In the face of climate change, people around the world have developed innovative new technologies to mitigate or adapt to its impacts. Despite their work however, adoption has proved more difficult. How can we promote these potentially planet-saving innovations? Does it require a significant overhaul of current systems? Or can existing frameworks be adjusted by more minor tweaks? Dr Maria Armoudian speaks to Holly Beals, a strategic director and innovation specialist with Aurora Climate Lab; and Michael Fielding, the Chief Executive of AUT Ventures.
Transcript:
Maria Armoudian: Welcome to Sustain. It’s such a great pleasure to be hosting you. I thought it might be good to start with the context, as you see it, around the sustainability issues that we’re trying to address, and how we’re going about trying to address them. Holly Beals, let’s start with you.
Holly Beals: In climate tech we’re mainly dealing with the issues of how we handle carbon and the many ways that we can reduce sources of carbon emissions and support drawdown opportunities for carbon, storing them permanently, and then improving our societies towards future systems and infrastructure that support that in ways that work for people.
Maria Armoudian: So, we should talk about some of the ways that you’re doing that. You said drawing down, reducing. What have you been developing so far in each of those areas?
Holly Beals: At Creative HQ, which is where I am, I run a programme named the Aurora Climate Lab, and it’s a climate tech accelerator for startups who have solutions for climate change related problems. They might fall into any of those categories around solutions that help reduce sources of emissions or would provide carbon drawdown and storage opportunities, or could be more in an adaptation space from a societal perspective.
Although we see less of those initiatives coming through our programme at the moment, we have a huge range of wonderful companies that come through our programmes and a lot of them are working with the future of energy. Some of them are working on future food, how we handle issues of food production and agriculture.
Some of the solutions are around the built environment, carbon negative cement alternatives, for example. One of our teams in our recent programme had some software for helping developers and architects measure the decarbonisation opportunities as they are designing. That’s a software solution, but it’s one that helps proactively manage carbon.
Maria Armoudian: So can we talk about some of these that have come out so far? You mentioned, for example, the drawdown, the storage. It’s a relatively expensive process, as I understand, but I could be way behind the times. What has developed in that space, and how is it doing in relation to the massive emissions that we’re emitting?
Holly Beals: Great question. I think there’s changing technology and changing sentiments around carbon drawdown technologies, and it can be quite polarising for people of different schools of thought. And this has to do with, how much do we enable large emitters to continue doing what they’re doing? I hold the philosophy, and we hold the philosophy here, of, we need to do it all.
We need to be enabling industry to reduce emissions, as well as drawing down atmospheric carbon where we have opportunities to do so and create new value out of waste. My approach is the multitude, and my philosophy is the multiple paths philosophy. But there are different schools of thought on this.
Maria Armoudian: What would you add, Michael Fielding?
Michael Fielding: I think, fundamentally, the problem has shifted. The understanding of the problem of sustainability has shifted over the last few decades. Originally, back in the 1970s-80s, probably persisting into the 1990s, population growth was seen as the biggest issue. We’re going to have more people demanding more resources, and how are we going to cope with that now?
All the projections are saying that population growth will top out. You probably know better than me, but it’s around 2050 or something. The growth is plateauing. I think global population growth is less than 2% at the moment, 1% or something. But at the same time, wealth is growing. That is a good thing. It’s lifting more people out of poverty. But it means they consume more. So while the population isn’t growing super high or super fast, the consumption of goods are shifting into more expensive, less environmentally-friendly forms of protein, with a greater desire for consumer goods.
In the area that my startup works in, Dot Ingredients, which is the area of surfactants and emulsifiers, these are used in everyday products. Any time you’re washing your hands, your dishes or your house, if you’re putting on a skin cream or you’re moisturizing, using makeup. They’re even used in agriculture. It’s a US$50 billion a year industry, and the growth in that industry is six times faster than global population growth.
