⛏ ClimateHack Vol 14: Minerals x Climate

Hey There,

Today you'll be hard pressed to find a Climate VC without a growing portfolio of Food and Ag investments, though for awhile before, there was a strong divide between the FoodTech and ClimateTech worlds, and the investors inside them.

But as the data shows, the two cannot operate in silos and this week's edition features news of legislations on farmers being put in place to curb emissions, fresh funding pouring into new approaches for sustainable food production and funds/grants emerging to incentivise "smart agriculture".

The divide between Food / Climate is narrowing, and the result of which will drive a unified effort towards decarbonising our planet, and hopefully reversing the worst of the climate crisis. Let's jump in.

What’s in today's edition? 🏭 The UN hint's at an extra tax for “polluting” fossil fuel firms.🕷 ADM and Spiber partner up for regenerative farming practices. ⛏ A chat with Collaborative Fund on why we should be future-proofing minerals

Digest x Climate

🧬 Synbio Leaps: It's an exciting time to be working, building and investing in Syn Bio as Jake Wintermute of Gingko highlights in his tweet.

📈 What’s up? The Net Zero Asset Owner Alliance, a coalition of pension funds and insurance companies, has committed to managing $7.1 trillion of assets in line with the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius.

📉 What’s down? Top farming and food firms could lose up to a quarter of their value, or $150 billion, by 2030 if they do not adopt practices tied to slowing climate change, according to a new report by United Nations-affiliated campaigners.

🏭 The UN Secretary General says that developed economies should impose an extra tax on the profits of “polluting” fossil fuel firms, which should go towards helping countries affected by climate change and households struggling with the cost-of-living crisis.

👀 Check out IndieBio’sSan Francisco Batch 13. A stellar bunch, including Minus Materials, which makes biogenic limestone for CO2-free cement, and Ingrediome, creator of animal-free protein emulsifiers.

💡 Good Read: Shira Eting at Vintage Investment Partners wrote this piece on investing in climate tech, and why this time is different.

Carbon x Climate

🔎 German startup Orbio Earth raised €600,000 for its methane intelligence solution, which leverages satellite data and data fusion algorithms to methane intelligence for emission reductions and benchmarking efforts.

💨 Google has acquired Israeli climate tech BreezoMeter for $200 million. The startup’s tech uses AI and machine-learning to monitor air quality and improve people’s health.

🌾 Yard Stick PBS and partners received $225 million from the USDA’s Partnerships for Climate-Smart Commodities initiative to further development of low-cost soil carbon measurement technology.

💰 New York State Governor Kathy Hochul announced $60 million in federal funds to advance climate-smart agricultural and carbon sequestration practices for the state’s farms and forests.

🐄 The Wolfe’s Neck Center for Agriculture & the Environment received a $35 million federal grant to promote climate-smart agriculture, create transition finance incentives for farmers and ranchers, and develop a marketplace for climate-smart commodities.

Food x Climate

🦠 MicroHarvest, based in Germany, closed 8.5 million in a Series A funding round led by Astanor Ventures. It has developed a precision fermentation technique that it claims is the “world’s fastest protein production system”.

🐜 InnovaFeed raised $250 million Series D funding to increase production at its vertical insect farms in the north of France, where it rears insects for animal and plant nutrition. It’s planning another ten farms by the end of the decade, and is expanding into the US.

🥛 The Dairy Farmers of America will receive up to $45 million from the US Department of Agriculture through its programme, Partnership for Climate Smart Commodities, to reduce methane emissions and develop “climate-smart,” low-carbon dairy products.

🥛 Berlin-based Blue Farm secured €3 million to “radically redevelop milk” with its powdered plant-based alternatives, that include oat bases and oat latte bases, and which the startup claims “significantly reduce the footprint of oat milk”.

📈 Data from AgFunder’s first Africa Agrifoodtech Investment Report shows that agrifoodtech startups on the continent have raised $1 billion in five years, though this counts for just 1% of global investment.

🌱 Here's a list of some of the best tasting alt-protein products, as voted by some of the top FoodTech VC's and Angels in the sector.

Materials, Transport x Climate

🕷 ADM is partnering with biotech company Spiber to support the adoption of regenerative farming practices amongst corn farmers in Iowa for Spiber’s Brewed Protein™.

🔋 French EV charging operator Bump secured $180 million in an equity and quasi-equity deal. Bump funds and manages the installation of new charging stations so that there is no upfront cost for their partners, them manages operation and maintenance while taking a cut on kWh.

🌊 British green tech Cleaner Seas secured more than £700,000 for its pollution-fighting washing machine technology, a filter designed to reduce the number of pollutants that end up in the world’s oceans.

🏭 EU groups ClientEarth, WWF’s European Policy Office, Transport & Environment, and BUND are starting legal action to prevent fossil gas from featuring in the EU’s sustainable finance Taxonomy Regulation and the European Climate Law.

Energy x Climate

☀️ California-based Enact Systems raised $11.5 million Series A funding to connect solar energy installers and customers with its two-sided software. It already processes more than $1.5 billion in projects annually across thousands of users in 20 countries.

