Speaker 1: You're listening to Redefining Energy. Your co hosts from Berlin,
Speaker 1: Gerard Read and from London Laurent Saga.
Speaker 2: Today on Redefining Energy, Laurent, we're going to talk about
Speaker 2: the decarbonization of industry and the solutions that we need
Speaker 2: in the future to do that.
Speaker 3: Yeah, the so called hard to abate sector. And there's
Speaker 3: been several trailblazer in that segment. Of course, we took
Speaker 3: about breakthrough energy venture energy impat partners in a certain way,
Speaker 3: Predu ad Ventures who really coined the term climate tech.
Speaker 3: And now the approach is how do we go from
Speaker 3: a VC all up to a first factory And that's
Speaker 3: what our guest is doing.
Speaker 2: Yeah, so listen. I know Sean Kingspike many years and
Speaker 2: obviously spent a long time in the whole financing renewables,
Speaker 2: particularly in the UK, and you know he's a chief
Speaker 2: investment officer Just Climate, just start up by Generation Capital really,
Speaker 2: which has been one of the four runners of investing
Speaker 2: in climate the last I don't know how long they've been,
Speaker 2: around fifteen years something like that. At this point in time,
Speaker 2: I think it's great to have him talk about what
Speaker 2: Just Climate is doing and also about industrial climate solutions
Speaker 2: from why they're important.
Speaker 3: Sean Kingsbury has been instrumental in the development of the
Speaker 3: na of show win industry when he was at the
Speaker 3: head of the UK Green Investment Bank. So let's bring
Speaker 3: Sean on the show. Sean, welcome to the show.
Speaker 1: Thank you very much both to you for having me.
Speaker 1: I'm looking forward to the discussion.
Speaker 2: So Sean, maybe just we kick off a little bit
Speaker 2: by talking a little bit about what you do.
Speaker 1: It's a nice easy one to start, Jared, isn't it.
Speaker 1: It's like, we do the hard stuff. That's really what
Speaker 1: we do with just climate. We try to focus in
Speaker 1: on the high emitting and most off track areas of climate.
Speaker 1: Why do we do the hard stuff? That's where the
Speaker 1: emissions are. So we look at those areas which produce
Speaker 1: maybe fifty or sixty percent of the emissions, but get
Speaker 1: very little of the capital flows that are moving to
Speaker 1: sort these things out. The middle of the investment flow
Speaker 1: maybe less than twenty percent. And you might say, well,
Speaker 1: why is that If these are the areas producing the
Speaker 1: most emissions, why does the money not flow to them.
Speaker 1: Surely that's what we should be doing. Targeting the art
Speaker 1: areas and The reason I think the money doesn't flow
Speaker 1: is because the buckets at the capitol comes in don't
Speaker 1: necessarily meet the requirements of what the investments need. You
Speaker 1: and I've both spent many times sitting at a conference
Speaker 1: hosting a round table discussion, and maybe on my right
Speaker 1: I've got banks, and on my left I've got the
Speaker 1: project developers and the technology companies. Another look at the
Speaker 1: banks and they all say, you know, we've got one
Speaker 1: hundred bizillion dollars to invest in this area. We're going
Speaker 1: to really move some capital, but we can't find the
Speaker 1: right opportunities. And I look to my left and I've
Speaker 1: got lots of project developers or technology companies, and they're saying,
Speaker 1: we've got an amazing green technology or a fantastic project
Speaker 1: we'd like you to invest in. And you feel like saying,
Speaker 1: haven't you guys met But of course they have met it.
Speaker 1: But the reason that they haven't been able to do
Speaker 1: something is finance typically comes in buckets. There's venture capital,
Speaker 1: there's growth capital, there's biod capital, there's infrastructure capital. We've
Speaker 1: got very very clever names for all the different types
Speaker 1: of capital, but these transactions are typically too big for
Speaker 1: venture Two asset heavy for growth certainly not yet infrastructure.
Speaker 1: Maybe real assets, but not infrastructure, and they're not biot.