What that means is there’s actually quite a growth in the demand for these things, these products, and they’re 95% made from petrochemicals or palm oil. So the industry has to try and reduce those at the same time. Underlying growth is growing faster than population. That’s the real challenge, it’s no longer that population is growing, the end is in sight for that. But we’ve got to find new ways of coping with increasing consumer demand.
You were touching before on drawdown and reducing carbon, and in the sector of industrial chemicals, there’s going to be a range of solutions. Like Holly said, there’s going to be a lot of different solutions needed. You can always find some way, some new feedstock that’s environmentally friendly. You could switch from fossil fuels to olive oil, for example. But the real challenge is always scale.
Maria Armoudian: And then of course, the climate conditions are making things like olive oil scarcer.
Michael Fielding: Yeah, well we’ll probably be able to grow more of it in New Zealand I guess, so we’re well positioned there. But it’s scale in the sector we’re in. It’s a 20 megaton a year demand, and you cannot just switch off the fossil fuels and go, oh, let’s use olive oil, because that’s got to come from somewhere. That is not without its environmental consequences as well. It could be water. It’s going to be energy.
It’s very easy to say, I’m going to set up a brand, we’re going to use this type of material, I’m going to make a skin cream or something, and it’s going to be environmentally friendly because it’s not going to use palm oil. It’s going to use coconut oil. Well actually, coconut oil has about three times the tropical land use of palm oil. It’s probably not more environmentally friendly. You’re also not doing it on an industrial scale. You can find all of that coconut oil, but when you start scaling up to say, a laundry powder, it just gets so much more difficult. That’s, I think, one of the big challenges with everything that you want to switch, is finding that scale.
Maria Armoudian: There are, and your own company is one of them, these alternatives that have claims of being more environmentally friendly, they have the green labels, they have names that suggest they are more climate neutral, maybe not completely climate neutral, but a little less damaging. How do you know? And what should they have in them? If somebody were going to turn to the back of their product and say, I’d really like to be as climate neutral as I can be, what should they be looking for?
Michael Fielding: I don’t have the answer. I don’t think there is one answer. I’ve seen companies pitching that they have carbon neutral fossil fuel-based surfactants or ingredients for some of these. But what they use is carbon capture and sequestration. They take the carbon from the production process, then they put it underground.
Maria Armoudian: Would that be just a limited amount in the production process or the entire process? Because those are two different things.
Michael Fielding: So you talk about, scope one, scope two and scope three emissions. I’m not an expert on this area. I think it’s very easy for companies to do some kind of hand-waving about choosing the scope of what they include. As an example, a company that I’ve seen saying at a conference that they have, I think, a carbon negative palm oil base, a carbon negative palm oil. And the thing is that they stopped their box, if you like, around which they’re considering to be carbon negative, before the product actually biodegrades.
Even a natural product like, say you take a palm oil or any sort of oil, it’s locked up that carbon up until the point it biodegrades. Now, you have to be biodegradable, I think we would all agree that’s a goal. It’s actually a legal requirement, a regulatory requirement to be biodegradable, which is a good thing. But at that point, it releases its carbon. Any carbon you’ve used in the production process is going to add to the carbon. Nothing’s free.
Maria Armoudian: That’s actually one of the things I wanted to talk with you two about because I love this solution focused effort to turn to technology, turn to business, even government and NGOs, and all trying to come up with these solutions. But given the speed with which the change is occurring, how are we going to get there?
It’s really complex. If it came down to technological solutions, we’d be there. There’s enough technological opportunity being explored and being found that, if it came down to technical solutions alone, we wouldn’t be in the position we’re in. It’s as much about behavioral change, systemic change, corporate change.
This is a large focus that we bring to our climate lab, helping academics and technological experts become entrepreneurial and how they connect with customers and markets and government and regulatory authorities to try to apply pressure on the right levers for systemic change, because so many of these solutions require new markets or emerging markets that don’t exist yet.
