC investors on June 9th for EU and UK-based startups. Apply by May 22nd to participate.

💡 AWS Clean Energy Accelerator: Apply by June 8th to AWS’s first Clean Energy Accelerator in partnership with Freshwater Advisors. Startups will receive 5 weeks of mentorship and access to AWS technical resources.

Jobs

Senior Data Scientist @Cloud Agronomics

Director of Systems Engineering @Electric Hydrogen

Senior Software Engineer @Glacier

Mechatronics Engineer @Glacier

Chemical Engineer @Emvolon

Carbon Capture Program Director @ClearPath

New Markets Strategy Lead @C16 Biosciences

Director of New Markets @ClimateAi

Head of Commercialization @Living Carbon

Sustainability Program Manager @Google

Fellowship Experience Director @Breakthrough Energy
Chief of Staff to CEO @Bowery Farming

Principal @Obvious Ventures

Feel free to send us new ideas, recent fundings, or general curiosities. Have a great week ahead!