Startup Series: Carbon Capture Equipment for Ships with Seabound

Today's guest is Alisha Fredriksson, Co-founder and CEO of Seabound.

Seabound builds carbon capture equipment for ships. They're the only way for existing ships to reduce up to 95% of CO2 emissions and meet new global regulations and they already have six LOIs secured from major ship owners. I was excited for this one because shipping is one of those areas that is a big source of emissions and also really hard to decarbonize. So it's interesting to dig into what it is that makes it so hard to decarbonize, the different options for doing so, and of course, where Seabound fits in.

We also cover the origin story of the company, what inspired Alisha and team to do the work that they do, and some of their progress to date. It's especially interesting to dig into some of the motivations of the customers that are signing these LOIs, what value proposition is resonating, what some of their concerns are, and how a business like this ultimately scales.

Enjoy the show!

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Today's guest is Alisha Fredriksson, Co-founder and CEO of Seabound. Seabound builds carbon capture equipment for ships. They're the only way for existing ships to reduce up to 95% of CO2 emissions and meet new global regulations and they already have six LOIs secured from major ship owners. I was excited for this one because shipping is one of those areas that is a big source of emissions and also really hard to decarbonize. So it's interesting to dig into what it is that makes it so hard to decarbonize, the different options for doing so, and of course, where Seabound fits in. We also cover the origin story of the company, what inspired Alisha and team to do the work that they do, some of their progress to date. And it's especially interesting to dig into some of the motivations of the customers that are signing these LOIs, what value proposition is resonating, what some of their concerns are, and how a business like this ultimately scales.

Alisha, welcome to the show.

Alisha Fredriksson: Thank you very much. Thanks for having me.

Jason Jacobs: Thanks for coming! I was excited for this one as, I think you know, we're investors in a company called Remora. And Remora is doing carbon capture at, at point of emission on semi trucks. And, from what I can gather from a distance, and I mean, I haven't done the deep dive so, so maybe I've got it wrong, but it, but it sounds like that's pretty similar but for ships with Seabound.

Alisha Fredriksson: Yeah, that's true. Similar for ships. And the Remora team have been an inspiration for us and, and very helpful as well. So, yeah, that's not a- not a wrong analogy.

Jason Jacobs: And you also were, uh, part of the recent Y Combinator class, right?

Alisha Fredriksson: Yeah, exactly. Just finished up a few weeks ago.

Jason Jacobs: Awesome, congrats.

Alisha Fredriksson: Thank you.

Jason Jacobs: Well, taking it from the top, what is Seabound? We talked a little bit but it would be great to hear it in your words.

Alisha Fredriksson: Perfect. So Seabound is a climate tech company that builds carbon capture equipment for the largest ships in the world. So we install carbon capture equipment on both existing and new ships to capture up to 95% of their CO2 emissions at point of source so that these ships can meet upcoming global regulations that are kicking off in 2023.

Jason Jacobs: And how did the company come about? And I guess I'm asking both the origin story of the company but also your journey that led you to doing the work that you do.

Alisha Fredriksson: Awesome. Yeah. So, I'll, I'll start with my personal story and then- and then go to the origin of Seabound. So personally, I've always been very excited on social impact. And so for the longest time, I've been trying to answer this question of how do I positively impact as many people around the world as possible? And in 2018, I found my answer, which is in tackling the climate crisis. So the IPCC Special Report on 1.5 degrees of warming really had a, a profound impact on me in that it clarified that essentially everyone around the world will be affected by the climate crisis in a shockingly short time frame. And so, you know, it's not just a- an environmental problem, as I kind of had previously bucketed it as, but it's very much a social problem as well. And so that's where I realized that, that finding a way to get involved in tackling this crisis would be the greatest way to impact people around the world.

So then I set about trying to figure out so how was I going to tackle the climate crisis? Kind of what would be my niche and an area of opportunity and contribution? So I started listening to climate podcasts like MCJ, reading books, studying kind of sub-problems, et cetera. At the time I was working at an organization called Generation, which is founded by McKinsey. So I started a climate program there. And then I started working on the side on a bunch of different projects.

And so one of the projects that I worked on was actually to help my dad get his climate tech company off the ground. So this is a company called Liquid Wind. They make carbon neutral fuel out of captured CO2 and green hydrogen for the shipping industry. And so that was how I got a lot of really unique insight and exposure into the challenges of de-carbonizing shipping. You know, the fact that it's still very much one of these hard to abate sectors. But then also into the value of using captured CO2 as a feedstock. And into the fact that, you know, carbon capture, which is relatively mature on land, could potentially be this viable solution for the shipping industry as well. So that's a little bit of background into how I decided to tackle maritime emissions as my kind of entry point into tackling climate.