Speaker 1: So the buckets are capital don't meet the opportunity set
Speaker 1: and that's what we do with just Climate. We try
Speaker 1: to provide a flexible capital stack to lean into those
Speaker 1: areas that are most off track, that are usually asset heavy,
Speaker 1: and try and provide the capitals. That's what just climates
Speaker 1: all about. We call it climate lant investing.
Speaker 2: And Jean, can you give a practical example of that
Speaker 2: so our listener really sort of understands what you're talking
Speaker 2: about there.
Speaker 1: Let me use an example one that many people will know,
Speaker 1: and it's one that I learned about maybe twelve or
Speaker 1: fourteen years ago when we were running the Green Investment Bank.
Speaker 1: When we set that up, we wanted to build usher
Speaker 1: wind here in the UK, and people would look at
Speaker 1: me kind of strange and say, you're going to be
Speaker 1: in wind turbines in the sea. And in those days,
Speaker 1: there wasn't a track record of building those projects and
Speaker 1: delivering them long time and on budget, and they required
Speaker 1: a very significant green premium. I think some of the
Speaker 1: first projects we did required about one hundred and fifty
Speaker 1: five pounds and I go whatever. When the market price
Speaker 1: was about fifty so three times the cost of conventional power.
Speaker 1: Over the next four or five years we started to
Speaker 1: fund those. We delivered nine or ten projects that we
Speaker 1: invested in all time on budget. The market did another
Speaker 1: nine or ten. We came down the cost curve and
Speaker 1: the bits on offshore wind were thirty nine pounds of
Speaker 1: mega one hour. So we went from three times a
Speaker 1: conventional price to twenty percent below and we created an
Speaker 1: asset class and then people could invest because it was proven.
Speaker 1: Now we need to do that in green steel, low
Speaker 1: carbon cement, green chemicals, plastic, SAFT, long duration energy stores.
Speaker 1: I could give you the list for the next five minutes.
Speaker 1: You know what they are. And that's the kind of
Speaker 1: track reck coord that we need to create. And we
Speaker 1: need to find these technologies and drive them down the
Speaker 1: cost curve and make them investable.
Speaker 3: I like that from the outside looking in, it sounds
Speaker 3: a bit like what Jigasha is trying to do at
Speaker 3: Dewey Long Program Office, but more onnbiquity side.
Speaker 1: In one sense, loan it's a private markets version of that.
Speaker 1: When I had the grit prove to be asked to
Speaker 1: set up the Green Vestment Bank in the UK. It
Speaker 1: was the world's first. We didn't have a business model,
Speaker 1: but we created one, something that was admired and copied
Speaker 1: around the world. They're now forty or fifty of these
Speaker 1: kind of institutions stay by stated mostly in the US
Speaker 1: country by country. But there are two flaws. Without business model,
Speaker 1: it works really well, but there limitations. And those two
Speaker 1: limitations are, as you all know, climate is not defined
Speaker 1: by national boundaries. It's a global problem, and so the
Speaker 1: capital needs to be global. And while governments, particularly the
Speaker 1: US government that you mentioned with Jiggershaw on Thede, can
Speaker 1: move large amounts of money, they can't move enough money
Speaker 1: to solve this problem. So we need a private markets version,
Speaker 1: and we need an international version, a private markets version
Speaker 1: that taps into the deepest pools of institutional capital and
Speaker 1: gets that money to work, but using the same principles
Speaker 1: that you've seen with something like the due, leaning in
Speaker 1: to the hardbits, proving a track record. So in one sense,
Speaker 1: just climate is a private markets, institutional quality version of
Speaker 1: a green bag. You're very very close.
Speaker 3: I look at your portfolio and for instance, you have
Speaker 3: h two green Steeler. So that's the decombanization of the
Speaker 3: steel industry. So can you elaborate to bit on green
Speaker 3: steel because we hear everything and it's opposite.
Speaker 1: That's a really good example. And of course we've just
Speaker 1: renamed the company's Stegro, so why you use that it's
Speaker 1: You could use it interchangeably with it's two green steel.
