123Fab #104

1 topic, 2 key figures, 3 startups to draw inspiration from

Urban areas face rising temperatures from the combined effects of climate change and the “urban heat island” phenomenon. Concrete and asphalt trap heat, creating hotter cities, escalating energy demands, and endangering vulnerable populations. To mitigate these effects, solutions must address the problem across all scales: city, neighborhood, street, building, and individual levels.

City-Level Strategies

At the city scale, urban planning focuses on creating cooler environments by improving airflow, increasing plant cover, and reducing heat-retaining surfaces:

• Urban Planning and Cool Corridors: Designing open spaces and cool corridors encourages air circulation and reduces heat concentration.
• Increasing Plant Cover: Initiatives like Paris’ Oasis Project transform schoolyards into green spaces, doubling as cool islands and heat refuges.
• Low-Emission Zones (ZFE): Reducing vehicular traffic in cities cuts emissions, indirectly lowering heat retention.
• Urban Water Management: Large-scale rainwater management systems and urban basins help infiltrate water into the soil. This not only prevents flooding but also encourages evaporation, naturally cooling the air during heatwaves.

Neighborhood-Level Strategies

Neighborhood interventions tackle heat through surface treatments, targeted greenery, and smart solutions:

• High-Albedo Materials: Reflective materials reduce heat absorption, like those used in Paris’ “cool islands.” High-albedo materials are surfaces that reflect more sunlight than they absorb, helping to lower surface temperatures.
• Vegetation and Cool Islands: Projects like Urban Canopée integrate vegetation into neighborhoods, while ENGIE Lab Crigen’s Skycooling panels provide shade-based cooling.
• Water Permeation: Soil desilting and localized rainwater infiltration enhance evaporation, which cools the surrounding air naturally. Incorporating small water features like ponds or fountains within neighborhoods can amplify these cooling effects.

Street-Level Strategies

Streets act as heat hotspots, but targeted solutions can reduce their thermal footprint:

• Draining Pavements: Products like Holcim’s concrete, a permeable concrete Hydromedia, allow rainwater to infiltrate the soil, supporting evaporation and natural cooling.
• Green Walls and Photovoltaic Shades: Vegetated walls and shaded walkways lower street temperatures while improving aesthetics and functionality.
• Localized Water Features: Incorporating fountains, small basins, or artificial streams along streets can provide significant localized cooling effects.

Building-Level Strategies

Buildings are central to urban cooling, as they represent a significant proportion of heat storage:

• Green Roofs: Vegetative layers provide natural insulation and cooling, reducing the heat stored by buildings.
• Reflective Paint: Products like Cool Roof reduce heat absorption, keeping interiors cooler.
• Advanced Insulation: Aerogels, a cutting-edge material known for their lightweight properties and high thermal resistance, can significantly reduce heating and cooling costs by providing superior insulation compared to traditional materials.
• Bio-Reactive Facades: Innovations like XTU Architects’ microalgae facades actively regulate temperature by producing oxygen and absorbing heat.
• Rainwater Harvesting: Buildings can integrate systems to collect rainwater, which can then be used for evaporative cooling or irrigation for rooftop and vertical gardens, further reducing heat buildup.

Individual Actions

Individual behaviors also play a vital role in reducing urban heat:

• Soft Mobility: Walking, cycling, and using public transport help reduce vehicular emissions and heat contributions.
• Urban Greening: Individuals can plant greenery at home, install small water features in gardens, or volunteer for local tree-planting initiatives to enhance cooling.
• Water Stewardship: Households can promote cooling by managing rainwater infiltration with permeable garden designs, rain barrels, or bioswales to ensure water is available for natural evaporation processes.

Cooling urban environments requires a multifaceted approach across different scales. From city-wide planning and water management to individual actions like soft mobility, these strategies not only provide immediate relief from heat but also promote the long-term sustainability of urban life. Addressing the urban heat island effect is a pressing necessity as cities prepare for increasingly extreme temperatures in the decades ahead.

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2 Key Figures

4

Temperatures can be 1 to 4°C higher than surrounding rural areas due to the presence of heat-retaining infrastructures like concrete and asphalt.

15%

A 10% increase in tree cover in cities reduces surface temperatures and lower energy consumption needs for cooling by around 15%.

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3 startups to draw inspiration from

CoolRoof

French-based startup specialized in reflective coatings for rooftops and pavements to reduce heat absorption in cities, lowering temperatures and energy consumption.