Jason Jacobs: And when you first started looking at shipping and how capturing CO2 could be utilized in shipping, what were your observations about how much it was being utilized at the time, if at all? And if it wasn't utilized much, why do you think that was?

Alisha Fredriksson: Yeah. So, I mean, the shipping industry more broadly is just starting to figure out how it's going to reduce its emissions. So we have these new regulations from the International Maritime Organization that start in 2023. There is new pressure from customers like Amazon, Ikea, et cetera, that have their own carbon neutral shipping pledges. But I think for, for a long time, it's kinda been allowed to emit CO2. Because it is really hard to solve for. And it is, relatively speaking, an efficient mode of transport.

And so we don't yet have companies that are making fuel for ships out of CO2. These companies, you know, are start ups themselves so is it- it is a nascent industry, but they're getting going to prove out the solution to build their facilities. But that's kind of the state of carbon neutral fuel for, for shipping.

Jason Jacobs: Uh-huh. And when you first started looking at shipping, did you jump right to capturing CO2 or did you look at potential solutions more wholistically before you landed on this one?

Alisha Fredriksson: Yeah. So that was definitely the, the spark and the hunch that I was most curious about. But I looked at other, other solutions as well. And I think what I found most interesting was that a lot of the potential upcoming solutions that others are working on, so primarily being kind of future fuels such as hydrogen and ammonia, they are still about 10 to 20 years away from maturity. And they're only suitable for brand new ships. But we need a solution that can reduce emissions today and we need something that's suitable for all of the existing ships that are still going to be sailing for another 25 to 30 years. So that's where I realized that we need technology that can be kind of an add on or a retrofit onto the existing vessels, rather than needing to completely, you know, replace the whole fuel supply or the whole propulsion system.

Jason Jacobs: And so when you first focused on this area, what were the first steps? How did you get going? And what are the- some of the twists and turns that you navigated before landing on your current approach?

Alisha Fredriksson: Yeah. So it was- it was studying alternative approaches to de-carbonizing shipping. And then it was really starting to speak to ship owners, starting to understand, you know, how are they thinking about the challenge of reducing their emissions? What were the specific sub-problems of that that they were facing? Kind of what was the hardest part about it? But really trying to learn how, how they think and how they've been evaluating the landscape.

Then it was exploring this hunch of carbon capture for shipping. So essentially reviewed all of the different approaches to capturing carbon on land. And then tried to figure out which one would be most suitable for, for ship specific constraints. I didn't do this alone. So I had at the time already called up one of my friends from university and asked her to see if she'd be interested in joining me to co-found Seabound. And so the two of us essentially did this whole kind of literature review and spoke to many different experts in the space to try to figure out if carbon capture on ships could be feasible and, if so, which type specifically. And that's how we eventually, you know, realized that, that there is a type that we think is most promising. And found an expert research team and research lab that we could work with to commercialize t- technology.

Jason Jacobs: And from the phase when you were out talking to these ship owners and understanding their thoughts, can you talk a bit about that landscape? Is it fragmented? Are there a handful of major payers? And also what did you learn about how they were thinking about de-carbonize and if they were thinking about de-carbonizing?

Alisha Fredriksson: Yeah. So shipping is pretty fragmented. I think in certain segments, such as container shipping, there is a decent amount of concentration. So you have some really massive players like Maersk or CMACGM, for instance. But shipping more broadly, when you look across the different specific segments, is actually a very fragmented industry. So there's about 100,000 commercial ships around the world. And the largest ship owners will own sort of three to 500 is kind of the largest that, that you can get.

They are looking at how to de-carbonize shipping because they need to in order to be compliant with regulation and because their customers are now asking for it. I think some of them are looking much more actively than others. So the bigger companies that have, you know, new de-carbonization teams, that's a new kind of role that you'll now find in shipping companies, so they've been serving different types of solutions. Others, I think the much smaller players, are kind of trying to do the bare minimum and wait for the bigger players to figure it out. But everybody is looking at different solutions and talking about this. It's very much the theme of the industry this year.

Jason Jacobs: Uh-huh. And is that mostly driven by the fear of the regulation that's coming?

Alisha Fredriksson: I think that was the spark. I think that, yeah. So that, that was the main driver. But now I think there's the demand from their customers. And there's also this interesting interplay between the two. So one component to the regulation, for instance, you can think of like a report card for ships. So every ship essentially gets a score from A to E on how carbon intense their operat- carbon intensive their operations are. And so that essentially, like, monitoring or sort of emissions measurement system, gives the shipping company customers the actual method to demand ships that have an A score or a B score. There is a specific mechanism now for them to make more specific demands for green shipping, and it's not as kind of wishy washy as it might have been a couple of years ago.