Speaker 1: But the story there follows the kind of approach we
Speaker 1: take at just Climate when we look for these investment opportunities.
Speaker 1: We start with road maps. We don't get up in
Speaker 1: the morning and figure out there's the transaction that looks interesting.
Speaker 1: Is it sustainable enough to go into our fund? We
Speaker 1: get up in the morning and we say where do
Speaker 1: the emissions come from climate led investing? And of course
Speaker 1: if you go through that, number one on that list
Speaker 1: is cement and concrete production to a steel. So you
Speaker 1: quickly get the steel and you say, okay, what are
Speaker 1: the technologies that might decarbonize this, what are the companies
Speaker 1: that are leading on this and where are they making
Speaker 1: things work? And so we looked at hydrogen for the
Speaker 1: decarbonization of the steel process, and we really liked what
Speaker 1: they were doing. Advantage to green steel niz Stagra in
Speaker 1: terms of developing a project that was world scale. This is
Speaker 1: the first steel plan, never mind green steel plan, the
Speaker 1: first steel plant built in Europe in nearly thirty years.
Speaker 1: And if you can build it at scale, you can
Speaker 1: come downe that cost curve and you can integrate all
Speaker 1: of the various pieces from the production of hydrogen through
Speaker 1: the direct production tower, the dri tower, through to the
Speaker 1: electric ark furnace, all running and renewables, and you can
Speaker 1: get done that cost curve and you can offer it
Speaker 1: really at scale inside the perimeters of Europe where a
Speaker 1: seabam applies, and that gives you an extra additional bump.
Speaker 1: And then the key question is how do you project
Speaker 1: finance this thing. This is a very large project including
Speaker 1: all of the financing calls well over six billion euros.
Speaker 1: It's a big project. And so in order to get
Speaker 1: project finance to work, and this is the kind of
Speaker 1: stuff that you do all day long, you need high
Speaker 1: quality off take arrangements that are multiple years with credit
Speaker 1: worthy countreparties. So they had set abite putting in players
Speaker 1: forty to fifty percent of the off tick locked up
Speaker 1: over five to seven years. And what we find is
Speaker 1: there are a number of customers who are willing to
Speaker 1: pay what's a reasonably modest premium for that great steel.
Speaker 1: And why is that. Maybe they're using it in trucks,
Speaker 1: maybe they're using it in cars. And whenever you're producing
Speaker 1: an elected car, you really want something with the lowest
Speaker 1: possible embedded carbon as well as zero till pipe permissions.
Speaker 1: And so today many of the companies buy steal steals
Speaker 1: about sixty percent of the win of a car, and
Speaker 1: then they buy carbonov sets for that. So they're already
Speaker 1: paying a premium over the cost of regular steel. And
Speaker 1: so if you can sell them green steel, they're really
Speaker 1: keen to do that to have a proper decarbonization. And
Speaker 1: so what we wanted to do was build a project
Speaker 1: which would then have a real perimeter that would produce
Speaker 1: the steel from the factory gate. All it was in
Speaker 1: is iron ore and green electricity, and what comes out
Speaker 1: is green steel, and that's what we've been able to finance.
Speaker 1: It was the biggest private markets transaction last year. So
Speaker 1: as we think about how difficult the market is at
Speaker 1: the moment, we are still getting transactions like that away
Speaker 1: and done in our sector. And that's why we did it.
Speaker 1: We started with the carbon emissions. They calculated where those
Speaker 1: were coming from, and we went and found a company
Speaker 1: ready to build a worst of the.
Speaker 2: Kindlad John, can I ask you about cement because there
Speaker 2: seems to be a lot.
Speaker 4: Happening in that area, right and obviously you're looking at
Speaker 4: that whole lockers.
Speaker 2: Could you just give your views on how you see
Speaker 2: that go forward.