SolCold

A materials startup from Israel that creates innovative coatings which cool buildings by converting heat into light, reflecting sunlight to reduce urban temperatures.

Green City Solutions

German startup that develops urban green spaces using “CityTree,” a smart, air-purifying moss wall that cools and cleans the air in densely populated areas through IoT integration.

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123Fab #103

1 topic, 2 key figures, 3 startups to draw inspiration from

Microplastics—plastic fragments smaller than 5 millimeters—originate from two main pathways:

• Primary microplastics are intentionally manufactured at microscopic scales, such as microbeads in cosmetics or fibers from synthetic textiles.
• Secondary microplastics are created when larger plastics break down over time due to environmental factors like sunlight, wind, and water.

Over time, these tiny particles infiltrate ecosystems, contaminating soil, waterways, and even human blood. Recent studies reveal that microplastics have been detected in the bloodstreams of up to 80% of the people tested, raising serious concerns about their long-term health impacts.

Faced with this crisis, companies are taking steps to tackle microplastic pollution. For instance, Nestlé Waters is participating in the Plastic Trace Project (2022–2025), which aims to standardize the tracking of microplastics in water, food, and the environment.

Key industries responsible for microplastics

The variety of consumer and commercial products that are intentionally loaded with microplastics is vast: cosmetics, detergents, paints, medicines, diapers, pesticides, and more. The International Union for Conservation of Nature (IUCN), identifies seven sources of microplastics in marine environments:

• Synthetic textiles (>50%): Washing synthetic clothes discharges millions of microfibers into wastewater.
• Vehicle tires (10-20%): The EU alone generates around 0.5 million metric tons of microplastics annually from tire wear, and this is expected to increase with the rise of electric vehicles that are typically heavier.
• Urban dust (10-20%): These come out of the sum of several sources that involve artificial turf, building paints, and industrial abrasives.
• Road marking (3-5%): Everything, including the roads’ infrastructure deteriorates. Hot-melt paints used for road markings contain polymer binders that contribute to microplastic pollution.
• Marine coating (4%): The coatings applied to ships’ hulls break down over time, contributing to the load of microplastics in the oceans.
• Personal care products and cosmetics (1-2%): Most skincare and cosmetics products contain microbeads, a well-known source of microplastic pollution. Since 2023, the EU called for a ban for microplastics in consumer products, including cosmetics.
• Plastic pellets (0.3%): Resin pellets, which are used as raw material in producing plastic items, often spill into the environment.

These categories only scratch the surface. Microplastics have countless other sources, many of which remain poorly quantified. Our understanding of the problem is still evolving, but the urgency to act is clear.

Solutions

Efforts to address microplastic pollution focus on two main strategies: reducing pollution at its source and improving filtration systems to capture particles before they reach the environment. Here’s how different industries can contribute:

• Textile industry:
  • Developing alternative fibers: Dutch startup Boldwill produces microplastic-free sports apparel. The company uses hemp, cotton, and fabrics made from eucalyptus and beech trees in its sportswear.
  • Installing filters in washing machines: A variety of filters are being developed capable of catching fibers before they go into the wastewater system. One example is the innovative filtration technology of Matter, originally developed for washing machines. Today, its solutions extend to industrial applications, stopping microplastic entry into sewage sludge.
• Automobile industry:
  • Durable tire materials: Projects like LEON-T are developing and testing airless tires for heavy vehicles. This would reduce friction of rubber material and minimize particulate emissions.
  • Tyre dust catchers: The Tyre Collective has designed a device to capture tire dust directly at the source. This device is placed behind the wheel and uses both a suction system and an electrostatic capture system to capture the plastic microparticles.
• Manufacturing:
  • Industrial filtration solution: Companies like IADYS or ECOFARIO are developing technologies to capture microplastics during industrial processes
  • Alternative materials: For instance, Naturbeads offers cellulose-based microspheres as a viable substitute for microplastics in everyday products.
• Packaging:
  • Plastic-free alternatives: Companies are manufacturing new materials that will replace traditional plastics. For example, Lactips produces water-soluble and biodegradable thermoplastic pellets using casein, a milk protein. The pellets can be used to make all sorts of packaging material.
• Cosmetics:
  • Biodegradable alternatives: Cosmetic products can be reformulated to be microplastic-free. A French company, Dionymer, has developed a 100% biosourced and biodegradable polyester obtained by fermentation for use in make-up and skincare formulas.
• Agriculture:
  • Bio-based fertilizers: BioWeg has developped AgriWeg a biodegradable emulsion for the substitution of coatings from petroleum and acrylic based materials on fertilizers and seeds.

