4 min read

#35 - Biomass to oil, and back underground

#35 - Biomass to oil, and back underground

Sucking carbon out of the atmosphere

Globally, we dump 40 billion tonnes of CO2 into the atmosphere every year. Even if we manage to reduce our emissions by 75% by 2050, we'll still be 10 billion tonnes short of becoming net zero.

To be the first carbon-neutral generation on Earth, we'll need roughly 10 billion tonnes of carbon removals every year. Not a walk in the park.

The carbon removal industry must grow 70% every year for the next 25 years to meet global climate targets.

Who wouldn't invest in a market like this?

The sector faces major technological hurdles. Because CO2 concentration in the air is only 0.04%, one obstacle is the amount of energy required to suck carbon out of the atmosphere. Fortunately, photosynthesis does that just fine.

Charm Industrial, the bio-oil forerunner

Peter Reinhardt (CEO) used to buy carbon offsets for his previous venture (successfully exited) but was unsatisfied with the quality. He and a bunch of engineers co-founded Charm Industrial in 2018, initially as a biochar company.

Charm's transparent Carbon Ledger builds a lot of trust and supports the high quality of the credits.

First things first, what is biomass pyrolysis? Heated at high temperatures in the absence of oxygen, biomass is transformed into 3 components:

  1. Biochar, a farm-friendly soil enhancer
  2. Biogas, typically burnt in situ to fuel pyrolysis
  3. Bio-oil, a crude-like oil
Charm turns organic waste into bio-oil

Crude oil, coal and gas were formed over millions of years, from the remains of dead organisms. Pyrolysis does it in just a few minutes.

Charm's breakthrough was to find a way to inject this CO2-riched bio-oil underground to store carbon permanently... and sell carbon credits. To date, Charm is the sole removal company pursuing the bio-oil pathway.

Since the first bio-oil injection in 2021, the San Francisco-based start-up has removed 7,000 tonnes of CO2. Only a dozen companies globally have managed carbon removals of this scale.

Charm's pyrolyse reactor fits on a truck

Charm needs biomass, lots of biomass. They currently leverage the millions of tonnes of corn stalks left behind by farmers of the American corn belt after every harvest season.

Because such biomass is fluffy and airy, the transportation cost per tonne is high. Charm's pyrolyser fits on a truck and goes from farm to farm to transform organic waste on-site.

In fact, they also buy bio-oil from other biochar producers.

Outstanding milestones

Last year, Charm signed a $53 million deal with Frontier to remove more than 100,000 tonnes of CO2 by 2030. JP Morgan also announced a 29,000 metric tonnes off-take agreement with the company.

One success led to another: Charm raised a $100 million Series B led by General Catalyst in June 2023. Being one of the fastest to deliver carbon credits, Charm is leading the removal start-up pack in terms of funding.

Time to build

With sales locked in for the foreseeable future and fresh funding in the bank, the team can focus on R&D and expansion. The next bumps on the road are:

  • Reducing costs down from $600 to $100 per tonne, the holy grail of any removal start-up.
  • Building a fleet of on-truck pyrolysers and establishing a reliable biomass supply chain.
  • Securing the heavily regulated use of wells to safely and permanently store bio-oil underground

Charm initially tried to reform its bio-oil into hydrogen. Another option is to use it as a carbon-neutral feedstock for hard-to-abate industries such as iron and steel making, a route Charm could be exploring.

Thank you for reading!
β€” Colin Rebel
LinkedIn / Twitter