Making batteries out of CO2, with Sebastian Pohlmann of UpCatalyst

Sebastian Pohlmann is VP of Business Development at UpCatalyst, which makes carbon nanotubes and graphite from CO2. They are literally taking one of the world’s most problematic waste streams and turning it into one of the most desperately-needed materials.

In this episode we talked about:

🔋 The carbon footprint of producing graphite for lithium-ion batteries

🌍 Innovative approaches to sourcing CO2 for industrial processes

🚗 The emerging market for sodium-ion batteries and their benefits over lithium-ion batteries

🏗️ How carbon nanotubes can reinforce concrete and reduce overall emissions

🤝 The role of academia in validating and advancing climate tech innovations

#climatetech #carbonnanotubes #sustainability

Transcript

Ryan Grant Little: 0:06

Welcome to another Climate Tech Podcast interviews with the people trying to save us from ourselves. Sebastian Pohlmann is CTO at UpCatalyst, a company that turns CO2 into graphite and other carbon-based products for use in applications like batteries. A German living in Estonia since 2019, he's bullish on sustainable ways to power the energy transition. I reached him in Tallinn. I'm Ryan Grant Little. Thanks for being here, sebastian. Welcome to the podcast. Hi Ryan, thanks for having me as CTO at UpCatalyst. You're turning CO2 into graphite for batteries, and this sounds like one of these killing two birds with one stone situations upcycling a waste product into a product that's necessary for the energy transition and it also strikes me as something that you don't just come up with as an idea on a sunday afternoon. So where did the idea for this come from?

Sebastian Pohlmann: 0:56

yeah, the idea for this came from a spin-off in university. So here in estonia, in tartan university, they actually found out how to electrolyze CO2 back into carbon. Well, they didn't find it out. The technology exists, but what they found out is how to do it for specific carbon allotropes, so how to make specific forms of carbon out of CO2 by splitting it electrochemically.

Ryan Grant Little: 1:23

And so that's in these types of carbon. So I mentioned graphite. Are there other kinds of carbon that you're using as well?

Sebastian Pohlmann: 1:29

Yeah, we can also make carbon nanotubes so very thin wires made out of carbon, and these have also a lot of applications in battery, space and composite materials. Let's say, in upcoming materials, a lot of new applications using carbon nanotubes Cool.

Ryan Grant Little: 1:46

I want to talk about the applications a little bit as well. Can you explain kind of in layperson's terms how this works? So what does the process actually look like to turn CO2 back into carbon?

Sebastian Pohlmann: 1:57

Sure. So this works a little bit like aluminum smelting, so that doesn't tell you anything in layperson's terms, but it is a molten salt electrolysis. What does it mean is that it works at fairly high temperatures, around 600 to 800 degrees Celsius, in a molten salt. So instead of having an electrolysis, like you normally have electrolysis of water, which is done in water you use another liquid which is a molten salt. If you heat up a salt, even table salt, if you heat it up to high enough temperatures, it becomes liquid.

Sebastian Pohlmann: 2:31

And what we do is we use carbonate salts, so salts that already have the carbon dioxide dissolved in them and we can dissolve more carbon dioxide in them. So we pump the carbon dioxide into this molten salt and then we have two electrodes in there that apply a voltage and a current flows, and that current goes directly into the carbon dioxide molecules. So it adds enough electrons on one side to strip the oxygen from the carbon and you're left with solid carbon on one side and with oxygen on the other side. So you have oxygen bubbles forming on the other side and just escaping into the atmosphere.

Ryan Grant Little: 3:09

Okay, and I want to talk to you more about salt in a minute as well, because I was actually out from the last week tonight with John Oliver. There was a piece on deep sea mining and talked about maybe you saw this recently, but talked about batteries from salt and it sounds like maybe there's some crossover here. So what about the economics of this? And let's talk also a bit about the market. For me, turning CO2 back into carbon sounds a bit like putting toothpaste back into the tube. How do the economics look for this relative to kind of the traditional but dirtier forms of mining carbon?