2 Key Figures

51 trillion

According to the UN, there are as many as 51 trillion microplastic particles in the seas, 500 times more than stars in our galaxy.

Between 78,000 and 211,000

The average person eats, drinks, and breathes between 78,000 and 211,000 microplastic particles annually.

3 startups to draw inspiration from

Naturbeads

A UK based-startup commercializing biodegradable, cellulose-based ingredients, offers a sustainable alternative to plastic microbeads used in personal care products, paints and coatings, packaging, adhesive and many other industrial products.

ECOFARIO

The German startup ECOFARIO develops microplastics removal systems for wastewater treatment plants. Its High-G-Separator uses hydrocyclone-based separation technology, eliminating the need for filter media to separate microplastics.

PlanetCare

A Slovenian startup that has developed innovative filters capturing 90% of synthetic fibers that are being released from textile products during each wash.

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Last week, during a discussion with a project leader from a major corporation, we asked a simple question: “How many business models do you know?”His response surprised us: “Uh… 5 or 6?”

This got us thinking about the importance of understanding business models in today’s dynamic landscape.

What is a Business Model? 🧐

A business model is essentially how a company creates, delivers, and captures value. It’s a fundamental concept that we explore using the Business Model Canvas (BMC). For those unfamiliar, there’s even a social version of this tool.

The Variety of Business Models

There are numerous business models out there, and a single company can adopt multiple models simultaneously.Take Google as a prime example:

• 💰 Pay Per Use: Google Cloud
• 🛠️ Self-Service: Clients access services directly
• 🎁 Freemium: Free services with paid options
• 🤝 Revenue Sharing: Partnerships with content creators on YouTube
• 🕵️‍♂️ Hidden Revenue: Monetization of user data
• 🎨 Long Tail: A vast catalog of services

As a transformation consulting firm, our role is to assist our clients in developing new business models.

Want to Go Further? Discover Our Business Model Toolkit

We’ve put together a toolkit to explore the 60+ business model in the format of a card game.

123Fab #102

1 topic, 2 key figures, 3 startups to draw inspiration from

The circular economy redefines traditional economic models and contrasts with the “take-make-waste” linear approach. In the latter, resources are extracted to create products that later become waste, with very limited uses or value recovery. Circular economy, on the other hand, emphasizes sustainability, keeping materials in use for as long as possible while minimizing waste and resource consumption.

Key frameworks such as the Value Hill and the Butterfly Diagram shed light on how this system works: the Value Hill describes how to maintain and regain value at every stage in a product’s life, while the Butterfly Diagram helps to visualize infinite cycles of reuse and regeneration within an economy. (For more information, read those articles on the Value Hill and Butterfly Diagram.)

At its core, the circular economy is guided by seven pillars, each offering actionable strategies to reduce waste, optimize resource use, and foster innovation. Let’s delve into these principles and their potential for transformative change in driving sustainability.

The 7 Pillars of the Circular Economy (as defined by l’ADEME)

1. Sustainable procurement: This involves considering the environmental and social impacts of resource extraction and usage, with the aim of minimizing waste and greenhouse gas emissions. The goal is to prioritize sustainable resources by choosing suppliers based on ethical and environmental standards, aligning with the overall circular model.
2. Eco-design: This involves considering the entire life cycle of a product or service, from the design stage onwards, to limit its impact on the environment. A very good example is the Renault Scenic E-Tech Electric, with its high rate of recycled materials in the manufacture of the car. Many parts are designed to be recyclable at the end of their life to reduce its ecological impact as much as possible.
3. Industrial and territorial ecology (or industrial symbiosis): This pillar connects various economic actors to optimize the use of local resources such as water, energy, materials, waste, equipment, and expertise. By sharing resources, one company’s waste becomes another’s resource. The most representative example of industrial symbiosis is the one in Kalundborg, Denmark, where companies like Novo Nordisk (pharmaceuticals), Ørsted (energy), and Kalundborg Municipality collaborate to share resources such as steam, water, and industrial by-products. This innovative collaboration not only optimizes resource use but also drives significant cost savings and reduces the overall carbon footprint.
4. Service economy: In this model, usage is prioritized over ownership. It emphasizes offering services connected to products rather than selling the products themselves, which extends their lifespan without consuming more material resources or energy, creating jobs, and encouraging sharing. A notable example is Michelin‘s “Tyre as a Service” model, where the company retains ownership of the tires and manages their entire lifecycle—maintenance, retreading, and recycling. Thus, customers are charged based on usage: per kilometer for trucks and per landing for airplanes.
5. Responsible consumption: Consumers, whether individuals or organizations, must consider the environmental and social impacts of products at every stage of their life cycle. This means choosing sustainable products and adopting eco-conscious consumption habits. Key questions include: Do I really need this? Is the product recyclable? What materials were used? How was it made?
6. Extending product lifespan: Consumers should opt for repairing, reusing, or donating unused or broken items to give them a second life. This not only benefits the environment but also supports circular business models and offers financial savings. For example, Back Market, a French platform specializing in refurbishing electronic products, collects smartphones, computers, and other devices nearing the end of their life, repairs them, and resells them, reducing e-waste and offering affordable products.
7. Recycling: This is the final phase of the circular economy whereby existing materials are converted to other new forms. The process is to recover and reduce the amount of waste by recycling into raw materials. This closes the cycle as recycled materials start being used for procurement. For instance, ROSI provides an innovative solution for recycling and valorization of raw material in the photovoltaic industry. Their technology can recycle all valuable raw materials in waste solar panels, including silicon.

