Introduction to Climate Tech Ventures

Eric Rubenstein 0:01

Yeah , well , I think the reality is we just need more power and we're going to need a growing amount of power over time . So there's that aspect of we need to support every type of power generation that is , you know , incrementally , even better for the planet , but also that is more reliable , like , and we need redundancy is more reliable and we need redundancy .

Ryan Grant Little 0:27

Welcome to another Climate Tech Podcast interviews with people trying to save us from ourselves . Eric Rubenstein is an oil and gas banker turned climate tech investor and an influential thought leader in the USA . He and his firm , new Climate Ventures , are based in Houston , where they're winning over oil and gas players to a more sustainable investment thesis . I was glad to hear his optimism about green energy in the USA under the new administration , even if I struggled to share it Because of a snowstorm in Houston that shut down the airport . He was stuck at his parents' home in Florida , which is where I reached him , which is where I reached him . For some of the younger listeners to the podcast , that sound you'll hear in the interview is the ringing of a landline phone , something we use to talk to people in the old days . Eric , welcome to the podcast . Yeah , thanks for having me . Ryan . You are the managing director of New Climate Ventures , which is based in Houston . What does the company do ? What industries do you target ? Tell us all about it .

Eric Rubenstein 1:24

Absolutely so . New Climate Ventures we're a little over three years old now . We are a decarbonization-focused early-stage venture fund , so our filter is emissions reduction , removal , avoidance . But that opens up the purview to invest in a lot of different technology types and companies . Largely we're looking for companies that have some sort of proof of concept that can scale to be economically competitive with incumbent technologies or , on the other side , enabling technologies that can help hard tech or help consumers simply reduce their energy use . Hard tech or help consumers simply reduce their energy use , help hard tech scale these types of softwares that can enable hardware to really penetrate market .

Ryan Grant Little 2:11

And what are some of the specific topics that you're looking at right now that you're really excited about ?

Eric Rubenstein 2:16

Yeah , I guess we can split that in two things . One is what we've already done and kind of what we're looking at . So , in terms of what we've already done , we've invested in point source capture and carbon utilization , so turning CO2 into usable things like jet fuel and diesel fuel and waxes and ethanol and cement , biomaterials and bioplastics . We've invested in recycling technologies , advanced when it comes to plastics traditional or mechanical , when it comes to to plastics traditional or mechanical , when it comes to carbon fiber and some other things . So , as we're looking at the world , we're looking at hard and decarbonized sectors , and among those sectors also is the built environment .

Eric Rubenstein 2:56

So we've invested in companies that can reduce the energy need of buildings , that can heat more efficiently or cool more efficiently . Then a lot of these have been hardware related , actually . So imagine windows that can reflect heat away from sunlight , so you can reduce the energy use of the building by 30% . Looking beyond that , the food industry is something we have invested in . So food tech you can reduce the amount of animals that are very , I guess , take a lot of resource to grow , then you can reduce a lot of the emissions associated and save a lot of resource to grow , then you can reduce a lot of the emissions associated and save a lot of resource associated with growing the animals . As we look deeper into that stack , we've also invested in a carbon credit ratings agency . One of the more recent investments has been an AI grant writing company . So there's a lot of purview to be able to be expansive but also very targeted in terms of what we're looking at .

Ryan Grant Little 3:50

And it's interesting . Built environments represent something like 40% of energy usage , but people don't think about it as much . They're more . You know , when you think about decarbonizing or electrifying , you think of the electric car and these kind of more visible tokens of this type of thing . Same with food , you know . As you know , I work in food tech as an investor and food tech is responsible for something like 30% of food itself . The industry is responsible for something like 30% of CO2 and attracts about 12% of climate tech funding . So these kind of underrepresented , unsexy areas of the sector , but where you know there's really kind of momentous action happening and you know underneath the surface .

Eric Rubenstein 4:28

Yeah , absolutely , and there's real technologies that could penetrate those markets and change them for the better . So , similar to how Tesla is changing the car industry there and Nest is also I'll put that in the built environment enabling technology category like Nest has reduced the energy need for buildings by just being more efficient with the way that we heat and cool , the timing of it , really the automation of it . There's so much room for technologies to penetrate these markets and to seamlessly , or more or less seamlessly , integrate into our lives , which is what we're really looking for in terms of things that we're looking at .