Jason Jacobs: And putting aside your approach, if you just look at de-carbonizing shipping overall, what is your theory of change there? Maybe talk a little bit about what makes it so difficult and how the transition should play out? And then also how you think it will play out in practice to the extent that you have given that much thought.

Alisha Fredriksson: Yeah. I think the reason for why shipping is so hard to abate is because of the energy requirements to transport such large volumes of goods over such long distances. They- and shipping has been very, very optimized to do this with the conventional types of fuel that we have today. And so if you look at the largest ships in the world traveling those long distances, you can't electrify for that type of long distance, which would be one of the, the potential solutions that you might look at for other sectors such as cars or, or trucks, et cetera. So it is kind of that, that long haul challenge.

That's where I think a lot of the potential solutions are really in replacing the type of fuel that we use, away from fossil fuels towards things like hydrogen, ammonia, e-methanol or biofuels. So tho- those are some of the, the upcoming contenders. But I think, in my mind, it's really kind of a combination of solutions depending on the type of ship and the type of trade as well, or the type of voyage. So I think electrification makes a ton of sense for smaller ships traveling shorter distances or more coastal routes. Whereas alternative fuels would make more sense for those longer voyages. And that's where we want to be capturing the CO2 as well, on top of ships today so that we can s- start reducing emissions already today. But even in the long term, we can combine carbon capture with alternative fuels such as electro-methanol or biofuels, so we can actually create even a- a carbon negative system and still be able to, yeah, use kind of existing types of propulsion for, for those ships.

Jason Jacobs: Uh-huh. And when you first started digging in, you mentioned that the shipping industry is fragmented and that there's all different kinds of approaches. And there's, you know, long haul and short haul. And, you know, commercial and, and different types. How did you balance starting to pull the technology together and get it to work with identifying a segment and really focusing in on that segment? So it'd be great to just understand a little bit the push and pull there of product development with customer development and how targeted of an approach you were and are taking.

Alisha Fredriksson: Yeah. So the segments are mostly dependent on the type of cargo that you're carrying. So that's where you have container shipping, dry bulk, tankers. You also have passenger vehicles like ferries or cruise ships, et cetera. So we're starting with the dry bulk shipping segment because we're capturing CO2 using solids. And so dry bulk ships essentially are most accustomed to, to dealing with solids and have the port side infrastructure for that. So that, for us, is the easiest way to get started. But we want our solution to be applicable for any type of vessel out there. So next we're gonna do containers, for instance. But we're just starting with what we think is kind of the easiest way to get going and to do de-risk the technology.

Jason Jacobs: And you touched on it but I, I think I missed it. W- what is it that makes dry bulk easiest? And then what would need to change as you expand into containers or other categories of ship, or of goods, rather?

Alisha Fredriksson: Sure. So dry bulk, so that's where we're transporting things like iron ore, grains. And so they have port side infrastructure for transporting dry bulk solids. And when we capture CO2, we're also dealing with bulk solids. And so they have the right port side infrastructure.

Jason Jacobs: Got it. So it's not as much about the capture on the ship, it's about the transport once you've got it.

Alisha Fredriksson: Yeah.

Jason Jacobs: Okay. And so can you talk a bit about the approach and also the process of defining an approach?

Alisha Fredriksson: Yeah. So how, how we capture CO2 and how we came to our approach to capture CO2?

Jason Jacobs: Yup.

Alisha Fredriksson: Is that right? Okay. So I'll start with the second first. So yeah. As I mentioned, so we essentially surveyed all the different approaches to carbon capture that's used today on, on land. And tried to figure out which one would be the best to adopt and integrate for ship-based implementation. And so kind of modeled out based on all these different constraints what it might cost for shipping specifically. And that's where we picked our particular type of technology. Specifically, the way that it works, so we install a carbon capture reactor adjacent to the funnel or smokestack on a given ship. And we route the exhaust into that reactor. And then that pulls our kind of binding material, our absorbent, pulls the CO2 out of the exhaust, stores it on board temporarily until the ship gets back into port, where it's then offloaded and post processed. And then we sell that captured CO2 for utilization such as into electro fuels or chemicals. Or for sequestration.

Jason Jacobs: Got it. And the process that you landed on, was that one that already existed but for other uses? Or were there elements of it that you needed to define?

Alisha Fredriksson: It does exist as a sort of basic technology. So it's a second generation form of carbon capture technology. We are working on a novel compact version of carbon capture reactor. And so we have a patent pending for that. But that kind of overall category does exist.

Jason Jacobs: Uh-huh. And where was it primarily used before being used for ships?

Alisha Fredriksson: Power plants, essentially.

Jason Jacobs: And the reason to make it more compact? I mean, there's the obvious ones, but what's the- what's the business driver from the end customer's standpoint? How does being compact help them or, or how does it help you?

Alisha Fredriksson: Yeah. So it takes up less space and then it's less capex intensive.