How can companies benefit from the circular economy?

Businesses can significantly benefit from the adoption of circular economy principles through new profit opportunities, cost reductions from lower reliance on volatile raw materials and increased use of recycled inputs. New business models, such as rentals or leasing, also create stronger, long-term customer relationships by increasing touchpoints throughout a product’s lifecycle.

2 Key Figures

70%

Material extraction and use amount to 70 percent of global greenhouse gas (GHG) emissions.

7.2%

 Only 7.2 percent of used materials are cycled back into our economies after use.

3 startups to draw inspiration from

Hubcycle

A French startup that specializes in upcycling food industry by-products into valuable ingredients. By sourcing vegetal by-products from industrial food processes before they are discarded, Hubcycle transforms them into ingredients for the food, pet food, cosmetics, and homecare sectors. This approach eliminates the need for new raw materials, reducing environmental impact and significantly lowering the carbon footprint for both suppliers and customers.

GreyParrot

A UK startup, leading the way in AI-driven waste analytics for the circular economy. GreyParrot aims to increase transparency and automation in waste management, unlocking the hidden financial value of waste. With its advanced AI-powered computer vision systems deployed globally in sorting facilities, the platform can monitor, analyze, and sort waste at scale. GreyParrot’s insights will help waste managers, producers, and regulators increase recycling rates.

Faircado

Berlin-based, Faircado has created a browser extension designed to promote the circular economy. The idea is simple: thanks to artificial intelligence, the extension uses a combination of image and text matching to suggest second-hand alternatives when you search for a product on the Internet. Faircado supports 1,600 sites, including Amazon, Zalando, Patagonia and Apple. These recommendations come from over 50 partners, including eBay, Back Market, Grailed, Rebuy, Vestiaire Collective…

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123Fab #101

1 topic, 2 key figures, 3 startups to draw inspiration from

Catalysts are substances that increase the rate of a chemical reaction without being consumed in the process. They are the unsung heroes of the industrial world and have become indispensable in a wide range of industries: chemical, pharmaceutical, petrochemical, automotive, etc. One of the best-known applications is the catalytic converter in motor vehicles, which transforms toxic gases into less harmful pollutants.

Today, they play an important role in decarbonization, with a wide range of applications, including the following:

• Production of renewable fuels: Catalysts enable the conversion of renewable raw materials, such as vegetable oils or organic waste, into sustainable fuels such as biodiesel or bioethanol.
• Green hydrogen: Catalysts are at the heart of green hydrogen production through water electrolysis. Until today, the most applied catalysts in the production of green hydrogen are noble metals such as platinum and iridium, but research is in process to find cheaper and more sustainable alternatives
• Biomass conversion: Biomass can be valorized into useful chemicals and fuels via catalysts, hence reducing further the dependance on fossil feedstock and lowering the carbon footprint of the chemical industry.
• Plastic recycling: Catalysts play an important role in chemical plastic recycling. They offer a way for the depolymerization of the polymer into its basic monomers, which can then be reused to manufacture new plastics. A good example is the enzymatic process for the recycling of PET developed by the French company Carbios.
• CO₂ conversion and utilization: Advanced catalytic processes are being developed to convert CO₂ into valuable products like fuels, polymers, and chemicals. These innovative reactions could turn carbon emissions into a raw material, and then close the carbon use loop.