Ryan Grant Little 5:07

Can you talk a bit about a couple of the companies that you've invested in and kind of how they got past the finish line with the IC and what was interesting about them ?

Eric Rubenstein 5:15

Yeah , one of our companies , dimensional Energy . They convert carbon dioxide and water into fuels and waxes . So , again , the technology itself was efficient . We believed it had a pathway and still believe it has a pathway to getting the cost parity with incumbent technologies . So meaning , in this case , if you're producing waxes and you can produce the waxes and be profitable , then you're doing a great job . If you can get your cost all the way down to sustainable aviation fuel , so if you can get down to jet fuel pricing , even better . But already they're in the money on their wax production and they have plants that are up and running now .

Eric Rubenstein 5:53

So , in terms of getting past the IC , it was originally a review of the technology , a review of what can they do . So a lot of companies on the surface look like a sustainable aviation fuel company , but then when you look into them and you look at the process and you look at the breadth of what they can produce , you start to realize , wow , these are little refineries and they can make a lot of different things and they can toggle to make more or less of something been trained to do , coming out of the energy trading industry . I immediately looked and said , wow , okay , you're not a jet fuel company . You're a company that can make waxes , and these can be of higher value . Let's see where that goes . So by getting through investment committee it was really early days we were a seed investor there . They're raising a series B this year .

Ryan Grant Little 6:39

You're also involved with a number of accelerator programs , so not just as an investor , but also working with some accelerator programs Climate , heaven , rice , clean Energy that's Rice University Clean Energy Accelerator and one called Breakthrough . I wonder if you could just talk a little bit about , I mean , both the concept , maybe , of an accelerator for people who aren't familiar with it , and then also kind of what your role is there , why you're involved , why you're so deeply involved in these .

Eric Rubenstein 7:03

Yeah , sure thing .

Eric Rubenstein 7:04

So the investment ecosystem in climate tech in particular is fairly deep and broad . So in the early days when you're a founder or you're thinking about starting a company you might through your university , and so this is where Rice comes in

The Need for Diverse Energy Solutions

Eric Rubenstein 7:19

you might be looking for some aid in figuring out how do I put a pitch deck together , how do I get payroll going , how do I attract investors into my company . And accelerators oftentimes there's kind of two different types . There's the types like the rice accelerator for the university that will interview companies , take them into the accelerator . They don't charge any fees . It's to accelerate the space and I think also to help rice companies develop , to the extent rice companies are involved there , but they take companies that are outside of rice as well for sure . And then there are other accelerators that for a fee will do that . Usually that fee is they get a piece of equity . They usually give you some cash as a company . So the historical like a very strong branded accelerator that people would know of is usually Y Combinator , who has hundreds and hundreds of companies in each batch these days . But there are many , many other accelerators that are more refined to say a specific industry type or a specific type of technology and in this instance , yeah , there's the Rice Accelerator . Other companies that , or other accelerators that our companies have gone through , have been the Indie Bio Accelerator that SOSV does .

Eric Rubenstein 8:33

So there are some venture funds that have accelerators that they run and operate . The Breakthrough Energy Fellowship is another one you just mentioned . I do some mentoring with them as well . So that's the fund that Bill Gates originally started and has many other notable investors . They have billions of dollars and they started a fellowship where them . And the Activate Fellowship is another one that was started by the government originally . Those are two of the very prominent ones in the climate tech space and those are a little bit different , where they'll give you a stipend for a couple of the technical founders typically one or two , however many are applied for and win that , and then , similarly though , they'll give you a couple of years to well , they'll groom you and help you think through the pivots of your technology . Those are actually not given to companies . They are actually given their fellowships for the founders , and the founders no-transcript .

Eric Rubenstein 9:53

And then Climate Haven . They're in the ilk of incubators . So Greentown Labs is another one that has locations in Boston and Houston . Now Climate Haven is specifically in New Haven , Connecticut . They are supported by Yale University in the state of Connecticut . They're just over a year old at this point . They just celebrated that one year anniversary . I'm an executive in residence there and I'm remote , so I'm working out of Houston and helping the companies there and the incubators . They give you well , you pay for as a company , some workspace there , so you get desks or you get lab space and you can grow , typically within these incubators to have more and more space to grow your business along with the needs of the business . They similarly will often incorporate programming into that with speakers , and give you a lot of introductions to investors and help you with pitch decks as well . It's just a different business model , but it's one that has a place and is thriving in the communities they're in .

