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How do you sell a little-known and poorly understood green technology to the market? This was the question that inspired Caspar Ziegner to think about how to make carbon dioxide removal pay.
He and his investor were convinced that the sense of public urgency would soon appear when they founded Novocarbo in 2017, and now the time seems ripe for them to scale their carbon removal technology over the next decade.
Here, Caspar talks to us about the challenges and lessons learned along the way, the reasons why he split the company’s activities into three distinct brands, and why the world would benefit from a clearer carbon removal framework from policymakers.
Q: What is Novocarbo and how would you describe the company’s proposition?
A: We are a carbon removal company developing carbon removal parks that will enable us to remove up to 30,000 metric tons of CO2 from the atmosphere annually by 2025. Through pyrolysis we process plant residues into biochar, thereby capturing and storing CO2 and generating green energy.
We’ve developed propositions under three different brands, because although for us these activities are linked, they are separate in the minds of most of ourclients. With our main brand Novocarbo we sell the climate-neutral energy in the form of “heat-as-a-service” partnerships. Under this brand we also offer carbon credits to companies that want to invest in Net Zero.
Then we have Novocarbo Biochar. This is where we produce the biochar, our main product generated through pyrolysis, and offer it to companies in horticulture, agriculture, or plastics and construction firms. These companies can benefit from using biochar as an additive in their production or agricultural processes. They’re interested purely in the biochar itself.
We also have a third brand called Swiss Biochar where we produce soil-based substrates enhanced with biochar. This is our portfolio, but to put it all together, we are a carbon removal company because this is our goal. We want to remove as much CO2 from the atmosphere as possible and our mission is to remove one megaton by 2030.
All our products and services are a means to achieve this end. Public interest in all this really ramped up when the war in Ukraine started and we all became aware that we have to get rid of gas from Russia and decarbonise industry. There are not many immediate practical solutions, but biochar production is one.
Q: Which aspect do you see as the main part of your proposition – generating green energy from the pyrolysis process? Or is it the biochar itself?
A: The core of Novocarbo was always removing CO2 from the atmosphere through biochar, called Biochar Carbon Removal (BCR). Green heat is a side product, but it has a big impact on the whole business case and on the economics. Signing a contract with an off taker for green heat is the first step for the construction of a new carbon removal park. This can be an industry partner or a utility, for example. Once the park is up and running, the site generates income through long-term heat purchase agreements, whereas the biochar is a slightly more hands-on proposition because we need to continually keep selling it. But biochar and carbon removal remain the core of our mission and what we really do.
Q: What was it that inspired you to start Novocarbo?
A: In 2017, I discussed with an investor the possibility of creating a company like Novocarbo because they had invested in a BCR technology manufacturer. I have a background in the energy industry, working for six years for a gas and power grid operator. We agreed that if we want to reach the Paris climate goal of 1.5 degrees, then we have to do something. We also hypothesised that carbon emissions would get capped and traded. In 2017 the price to emit CO2 was set at €7.00 per tonne on the ETS market. Today we sell our credits at €200 on the voluntary carbon market. This was the main hypothesis; we anticipated that the carbon price would increase sharply over time.
Q: The carbon credits market is global. Is most of the work you’re doing in Germany, across Europe, or more global in scope?
A: Our green energy projects so far are based in Germany. Our biochar clients are mainly located in Scandinavia and the DACH region [Germany, Austria and Switzerland], and some other European countries. These are our main markets. We are looking to expand in Europe by the end of 2024 and 25, and of course the US market is interesting for us too. We’re starting to build our networks for building carbon removal parks there.
That said, the US would be a big step for us. It is a growing market for biochar, and it is business friendly when it comes to regulation, but that remains more of a mid to long-term goal for us. But the market for carbon credits specifically is very global, so we do have US customers for that as well as in Europe.
Q: Has the US Inflation Reduction Act expedited your US growth plans?
A: There are programs within the Inflation Reduction Act that focus specifically on biochar and carbon dioxide removal and offer subsidies which are helpful for farmers to be able to afford to buy biochar. These kinds of programs would help to grow our business. This is not necessarily speeding up our plans, but it is a benefit that we’re keeping in mind for when we do focus on expanding there.
Q: Given your diverse product offering, what sets you apart from the other players in the carbon capture arena?
A: It’s worth clarifying that I think the world needs a broad portfolio of different technologies for carbon removal if we really want to reach our global target of sticking to 1.5 degrees of global warming. There are a lot of technologies out there, and broadly that’s a positive thing.
The benefit of Biochar Carbon Removal is that the technology and the market are already there, whereas lots of other CO2 removal solutions are still at an earlier stage of development. We can scale up now, whereas some of these other technologies will take a while to get to that point.
Q: What are the major challenges you face? Are you getting the right amount of support from governments and policymakers?
A: There could be much more support. For us the main problem is a lack of public understanding of these carbon removal technologies. Investors prefer a certain amount of security. In Germany, for example, there is a renewable energy fund that will pay for the energy generated from wind farms or solar panels. That’s a guaranteed income, so investors are putting their money there.
What would be helpful from policymakers would be clear guidelines on the goals we want to reach in the future and how much CO2 we want to remove from the atmosphere, with a clear background for investors. It’s these guidelines that are missing at present. Policymakers are starting to look at the subject, which was the reason why we co-founded the European Biochar Industry Consortium (EBI) – to start the conversation about it in Berlin and Brussels. But of course, it takes time and a lot of work to get to where we need to be. We really have to speed this up because most people have not realised how bad the changes could be if our atmosphere becomes two degrees warmer.
Q: What are the most important lessons you’ve learned in your Novocarbo journey so far?
A: There is one lesson every founder will tell you. When you think you will finish something in X time, in reality you definitely need twice that. Things will never quite go as fast as you hope! We have made mistakes, but mistakes are good because you learn from them. Beyond that, the real learning is the urgency when it comes to carbon removal and Net Zero. The whole carbon issue is definitely becoming more mainstream, and that will be a game changer for us. When I started the company, our hypothesis was that carbon removal would become much more important, and today attitudes are definitely changing, which is helpful.
Perhaps the most specific thing we learned was the need to develop separate, specific propositions. Those customers who buy green energy from us are usually not interested in carbon removal or biochar. And the companies that want to buy our biochar are mostly not interested in green energy. That’s why we came up with our separate brands for the separate propositions. Because the more successful we are with our individual brands and products, the better for the climate.
Q: Where do you see Novocarbo in five years?
A: Our main goal is to remove one megaton of CO2 from the atmosphere by 2030. We will then operate more than 100 sites around the world to realise this goal. I see Novocarbo as a cleantech company which is focusing on producing the right products, which will have a great impact on the CO2 balance of our world.
This is what inspires our team every day and why I’m sure we will get where we want and need to go.