Sebastian Pohlmann: 3:44

Surprisingly, they don't look too bad. So if you compare it to mining carbon, to mining especially graphite because graphite can be mined then mining graphite is normally a little bit cheaper. But mining graphite doesn't give you the graphite that you need for lithium ion batteries, so you need to still treat the mine graphite, and then you have a lot of other energy expenses. There are other ways how to make graphite. Most battery graphite today is actually made synthetically from petroleum coke, and this is very energy intensive. So petroleum coke is taken and heated up using fossil fuel energy, again to around 2,900 degrees Celsius, so very high temperatures, and at these, if you exclude oxygen, every carbon turns at some point into graphite.

Sebastian Pohlmann: 4:29

That is how they synthetically make graphite, in a nutshell, for nanotubes the process is also quite high temperature and also fossil fuel-based. So you use natural gas and use a process called chemical vapor deposition at around 1,200 degrees Celsius. So again, again very high temperatures, much higher than the temperatures that we use. So, while it is actually our process, taking toothpaste and putting it back into the tube, and the other processes use much, much higher temperatures. So our main energy expense is the electricity that we use to split up the carbon dioxide molecule, the other guy's main energy expense is heating up the process. So cost-wise and energy-wise, we are actually energy-wise better off and cost-wise also especially on the carbon nanotube part much better off when making carbon nanotubes our way.

Ryan Grant Little: 5:23

Okay, so getting toothpaste out of the tube at 2,900 degrees is actually quite expensive as well. Exactly, and what about the market size? So can you just paint the picture of what's the demand for graphite for nanotubes globally right now, and how do you see alternatives like this playing a role in cutting into that as a supplier?

Sebastian Pohlmann: 5:42

Yeah, the market size, for we can split it into two things, into nanotubes and graphite. So for graphite, the main market today is the battery market. You use graphite actually today in a lot of other things. A pencil uses graphite, but the graphite that you can use in a pencil is very low quality graphite. You don't need really high purity or anything. For batteries you need extremely high purity graphite. And graphite is these layers of carbon atoms, right, and the lithium ions in the lithium ion battery. They move in between these layers. That's what happens when you charge a lithium ion battery.

Sebastian Pohlmann: 6:17

Just for context, the average lithium ion battery uses about one kilogram of graphite per kilowatt hour of stored energy. That means every electric vehicle has around 60 to 70 kilograms of graphite in it and that means that if you make synthetic graphite with the current method, for the graphite alone you have around 1.2, 1.3 tons of CO2 emitted just for making the graphite, which is still, I mean, it's not too bad, but it's still quite bad, especially given the amount of electric vehicles that we want to make, and cutting down on these emissions is quite important. So that market alone is huge. Of course, because of the amount of batteries that will be made in the future. If you take the projections of the battery industry, then we look at four to five terawatt hours in 2030 of batteries being made. So one terawatt hour is one million megawatt hours. One megawatt hour takes one ton of graphite, so we are talking about millions of tons of graphite that needs to be made, especially in the coming years. So that's the one part. The other part is the nanotubes. So nanotubes are also used on batteries. Average electric car uses about 500 grams to one kilogram of nanotubes, and nanotubes are much more carbon intensive, so they emit a lot more carbon emissions per kilogram of nanotubes.

Sebastian Pohlmann: 7:44

And here it is also. It's not only the battery market, it is actually here. Half of the market is the battery market, the other half is other things like composite materials, even the concrete market and anything that can be structurally improved on a molecular level and concrete. For example, there are a lot of studies showing that if you add nanotubes you can improve concrete strength by 20-30% and these kind of applications again also save emissions because you can use less concrete to build the same building, just as an example. So yeah, the market size is in total if you take the service level address on the market for nanotubes alone, for both the battery market and the other markets, it's, in 2030, estimated to be around 50 billion US dollars. So there's a lot of different applications which can utilize these products.

Ryan Grant Little: 8:34

And how are you taking the CO2? How does that supply look? Are you attaching to the exhaust of a cogen, or what does that look like?

Sebastian Pohlmann: 8:41

exactly that's a very good question. We even sometimes get the question is there even enough CO2 to do it? Sadly, there is. There's much, much more than we actually need.

Ryan Grant Little: 8:51

That doesn't surprise me.

