Jim Fitterling, Chairman and CEO, Dow
Dr. Jennifer Holmgren, Chairman and CEO, LanzaTech
In conversation with: Alex Wood Morton, Fortune
Dr. Jennifer Holmgren, Chairman and CEO, LanzaTech
In conversation with: Alex Wood Morton, Fortune
Category
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TechTranscript
00:00Before we dive in, just a housekeeping reminder for everyone in the audience.
00:05We would love to hear questions from you and bring you into the conversation.
00:08I'm going to kick off with a quick discussion with our amazing panelists,
00:12and then we will bring some roving mics to you.
00:15Jim, I want to kick off with you.
00:17Talk me through the transformation of Dow, an incredible Fortune 500 company,
00:22into what you describe as the most innovative, customer-centric,
00:26inclusive, and sustainable materials company in the world.
00:30What does that mean in practice?
00:31Well, the drive to be most innovative,
00:34I mean, we have a tremendous research and engineering background,
00:38and so how you put that to use is pretty important.
00:42Customer-centricity is key.
00:44The demands are changing so rapidly for us that we have to be close
00:49not only to our immediate customer, we're typically a B2B company,
00:54but also with the end users and the brand owners' customers
00:57to understand the changes that are coming.
00:59So customer-centricity and sustainability and innovation,
01:03all three go hand-in-hand.
01:05Almost everything that we're doing today for new product growth
01:09is driven by sustainability,
01:11and everything we're doing to transform our footprint
01:14to get scope one and two emissions to zero is the same.
01:17And then inclusion is just about creating the environment for people
01:20that allows us to attract and hire the best talent in
01:23so that we have the workforce to do that
01:25because the only way to have an innovative company
01:27is to have great people.
01:29That's fantastic.
01:30And Jennifer, I want to turn to you now.
01:32You're really at the forefront of a number of practical applications
01:35of sustainable technologies.
01:37Can you share with us your vision for what many of us call
01:40the circular economy?
01:42Well, simply put, we have a dream that someday
01:47everything you use in your daily lives
01:49will come from carbon that's already above ground.
01:53So that is the circular economy,
01:55that we no longer throw things away
01:58and that instead we use them to make the next product
02:01and the next product.
02:03And I understand you may have brought a prop with you.
02:05I want to hear more about what you're carrying with you.
02:08So let me just take one second to tell you what we do.
02:13So we take carbon emissions and we ferment them to ethanol
02:17and then we use ethanol as an intermediate
02:19from which to make sustainable aviation fuel,
02:22polyester, polyethylene, etc.
02:25And an example of a commercial plant that we have
02:29is a steel mill in China
02:31that would normally emit carbon dioxide
02:34and particular emissions.
02:36We take that, we just pump that into our bioreactor
02:39and we convert it to ethanol.
02:41That ethanol is then converted to the monomer
02:45that ends up being made into polyester.
02:49This is a Kraghopper's jacket
02:52that is under their CO2 Renew label.
02:56They have a whole line.
02:58And basically the polyester in this jacket
03:01was going to be pollution.
03:04And that is the circular economy.
03:06No pollution, products.
03:10That's absolutely fabulous.
03:12And just so I get this right,
03:14this is actually into real-world products happening already.
03:17Yes, just go to the Kraghopper's website
03:21and type in CO2 Renew and we're there.
03:24You can go to the REI website and just type Lanzatec
03:27and you'll see polyester jackets, running pants, etc.
03:31It's fabulous to hear that, you know,
03:33we talk about these things as being so conceptual
03:35and they're here and they're now
03:37and you're making it happen.
03:40Jim, I'm going to turn back to you now.
03:42We've heard so much over the conversations
03:44over the last day or so.
03:45It feels like we're entering into a new political era.
03:48And especially when it comes to the green transition.
03:51We've seen a lot of successful projects,
03:53particularly from Dow and from Lanzatec,
03:56where you're working in different countries
03:58as different countries take a different view
04:00on the transition.
04:01Describe to me your experience in Canada
04:03and how do you get that buy-in politically?
04:06Yeah, we have a very interesting
04:08first mover project in Canada,
04:10which is to create the world's first net zero
04:13scope one and two ethylene and derivatives facility.
04:17And to give you an idea of the scale,
04:19we'll build a new 2 million ton ethylene facility
04:22next to an existing 1.5 million ton facility.
04:26We will fire the furnaces for those big
04:30transformative units from hydrogen,
04:34which is made from waste byproducts
04:36from our own process.
04:38So typically when you take natural gas,
04:40liquid like ethane, and you crack it,
04:43you get ethylene, which is the product we want
04:46to make plastics maybe for plastic packaging,
04:49could be plastics for piping, whatever.
04:53And then we make hydrogen and methane.
04:55We'll take that hydrogen and methane waste product,
04:59convert that through a process technology
05:02that will convert it to pure hydrogen,
05:04and we'll use that pure hydrogen to fire the furnaces,
05:06making the whole thing a closed loop
05:09and no scope one and two emissions.
05:12That will be about 25% of our global ethylene
05:15and polyethylene capacity.