Ryan Grant Little 11:44

And what does it mean to be an entrepreneur in residence there ? What does that look like ?

Eric Rubenstein 11:48

Yeah , so there it's an executive in residence . So I'm committing Sorry , yeah , no , that's totally fine . The entrepreneur in residence the EIR title there is more prominent across spaces Executive in residence . The only difference is they're trying to differentiate between , say , founders of companies that aren't founders of , so it could be anybody that's the executive in residence . An executive of Coca-Cola could be an executive in residence in theory , but so it gives more purview , I think , to have a broader range of people calling it that than the entrepreneur in residence , which typically is someone who started a company that's a startup and maybe exited those companies and is giving back their time to the community . Actually , one of the executive in residence is that at Climate Haven . Yeah , the entrepreneur in residence title like that's very typical also at places like Climate Haven and others that just Climate Haven is using that executive in residence title .

Eric Rubenstein 12:42

Investor in residence is the one that's new to me . I became an investor in residence this past year with Yale Ventures . Yale Ventures is effectively the tech transfer office for Yale , but it does more than that . They've integrated a number of different functions at the university into Yale . Ventures is effectively the tech transfer office for Yale , but it does more than that They've integrated a number of different functions at the university into Yale Ventures and there it's largely a mentorship .

Eric Rubenstein 13:01

Across all of these things where you're working , you're putting some time into working with the companies , giving advice , and what it really leads to or the reason people would do it is to give back to the community for sure .

Eric Rubenstein 13:13

But also it's a great way to cultivate deal flow , where you get to know companies early , before they're looking to raise capital . You can identify the ones that you want to invest in and then you can work toward getting them to a stage , helping them get to a stage where they're ready to accept investment . You can propose terms in terms of actually investing , or you can simply know their journey well enough that you are invited into the rounds that come together and you get to see where the breadth of technological kind of prowess is today , because it's always evolving and changing . Three years ago you wouldn't have seen an AI company you know , one of these accelerators and incubators because AI just wasn't advanced enough at that point in time to be able to handle the kinds of developments that were happening in the market and the needs of the market , and now it's advanced enough . So now you're starting to see technologies like that , for instance , and you can get an early look at them , sometimes through these different programs .

Ryan Grant Little 14:10

Okay , so you're working with fellowships , accelerators , incubators and a tech transfer office and it's a combination because you're interested in mentoring and you've got a lot of goodwill and you're just a really good guy , but it's also great deal flow , basically potentially for new climate ventures .

Eric Rubenstein 14:24

It's certainly a dual purpose and I think people treat it as such yeah .

Ryan Grant Little 14:28

Yeah , yeah , very cool . Can you set the scene a little bit for us right now ? Someone who you know you're covering a lot of ground in the US . You're you know both coasts , basically with climate tech startups . Can you just set the scene for us right now ? The beginning of 2025 ? Kind of what's going well , what trends are you seeing ? Just give us a bit of a picture of what's happening in the US .

Eric Rubenstein 14:50

Well , there is an election . That just I'll get to that part . So you know the landscape may be changing , but what's going well in the US is there's a lot of interest in climate tech that , say , when I started looking at the space a number of years ago , just wasn't there . Yet All the innovation originally that I was seeing and this is going back I don't know five years even that you know that recent ago was coming out of Europe or Canada . You really didn't have a lot coming out of the US . I think COVID probably changed that where ? Well , two things I think . One is you had 2019 , you had the first handful of commitments net zero commitments come from corporations announced . So I think that started getting people's attention toward oh , maybe there's something there 2020 .