Speaker 1: It's perhaps one of the more difficult markets. First of all,
Speaker 1: it's the biggest emitter. You have emissions not just from
Speaker 1: the heat or the energy needed in the kilns, but
Speaker 1: you have process emissions when you drive off the CO
Speaker 1: two from the limestone, and so you can look at
Speaker 1: ways of decarbonizing the heat source using renewable energy. So
Speaker 1: an electric kiln does something. You can look at carbon
Speaker 1: capture and storage, or you can look at other processes.
Speaker 1: Maybe you don't start with limestone, but start with another
Speaker 1: rock that you can then use as a substitution in
Speaker 1: the concrete and cement mix that you produce, which is
Speaker 1: less embedded carbon emissions. But it's very hard because the
Speaker 1: unit value of cement and concrete is actually very low.
Speaker 1: It's very expensive to ship. It doesn't go very far,
Speaker 1: you know, maybe one hundred miles maybe two hundred miles
Speaker 1: at most, and the margins in it are much lower
Speaker 1: than the margins for example, in steel production. No one
Speaker 1: has yet merge with a leading technology and a leading solution,
Speaker 1: but lots of people, as you say, are very active
Speaker 1: in finding different ways to significantly reduce the footprint, and
Speaker 1: I expect to see companies emerge using a variety of
Speaker 1: those different solutions, from decarbonizing the heat source to substitution
Speaker 1: of ordinary Portland cement over the next few years that
Speaker 1: will actually make an impact. We have to do something.
Speaker 1: When you look at where the emissions come from. Sixty
Speaker 1: percent of cement concrete is going into new cities, mostly
Speaker 1: in Asia, and we really have to do something. Nw
Speaker 1: We've worked on a concept of time value of carbon.
Speaker 1: We all understand time value of money, but removing carbon
Speaker 1: from the atmosphere now is more valuable than removing in
Speaker 1: a twenty thirty or twenty thirty five. So making progress
Speaker 1: on these sorts of things now is really important.
Speaker 3: Guys, you are the great thinkers, and me I'm just
Speaker 3: a guy with a calculator in front of a trading screen.
Speaker 3: So I'm going to tell you sim is one hundred
Speaker 3: dollar paton okay, and steel is eight hundred dollar paton.
Speaker 3: It's a very simply calculation cement, super high volume and
Speaker 3: super low margins. The energy feed cement is the waste
Speaker 3: of refineries. They almost get the powerful free petcock is what.
Speaker 3: It's all full petcock. But it's a volume game. So decogonization,
Speaker 3: you're going to find a lot of great techniques and so.
Speaker 3: But the price are so low. It's a tough one.
Speaker 1: It's a tough one. It's exactly right. You're right about
Speaker 1: the point about the unit price. You're also right that
Speaker 1: it's not just the price. It's two other things that
Speaker 1: impact that. It's a low margin business compared to steel,
Speaker 1: and it's a very heavy and difficult and expensive product
Speaker 1: to move. So whatever you do, it can't be very
Speaker 1: much more expensive or the adoption will be very low.
Speaker 1: And whatever you do, you have to be able to
Speaker 1: do it in lots of locations because you can't have
Speaker 1: a big centralized planet that you ship the stuff licens
Speaker 1: and miles. It moves very distances. Those are the challenges
Speaker 1: with it. But I have to say we have seen
Speaker 1: some interesting technologies and we've seen some interesting companies that
Speaker 1: all come from the research the climate let research we do,
Speaker 1: and I would hope in our first fund, we're about
Speaker 1: seven hundred million advasted of our fund before we have
Speaker 1: completed that. I would hope that we can find something
Speaker 1: that can make a significant contribution. Maybe I can come
Speaker 1: on and talk to you about it and how it
Speaker 1: works and how you get over it exactly those critical
Speaker 1: issues that you'veidelined, that's what makes it difficult.
Speaker 3: You're also invested in immobility. So what's the segment Because
Speaker 3: the value chain is ginomos, So how do you position yourself?