05:17Why is that important?
05:18Well, brand owners use our product for,
05:21they might use it for the packaging,
05:22they might use it in textiles,
05:24they might use it in any number of things.
05:27They might use it in the ingredients
05:29that go on the inside of the package,
05:31which has a big CO2 footprint for them.
05:34So if we can make those ethylene derivatives
05:36with zero scope one and two emissions,
05:38we help them tremendously reduce their footprint,
05:41and that demand driver is still there.
05:44The other thing I'd mention is all industries
05:47that make basic materials,
05:49the products that we were just talking about,
05:51the project that I talked about,
05:53need a tremendous amount of energy,
05:54so we have to manage through that energy transition.
05:58So we talk about circular hydrogen
06:01or blue hydrogen in this case.
06:04We're looking at small modular nuclear reactors
06:07to be able to take an existing site
06:09and convert from combined cycle natural gas
06:12to power and steam from a small modular reactor,
06:16take the entire site to zero scope one and two emissions.
06:20And those two things are very critical
06:22because they're 24-7 reliable power, steam,
06:26and energy for the transition.
06:29So that project I mentioned in Canada
06:31is there because we're close to our raw materials,
06:34which we need to be to be low cost.
06:36There are tax incentives
06:38for making that hydrogen investment,
06:40which is a little bit more expensive,
06:42but not prohibitively expensive.
06:45And then we also have access
06:48to a carbon capture pipeline that's in existence,
06:51so we have a place to sequester the CO2.
06:54And there are long-term policies
06:57to be able to support it with a price for carbon.
07:00They have a market price on carbon in Canada.
07:03That price signal is important
07:05to drive that next wave of investment.
07:08We moved to Canada first
07:10because they had those policies in place.
07:12A lot of that same policy is in the IRA,
07:16some from the infrastructure bill,
07:18some from the IRA that's here in the United States,
07:21and actually some of the infrastructure
07:23that we need to be able to do those kinds of investments here
07:26will be coming.
07:27It's under development now.
07:29So it really sounds like you do need to have
07:31that leadership from political leaders
07:33and policymakers to start that.
07:35Jennifer, on the partnership side of things,
07:37I mean, how have you found working
07:39with other organizations as a smaller player,
07:42and how has that dynamic played out?
07:44Well, we have so many large partners and investors,
07:50including we have a collaboration with Dow
07:52on making low-carbon surfactants.
07:56I actually think that for a small company like ours,
07:59it's extremely important to partner with the large players
08:03because we don't have the domain knowledge
08:06that allows us to be successful, right?
08:08We don't want to reinvent everything.
08:10We just want to invent the piece that we're inventing.
08:14And so I find that these partnerships are super important
08:19in terms of giving us knowledge.
08:24But I would also say for all of you who are in large companies,
08:29please try to remember that IP is the only thing
08:32a small company has,
08:34and if your need for exclusivity or certain rights
08:39is what you've come in to talk about,
08:41then it's very difficult for a company like ours.
08:45A large company has many sources of revenue,
08:47and if the specific project doesn't move forward, that's fine.
08:51But for us, if a specific project doesn't move forward,
08:55it's life and death.
08:56So I think the relationship can work really well
09:00if everybody understands what the other partner needs.
09:03And we're very fortunate to have just fantastic partners.
09:08Yeah, and so we've heard about that partnership element.
09:10Now, I have to talk about misinformation for a moment as well
09:14because from where I'm sitting in Europe where I'm based,
09:17we hear a lot about carbon capture,
09:19and there are a lot of people out there
09:20that are very skeptical about the technology.
09:23How do you win the hearts and minds of the skeptics?
09:26You don't.
09:28You know what, I always like to say
09:34whenever you have a new technology,
09:37it's almost like you're going to the ministry of no.
09:40Everything is no.
09:42There's always a reason why it doesn't work,
09:46or why it can't work, or why it can't scale,
09:48or why people won't want it, or why it's not perfect.
09:51And the perfect being the enemy of the good
09:53is really the biggest thing we deal with.
09:56And it's tough for me to make those arguments
10:00and win those arguments.
10:02And so I think the success comes from allies.
10:05It comes from people like all of you sitting in this room
10:09and whenever somebody says,
10:10well, the Landsatec technology can't scale,
10:13you're the one that jumps in and says,
10:14well, but if it does scale, will reduce emissions
10:18and will displace fresh fossil carbon.
10:20So why don't we give it a chance?
10:22And so I need the allies.
10:23I need the people that lean in to help us be successful.
10:27Yeah.
10:28And Jim, from the larger company perspective.
10:30Yeah, I grew up in Missouri,
10:32so show me is the answer for us.
10:34I mean, you have to build it
10:36and you have to show people what it can do.
10:38And that requires taking some risk.
10:40Jennifer's right about IP.
10:42You've got to protect your own IP.
10:44I think that's one of the things
10:45that all of us around the world agree to
10:48is you want to protect your technology.
10:50But you also have to take some chances
10:53to get out there and make these things work.
10:55And to some extent,
10:58people believe what they want to believe, right?