Eric Rubenstein 15:37

With COVID , everyone got to sit back and reflect on what they were doing with their lives . They got to look at the problems in the world that happen when you shut down industries all over the place or when you're isolated from everyone and what you know , the things you really need in order to keep the lights on , in order to remain entertained , to feed oneself , right . So everything started to become more localized as well , like you started going to your local , like fruit truck right to buy some fruit rather than going to the grocery store , because it was outdoors and you know there was a lot more of this happening of community , of farm to table , let's say just from a food perspective . But when you think about it from a business perspective , there was the same thing happening where this was . Covid disrupted energy movements across the world because docks were shut and , you know , people were staying home . It disrupted people's ability to leave the house . There were lockdowns many times over in China that lasted way longer than they did in other parts of the world , which disrupted both business there and human life , right . So when I think about it from that perspective , it's like it's been this series of things that has led to where it is today , where climate tech , broadly defined , became more and more important during the last number of years because people started thinking how do I generate this fuel locally , how do I create this food locally , how do I separate from the rest of the world ? Because I'm starting to get used to this shop , local support , small business , let's say , and I think you're seeing that still kind of in society today , even though COVID is not the same as what it was a few years ago and it fits pretty well into the current concept of what's happening politically here as well , and I know we're going to get to that .

Eric Rubenstein 17:26

But when you think about it , there's the domestic production component , there's the energy security component , and so what I'm seeing is things in the carbon management space , like carbon , that I think largely it's investor-based . Investors have less of an appetite to support the companies . Consumer trends also . When you don't have a lot of public companies in that space , there's not a lot to look at and say , ok , this is a huge need . You're looking at the sales of those companies , like a Beyond Meat in this instance . Then you're extrapolating that to an industry On the energy side , all you're seeing is more and more need right . So the things that are working is anything that's grid related , anything that's power production or storage related . Carbon capture is a bipartisan issue . So in the US , since it has support across the aisle , you're seeing a lot of interest in carbon capture storage .

Eric Rubenstein 18:33

When you look at the critical minerals is something people have been interested in .

Eric Rubenstein 18:36

All these happen to be things that the current administration , the new administration and just the current political scene in the United States largely support or would not actively , you know , I think , act against .

Eric Rubenstein 18:51

So I think the world's interestingly in this place where those two things fit together nicely .

Eric Rubenstein 18:57

I mean , the things that are working best also are companies that have a path to profitability , that have a path to scale , so ones that can lock in like real customers with contracts that are priced , that can showcase that they actually have built a thing and done a thing that works and are just looking to scale that and need money to scale .

Eric Rubenstein 19:17

I mean , basically the industry has matured and mature companies or companies that are smart enough to identify that they need to be on those paths as well . They can't just be this big idea that is going to take 20 , 30 years to play out , that is going to take 20 , 30 years to play out . Nuclear is one that historically has been thought of as this long , like you know , 20 year , rolling 20 year . You know hard to scale , hard to bring to market , with political challenges there as well , with regulations , but now , like there's actually venture deals that have been getting done in the past 18 months on the nuclear side . Even so , you're seeing this shift toward energy security power generation needs , fuel needs , support , local , domestic , mostly from a security perspective I'd say more so than anything else even and those are the things that I find are doing best out there .

Ryan Grant Little 20:07

That's interesting . I mean , the power demand side of things is maybe not surprising for a couple of reasons . One , because as infrastructure kind of ages and you know it's becoming more and more challenging to maintain that stuff , we're looking for kind of new and , in a lot of cases , kind of more distributed solutions for this . But I think one of the main drivers is AI . Right and just , I think you know people don't always think about this , but AI is driving our power usage like astronomically right now .

Ryan Grant Little 20:35

I read somewhere recently that every time you do a kind of chat GPT prompt , it's like two days of charging your phone , which you know is not I mean it's not a ton , because charging your phone for two days is not actually a whole lot . But if you're doing , if you're replacing Google with chat GPT and everybody's doing this , then we're looking at I mean massive , massive increases . And we're seeing this with companies like Microsoft and Google , whose power usages are going up , like you know , double digits , sometimes like 50% , and probably only going in that direction . So that could be a really big part of what's driving this side of the climate tech industry .