Speaker 1: Why is transportation important? First of all, twenty five to
Speaker 1: thirty percent of the emissions to each country is a
Speaker 1: little bit different, and we see electrification as the main
Speaker 1: way in which almost all of the transport emissions will
Speaker 1: be reduced over time. You could do it for two whellers,
Speaker 1: you can do it for three whe you can do
Speaker 1: it for cars. You can do it for light trucks,
Speaker 1: increasingly heavier trucks, but the heaviest trucks are still very
Speaker 1: hard to decarbonize with power. And so if you look
Speaker 1: at the supply chainel that the area that we thought
Speaker 1: was one of the pinch points was the ability to
Speaker 1: rule out the highest powered chargers, the ones that you
Speaker 1: would use not at destinations or at your home, but
Speaker 1: I've been transit at scale and to do that on
Speaker 1: a global basis, and so the reason we selected to
Speaker 1: invest in Abbe Mobility is we think they are one
Speaker 1: of the only providers who can deliver those high power
Speaker 1: chargers to global CTOs around the world. We have customers
Speaker 1: and are delivering in over seventy countries. Fixing that pinch
Speaker 1: point would enable a faster decarbonization and electrification of transport.
Speaker 1: We also want to get to the higher powered chargers
Speaker 1: because we want to get to bigger and bigger trucks
Speaker 1: because if you look at where thetions come from, disproportionately,
Speaker 1: they come from the largest vehicles on our roads today
Speaker 1: and those will meet the fastest possible charging. Today, the
Speaker 1: company has a new product out there which is four
Speaker 1: hundred killowts, but over time we can imagine with liquid
Speaker 1: cooling and with the product development suite, we have getting
Speaker 1: up to a megawat of charging and that will enable
Speaker 1: the juty cycles on those larger trucks to work. And
Speaker 1: that's why we're particularly interested in emobility and made the investment.
Speaker 2: So Sean slightly different topic, which is I'm listening very
Speaker 2: clearly to you and I'm wondering if you're going to
Speaker 2: make money doing this.
Speaker 1: If we don't make money, we will failed. Our job
Speaker 1: is to bring that institutional quality, deep pools of capital
Speaker 1: to these areas, these areas where the missions are highest
Speaker 1: than their most off track. And it's till very well
Speaker 1: be talking about climate lane investing, but I should make
Speaker 1: really clear there is nothing about climate led investing that
Speaker 1: isn't one hundred percent commercial. It's fully caffemated at investing.
Speaker 1: If we are going to move the large amounts of
Speaker 1: capital that are required to solve these challenges, they will
Speaker 1: move when they conceive profit opportunities. I have experience of
Speaker 1: doing this before, looking for in the hard to abit
Speaker 1: areas and showing that you can make great money, I
Speaker 1: mean the great opportunities. There is a much less competition
Speaker 1: in those areas. But of course you have to be
Speaker 1: thoughtful and you need a different set of skill sets
Speaker 1: to have a strategy like this and be successful in it.
Speaker 1: Activity what you do and you work with many people
Speaker 1: they have a very similar kind of investment banking kind
Speaker 1: of team. But we needed a team who were purposely
Speaker 1: very diverse in terms of their background and experience. Because
Speaker 1: we're building real assets. We needed a team that understood
Speaker 1: building companies and growth styles investing. We needed people in
Speaker 1: that team who understood infrastructure style investing real assets. We
Speaker 1: needed on that team people who understood project financing, impact,
Speaker 1: engineering operations, and bringing them all together under the umbrella
Speaker 1: of just climate. We purposely set the team up to
Speaker 1: integrate those sorts of skills because I think if you
Speaker 1: haven't got those skills, this becomes a very very difficult
Speaker 1: investment Manda. Of course, the proof of the pudding will
Speaker 1: be in the eating, and it's a hard manded. But
Speaker 1: having done this before, having led this sort of an
Speaker 1: integrated team to look at the things that other people
Speaker 1: find difficult and proven that that works, I think within
Speaker 1: the team we have a track record to be able
Speaker 1: to deliver that. But let me be really clear. If
Speaker 1: we're going to succeed in making climate lead and investing
Speaker 1: something that is admired and copied around the world, much
Speaker 1: like the green investment bank model was admired and copied
Speaker 1: around the world, have to deliver attractive returns and highest
Speaker 1: level of impact and deliver them both at the same
Speaker 1: time or will fail enor mess.