11:00Until they've seen something different,
11:02until they've seen a future
11:04or they've seen an opportunity that they can't imagine.
11:06Yeah.
11:07And so I think the physical,
11:08like we get enamored with show and tell,
11:11the physical aspects are huge.
11:13Fantastic.
11:14I'm going to break for questions from the audience
11:16in just a moment.
11:17Before we do,
11:18I think given the audience of people
11:19that we have in the room,
11:21what lessons would you both share
11:24to our audience of business and policy leaders
11:26on the green transition?
11:28What have you learned
11:29and what can you share as advice for going through that?
11:31And Jennifer, I'll start with you.
11:32Well, I think the biggest thing in terms of policy
11:36is we cannot let the perfect be the enemy of the good.
11:39We fall in love with these beautiful ideas
11:41that are going to be silver bullets.
11:43And sometimes those silver bullets prevent progress.
11:46And, you know, are we going to have hydrogen steel?
11:50Yes.
11:51When are we going to have it?
11:53Not for a while.
11:55So why not just capture steel emissions today?
11:58And so what tends to happen is we slow ourselves down.
12:01These are calls to inaction.
12:03What we really need is people to agree
12:06small bits of progress is better than dreaming of the unicorn
12:10that's going to show up in 2035.
12:12Yeah.
12:13I would agree.
12:14I think in the U.S. on energy,
12:16we've often talked about our energy policies
12:19and all of the above policy.
12:21But all of the above
12:23and focused on being a leader in those technologies,
12:26focused on being low cost in those technologies.
12:29And one of the things that Jennifer mentioned,
12:32you know, in the pursuit of the perfect,
12:35we sometimes forget how expensive it is.
12:38So that project I talked about in Canada,
12:41which we will, you know, make three million tons,
12:44three and a half million tons of capacity
12:46with zero scope one and two emissions.
12:48That's going to be about a billion dollar project
12:51to make the additional hydrogen that we need.
12:54It'll be the largest hydrogen project that's ever FID.
12:58If I was to do that with green hydrogen,
13:01I would need seven gigawatts of electricity
13:04and all the electrolyzers to make the green hydrogen.
13:07It wouldn't be a billion dollars more expensive.
13:10So for me to do it at a price where a brand owner can say,
13:14I can convert my product line,
13:17means I can't wait for green hydrogen.
13:20I have to move now and make that transition now.
13:23Fantastic.
13:24If you could raise your hand in the audience
13:26if we have any questions.
13:27I can't see anyone.
13:29We have one at the front.
13:30We've got a mic.
13:33If you could say your name and company,
13:34that'd be fantastic.
13:35Emily Jeffs.
13:37I'm the founder and president of Women in the World,
13:40Sustainability Women in the World.
13:43I know Jennifer.
13:45Thank you for all your leadership.
13:47My question is the, you know,
13:51congratulations on moving us from linear to circular model
13:56and every, you know,
13:58every innovation in that transition is critically important.
14:05In the era of, you know, needing,
14:09the world needing more collaboration and partnership,
14:12you know, we are moving to looking at advanced recycling,
14:16chemical recycling in context of taking, you know,
14:21truly circular direction in terms of getting the consumer waste as an input,
14:27as a, you know, waste as an input, and then, you know,
14:31creating that bigger circle.
14:33So two questions.
14:35Are you collaborating with other chemical companies like Eastman,
14:41DuPont, and BASF who are looking at that?
14:47So that's one question.
14:49Second question is, you know, we've seen like new shiny things.
14:53RenewCell, the world's biggest fiber-to-fiber recycling,
14:5760,000 tons a year, you know, went through truly crisis and chaos.
15:04They're back on their feet and, you know, on their way to make an impact again.
15:10But is Longitech another shiny thing?
15:13How do you maintain this momentum?
15:16Okay, you go first.
15:18Well, on circularity, I would say a huge opportunity.
15:22All the companies are working, some together and some in competition,
15:26on all forms of technologies.
15:29We have a target to have 3 million metric tons of recycled materials.
15:34I think the biggest thing is getting the high-quality materials back in.
15:39So one of the biggest limiting steps on our ability to recycle is getting that waste.
15:44We don't want it to go to landfill.
15:45We'd rather have it sorted out and brought back to the entry point for feedstocks.
15:51On the issue of are we the next shiny object, that's a great question.
15:57One comment I would make is I think what we have done as a company
16:01is shown that gas fermentation works and scales.
16:04We have six commercially operating plants.
16:06And what I'm starting to see is a bunch of other companies doing gas fermentation.
16:11So I would say gas fermentation is becoming a thing.
16:15And I think we've enabled that.
16:18And is it a shiny object?
16:20If there is something better that can do the things we do, I'm all for it.
16:26I think the competition is really climate change
16:30and not companies versus other companies.
16:33So I welcome being obsoleted.
16:37Thank you so much for your fabulous question.
16:38I'm so sorry.
16:39I think we are completely tight on time.
16:41I wish we could get more questions in.
16:43I want to say a huge thank you to both Jim and Jennifer for being fantastic.