Eric Rubenstein 21:10

Yeah , that's a huge conversation in the US and in venture , generally speaking , right , ai received the most venture dollars last year . Climate tech received the second most . So it just goes to show that both are intrinsically important to our future but also are tied together in the way that you're talking about . I mean the other side that people don't talk about as much , probably because it's just hard to quantify . In the same way don't talk about as much , probably because it's just hard to quantify . In the same way , people talk about the power suck that comes from AI , but they don't talk about as much the energy savings that can come from it as well . So that's the side that I think is definitely investable and interesting .

Eric Rubenstein 21:48

And you are seeing more and more companies that are working on making industry more efficient , that are working on making our homes more efficient , our buildings more efficient , and that sort of AI .

Eric Rubenstein 21:58

I don't know if it can offset the same amount of power use that is needed in order to power the AI , but I mean there's a lot of power being used by buildings and by industry . So if we can just be more efficient with the way that we use that power , if we can capture the heat that is wasted , let's say , off of industry and use that if you can capture the waste and if you can do all that more efficiently , because AI is powering the logic and the development of the tools to do it . If the climate technologies even are more and more so , machine learning is something that people have talked about for a long time , but the AI component as well , adding that in , if that can make these technologies the hard tech more efficient by simply improving by 1% , 2% , 5% the efficiency of the technologies , that'll be meaningful as well as we move forward . So hopefully there's room for that as well . Reducing energy need with AI , in addition to increasing the amount of power to fuel it .

Ryan Grant Little 23:02

As you alluded to , we're talking well , actually , two days after the new administration came into place right now . So lots of changes ahead by the time this airs . Some of them will be known , probably through executive orders . At this pace , and you know , I think logically it would make sense for us to think that renewable energy that's already at price parity and that type of thing , with , you know , conventional sources of energy , shouldn't be kind of left out of the mix because economically it makes sense . But then again there's always the signaling and then signaling and then the talk of woke energy and stuff like that .

Ryan Grant Little 23:36

I just pulled this this morning from the New York Times . Just a headline Trump wants to unleash energy as long as it's not wind or solar . And then the kind of first line legal experts said the president was testing the boundaries of executive power with aggressive orders designed to stop the country from transitioning to renewable energy . And I just wonder , I mean you know , you and I , if we were in charge of this , we would say , hey , like you know , even if you wanted to leave climate out of the picture , this stuff makes sense because solar makes sense economically . Now wind makes sense . All this stuff makes sense as part of the mix anyway . But as we know , we're not just dealing with pure reason on some of this stuff . I wonder kind of what your outlook is as someone who kind of knows this stuff pretty well and particularly as someone who has like an oil and gas background . You know can add that lens to it .

Eric Rubenstein 24:38

Yeah , well , I think the reality is we just need more power and we're going to need a growing amount of power over time . So there's that aspect of we need to support every type of power generation that is , you know , incrementally even better for the planet , but also that is more reliable . And we need redundancy because , like living in Houston , we're seeing the effect of having a lot of renewable power us right where , during the freeze in 2021 , the wind turbines froze , but also the gas infrastructure froze . So you ended up with a double whammy of just losing all sorts of power , but solar was still working , I think , so long as the transmission lines can handle it and the infrastructure can handle it like having local power would have been even better , right If we had solar on our roof . And it like having local power would have been even better right If we had solar on our roof and could power ourselves we wouldn't have been in that same predicament . So I think there's room for both for sure .

Eric Rubenstein 25:22

I think it's convenient also to say that I won't . You know , I , whoever I , donald Trump in this instance will not support offshore wind . So things that are not economic , that even the energy companies aren't really putting a lot of effort into because they're not as economic or not economic , it makes sense not to be doing , you know , supporting those blindly , and to be supporting things that are , or can be , economic and simply need to be scaled , particularly if it means resilience for the grid . So there's that give and take .

Ryan Grant Little 25:50

So your hope is that it will be kind of pragmatic in the approach of this . So stuff that is already paying off , despite any kind of posturing around it will still will still be included in the mix .

Eric Rubenstein 26:00

Yes , that's certainly my hope . I mean , I certainly think from a developer standpoint , they're going to definitely do what's economic right . They're going to push projects forward that makes sense to push forward because they're in the business of developing projects and making money doing so . So things that make sense should move forward . The subsidies may not be there in the same way , and that's the nature of what that would be , however , and a lot of those are locked in for long periods of time . So there's still transparency around and confidence in being able to underwrite a project with whatever is around and is going to remain around , because Congress needs to change some things , is my understanding , in order to the like .