Maria Armoudian: You had listed in your annual report four success stories in this area. Do you want to pick a couple of them?
Holly Beals: One of our teams in last year’s programme, Last Mile, had a demand side energy management tool which they’re bringing to market now, starting with schools in Taranaki and working with the Ministry of Education. They’re a company who have a plug-in solution that you can put in your home or put in your school to help your smart appliances talk to each other and manage the demand on the grid, while also plugging into lines companies and Transpower to help from an infrastructure grid management perspective to pre-empt your habits around power use and be able to manage demand more effectively across the grid.
It brings power reduction and power bill benefits to a consumer so their power bills can go down. But it also brings much more foresight, from an infrastructure perspective, back to the grid. They’re a company who absolutely had a technological solution a long time ago, but without forming the strategic partnerships to get a system working together and connecting with those partners to create this effect, the solution cannot be utilised.
Another company I’m going to talk about is Good Grub Agritech. Also alumni from last year’s climate lab. They have a solution for insect bio-conversion of waste. This is something that can be utilised in citywide infrastructure eventually. But starting on a smaller scale at first, providing a circular solution for management of waste, turning this into frass, which is a protein sources for agriculture, or pet food, and also minimising the carbon emissions of the waste that would otherwise go to landfill.
Maria Armoudian: Let’s just check with Michael Fielding here, too. What are some of the innovations that you think are really important and effective at the moment?
Michael Fielding: I know of quite a lot of innovations in New Zealand that seem to be around the commodity chemicals area and what I found really interesting over the last year is the shift in the pitch, driven by the changes in the political landscape, particularly in the US.
Mint Innovation is launching a $100 million investment round, which is a pretty chunky round. For those who aren’t familiar with them, Mint Innovation takes e-waste; phones, computers, that sort of thing. They grind them up and extract the critical minerals out of them. When they started, this was an environmental thing. Let’s not buy new chemicals or use a lot of chemicals which often get left in the environment, and also use a lot of energy, which isn’t great for the environment.
But the pitch now is that this is a solution to sovereign materials. Instead of mining materials out of country X, Y or Z, you reuse your own materials that you’ve already got in your old products and reuse them, to reduce your dependence. I’ve actually seen this in our sector, in the surfactants and emulsifiers area as well.
The kaupapa is no longer around just being environmentally friendly. That’s taken as a given, and just to loop back to what you’re asking before about how would customers know? I think that if you make buying choices and create demand for environmentally friendly products, you should possibly be less worried about the short-term precision of, is this product better than that product?
But by creating demand, these companies are trying to understand consumers all the time, not just in terms of sustainability but, when you create demand for environmentally friendly products, it filters all the way up to the board level, that these are the products that we want to release. It’s not a perfect solution. You cannot go to something and say, right, this is definitely more environmentally friendly than that. But if you choose to make buying decisions based on that interest, then that creates demand and the solutions will flow from that.
Maria Armoudian: How do you create demand?
Michael Fielding: Well you use your wallet, buy the products that claim to be green. Hopefully the consumer marketing legislation is strong enough that it means that they are actually more environmentally friendly. Many times you can have unintended consequences. But the major manufacturers, certainly in the chemicals space, are looking for new approaches to creating the same chemicals, because of the demand from the people who buy them, and they’re the ones who are making products for consumers because of that demand.
They’re saying it’s going to have to be more environmentally friendly. It’s not necessarily going to be perfect, but we’ve got to be moving in the right direction. Whereas five years ago, you know, let’s introduce a new product that’s more environmentally friendly. Now it’s, right, when you need new products, they have to be environmentally friendly as long as they don’t cost more, and as long as they perform as well.
You used to have this triangle, it’s got to be more sustainable, it’s got to be cost-effective, and it’s got to perform well. You can have two out of these three options. These days, you really have to have all of them. That’s making things tougher, but it’s also driving innovation. However, if consumers stop demanding more sustainable ingredients because they’re unsure about whether it really is or really isn’t, then that’s when these companies will go, well, obviously consumers don’t even care about sustainability, so why should we?