Speaker 2: Jean, thank you very very much for that.
Speaker 1: Again, just I want to maybe go.
Speaker 2: A little bit back to the market environment if you
Speaker 2: look at it, I think, if I go back in
Speaker 2: my career, we've seen sort of three clean.
Speaker 4: Tech bubbles and all of them have blown up, and
Speaker 4: I feel we're in a third one now. You see
Speaker 4: all the spoks in the US that like down, you
Speaker 4: see dal rounds taking place everywhere.
Speaker 2: It's just over capacity. It seems to be from investor
Speaker 2: part of a mess. I'd be interested to hear.
Speaker 4: Your thoughts on the market environment and how you see
Speaker 4: it going forward.
Speaker 1: Basically, I guess one of the few joys of being
Speaker 1: older is you see pattern recognition. And indeed we've seen
Speaker 1: some of this before. There's a sudden wave of enthusiasm
Speaker 1: followed by a crash of reality. But what happens after
Speaker 1: that is a steady, solid growth. If you think through
Speaker 1: wind on shore, if you think through wind offshore, you
Speaker 1: think through batteries, if you think through solar for example,
Speaker 1: we've all gone through this initial wave of enthusiasm, maybe
Speaker 1: some excitable inflated values, a crash of reality, and then
Speaker 1: a steady growth That's what I expect we will see here,
Speaker 1: and we will see waves of enthusiasm and volatility I
Speaker 1: suspect over the next twenty years as we continue to
Speaker 1: invest in these things. But if you can create investible
Speaker 1: and repeatable business models where you can get the first
Speaker 1: signs of success in each of these subsectors and then
Speaker 1: go for the sam rinse and repeat program that we've
Speaker 1: seen in wind and solar in batteries, I think you
Speaker 1: can create acid classes just like we were able to
Speaker 1: create around offshore wind, in things like SAP, in things
Speaker 1: like steel, in things like cement, where at the very
Speaker 1: early stages of that. But we shouldn't get too excited
Speaker 1: when the market gets frothy or too depressed. When the
Speaker 1: market's done and look for that wave of standard growth
Speaker 1: that typically comes after these periods of volatile We need
Speaker 1: a deliver chart, we need to deliver which.
Speaker 2: Shorty show absolutely needs to deliver.
Speaker 3: I agree on the principle, which is in the short
Speaker 3: term pessimist always right and in the long term optimist
Speaker 3: deliver change that I agree.
Speaker 1: Now now I think you should just stop there. I
Speaker 1: agree with you.
Speaker 3: Now. When Trump got elected, everything in the market when
Speaker 3: except when obles went down, and look, that's very sad.
Speaker 3: And sometimes I wonder if a lot of pine the
Speaker 3: sky who could five years ago raised hundreds of millions
Speaker 3: based on a power point. The purject is still not finished,
Speaker 3: the quantum scape for solid state battery and the energy
Speaker 3: war for gravity storage, because what we've seen in the
Speaker 3: solar industry is first you have like a multitude of
Speaker 3: potential different technology csp on crystalline, and then one technology
Speaker 3: emerged and literally kills the rest. And I know it's
Speaker 3: almost impossible to time the market. I see a great
Speaker 3: future five ten years, no problem, but I'm really concerned
Speaker 3: about the next eighteen months.
Speaker 1: A lot of the stuff arived renewables is done by
Speaker 1: the states, each of the individual states in the US
Speaker 1: those targets, and I don't think those will change. In
Speaker 1: the last period that we had President around War, wind
Speaker 1: and solar was built in the US than at any
Speaker 1: time before that, and I expect that to continue. This
Speaker 1: transition will continue to happen. It's a matter of physics,
Speaker 1: it's a matter of chemistry, it's a matter of biology.