However, while catalysts provide considerable environmental benefits in use, many have resource-intensive and polluting manufacturing processes. As an example, mining and processing precious metals, widely used in catalytic converters, like platinum or palladium, are often associated with ecological damage, including habitat destruction and water contamination. It is therefore crucial to find and develop new, more sustainable alternatives.

Emergence of new catalysts with lower environmental impact

To meet sustainability requirements, companies in the chemical industry are actively seeking catalytic solutions with lower environmental impact. For instance, BASF has established a Catalysts Innovations Platform dedicated to identifying more sustainable catalysts. In this context, various approaches and types of catalysts are emerging, each offering specific advantages to help achieve the industry’s sustainability goals:

• Biocatalysts, sometimes referred to as “nature’s catalysts “or enzymes are intrinsically sustainable. Their use allows to produce organic molecules in a milder manner compared to traditional chemical methods. For instance, Novozymes offers biocatalysts for biofuel production. Additionally, Solvay utilizes biocatalysts in the manufacturing of some of its polymers.
• Nanocatalysts offer several benefits compared to their traditional counterparts: the nanometric dimension offers a much better structure-performance ratio, which increases their catalytic activity and selectivity, and reduces energy consumption and the cost of chemical processes. Gen-Hy is a start-up developing catalysts based on nickel nanoparticles.
• Catalysts with abundant metals: Research is moving towards the use of more abundant and less expensive metals, such as iron, to replace precious metals like platinum. Gen-Hy, for instance, develops high-performance catalysts based on nickel nanoparticles, an abundant and inexpensive metal, to replace platinum and iridium in certain applications.
• Photocatalysts are catalysts that accelerate chemical reactions by absorbing light. This technique can be applied in interesting ways in the context of energy transition, particularly for the chemical trapping of CO₂. Researchers from the Institut lumière matière in Lyon and the Institut des sciences chimiques de Rennes are working on molybdenum aggregates, an abundant and inexpensive metal, as an alternative to noble metal-based photocatalysts.
• Ecocatalysts are quite new in sustainable chemistry. They are derived from plants that have naturally accumulated metals present in their environment during the phytoremediation process. Bioinspir has developed, for instance, ecocatalysts derived from plants for the responsible synthesis of cosmetic and perfumery ingredients.

2 Key Figures

6%

The chemical sector is responsible for approximately 6% of global CO2-equivalent emissions

$22.30 billion

The global industrial catalyst market size was nearly $22.30 billion in 2023

3 startups to draw inspiration from

Gen-Hy

A French start-up specializing in green hydrogen production has developed high-performance catalysts free of noble metals. Using an innovative formulation based on nickel nanoparticles—an abundant and affordable metal—it offers a new path toward more sustainable and cost-effective hydrogen production.

Entalpic

Founded in 2024, Entalpic is a French startup at the forefront of generative AI technology for the chemical industry. The company’s advanced AI platform designs catalysts to optimize chemical processes in areas like energy storage, fertilizer production, and pollution control, blending open and proprietary research.

Cascade Biocatalysts

Denver-based startup Cascade, specializing in enzyme-based processes, uses its Body Armor for Enzymes™ technology to drive greener, cost-effective chemical reactions that reduce greenhouse gas emissions. Its projects encompass diverse areas, including CO₂ capture, fragrance production, and wastewater treatment, highlighting the broad commercial potential of biocatalysts.

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123Fab #100

1 topic, 2 key figures, 3 startups to draw inspiration from

In today’s rapidly evolving agricultural landscape, regenerative agriculture has emerged as a transformative approach to address the pressing challenges of climate change, soil degradation, and biodiversity loss. This innovative methodology, first introduced in 1983 by Robert Rodale, offers concrete solutions to restore ecosystems and ensure the long-term viability of farming.

What is Regenerative Agriculture?

Regenerative agriculture is a holistic approach designed to regenerate critical resources such as soil, water, air, and biodiversity while boosting farmers’ incomes. By using regenerative farming methods, farmers can restore the natural balance of their ecosystems, leading to healthier soil, lower CO₂ emissions and increased resilience against extreme weather events like droughts and floods.

Key solutions in Regenerative Agriculture

Soil Regeneration

Soil health is the foundation of regenerative agriculture. While traditional methods like crop rotation, cover cropping, and reduced tillage remain effective, innovative techniques are emerging to further improve soil fertility:

• Precision agriculture: data-driven tools optimize farming practices. For instance, Assolia enables farmers to fine-tune crop rotations and soil management based on real-time insights into soil conditions.
• Biochar application: this form of charcoal produced by heating organic material in a low-oxygen environment, enhances soil quality, improves water retention and contributes to carbon sequestration. Companies such as NetZero and Poas Bioenergy manufacture it.
• Microbial solutions: biostimulants and biofertilizers from companies such as Veragow and Mycophyto offer natural alternatives to synthetic fertilizers, promoting soil fertility and plant health.