Eric Rubenstein 26:36

Executive order can do only so much right . But then , when you look at what isn't being said , we need more power . So what about geothermal ? What about nuclear ? What about fission ? What about , you know , storage , energy storage so whether it's batteries or thermal storage or otherwise , will those be supported ? They're not being talked about in the same way .

Eric Rubenstein 26:57

So maybe there's a quiet support for a lot of other technology types and I think , the things that changed the most , because I was investing in companies before the IRA and when Trump was previously in office and there were grants still flowing out of the Department of Energy during that period of time . A number of our companies , when they were beginning , got those grants and they helped them , and the grants are not small grants either . So there's still plenty of . I would like to believe . There's plenty of appetite to be backing technologies that can be transformative and quietly doing so . But then there's also the really big checks from the loan program office . I could see those slowing or those halting for a period of time and then those monies being redirected to different technology types than maybe they were over the past couple of years . So I think that's a wait and see . And then I think there are other things that also are not really being talked about much that will get support , like the grid resiliency and critical minerals things that also are not really being talked about much that will get support , like the grid resiliency and like critical minerals , like things that support the oil and gas industry to either be more efficient , or things supported by the oil and gas industry because they're also interested in carbon capture and carbon utilization and these sorts of technologies . I think there's a lot of room for advances under this administration . That will happen because they're more economic than others , and I think that's that's going to be now Maybe they're not today , but where they have a path to becoming more economic or as economic as anything out there on the refining side .

Eric Rubenstein 28:34

Refiners and oil companies that told me in the past is the ones that are not , say , investing in climate tech or in technologies at all , that don't have venture vehicles to do so and naturally aren't doing that from a corporate perspective . They want to be incorporating technologies that make sense for them and they want to be putting hundreds of millions and billions of dollars to use doing so . The technologies just need to be mature enough where they can actually evaluate them and then incorporate them . So we're just on the c mature enough where they can actually

Eric Rubenstein: Background and Insights

Eric Rubenstein 28:54

evaluate them and then incorporate them . So we're just on the cusp of that happening now , whereas a few years ago we weren't there yet . I mean , the industry was just too young , particularly in the United States , but we're moving in that direction very rapidly .

Ryan Grant Little 29:05

You mentioned oil and gas . Your background is in banking and in particular in the kind of oil and gas side of things . I wonder if you could just talk a little bit about that transition , of how you went kind of from banking in oil and gas into investing in kind of climate tech , and if there is anything you could kind of pull from that as advice or inspiration for people who are working in kind of the more traditional side of energy , who are considering making the transition .

Eric Rubenstein 29:30

Yeah , that's a question I get often actually is how do I transition and how do you do it ? And giving that kind of guidance to folks that have skills that are advanced and excellent in Houston that can reapply those skills in other formats , and the upcycling of skills . So I've introduced a number of those types , from everything from the oil and gas industry to the consulting industry , to the banking industry , to startups , and they are working for startups now , some of them because they found that fit . But my journey was gradual . I started so I was in commodity trading and oil trading and I was running oil strategy for Citigroup when my life really started transitioning more and more in the direction toward where it is now . I'd already had physical trading experience and financial trading experience , analytical experience around that , where we were analyzing the oil barrel in very fine detail , barrel in very fine detail . Everything from the competition between different grades of crude oil and the pricing that is associated there to refining and the competition between different molecules , say jet fuel , diesel fuel , gasoline , what's needed in the world , what's that demand look like and then what supply can be created . We're looking at maintenance schedules and unplanned maintenance schedules for refineries and oil fields to really stay on top of what was happening physically and then on the other side , the financial flows we were looking at as well . So it was a great ground to learn about how the physical world definitely works in real time , how companies plan for that , because it was also working with the oil companies and the petrochemical companies , the refiners , the airlines , the trucking companies , the waste management companies , pension funds , hedge funds , advising them on where prices were going to go for oil and refined products and what kind of hedging strategies could be used to help them . But what I started doing also during that period of time was investing personally in venture capital funds and then directly in companies . And then I found a path through the trade desk to invest in companies . So that started with a thesis to streamline processes and enhance our trade analytics , but later and only a few years after that , to develop new markets .