Jason Jacobs: So where are you on that journey today? Where's the technology and, and where are you in terms of actually testing it out with ships and/or having customers?

Alisha Fredriksson: Yeah. So we've built our first land-based prototype, which demonstrates capturing CO2 at 95% efficiency. And now we're building our second larger and more complex version of that. And that'll be our, our final land-based proof point. So we'll have that tested by the end of this year. And then we're doing our first ship-based trials next year. And so far we have six letters of intent from major ship owners.

Jason Jacobs: Got it. And the, the ship owners, what was the pitch to them and what was it that got them excited to sign this LOIs?

Alisha Fredriksson: Yeah. I mean, it's, it's really the ability to continue to operate the existing ships that they made major investments into just a few years ago. So to make sure that they are compliant with upcoming regulation by capturing CO2 on board. And then I think specifically these ship owners, I think they're excited to be a front runner, really, in this new kind of category of climate tech for the industry. So they really wanna be one of the- one of the first ones to prove it out.

Jason Jacobs: And when it comes to these land-based prototypes, what are the key things that you're hoping to prove out? And then, and then same question, when it switches to ship, what are the biggest differences between being a land-based prototype and being a, a ship-based in terms of the key proof points and risks?

Alisha Fredriksson: Mm-hmm [affirmative]. Yeah. So the first- so the proof point of our first prototype was really the kind of compact approach to carbon capture. The proof point, or what we're working to prove for our second system, is a continuously operating version of that, that we can then fine tune much more closely. The ship specific tests, so it'll be a similar system but what we're really testing for there is how does a marine environment influence the capture rate? So for instance, the motion of the vessel, how might that influence the, the reactivity? And then additionally we're testing for, you know, the exact way to integrate the system on board the ship and how to set up the installation so that it is- takes as little time as possible as well so that we don't have to kind of disrupt the ship operations in any way.

Jason Jacobs: Got it. And then if these pilots go well, then what is the next step when you think about staging and phasing? How do you take Seabound to market and what do the next few stages of the company look like?

Alisha Fredriksson: Yeah. I mean, so the pilot is really- it is a full deployment of our system. And it, it's the first version of it. But so far our first full scale representation pilot, which is happening in the second half of 2023, that will be a system that will live onboard the ship, you know, for years to come. But it's just framed as a pilot because it's the very first time it's happening. But so after that, essentially, then it's selling more units to other ship owners. I think realistically what we'll probably do is, you know, start with our first ship owner kind of early adopter partners, get, you know, one or two systems on their vessels, and then expand across their fleets because they'll be most comfortable with the technology. And that way we can kind of learn together how we scale up the equipment across many different vessels in a short time frame. And then we'll be able to, to scale that out to additional ship owners as well.

Jason Jacobs: Uh-huh. And I assume it's the ship owners themselves that are paying? So they're the customer?

Alisha Fredriksson: The ship owner is the main customer. And then, in some cases, it could be the ship manager. But then also the ship owner or ship manager's customers that will then pay for the opex. The ship owner pays for the capex.

Jason Jacobs: Got it. So there's the equipment and then there's the ongoing cost of what? What needs to be done once the equipment is installed?

Alisha Fredriksson: Yeah. So it's essentially the sorbent to capture the carbon.

Jason Jacobs: Uh-huh. And what needs to happen with the sorbent? Is that worked that you're doing on the ship? Or is that work that you're doing in the cloud? Or what is actually happening on an ongoing basis with the sorbent?

Alisha Fredriksson: Yeah. So it's that we're loading sorbent onto a ship so that it can capture CO2. And then we offload it when it's in port. And then we sell the captured CO2. And so we essentially sell kind of two things. We sell the hardware, which is the carbon capture equipment to the ship owner. But then we also sell a material subscription where we supply the sorbent and then we take the captured CO2 off their hands. And then we share that revenue stream with the ship owner when we sell the captured CO2.

Jason Jacobs: And when you think about the cost of the hardware versus the cost of the subscription versus the potential profit from the captured CO2, how does that break down percentage wise, just ballpark, in terms of where the, the bulk of the revenue will come from? And also how meaningful can that rev share be in offsetting the cost for these customers.

Alisha Fredriksson: Yeah. So for Seabound, the bulk of the revenue does come from the material subscription. So on an annual basis, it's almost the same amount as the capex. And then for ship owners, the big part of the return is from the- well, one, from savings on kind of regulatory schemes. But two, from the captured CO2 revenue. So we do give the majority of the CO2 revenue because it's really kind of their, their carbon that's been captured. But we're the ones facilitating the transaction.

Jason Jacobs: Mm-hmm [affirmative]. Got it. And how big an undertaking is it to build out the infrastructure and logistics to- for the CO2, to remove it and transport it and sell it?