Sebastian Pohlmann: 8:53

We cannot hook up, sadly, directly to the exhaust of a generator or to the exhaust of a concrete plant or something like this. We need relatively pure CO2, about 98-99% purity. But these purities are today available if you have CO2 washing process after your standard exhaust. So the concrete industry is already doing that. Not every concrete plant, but a lot of concrete plants are already building the CO2 washing units in order to prepare for CO2 utilization because they have some of the hardest to abate emissions globally. So concrete is kind of this you have 8% of global carbon emissions and at the same time they're extremely hard to abate because you cannot replace the emissions with something else. You cannot avoid them by going to solar or going to wind energy. That's not possible.

Sebastian Pohlmann: 9:46

So generally, how we see it is we would build our larger factories next to these large scale emitters, whether that's concrete or cement factories in this case, or waste incineration plants. So waste incineration is, in Europe at least, one of the larger ways how to get rid of your waste and they emit a lot of CO2 and they have very high pressure by regulation to abate the CO2 emissions as well. Today, at the smaller scale that we operate today so pilot scale we actually use already CO2 from biogas. So biogas that you get from biogas plant is around 40% CO2. That CO2 has no energy value and it normally is split from the methane and that CO2 can then be, of course, just emitted. But a lot of biogas installations don't want to emit it, of course. They want to store it or utilize it, and that's where we come in Interesting.

Ryan Grant Little: 10:42

So basically looking at co-locations with large emitters and would you be working with them in partnership or would you set up projects as like co-joined ventures with them? Is that kind of the idea?

Sebastian Pohlmann: 10:53

Yeah, the idea is that the very first large-scale installations we will build ourselves and we will operate them ourselves, and we will basically take co2 as a feedstock from somebody who is wanting to get rid of it. There will most probably be some kind of renumeration involved regarding co2 certificates, something like that. That is something that we're currently figuring out with these partners. After that, we actually are considering to go rather for a licensing model. We have the technology. We can tell people how to set it up next to your emission plant, and then we rather focus on the product quality. We rather focus on the actual battery grade, graphite on the nanotubes and how to create value from those.

Ryan Grant Little: 11:35

Interesting. We talked about batteries for EVs, for smartphones, that type of thing. Are there any other applications that you're targeting that work with this kind of carbon For?

Sebastian Pohlmann: 11:43

graphite, of course, it's batteries all over the place, whether that's batteries for EVs or smartphones or stationary storage, but for graphite it's all batteries. Then for the nanotubes it is half the market is batteries. The other half is, as I said, composite materials. It can be improvement of concrete strength, can be paints and coatings, functional coatings, especially because nanotubes make everything a little bit more conductive. So if you want a black conductive coating or a coating that is very good at conducting thermally as well, the nanotubes make a lot of sense.

Sebastian Pohlmann: 12:20

The third thing that we haven't talked about yet, what we also are doing, is we also have a product made from biomass, so it's also a CO2 negative product, which is a hard carbon, and that hard carbon is actually used in sodium ion batteries. So sodium ion batteries are kind of the next big thing that is coming up in the battery space. Catl, for example, has already launched one sodium ion batteries. So sodium ion batteries are kind of the next big thing that is coming up in the battery space. Catl, for example, has already launched one sodium ion battery and we see that this is quite an important battery market to follow in. And the graphite cannot be used in sodium ion batteries.

Ryan Grant Little: 12:49

So what they use in sodium ion batteries is a different form of carbon called hard carbon, and we're also offering a product in that space you're totally stealing my thunder here, sebastian, because I even have a point here about catl in china, which is the largest battery manufacturer in the world, and they're making these sodium ion batteries and supplying them to ev companies, the major one being sherry, which is also a chinese one, and I was going to ask you what your take is on this technology. But if it's on your roadmap as kind of the third product, I think that answers it.

Sebastian Pohlmann: 13:19

Yeah, it is. I mean I can expand a little bit on our take on it. So the sodium ion battery is generally regarded in the battery space as definitely a large part of the technology mix coming up in the future regarding energy storage. Why? Because it doesn't use lithium. It's much safer than lithium-ion batteries. It doesn't necessarily use cobalt. It can be discharged to zero volts, so you can transport it more safely, install it more safely. There are a lot of benefits of this, but most importantly it's cheaper. For per kilowatt hour you can probably get sodium ion to levels that are 15%, 20%, 30% cheaper than what you get from a lithium ion battery.