Water Regeneration

Water is a precious resource, yet is often taken for granted. Regenerative agriculture emphasizes the importance of efficient water use and regeneration through:

• Optimized irrigation: ensures crops receive the exact amount of water needed, reducing waste. For example, Unilever has implemented this in its Spanish tomato supply chain using soil moisture sensors, weather stations and data analytics software production to provide accurate data on water requirements.
• Water recycling: involves collecting, treating, and reusing water on the farm, through techniques such as simple filtration, artificial wetlands (which naturally filter and treat wastewater), and reverse osmosis, an advanced filtration method that removes contaminants for safe reuse

Air Quality

Regenerative agricultural practices offer a dual benefit: they significantly reduce greenhouse gas emissions—addressing the 20% of global emissions attributed to conventional agriculture (see our blogpost for a detailed breakdown of emissions by sector here)—while simultaneously enhancing the soil’s capacity to sequester carbon.

• Reduced use of chemical inputs: by minimizing reliance on synthetic fertilizers and pesticides, farmers can lower their greenhouse gas emissions.
• Reduced use of heavy machinery: regenerative practices also limit the need for heavy machinery, resulting in lower fuel consumption and reduced emissions. This not only decreases greenhouse gas output but also lowers operational costs and machinery wear.
• Carbon sequestration: techniques like no-till farming and agroforestry—planting trees and shrubs alongside crops—enhance the soil’s capacity to store carbon, effectively removing CO₂ from the atmosphere.

Farmers can also generate additional income by selling carbon credits, for the additional carbon stored in their soil, through platforms like Klim or Soil Capital, which support them in their transition to regenerative practices.

Biodiversity Enhancement

• Biodiversity monitoring: companies such as Nature Metrics utilize eDNA technology to detect individual species from small samples of soil, sediment, water, or air. This approach enables accurate monitoring of changes in both above-ground and below-ground biodiversity, including soil bacteria and fungi.
• Pest management: biological pest control, often referred to as biocontrol, is a method of managing pests using natural predators, parasitoids, or pathogens. French startup Agriodor uses natural scents emitted by plants to repel crop-destroying insects.

How can the transition to regenerative agriculture be accelerated?

The shift to regenerative agriculture can’t be left to farmers alone. Initial costs and associated risks require collaboration between farmers, governments, and the private sector. Policymakers play a crucial role by rethinking existing farming policies, providing financial incentives and offering technical support.

The private sector also has a vested interest in financing the transition to regenerative practices, as it improves their carbon footprint and enhances supply chain resilience. Many companies are already making commitments; for instance, Nestlé, the world’s largest food and beverage company, aims to source 50% of its key ingredients through regenerative agriculture by 2030.

2 Key Figures

40%

of the world’s soils are moderately to highly degraded due to conventional agriculture

$2.2 billion

the amount Danone, Pepsico, Nestlé and Cargill commited to investing in regenerative agriculture at COP28

3 startups to draw inspiration from

Klim

Headquartered in Berlin, Klim enables farmers to transition to regenerative agriculture at scale by providing financial support, knowledge, documentation tools, and a community via their digital companion for farmers. Klim-verified carbon removal credits, generated by Klim farmers, help companies offset their carbon emissions locally with maximum impact and transparency.

Veragrow

A French company that offers organic fertilizers made from vermicompost, i.e. earthworm droppings containing nutrients and micro-organisms beneficial to plants. An ecological alternative to pesticides that also revitalizes the soil.

Agrovar

A Bulgarian company which has developed a software specialized in precision agriculture, offering advanced tools for informed decision-making, as well as real-time crop monitoring and management. Its soil health assessment algorithms analyze essential soil data, contributing to climate resilience by helping farmers adapt to changing weather conditions.

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At Aster Fab, we are the architects of the climate industrial revolution, partnering with emission-intensive industries to transform them into the engines of a sustainable future.

Defining the Decarbonization Battlegrounds

Carbon-Intensive: Sectors that generate high levels of CO₂ emissions, typically from the use of fossil fuels in their production processes. These sectors are a major contributor to climate change and a key focus of decarbonization efforts.