Alisha Fredriksson: So essentially, I mean, we're starting with key ports and key shipping routes where we have round trip to the same port or shuttle routes to two different ports. So we really kind of prove out the infrastructure in those key locations and aggregate demand for ship owners that already prioritize those locations. And then roll it out from there more broadly.

Jason Jacobs: Got it. And in terms of the customers for that captured CO2, so, I mean, do you need a sales force, for example, that's out trying to find a home? Or where are you getting that demand?

Alisha Fredriksson: Yeah. There's not that many carbon transformation companies in the world today, unfortunately. I think there will be many more, upcoming. But I mean, we have letters of intent from three CO2 kind of utilization customers already. And I've spoken to- yeah, most of the electrofuel companies that I can find. So I don't think we need that many. That we don't need much of a sales force essentially for that just yet. Especially what I think is exciting is the volume and the scale ambitions of many of the companies that we're talking to. And so kind of long term, part of the vision is to create a circular fuel system, for instance. And so we will co-locate our land-based facilities with electrofuel facil- facilities so we can directly feed them the pure stream of CO2 and, and not need to transport it. And if we can prove that out in one location, then we can do that in multiple locations as well. So I think it's really about finding those strategic mission-aligned partners that we can grow with over time.

Jason Jacobs: Uh-huh. And so you, you mentioned for example the, the patent and making it more c- making the process more compact and the hardware more compact. And then you also mentioned the, the ongoing servicing, you know, through the sorbent and the CO2 capture. And then it sounds like there's this, you know, kind of distribution network for the captured CO2 that maybe isn't a big issue today because of the strategic ports that you're selecting. But directionally, as you scale, might become more important. What's your view, maybe Seabound aside, in terms of, for the companies that are actually doing the capture, are they also gonna try to take on the transport where there's multiple companies that are doing the capture and the transport? Or is somebody gonna own the transport and then, almost like a platform, that then enables all the different capture companies to plug in?

Alisha Fredriksson: It's a good question. I haven't thought about it very much. Because I think, for us, the capture and transport is one and the same, right? But the ship carries the captured CO2 and kind of delivers it to the customer in port. Ports are already industrial clusters. And so we don't envision then kind of carrying it long distances to where it would then be used or sequestered.

But I think more broadly, I mean, I think it would be amazing if there was kind of a new crop of companies to support with various elements of the kind of carbon capture and, and transformation value chain. I think that would be helpful for, yeah, a number of different companies to get off the ground. But I think, for us, it is relatively integrated.

Jason Jacobs: And you mentioned that it, it sounds like there's some international regulation. I mean, international regulation when tackling climate change and de-carbonization sounds like a dream. Is that specific to maritime or is that type of international regulation popping up in other places as well?

Alisha Fredriksson: Yeah. So if you think about the nature of the shipping industry, I mean, it is inherently global, right? And so that's why it is very uniquely governed by an international body, which is called the International Maritime Organization. And that's what really has [inaudible 00:26:53], and as we spoke about earlier, that's what's really kind of triggered the whole industry to, to look into how it's going to reduce emissions.

Jason Jacobs: So does that mean, for example, that country specific policy is less important to you than it might be for a similar company that was operating in an area outside of maritime, for example?

Alisha Fredriksson: Potentially. I think it depends on the level of ambition of the company specific policy relative to the International Maritime Organization. So for instance, we've seen in the EU, I mean, their- shipping enters in the emissions trading scheme in 2023 as well. And there's Fit for 55, Fuel EU Maritime. There's a number of schemes that I think are more aggressive than the International Maritime Organization ones. And so that's where that is a key market for us to get started to really find kind of even more incentivized ship owners, to really catalyze our technology there to then scale it out elsewhere. I think you could say the same about, like, the low carbon fuel standard in California. Other specific kind of, whether it be states or countries, might have more ambitious targets and regulations for, for different industries. So I think- I think any supportive climate regulation is, is helpful and it's just about figuring out which one is the probably most supportive and, and then starting there.

Jason Jacobs: Uh-huh. And so from a people standpoint as you think about scaling your customer base and scaling your footprint within these customers, and ultimately scaling, you know, the team and the technology to deliver on this, how does that scale? What, what types of people will you need as the company scales? And also just what types of infrastructure will you need as the company scales? Like will you need plants, for example, or, or things like that? Or, or how capital intensive will it be to build?

Alisha Fredriksson: Mm-hmm [affirmative]. Sure. So in terms of building our core team, so right now, and I would imagine upcoming as well, we're really focused on building out our engineering team. So with mechanical engineers, marine engineers, chemical and process engineers, controls engineers kind of overriding different types of, of engineers. Eventually we will need more of a sales function for ship owner relationships as well. But I think kind of excitingly, the ship owners face, at least the ones that we have letters of intent from, many of them have sort of 100, 200, maybe 300 ships. And if we just have several of those, we would have business for a very long time. So we also don't need kind of a massive sales force on that front if we can find the right partners.