Maria Armoudian: I love the idea that these old electronics that we used to just toss out are really goldmines, they’re full of precious metals. To be able to extract all those metals really does affect sustainability on multiple levels.
Michael Fielding: In fact, if you had to design a product or a new ingredient, most things that are reusing waste are surely going to be more environmentally friendly than other things. In the commodity chemicals area, even if you can create something from a crop like palm oil or coconut oil or canola oil, what the industry is aiming for is land less. How do we supply all the chemicals that we need, but without using more land, because we don’t want to deforest more land.
There are regulations of course. Europe has introduced the EU deforestation regulations. It’s a little bit up in the air about how committed they are to sustaining that in the sense of keeping it around, but the regulations essentially means that, beyond the cut off date, products imported into Europe cannot be made on land, or have ingredients made on land, that was deforested after that period of time.
So every company that’s importing into Europe has to be able to prove that the land was deforested before that time. That’s a pretty powerful regulation. Again, unintended consequences. It may mean that all of the old, long-existing crops now go to Europe, and the rest of the world gets the newly deforested crop or the crops grown on newly deforested land.
Maria Armoudian: Unless the rest of the world follows in their footsteps, which may or may not happen. There are treaties and that sort of thing. One is happening right now with plastics. There’s always the possibility that the world comes together. But you’re right, I can see on your face that you’re not convinced.
Michael Fielding: No, but again, I’ve stopped being a perfectionist, nothing is going to be perfect, but it will create demand for better use of land or, in fact, not using land. That’s where we come back to, anything that’s using waste is generally going to be a good thing. Municipal food waste is a great resource of high nutrients for example. But in most places there’s no system to collect that. It’s highly variable. It’s seasonal. It’s subject to a huge amount of contamination.
It’s not perfect. But if we create demand for these products, then I’m really buoyed up by the billions of dollars and venture capital that have been put into solving problems like this. They’re only going to keep investing while we create demand for it.
Maria Armoudian: The idea of using waste in a circular economy, not being a linear economy. For people who aren’t immersed in this terminology, it means that, rather than extracting something new, we use the old over and over and over again, it’s repurposed or refurbished or whatever that happens to be. How much can that continue? And fuel the sustainable future?
Holly Beals: I think it’s critical that our solutions become more circular, more regenerative. Michael was talking about this changing climate sentiment, and we can no longer charge a green premium for these solutions, because it’s expected that all three corners of that triangle need to be met. Part of that is this changing sentiment that these solutions bring more energy security, onshoring of supply chains. This is where innovation comes in. Everything becomes less centralised, less globalised and more regionally local.
We really move away from terms around sustainability and global warming and emphasizing these scary sentiments that maybe the earlier eras of climate tech or clean tech focused around. Absolutely, I think the circular economy is fundamentally part of that.
Maria Armoudian: It can be done locally. Given what we’re facing already, food insecurity, major weather events, at what speed do we have to innovate to really have the impact that we need? Any thoughts on that?
Michael Fielding: Again, I’ve stopped being an idealist. We’ve smashed through 1.5% with no end of growth in sight. I think the adaptation that you mentioned earlier, Holly, is also an important part of the solution. We have to be realistic, but we have to not give up. I’m trying to think of an analogy. It’s like running a race and knowing that you’re not going to win, but you sure as hell don’t want to be last. You’ve got to keep on running. We’ve got to keep on working on solutions, because every one solution is one tiny little piece of the puzzle.
Maria Armoudian: It buys us time. That’s the way I think about it. Every time we have a solution, it buys us a little time to come up with another solution, and plug the holes on the boat that has a bunch of holes on it to prevent it from sinking until we come up with the final thing.