Emission-Intensive: Sectors that generate high levels of greenhouse gas (GHG) emissions, including not just carbon dioxide (CO₂) but also other potent gases like methane (CH₄) and nitrous oxide (N₂O). This extends beyond carbon-intensive, as sectors like agriculture can also be emission-intensive due to methane emissions from livestock and nitrous oxide emissions from fertilized fields.

Energy-Intensive: Sectors that consume large amounts of energy, regardless of the source of that energy. This can include both carbon-intensive and low-carbon energy sources. Reducing energy consumption through efficiency improvements is an important strategy, but these sectors must also transition to low-carbon energy sources, such as renewable electricity, hydrogen, or biofuels, to achieve deep decarbonization.

Hard-to-Abate: Sectors where achieving deep emissions reductions is particularly challenging due to technical limitations or a lack of viable alternatives. This typically includes carbon-intensive and energy-intensive industries like steel, cement, chemicals, aviation, and shipping, where alternatives to fossil fuels are limited or costly.

Quantifiying the Emissions Challenge

Figure 1 – Global Emissions by Sector

According to data from Rhodium Group’s 2021 net GHG emissions report:

• Industry accounts for 29% of global emissions, driven by industrial processes and the use of fossil fuels as feedstocks and energy sources. Manufacturing processes such as cement production, steel manufacturing, and chemical production emit substantial amounts of CO2 due to high-temperature processes and chemical reactions. Cement production alone accounts for around 5% of global CO2 emissions, making it one of the most carbon-intensive industrial processes. Decarbonizing manufacturing processes entails an important need for energy efficiency through industrial electrification (electrifying process heat and high-temperature processes), adopting low-carbon fuels, low-carbon feedstocks and energy sources (hydrogen, biofuels, bio-based feedstocks) as well as developing CCUS.

• Electricity generation is also responsible for 29% of emissions, primarily due to the heavy reliance on coal and natural gas for power generation. This sector encompasses various activities, including power generation and use. Countries heavily reliant on coal, such as China, the United States, and India, face a significant challenge in balancing energy demands with environmental imperatives. Coal combustion alone contributes a significant portion of CO2 emissions, with coal-fired power plants being major contributors. The aim is to transition away from coal-fired generation and fossil fuels by increasing the adoption of renewable energy sources like solar, wind, and hydroelectric power. To do so we must enhance the flexibility and interconnectivity of the grid.

• Agriculture represents 20% of global emissions, largely from methane emissions produced by livestock and nitrous oxide emissions from crop fertilization. Moreover, the use of synthetic fertilizers in agriculture leads to the release of nitrous oxide emissions, a potent greenhouse gaz. Sustainable agricultural practices, such as precision farming, agroforestry, and improved livestock management, offer opportunities to mitigate emissions and enhance resilience to climate change.

• Transport accounts for 15% of emissions, primarily due to the use of fossil fuels in road, aviation, and maritime transport. In addition to CO2 emissions, transportation also produces other greenhouse gases such as nitrous oxide and methane, contributing largely to climate change. Electric vehicles offer a promising solution to reducing emissions from the transportation sector, with estimates suggesting they could reduce CO2 emissions by up to 50% compared to internal combustion engine vehicles. However, challenges such as the need for widespread charging infrastructure, range anxiety, and consumer behavior pose significant barriers to their widespread adoption. Furthermore, the aviation and maritime sectors present large challenges, making the top priority to develop low-carbon alternatives for long-distance travel and freight transportation. We need to accelerate the adoption of electric vehicles and to develop viable low-carbon alternatives by investing in R&D for SAF, green hydrogen, ammonia and methanol.

• Buildings account for 7% of total emissions, mainly from energy use for heating, cooling, and appliances, as well as emissions from construction materials. Moreover, as urbanization accelerates and populations grow, the demand for new buildings and infrastructure rises, placing further pressure on this industry to reduce its environmental impact. Sustainable building practices, such as energy-efficient design, use of renewable materials, and adoption of green building standards, offer pathways to mitigate emissions from the building sector. However, challenges such as retrofitting existing buildings and addressing the lifecycle emissions of construction materials remain key areas for improvement in the industry’s efforts to combat climate change

The Most Polluting Industries are the Hardest to Decarbonize

The most polluting industries are often the hardest to decarbonize due to inherent process emissions from chemical reactions, high-temperature heat requirements above 1000°C that are difficult to electrify, long-lived capital assets with recent investments locking in emissions for decades, or being trade-exposed commodities where transitioning alone could make them uncompetitive globally. Overcoming these barriers will require technological breakthroughs, supportive policies, and demand shifts to create viable pathways for deep emissions cuts in sectors like steel, cement, chemicals, and other energy-intensive industrial processes.