And more broadly on infrastructure, I mean, I think for us, and, and one of the unique ways that we're tackling the challenge of maritime emissions is we really see this as sort of an ecosystem approach, we're looking for and, and already have identified a number of key partners that can help on the infrastructure front, on the sorbent manufacturing front. So we see ourselves definitely as a kind of technology developer and, and provider, but also as an integrator of a number of different key players. We can't do all of this ourselves. And it's really about piecing together a number of different strategic partners.

Jason Jacobs: So when you look at, say, the next 12 or 24 months, what are the biggest proof points that you need to solve for as a company? And where are the biggest risks? What do you worry about the most?

Alisha Fredriksson: Sure. So right now what we're most focused on is building our second prototype. And that will be kind of the, the final proof point on land that we need before we go ship-bound. So that's the big focus for us at the moment, by the end of 2022. And then at the same time, we're planning for our pilots in 2023. So we are testing on board a small ship in the first half of 2023. And then a large kind of fully representative commercial vessel in the second half of 2023. So those are the big miles- milestones for us, upcoming.

Jason Jacobs: And if those go well, what does that next phase look like? And how do you think about f- subsequent capital in terms of how much you might need but also what type of capital would be the best fit?

Alisha Fredriksson: Mm-hmm [affirmative]. Yeah. I mean, so after that, then it's really about installing our equipment on many more vessels and figuring out how do we start to manufacture at increasing scales? And at lower costs, of course, over time? So, I mean, our goals are to put 1000 ships, or 1000 systems, sorry, on ships by 2030. And then 10,000 systems on ships by 2040. So have pretty aggressive growth ambitions. In terms of capital to, to front that, so I mean, the capex is something that we- is covered by the ship owner when we sell them the hardware upfront. So our core kind of ship based business isn't particularly capex intensive for Seabound. When it comes to building land-based facilities, which is our second phase, that's where we'll be looking to things like project financing to support with those build outs. I don't think equity will be enough to, to get us to that stage. But I think there are, yeah, different mechanisms at play that we can leverage.

Jason Jacobs: And the purpose of the land-based would be to do similar to what you're already doing on the ships but just at a bigger scale to support bigger fleets?

Alisha Fredriksson: So the way that we're tackling this, so the kind of two key steps to carbon capture, is that you capture the CO2 with the sorbent and then you separate it or regenerate it from that sorbent. And what we've done to dramatically reduce capex by about 90% versus competitive approaches, is de-couple it. So we just capture CO2 on board. And then we regenerate on land. So the land-based facilities are really the regeneration facilities to produce more sorbent to then put on board the ship and, and capture CO2 there.

Jason Jacobs: Uh-huh. So in the grand scheme of things, for this type of carbon capture, or others as well, even outside of maritime, is it just a bridge to get to full de-carbonization, a stepping stone, if you will, or do you see it as part of the long term equation?

Alisha Fredriksson: It's both. So it's something that can be ready, you know, in 2023 when we're putting our first systems on ships. And ready for all the existing ships that don't have any other alternatives. But it's also something that is complementary to other solutions such as electro methanol, where we could capture the CO2 and, and turn it to make more fuel for the shipping industry. So we create that circular fuel system. But then it's also complementary to other types of future fuels such as biofuels. So we think that there is long term potential for this. And even the likes of Maersk, kind of one of the, the top names in the shipping industry, they're taking a bet on e-methanol over hydrogen or ammonia as a more viable future fuel. So we think our system is complementary to what is seen as, as one of the other kind of top contenders for the industry.

Jason Jacobs: Got it. And when you say complementary, you mean that, that some of these future fuels are also a source of emissions that you could capture? Or that this presumes that fossil fuels will stay around for as far as the eye can see in certain elements of shipping?

Alisha Fredriksson: So what I mean specifically for the case of electro methanol is that if we want to produce a lot of that fuel, which the industry does want, we need a lot of captured CO2 to do so. And need it in the right locations. And so e-methanol companies are companies that we can sell our captured CO2 to, to make more e-methanol, to create a circular fuel system. And so we can actually kind of help e-methanol to get on the ground. So that's- get off the ground. Where there's a very direct, yeah, complement to those two solutions.

Jason Jacobs: Is there a day when shipping doesn't have ships that use fuels that produce emissions?