Eric Rubenstein 31:45

So for me this transition was gradual . The first market I approached was recycled plastics , because we had the Coca-Colas and Pepsis of the world approaching , wanting to hedge their future exposures because they had made such big commitments to including so much recycled plastics in their bottle mixes that they didn't know how they were going to meet those necessarily and they recognized there was going to be upward price pressure on recycled plastics and there wasn't a financial market for them to hedge that . So when I set about figuring out how to create that for them , I found that I had to invest in companies , because I exhausted all other avenues to doing that , out of the bank at least , and I already knew how to invest in companies and knew how to work that through the city system and got approvals to approach that . So we started investing in we're looking at advanced technologies . So turning your clothing into new plastic bottles was the technology just on the cost back then . Building the first like commercial pilot plants which would lead to commercial plants so that was the foray and the appetizer into the space .

Eric Rubenstein 32:45

Really , in a more formal sense , I was already investing in food tech companies personally and then in 2019 , when those handful of net zero commitments came out , I started looking at the voluntary carbon markets and realized rather quickly that the market was largely forestry protection and planting trees and these types of technologies that weren't really technology-based . It was more functional in nature and like , in a literal sense , functional in nature . But I started getting concerned really quickly is what happens if a forest burns down ? Like what if what's happening in Los Angeles right now is happening in those forests where carbon credit generating forests like do you just lose all your credits ? What happens if you're invested in a project in a country where the government turns over and suddenly they say any credits that have been generated off these forests now belong to the government , which is now ? Things like that have happened in the last number of years . And what if there are projects that that are just low in quality of ? Like you're protecting a forest but the forest next door can still be cut down ?

Eric Rubenstein 33:51

All of these things were things I just didn't know how to measure or monitor or quantify and the tools really weren't there back then to do that without spending a lot of money on consulting services . Now there are a lot of . There's a whole cottage industry that's built around that sense and the technologies are kind of there , but back then there wasn't anything . So I started looking at carbon capture and carbon utilization and bioplastics , all these other things that could store carbon in the ground . So I was like anything measurable I started getting excited about because I could understand if you can measure it and quantify it , then I could understand the emissions associated with that and I could understand the credits associated with that . So really , it was that transition to looking at all those technologies and then realizing this underlying commonality between recycling technologies and food technologies and these other carbon management technologies and the bioplastics and all of these things . The underlying commonality was carbon reduction , removal and avoidance .

Eric Rubenstein 34:56

So that's how my career kind of took the direction it has taken , and what I suggest others is be gradual about it and be very specific about it as well . Like know that if you want to do it , start doing it . Like , start talking to people like yourself , grant , or like me , and start asking those questions . Start learning what's out there . Start joining the different communities that are out there , like my climate journey and their community , or you know the other communities that have come together across the world to bring people together , to learn from one another and to move technologies and businesses forward in a more sustainable way . Work within your own business . Find ways that you can do things on a day-to-day basis , even if it's 5% of your time . That moves you in the direction you want to be in . So explore within your own companies what is happening and find ways to get involved there and I know I have friends in the trading world , in the oil trading world , that have done that and are now trading carbon or are involved in investing in companies in the same way I am for their companies .

Eric Rubenstein 35:54

Those transitions can't happen . You just need to be deliberate about it and start making the change on your own , because other people aren't going to give it to you or force it on you . You need to find that path , and what you'll find is if there are ways to make money off it . Oftentimes your colleagues will be supportive and oftentimes you'll find other paths to what you want to be doing if you aren't finding it yet . Whether that's moving on to a startup and working with them , or working in a slightly different way than what you're doing now for another corporation or another company , there's a lot of ways to do it , and you can also donate time as well . You can judge , pitch competitions , you can mentor companies as you get more familiar with what companies want , in the same way that I'm doing . So these are all things that you know . You test it out and you work in that direction , and you can find things to help you move your career along .

Ryan Grant Little 36:46

Final question and I just have to ask because you mentioned it in a TEDx talk and it got me really wondering how do you turn CO2 into vodka ?