Speaker 1: We need to fix these things and fix the pilot.
Speaker 1: And it's a matter of economics. Many of these technologies
Speaker 1: are cheaper today than the altarnids. They will be adopted,
Speaker 1: whether there's a large amount of political support or a
Speaker 1: little bit of political support. Their job creating, and they
Speaker 1: give economic advantages to those who invest in them. That's
Speaker 1: not going to change. I am an optimist about this.
Speaker 1: I think we're going to deliver this, and there will
Speaker 1: be bumps along the way. There will be periods of
Speaker 1: frothy markets and declining markets. There will be periods of
Speaker 1: political headwinds and periods of political tilwoods. But the fundamentals
Speaker 1: of what we're doing and why we're doing it are
Speaker 1: driven by physics and chemistry and biology and economics, and
Speaker 1: those are going to continue. So I am an optimist,
Speaker 1: and I remain enthusiastic about the mission and about the
Speaker 1: probability of making a real change.
Speaker 3: Great way to a very good, very superb, very much.
Speaker 1: It was good. I enjoyed it. Thank you both very
Speaker 1: much for inviting.
Speaker 3: That's great.
Speaker 2: Thank you Sean, well Laurent. The key question that's it
Speaker 2: comes into my head is whether they're going to make
Speaker 2: any money and make any of these investments. It's an investment,
Speaker 2: but now you might say it's not an investment of
Speaker 2: but it's a philanthropy adventure and that's okay. But I'm
Speaker 2: doubting wh they're gonna make money from this.
Speaker 3: The most embarrassing moment was eighteen minutes inside the interview,
Speaker 3: you asked the question about the climatic bubble and his
Speaker 3: answer was a big si, a sigh of powerlessness.
Speaker 1: That was brutal.
Speaker 2: Yeah, it was. It was a little bit of frustration
Speaker 2: with everything. And I understand that. I understand that we've
Speaker 2: been through these bubbles with Laurent, so it's just it's
Speaker 2: not easier.
Speaker 3: You said, third bubble for our young listeners, can you
Speaker 3: remind us what were the first birds.
Speaker 2: In the Internet bubble in nineteen nineteen nine, two thousand.
Speaker 2: You also had a clean tech bole that was there
Speaker 2: was a huge amount of hype in particularly in around
Speaker 2: field seal companies and a lot of IPOs in those years,
Speaker 2: and all the share prices collapsed. So that was the
Speaker 2: first one, and then the second one really was to
Speaker 2: eight two thousand and nine, where we had all pile
Speaker 2: of IPOs of solar companies, German companies, Chinese companies, and
Speaker 2: huge amounts of new funds going into that whole space
Speaker 2: and then that blew up as well.
Speaker 3: I remember you had the cos Laventuez, you had the
Speaker 3: kind of bio fue funds one billion, you had to
Speaker 3: write down one hundred percent of it.
Speaker 2: Yeah, yeah, exactly exactly. So it was just it was
Speaker 2: tough from what we've seen as another one. Again, we
Speaker 2: saw obviously the peak of it being about whatever two
Speaker 2: years ago, I suppose, and we had all these SPACs
Speaker 2: being put on the market in the US really really
Speaker 2: outrageous valuations, and obviously they collapsed and you know a
Speaker 2: lot of them went bankrupt, and yeah, they brought down
Speaker 2: the whole sector with them. And we're talking to the
Speaker 2: public markets, but I just want to say it's also
Speaker 2: in the private markets at the same thing, because what
Speaker 2: we're living through right now in Europe and North America
Speaker 2: is a whole pile of down rounds and restructuring of
Speaker 2: climate business. That's what we're saying. It's not a pre
Speaker 2: market environment out there still.
Speaker 3: Even before taking into account the impact of Trump's election.
Speaker 2: Exactly, without a doubt, without there absolutely.