Alisha Fredriksson: Potentially. Hydrogen and ammonia do not emit CO2. I think there are a number of different challenges with each of those. And so we'll see if they are able to be viable for the industry. I think there's also a world in which electrification plays a, a bigger role. And, and we, we know the Fleet Zero team very well as well. And we were with them in the same kind of YC batch. And I'm really excited about their vision. I think it'll be particularly effective for certain shipping routes. But long term, if it can be viable for the industry more broadly, I think that would be amazing too. So I think there's, there's different ways to approach de-carbonizing shipping. And we'll see how, yeah, w- which one we can kinda get off the ground most quickly.

Jason Jacobs: Uh-huh. But I think what I'm hearing from you, and, and correct me if I'm mishearing, is that there's no approach that is going to be a magic bullet. And if there was, which there doesn't seem to be, and it- should- will likely take different approaches, it's gonna take a while because shipping is so hard to de-carbonize. And so while all the other approaches are sorting out how to ultimately de-carbonize, in the meantime, there's a whole lot of emissions that happens. And that is not like a three to five year thing. That's like a decades and decades thing. Therefore there's ample work for you to do. And if, for whatever reason, they end up solving it and it eliminates the need for capturing CO2, then that would be a good problem to have.

Alisha Fredriksson: I think that's right. Yeah. I think it's- I think our solution is especially helpful in the short term in ways that other solutions aren't. But I also think our solution can be combined with some of the contenders for the long term and actually support those contenders to be even more viable and therefore to scale more quickly, which is where I think there's a short and long term future for what we're providing.

Jason Jacobs: Uh-huh. Got it. And when you think about the barriers to carbon capture being used more broadly in maritime, what are the biggest barriers and how might we go about addressing them? So not necessarily the ones that are, that are Seabound specific but more just if Seabound is to be successful, what needs to happen from a bigger picture standpoint and where are the knots?

Alisha Fredriksson: I mean, if we had sort of a, a silver bullet that would help that's outside of our control, I think something like a global carbon tax for shipping would be hugely instrumental for Seabound solution but for many other solutions for maritime as well. So I think that would be most helpful. I think the, the shipping industry is a conservative one. It is changing and it does need to change. And I think there some ship owners that are ready to go now. But when it comes to really scaling across the entire industry, that's where I think we'll need things like extremely ambitious regulation, such as a global carbon tax to really get us there.

Jason Jacobs: Got it. And do you see advocating for things like that as something that will be worth resourcing to as you grow? Or is that just something to hope for and hoping that other people address it? And realistically, like, I mean, do you think we're ever gonna see it?

Alisha Fredriksson: I think we could see it. So specifically a global carbon tax is something that over 100 companies in the shipping industry have already called for. And so I think there's kind of precedent for that type of advoca- advocacy within shipping. I think it's something that Seabound could play a role in. I would definitely want to start by learning what others have done so far and, and kind of teaming up with, with other experts in the space before kind of trying to start from scratch. But yeah. It's something that we're working to contribute to if it'll help what we're doing to de-carbonize the industry and help other solutions as well.

Jason Jacobs: And when you think about the broader climate community, one of the critiques of carbon capture is that it's not necessarily a technical critique of well, you know, it isn't good to capture the emissions. It's more of a psychological critique that it gives these companies permission to keep business as usual and maybe drag their feet when it comes to doing the hard work of de-carbonization and getting on solutions that aren't actually producing emissions. Do you worry about that at all? And if so, why? And if not, why not?

Alisha Fredriksson: So I don't worry about it very much because of the challenges of the industry that we're working in and the implications that it would have for the whole world. So the shipping industry moves 90% of the world's goods. And is one of the last, I think there's four sectors that are kinda considered hard to abate right now. We can't just kind of shut it off. [laughs] Right? And I think that's where, as much as I am an optimist and, and want to see completely clean solutions started all around the world at, at massive scale, you know, today, I think we also need to be realistic about the implications that it would have for, for people and supply chains around the world. And that's where we're really trying to, you know, provide a solution that can start as soon as we can, right, with our first systems on ships in 2023. So that we can stop emitting CO2, you know, in 2023, but not disrupt the whole world and not disrupt all the supply chains, and kind of continue to then develop this technology so it's as cheap as possible and can be scaled up across the global fleet.

So I think, I think that's what I would say. Is, is that I, I want solutions that are completely clean, but I also think we need to be relatively pragmatic about what the implications for the rest of the world could be if we, if we were to shut things off.

Jason Jacobs: Uh-huh. And so as the regulation picks up, and as the Amazons and Ikeas put more pressure on, and as consumer sentiment changes in terms of the people that are actually purchasing the goods, and you know, let's even say there's a- there's a global carbon tax, and, and as the costs come down and so a- all the things start, like, nudging towards the middle, what about the competitive landscape? I mean, is this something that would be easy to replicate for other players once they feel like the fruit is getting riper here? Uh, and do you think this is gonna be like a winner take all type of market or will there be a bunch of players that are doing what you do, maybe with slightly different approaches and models?