Ryan Grant Little: 13:59

And for stationary storage that is a huge game changer because suddenly it becomes very viable to install large battery, large stationary battery installations, next to wind farms, solar farms, and secure the energy supply for renewables farms and secure the energy supply for renewables, and so I mean also the accessibility of salt is much easier than some of the more difficult precious metals that are, you know, in geopolitically unstable places or, as is the case with deep sea, drilling kind of in the deepest parts of the sea, and I'll go back to the John Oliver episode of Last Week Tonight again, where he's talking about the metal company which is looking to basically harvest the deepest part of the seabed in order to get materials for batteries approaches like you're talking about and with salt, is there a way to obviate this altogether, so that we don't have to continue with the most hazardous for the environment or for people types of mining?

Ryan Grant Little: 15:03

Or is this a kind of everything required solution in order to electrify the world? I mean, we're trying to shift the entire planet into an electrified world, and so I can imagine that it might take everything that we've got in order to do it within a timeframe that doesn't.

Sebastian Pohlmann: 15:21

Of course, I think the concern always needs to be how to get the metals that we need in order to get fully renewable and get carbon neutral in our energy landscape without damaging the environment too much. I think it would be foolish to think that we can do it without damaging the environment overall. But we also need to consider that we are switching right. We are not doing something new. We are actually switching from something much more harmful, which is deep sea drilling already, which is oil and gas and that's a quote, I actually don't remember from whom but we're switching from an oil and gas-based energy system to a metal-based energy system.

Sebastian Pohlmann: 15:59

The good thing about metals is you can recycle them right. Oil and gas you cannot recycle. I mean, that's kind of what we are trying to do. We're trying to get the CO2 back into carbon form, but generally oil and gas products, the final product is CO2, and you cannot recycle that really well, whereas metals you can recycle. So I agree that maybe we should think about before going to deep sea mining. It sounds also very costly and there might be just deposits elsewhere that are easier accessible.

Sebastian Pohlmann: 16:28

But I also think that we're globally in the space where we are trying things out. It's new to, still new to a lot of people. I mean think about how the lithium-ion battery looked in the 90s. Then people never thought that a lithium-ion battery would be available below 1,000 euros per kilowatt hour. Today we are already at 50. So that is something where a lot of learning is going on as a learning process and also learning process on the supply chains. So I'm pretty sure that we need to closely watch it in order to figure it out. But we will figure out how to get the metals we need without necessarily destroying all of our ecosystems.

Ryan Grant Little: 17:04

Yeah, some of our listeners will be, like me, old enough to remember carrying around the giant Motorola phone and laptops that basically break your back with the weight of these batteries. You mentioned that UpCatalyst is a spin-out of Tartu University and I wonder if you could talk a little bit about kind of the role of academia in the work that you do and what kind of connections you still academia in the work that you do and what kind of connections you still have with them or with other universities in working on R&D or lifecycle analyses or any of these kinds of things.

Sebastian Pohlmann: 17:35

Yeah, so we work a lot with universities. We actually host that. Currently, most of our laboratories are hosted in university laboratory space that we have rented specifically for these purposes and we are now slowly growing out of this phase where we go into a larger facility that is next to a waste incineration plant here in Tallinn in Estonia. But generally, this connection between industry and academia is quite important in this early phases of the startup as well, because the earliest validation that you get of your process, get of your product, is normally from academia. It's not from customers, because academia is willing to test for free and is willing to share the report then afterwards with everybody else.

Sebastian Pohlmann: 18:15

But also, academia has a lot of assets that are available for you to use without having to spend millions of euros on measurement equipment, right? So there's electron scanning, microscopes and all these kinds of things that are quite expensive to buy, but not that expensive if you just want to buy maybe three to 10 tests or something. So that's something that we definitely work with academia. But we also work in a lot of grant projects with academic institutions all around Europe. So Europe has, I'd say, a very successful grant structure when it comes to these research projects where industry works together with academia, and then we work with universities and research institutes all around.