Eric Rubenstein 36:55

Oh , okay , yeah . So yeah , we're investing in a company called Air Company that turns carbon dioxide and water into ethanol and also into jet fuel . So in turning it into ethanol or any of these products , what you're doing is you're taking the carbon dioxide . You need a source of hydrogen to make it a hydrocarbon . In this case , they're splitting water , they're breaking the water apart and releasing the oxygen and using the hydrogen . And then the magical science that these companies use and each company does it a little bit differently or very differently from one another but you're combining that carbon dioxide and hydrogen and in these , these hydrocarbon chains in this case they're short chains that make ethanol .

Eric Rubenstein 37:39

The question is , why would you want to make vodka ? I think also when you're making ethanol , not just because it's fun , but when you look at what ethanol is used for today in the US and other places , ethanol is also put into gasoline . So roughly 10% of the gasoline that we use in the United States has ethanol in it or is ethanol . Rather , 10% of the gasoline is ethanol , but ethanol is . If you think of the price of gasoline , ethanol has to be as cheap or cheaper than gasoline in order for that to work right . Effectively is how that works , particularly because it's a less efficient molecule , so about a third less efficient in energy than gasoline or other hydrocarbons like that . So with the ethanol , if you're selling a gasoline space , it's like two to three dollars a gallon here in the United States .

Eric Rubenstein 38:25

If you think about vodka , vodka is 40 percent ethanol , 60 percent water , so water you can effectively think of as free , and the 40% that's ethanol . If you're selling it and you're also not selling in gallons , right , you're selling in units that are smaller than gallons . So when you're selling a $65 , $70 , $80 bottle of vodka , the ethanol component is roughly $400 a gallon that you're selling . So it's a huge step change from $2 to $3 a gallon to $400 a gallon . What our company also does is turn that into perfume . So when you make perfume , because the volumes are so small and the pricing is so strong , it's $18,500 a gallon .

Eric Rubenstein 39:04

So when you start thinking through as a company then like , why would I make vodka to ethanol ? It's because you can make money making vodka , vodka , ethanol . If you're selling it at the right price point , if you're efficient enough where you can do that at the right scale , you can be in the money there well before you can be , if you're selling it in the gasoline or turning it into jet fuel , for that matter . So yeah , the way you do it is you smash these hydrocarbons , you know the hydrogens together with the carbon dioxide . And the way you do it is you smash the hydrogens together with the carbon dioxide and you have catalysts that encourage them to combine in certain ways that will make these molecules . But then there's the . What do you do with the ethanol component ?

Eric Rubenstein 39:39

And you can do a lot of different things , which is pretty cool , and I appreciate that Air Company had that foresight to find these higher value products that also consumers can relate to and really , like I mean , I'll just I'll also draw a parallel to Dimensional Energy , who has a different technology because they're also an investment of ours that makes waxes and fuels , and the waxes can be made into candles , they can be made into surf wax , they can be made into cosmetics .

Eric Rubenstein 40:06

So again , it's like you can make all these different things . There the process is different , like they have to also take the carbon dioxide and take the hydrogen and put them together , which makes like what looks like a barrel of oil almost it's called the syngas and then that has to get processed one step further to be making these waxes and these ethanol or sorry , the waxes and the fuels through a Fisher Tropes process . But each of these companies has a different secret sauce to making that component and they can do some cool things with it , which I think , as a society , is the part that's fun , because we can use these in our everyday life . The vodka , at least , is always sold out . You can't get your hands on it . They need to really scale up production to meet demand . But yeah , it's cool that you can take those molecules and put them together in a way that makes something you can consume , even because it's not something that's intuitive , that , oh , you can take carbon dioxide and make something like vodka . That's the fun part of what we do .

Ryan Grant Little 41:07

What's the brand name of the vodka there ?

Eric Rubenstein 41:09

Air Vodka .

Ryan Grant Little 41:10

Air Vodka , air Vodka . Yeah , very cool , eric . Thanks so much . Tons of interesting information in there .

Eric Rubenstein 41:16

Yeah , Thank you .

Ryan Grant Little 41:16

Ryan Really appreciate being here . 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 climatetechpodcom . Find me , ryan Grant Little , on LinkedIn . I'll be back with another episode next week . Bye for now .