Alisha Fredriksson: Sure. So yeah. I think in terms ... And I think you're kind of touching on defensibility a little bit as well.

Jason Jacobs: Yeah, I am.

Alisha Fredriksson: Yeah. So I mean, I think there's a variety of different approaches to capturing CO2, but many of them are still quite expensive and not particularly feasible for mobile relatively low volume applications compared to power plants. So that's where we're really taking a bet on, on the type of technology that we're developing and that we have a patent for, which is this kind of more compact approach. And then really learning how to optimize and reduce costs for that over time. And, and trying to move as quickly as possible to do so. Ultimately, we are very mission driven and if there's others that are able to develop other solutions as well, and we can all scale across the industry, you know, it's a very big industry. So we're not particularly worried about kind of competitive challenges or pressures. We just want to reduce CO2 from ships as quickly as possible.

Jason Jacobs: And when you think about this next phase, for anyone listening that's inspired by your work, who would it be helpful to hear from and what message do you want to leave with listeners?

Alisha Fredriksson: Sure. Thank you. In terms of who we'd want to hear from, I think what's most top of mind is engineers. So if you have experience in marine engineering, controls, mechanical or process or chemical, we're hiring across all of those fronts at the moment. So that is definitely kind of the most urgent priority for us. Additionally, if you happen to be a ship owner or know ship owners and are keen to pilot this type of solution, would love to chat with you as well. And then finally, outside of the regulated carbon market, such as in the EU, we're also selling carbon credits on the voluntary market. And if that's something that, that is interesting to, to you to really kind of catalyze this type of frontier technology, we're happy to talk with those types of folks as well.

And maybe the last thing I'd say in terms of kind of broader message, I think is if you are curious about how to get involved with tackling the climate crisis, I would definitely urge you to think about starting a climate tech company. We need so many more solutions today than we have. And so I think- at least that was my analysis, is that the greatest way to, to get involved was to, to start something, particularly for a hard to abate sector. There's of course other, other alternatives too. But if it's even something that you're thinking about, I would definitely encourage you to do so 'cause I think there's lots of support in the space as well to help you to, to get something off the ground.

Jason Jacobs: Uh-huh. And I know this is not an investment discussion, but for when there are investment discussions, I never like the question about, like, what's your exit strategy because I think, you know, it seems defeatist. Like you wanna set out to build a big independent company and, and certainly it seems, given the size of the shipping industry and how important it is for the world, and just how much emissions is coming out of it today, that there is an opportunity to build a large stand alone company if it works. I can't help but wonder though, and I don't think I've asked that que- this question to, to any of the carbon capture companies that I've talked to is, is that the only path? Like is this strategic to large players as you go? And if so, what kind of players would it be most strategic to, do you think?

Alisha Fredriksson: Sorry which, which path was that that you're referring to?

Jason Jacobs: Oh, so the company. So as you grow the company is the, like, is public offering the only option for liquidity for, for your investors? Or do you see that this, or other carbon capture companies, for that matter, might be strategic to large companies? And if so, what type of company would see the most value? I just- it's a random one to slip in at the end but I, I just always wondered that, not just about Seabound but about carbon capture in general.

Alisha Fredriksson: Yeah. I think if you are a carbon capture company focused on a particular industry, there could be big industrial players that could be interested in an acquisition. So I'm thinking of Remora. Perhaps there's a, a major trucking company or a truck logistics company that would be interested in, in having this type of thing in house. I think, for us, could it be an engine manufacturer or even kind of a massive shipping conglomerate. I don't think that would be totally out of the question. So it's definitely not something that we are thinking about at the moment. But I don't think an IPO is the only path to liquidity. I think, especially given the, the regulatory tailwinds here, there is money to be made in these types of carbon capture solutions for specific industries. And I think that the big industrial players would recognize that as well.

Jason Jacobs: Awesome! Yeah. It's a weird question to end on but thank you for entertaining it. I, I was really curious-

Alisha Fredriksson: No worries.

Jason Jacobs: ... about that. So, well Lisa, thanks so much for coming on the show. I learned a lot from this discussion. And wishing you and the whole Seabound team every success.

Alisha Fredriksson: Thank you so much. And I have to say hi from, from the team. They're all big fans of the podcast as well. So thank you for, for letting us have our, have our turn.

Jason Jacobs: Amazing! Well hi back to them. And we'll have to find-

Alisha Fredriksson: [laughs]

Jason Jacobs: ... other ways to get you all engaged with the MCJ community as well.

Alisha Fredriksson: Sounds great. Thank you so much.

Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at MyClimateJourney.co. Note, that is dot C-O, not dot com. Some day we'll get the dot com. But right now, dot C-O. You can also find me on Twitter @JJacobs22 where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.