⚡️ Sweetch Energy, based in France, secured €6 million to scale up its pioneering osmotic energy tech, which produces electricity from salt water to potentially provide Europe with a new renewable energy source.

🇪🇺 The EU has approved up to $5.2 billion in public funding to support the construction of “large-scale electrolysers and transport infrastructure, for the production, storage and transport of renewable and low-carbon hydrogen.”

🚴‍♂️ British startup Energym has created an indoor fitness bike that converts human power into electricity, stored in a removable battery back, and is partnering with gyms and offices to create a network of clean energy.

Funds x Climate

🌎 Extantia, based in Berlin, announced a €300 million platform to invest in climate tech innovation. Its portfolio already includes companies such as H2Pro, INERATEC, GA Drilling, BeZero, and Reverion.

🇪🇸 The Klima Energy Transition Fund, managed by Spanish investment firm Alantra and energy company Enagás, closed with €210 million in commitments to decarbonise Europe’s economy.

⚡️ Amsterdam-based Rockstart launched its third fund, Rockstart Emerging Tech, aiming to raise €30 million to help up to 50 early-stage emerging impact technology startups and ideas over the next ten years.

💰 Dry Powder: Quick analysis on VC Dry Powder which suggests another strong investment cycle might be ahead - goes hand-in-hand with this post about family office's dry powder (and how they'll be competition for VC's).

Conversations x Climate: Minerals x Climate

This week I reached out to Tomás Álvarez Belón, Senior Associate at Collaborative Fund, with a focus on Decarbonization.

Collaborative Fund have been early investors across the Climate Tech sector, and this year the team launched a new $200M fund "Collab SOS" to back founders working on climate solutions.

Already the US-based firm has backed several Climate-focussed startups including AlgiKnit, MeliBio, Modern Meadow, Dandelion, Brimstone Energy and more.

💡 Biggest area(s) in climate you’d like to see more founders working on and investment going to?

Minerals and Mining ⛏

❌ The Problem:

Hitting global net zero targets will lead to an inexorable rise in demand for raw materials, including critical minerals. We know that there is both a gap in the supply of these minerals and, simultaneously, a need to change how we extract them. As a result, we believe that there is a unique opportunity today for companies to reimagine the mining sector while building massive, profitable, and climate-positive ventures.

Today’s economy is based on pumping out hydrocarbons, but a world powered by clean technologies should be built on emission-free, environmentally-friendly mineral extraction. Most of us have heard of lithium, a key ingredient that powers phones and EVs alike. But even batteries require lots of other minerals – exactly which and in what proportion depends on the chemistry.

Beyond just powering our batteries, minerals play a hugely important role in clean energy production, like solar cells, wind turbines, and distribution, namely power lines. The list of minerals includes lithium, copper, nickel, manganese, cobalt, graphite, zinc, rare earth metals, and more.

📈 The Demand:

These minerals have become critical for clean energy at an astonishingly rapid pace – a rate that is set to accelerate even faster. In 2010, for example, only a tiny fraction of the world’s lithium supply went to powering clean energy resources, but by 2020 it was 30% of total supply. Now, demand for lithium is posed to 40x, graphite to 25x, etc. Naturally, there is still some uncertainty as to the demand for specific minerals, which will largely be defined by a mix of policy and technological choices made by companies.

In addition to a gap in the amount of minerals the world can produce today, we need to radically alter how they are procured.

1. First, supply chains are highly concentrated in China, which controls over 30% of the world’s lithium, copper, nickel and cobalt supply… and over 80% of the world’s rare earth elements!

2. Second, we need more stable supplies. The war in Ukraine has, among other factors, led to skyrocketing costs of lithium, which has led auto manufacturers to increase the price of EVs multiple times in the last year.

3. Third, the world has largely tapped the easiest-to-extract mines, which means that costs will increase as mining companies have to put more effort to dig up worse-quality minerals.

And these are just only some of the many issues that the mining industry faces.

💡 The Solutions:

As a result, we see a number of areas where we see exciting companies and, given the magnitude of the challenge, hope to see many more moonshots.

1) Identifying new mineral deposits 🔎 Examples Include: KoBold, Earth AI, Mineral Forecast

2) Decarbonizing the mineral extraction and processing value chain ⛏

Examples Include: Summit Nanotech, Aepnus, Lithios

3) Recycling critical minerals in products like EV batteries 🔋

Examples Include: Redwood Materials, ABTC, Li-Cycle, Ascend Elements, KULR

4) Reducing the need for critical minerals, e.g. creating battery chemistries that don’t require rare earth elements) 📉

Examples Include: C-Motive, Mitra Chem

5) Building more transparent and liquid marketplaces to trade said minerals

The solutions here are still relatively early, but the time to act is now in order to future-proof these essentials minerals which are the backbone of clean energy transition.

If you’re working or investing in any of these areas, we'd love to chat - You can reach me at [email protected].

Bit of Fun: 

Add an "ESG Slide" 😅

That's for reading, and have a great weekend ahead,

How did you like today's email?Love it 😁 Meh 😐 Hate it 🙁

Curated by Nicola & Arman