Speaker 3: Now, if we talk about green Steel, a Stekar is
Speaker 3: a big project five billion. They're really invested heavy into it. Wow,
Speaker 3: green Steel, if you look Arcelo Metal. They just announced
Speaker 3: that they are almost stopping their new green steel development
Speaker 3: despite receiving hundreds of millions of subsidies. We just saw
Speaker 3: to Saint Groupe slashing forty percent of their workforce. It's
Speaker 3: very difficult to turn into green steel when the market
Speaker 3: is massively over supplied, and that's a consequence of what's
Speaker 3: going on in China. In China, there's so much steel
Speaker 3: of a supplied, but the problem is they are closing
Speaker 3: the electric afflness. They're not even closing the blastphones, so
Speaker 3: they are closing the greener plants. It's a very very
Speaker 3: difficult environment for green steel.
Speaker 2: It is a very difficult environment. And actually what you
Speaker 2: need to add to that is that the customers, in
Speaker 2: other words, the automobile manufacturers, these guys are all the
Speaker 2: pressure too. That makes it difficult. I'm also be at
Speaker 2: of reflection around. You might think a map when I
Speaker 2: say this, but the reflection I had is that Europe
Speaker 2: can't go alone. So in the sense that if Europe
Speaker 2: goes and puts carbon taxes on stuff coming into Europe
Speaker 2: and making europe being products more expensive, we just can't compete.
Speaker 2: And that's not going to work. So I'm a little
Speaker 2: bit cautious about all this type of project going forward.
Speaker 3: Green steel, cement e fuels. I weigh my words very carefully,
Speaker 3: but it's been almost a theological approach that we need
Speaker 3: to go to net zero and the only way is
Speaker 3: through podcore engineering, which might not succeed with the row
Speaker 3: of thermodynamics and the low of economics. And there has
Speaker 3: been a movement to go after carbon of sets because
Speaker 3: you can shoot and so on. But you know what,
Speaker 3: if we can use the forest three and a certain
Speaker 3: number of natural investment, which by the way, are much
Speaker 3: cheaper and which can deliver not in fifteen years, but
Speaker 3: in the next two or three years, why don't we
Speaker 3: use more carbon upsets provided they have high level integrity,
Speaker 3: which we can do now we satellites and everything. We
Speaker 3: just had articles six past at COP twenty nine. So
Speaker 3: at some point, why banging your head to just try
Speaker 3: to do green cement or green steel and ignore carbon
Speaker 3: upsets which are not perfect, but you know that's what
Speaker 3: they are for. They are for the so called how
Speaker 3: to abate sector, and it's it's much cheaper.
Speaker 1: I would say.
Speaker 2: Also, what you're doing is you're helping them develop world
Speaker 2: because a lot of these projects are in those areas
Speaker 2: and we ad at the end of the day, we
Speaker 2: need them to learn from our mistakes. We built an
Speaker 2: economy based on fossil fuels. They don't need to do
Speaker 2: this in the future, so we need to provide them
Speaker 2: the financing to do this. In the carbon credit mechanism
Speaker 2: is one way to do that. So I'm wich macha.
Speaker 3: The conclusion is a bit brace for impact. And I
Speaker 3: want to finish on a pot by Matt Eggers, who's
Speaker 3: the managing director at Prelude Venture, super respected when it
Speaker 3: comes to climate tech, and he says AI has sucked
Speaker 3: all the oxygen in the room. Climate tech. Now there
Speaker 3: you know they raised a ten billion per quarter. That's
Speaker 3: two or three days of crypto. That's it. Now, let's
Speaker 3: not confuse clean energy infrastructure investment, which is really going great,
Speaker 3: but that's with existing technology solar batteries, evis and so on,
Speaker 3: and trying to find the missing link in certain segments
Speaker 3: that's much tougher.
Speaker 2: Agree, totally, my friend. Well listen, good charting.
Speaker 3: Yeah, as always, and I talk to you next week
Speaker 3: the pot.
Speaker 2: Thank you for listening to redefine it energy. Don't forget
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