Unlocking Solutions Through Collaboration

The emission-intensive industries highlighted in this article represent some of the toughest challenges in the quest for sustainability. Unlocking solutions will require a concerted, collaborative effort from governments, industries, investors, and society. Innovative technologies, disruptive business models, and shared purpose will be essential in navigating this labyrinth. As we tackle the toughest emitters, we can expect to see the emergence of a new sustainable infrastructure, read more here.

In the vast landscape of innovation lies a pivotal point where groundbreaking concepts collide with the formidable challenge of commercialization. This nexus, often termed the “first-of-a-kind (FOAK) puzzle,” presents a unique set of hurdles, especially in industries dedicated to combatting climate change. This article delves into the complexities of navigating this puzzle, with a specific focus on climate technology and the capital expenditure (CAPEX) demands it entails.

Defining FOAK

Figure 1 – The financing structure of a FOAK

FOAK projects are those pioneering endeavors that herald the debut of a new technology, business model, or production process at a commercial scale. These ventures hold immense promise for advancing climate change solutions while offering substantial opportunities for exponential growth if successful. However, the novelty and capital intensity of FOAK projects erect significant barriers, creating what is often referred to as the “first-of-a-kind valley of death.”

Indeed, the journey from prototype to full-scale commercial deployment involves traversing various stages, including lab pilots, pilot plants, and commercial-scale demonstrations. At each phase, startups encounter escalating capital requirements, coupled with escalating risks.

The Chicken and Egg Problem

Innovative projects, particularly those considered “First-of-a-Kind” (FOAK), face a significant funding challenge known as the “chicken and egg problem.” This conundrum arises from the reluctance of traditional funding sources such as venture capital (VC), private equity (PE)/infrastructure finance, and debt lenders to invest in FOAK initiatives. The inherent risk and capital-intensive nature of such projects make them unappealing to these investors, who prefer more established ventures with proven track records. Consequently, there exists a pronounced funding gap, especially during the mid-stage of development, where FOAK projects require substantial financial support to progress.

Furthermore, even corporations, which might be proactive in entering offtake agreements with FOAK projects, encounter their own set of challenges. They often lack sufficient risk-bearing capital and are burdened by slow decision-making processes.

While public grants could potentially fill this funding void, they typically come with limitations. These grants are often too small in scale or contingent upon securing additional funding from other sources mentioned above. This creates a circular dependency, exacerbating the chicken and egg situation – FOAK projects need funding to progress, yet traditional investors are hesitant to invest without proof of viability, perpetuating a cycle of financial uncertainty and stagnation.

Solving the Equation

From the founders’ perspective, ensuring successful project and infrastructure financing requires a comprehensive understanding of investor needs. This entails familiarity with various financing methods, including grants, debt, and equity. Such expertise can be cultivated through the guidance of a proficient CFO or by seeking advice from external advisors. Moreover, establishing technical proof-points is paramount. This necessitates demonstrating the technology’s viability with a Technology Readiness Level (TRL) of 6 or 7, often achieved through the operation of fully functional demo plants or through strategic partnerships. Finally, granular planning and meticulous documentation are essential for satisfying project financiers and debt providers. This involves providing comprehensive details of the business model, market projections, patents, regulatory approvals, contracts, and contingency plans.

From a financial players’ perspective, it is imperative to involve more engineers in the investment evaluation process, particularly for technologies that have yet to attain full commercial scale. This ensures a thorough assessment of the technical potential of solutions and helps in making informed investment decisions. Furthermore, fostering strong multi-stakeholder alliances among founders, venture capitalists (VCs), private equity (PE) firms, infrastructure investors, corporates, banks, foundations, government entities, and universities is essential. These alliances facilitate risk mitigation and expedite the development of First-of-a-Kind (FOAK) plants.

 Figure 2 – Illustration of FOAK deals

In summary, tackling the FOAK puzzle offers both significant hurdles and unique chances for progress, especially in fighting climate change. Startups can overcome these challenges by adopting a comprehensive financing strategy, tapping into various funding sources, and forming strategic alliances. In essence, solving the FOAK puzzle requires not only financial ingenuity but also strategic foresight, collaboration, and perseverance—a journey essential for realizing the transformative potential of climate technology and capex-intensive ventures.