Ryan Grant Little: 18:55

Europe. That sounds great. Yeah, I'm aware that a lot of these programs require kind of an industry part and an academic part, and then there's sort of a negotiation around what information is provided publicly and what's allowed to kind of stay as your IP, and some universities do that very well. Some are still kind of figuring it out, especially when it comes to a lot of the climate tech stuff where it's a public good. You know this information. There's a real public need to open source it, but at the same time, there's a need for you to be able to protect your IP time. There's a need for you to be able to protect your IP.

Ryan Grant Little: 19:29

Your latest funding round was led by Berlin's Extantia, which I consider to be one of the finest climate tech investors in the world, and listeners can go all the way back to episode number five and hear partner Carlotta Ochoa-Nevin Dumont's episode on this podcast. I wonder if you could talk a little bit about what the path forward looks like. This doesn't sound like a cheap venture. What does a path forward look like in terms of financing?

Sebastian Pohlmann: 19:50

First of all, I would be very happy to hear that you think that highly of them. We, of course, think also very highly of them, and work with them has been very great so far. Of course, to answer your question, of course this is capital intensive. It's deep tech and we need a lot of capital expenditure to make this happen. To build these large electrolysis reactors it costs a lot of money, and to especially build something for the first time costs a lot of money. It is capital expensive. It is not as expensive as some people might think.

Sebastian Pohlmann: 20:23

So when we talk to our customers, or our partners as well, on the carbon capture side, then they expect much higher sums than we normally tell them that it will cost to abate their emissions. But it is still capital intensive and that's also why we, of course, will consider additional funding rounds. So the good thing is about all of this is that the carbon dioxide is such a huge pain for anybody who's emitting it that most people are focused on also spending some money to get rid of their carbon dioxide emissions or evade them somehow, and some of these are even are even the same people that would then use the products, so some of them actually would use carbon nanotubes at the same time while emitting a lot of CO2 emissions. So they have a win-win situation with this technology. And, of course, these are the partners that we are starting to work with now to also figure out how much of this will still be venture capital funded, how much of this will already be partner funded.

Ryan Grant Little: 21:24

Interesting. And then they love the story also that they can make this very close loop right when they're both the consumer and the producer of the CO2 and the offset. So it makes a lot of sense.

Sebastian Pohlmann: 21:35

And it's not only a story in that sense. So of course, we see a lot of stories when it comes to climate tech, because a lot of people just want to have a nice green label somewhere on their product. But in terms of concrete, for example, then you have all the emissions from cement, which are huge, but you also have nanotubes in concrete which are taken out of the carbon cycle for 100, 150 years at least, because concrete is never burned or very rarely burned at these temperatures that you would release these carbon emissions again. So it's also important to think about whenever somebody tells you okay, we're taking carbon out of the atmosphere, we abate carbon emissions and we're putting it somewhere that how long will it stay there? Will it stay there for 10 years? Then you're not really taking it out of the carbon cycle. If you take it out of the carbon cycle for 100, 200 years, then you start to make a dent, really drill in on that somewhere.

Ryan Grant Little: 22:28

aspect of it. Yes, who would you like to hear from and what kind of people who are listening could help you further your mission, sebastian.

Sebastian Pohlmann: 22:35

We would like to hear from. First of all, we are always happy if somebody is interested in what we are doing. We're a small company. We are always happy to talk about it, so anybody who wants to learn more should definitely reach out to us. Of course, we are very happy to hear from companies that have the pain of CO2 emissions and would like to get rid of them, and maybe even already have an idea. Wait a minute. I have a battery plant that has CO2 emissions and I need graphite, so maybe that's combined the two. These stories also exist. And finally, of course, speaking of investments, then of course also anybody who is interested in further investing into these kind of technologies is, of course, welcome to contact us.

Ryan Grant Little: 23:17

And, as always, I'll put your LinkedIn and website in the show notes. Sebastian, thanks so much for talking today. Thank you, ryan, it was great talking to you. Thanks for listening to another Climate Tech podcast. It would mean a lot if you would subscribe, rate and share this podcast. Get in touch anytime with tips and guest recommendations at hello at climate tech pod dot com. Find me, ryan Grant Little, on LinkedIn. I'll be back with another episode next week. Bye for now.