Michael Fielding: It’s part of the whole entrepreneurial mindset. People will tell you there’s no such thing as a perfect plan. It’s an unknowable thing. You have to take some steps forward and accept that some of them might not be, when you look back in five years, the perfect step forward. But at least it was a step forward. I’m not working on nuclear fusion, right? I’m working on a small piece of the puzzle. It’s not going to fundamentally change the world. It’s not going to save the planet single-handedly. But if there are thousands of us all solving pieces of the puzzle, pretty soon your 1000 piece puzzle is done
Holly Beals: Just adding to that, I absolutely agree. In innovation speak we talk about creating means, you move towards an island, you assess the means that you have and which island you should progress to next. Then you continue on your journey and your means improve, and the context around you has changed. I think this is a picture of the time we’re in.
We’re in a massive age of transformation with regard to technology. There’s no shortage of technological solutions out there, but the rate that these technologies develop and then the context around them, how hugely they shift. Right now we should be concerned about the geopolitical changes in the world and how that stresses supply chains in particular. Then we assess our means and we move from there.
We have to be hopeful. We’ve got a lot of work to do. We’re not going to succeed fully. We can see the damage that we’ve created and how slow the trajectory has been to date in some ways. So we must keep going.
Maria Armoudian: You mentioned the geopolitics, and I think that’s it’s not just the geopolitics, but also the local politics that we have to be super aware of. How do you see politics as facilitating or hampering the solutions that you are both working on?
Michael Fielding: Closely tied in with politics are regulations, and that’s where the access to existing markets really is, I’m going to say held back, but constrained. Sometimes that can be political. But we should, I think, throw regulations out at our peril. They’re generally there for some kind of reason. It’s important to keep consumers safe. I do hear a lot of people, a lot of entrepreneurs sometimes complain about all the regulations.
But compared to a world where your medical device doesn’t have to pass through FDA approval or TGA approval or CE marking, that would be a pretty rough and ready world. It’s the same with chemicals, regulations are a hurdle that has to be passed. There are good and bad regimes, and smart companies will choose their market entry strategy based on the predictability of the regime.
I’ve heard a lot of American companies that want to launch new chemical products in Europe, because the regulator in the US is seen as very slow and unpredictable. Politics, of course, sets a lot of buying incentives in what tend to be highly subsidised industries like energy. I haven’t really seen so much political influence in the commodity chemicals area, because the regulations don’t tend to be solution-specific. They’re kind of fairly generic regulations. Certainly political interference will change the energy mix. For example, in the US certain views that are not necessarily scientifically-based right now mean market interference.
Maria Armoudian: What do you see in terms of what would be supportive of finding these solutions for somebody like you who’s working with these entrepreneurs and other public officials and young people?
Holly Beals: I have so many thoughts about this. We definitely work with and recognise the role of connecting actors across the ecosystem and some of those key actors in the system are, of course, central government and local government, regulatory authorities, in associations like this. We see innovation in the public sector as a massive force to partner with. When we bring our entrepreneurs through programmes like these.
So, where it’s relevant, having energy teams work with. The Electricity Authority has a pathway to innovation programme, for example. Creating a funnel where our teams can validate their technologies and validate their markets, and then move through into a programme like that which also funds and enables regulatory transformation to assist with that change. That sort of flow across an ecosystem is really beneficial.
What is hard is the removal of funding from certain parts of the ecosystem or certain stages of the journey for an entrepreneur, which we do see. And the focus on short-term economic gains over long-term when it comes to how we invest in climate solutions. That’s what I see happen a lot. I’m seeing it happen a lot in Aotearoa New Zealand right now, and the unnecessary undoing of great systems that have traction and are being built.
So we’re very hopeful about how positive the shift for innovation can be through the changing of the science CRIs, but we’re in a bit of a holding pattern, a wait and see space at the moment.
Maria Armoudian: Well, thank you both so much for joining us here on Sustain. It’s just wonderful to host you.
Image used is as solar firmengebaude by ChristofferRiemer. Used under CC BY 3.0
Recent Comments