Thomas Bräck - Meva Energy

00:00:01: Welcome to the Rooted in Change podcast.

00:00:05: Hey everyone, my name is Jan and you're listening to the Rooted in Change podcast.

00:00:08: This show features European King Tech Champions and their solutions to tackle the climate crisis.

00:00:13: Today's guest is Thomas, Business Development Director at MAVA Energy.

00:00:17: Reusing bad products from other industries to close the loop is a recurring theme on this podcast and something that MAVA Energy does as well.

00:00:25: They envision a fossil-free manufacturing industry where no biomass resources are wasted and no fossil emissions are created.

00:00:32: So their approach converts local biomass residues like sawdust or agricultural waste into clean energy through a process called entrained flow gasification.

00:00:44: This generates renewable gas that replaces fossil fuels for industry heat and power while also producing biochar that stores carbon.

00:00:51: We'll learn more about the tech in just a few minutes.

00:00:54: Welcome Thomas.

00:00:55: Thank you.

00:00:55: Nice to be here.

00:00:57: And I'm very happy to have you.

00:00:59: Let's start with your background.

00:01:01: Who are you as a person?

00:01:03: Tell me.

00:01:04: Okay, yeah.

00:01:05: I will start with normally described as quite positive thinking and opportunistic background from Shalma School of Entrepreneurship.

00:01:15: So I've been working with small medium sized company startups in that world.

00:01:20: And I think that has also formed formed me a bit.

00:01:25: And really want to make the world a bit better place.

00:01:31: If I see some smart ideas and combining good products with good designs and so on, that hasn't yet reached the market.

00:01:45: I think that is a pity.

00:01:46: So I always want to be there and support and help.

00:01:51: Nice.

00:01:51: I mean, that's a very good position.

00:01:53: to start us off for today because I guess an optimist and sort of the an eye for opportunities is really helpful in the sector that we are operating in as well.

00:02:07: I mean, this leads us directly into the area.

00:02:09: I mean, I try to frame the area that you're operating in, but maybe in your

00:02:14: own.

00:02:15: Thank you.

00:02:16: So in your own words, what's the what's the problem that you're tackling?

00:02:20: Maybe start slightly broader than where I try to give the intro?

00:02:24: Well,

00:02:26: I mean, we start with trying to focus on those hard to abate fossil emissions, such as fossil gas within the industry like natural gas that is used to in more places than you would actually know in the industrial world.

00:02:51: More or less everything has touched a flame as we are talking about in more or less all the materials.

00:03:01: Steel, other type of metals, ceramics, glass, paper, also even coffee that you've been roasted or bread been dried and so on or cooked in some case.

00:03:18: All of that has been in some way touched by some heat.

00:03:22: that is today a lot is still fossa, unfortunately, and it's hard to get to that because in more or less all of these applications you have really high requirements on that heat generated.

00:03:38: It is especially when you have the heat coming in direct contact with the product, such as when you dry a tissue paper, for instance, then you need to have the heat coming in direct contact with the tissue paper and you cannot allow any particles, soot or smell or so on the tissue paper.

00:04:01: And still most of these companies or industries, I would say, is mature industries where you have really focus on productivity and you really want to make sure that you have the best cost efficiency and high quality requirements.

00:04:24: means that combination is that's not really easy to go for any renewable alternatives.

00:04:32: That's why so many have been sticking to fossil natural gas.

00:04:38: So what you're saying ultimately is You know, those processes that are being that rely on fossil gas right now, they have quite tough requirements and the alternatives that have been out there so far hasn't really met the the producers.

00:04:56: Well, requirements again, in terms of what they were looking for.

00:04:59: And ultimately, that just leads to them sticking with what they have continued burning fossil gas.

00:05:06: Is that the correct assumption?

00:05:09: Yeah.

00:05:09: Correct.

00:05:10: I mean, it's also so that we have seen a quite uncertain tutor outlook when it comes to where are Europe going in terms of energy production?

00:05:23: and what should me as an industrial player, which focus should I have?

00:05:31: What should I go for?

00:05:31: Should I go for hydrogen?

00:05:33: Should I go for electricity and biogas?

00:05:36: What should I actually have a strategy internally and to take that decision?

00:05:45: you really want to see the long-term benefits and what is the... You need

00:05:49: to be sure sort of on the roadmap.

00:05:52: Yeah and you know we want to see the roadmap also from EU and regulation point of view and so on.

00:06:01: What we can do there is like focus on local energy production from local biomass which gives a more like.

00:06:10: you can determine much more what the prices will be for the future than having a security of supply.

00:06:17: Yeah.

00:06:19: Right.

00:06:19: So and then we we've described the the problem.

00:06:23: Let's turn this to the solution instead.

00:06:25: So what is it that you guys do?

00:06:28: And maybe this this is the first question that I'd like to ask.

00:06:32: Yeah, of course, that's the interesting.

00:06:34: What's the magic?

00:06:36: Well, in this case, what we do is that we have um gasification technology.

00:06:42: so we we start with some kind of biomass solid biomass like wood residues like sawdust or furniture waste or it can also be agricultural residues like husks from wheat or oat or something like that.

00:06:59: um.

00:07:00: and then we gasify that meaning we expose it to to heat um and some oxygen And due to that, we only give it some oxygen.

00:07:10: We will not have a full combustion.

00:07:12: Instead, we will transfer that into a gas, which then we can control the combustion in the next step.

00:07:20: And our whole idea is to produce this gas on site.

00:07:25: So for instance, just next to a manufacturing company, who today have burners who combust natural gas.

00:07:35: then be able to keep their whole system or less and then just change the burners to a multi-fuel burner so they can use both existing gas as well as our renewable gas.

00:07:49: But so it's ultimately sort of a hybrid approach there that they can switch the supply on there and as well, which probably makes it which addresses one main concern that they would have, right?

00:07:59: Because they didn't want to have any downtime in terms of supply.

00:08:02: And I guess natural gas is widely available.

00:08:04: So that's going to be abundant for them.

00:08:07: Whereas I guess the renewable solution always comes with, you know, are the supply chains strong enough and so on and so on.

00:08:14: So for them, sort of following that hybrid approach means it's a relatively easy switch to the target to decarbonize.

00:08:23: Yeah, you're completely correct.

00:08:25: Because having full redundancy, that's what it's about, especially that we are producing the gas on site.

00:08:34: I mean, we would need to have some planned maintenance and something can happen as well.

00:08:39: So for our production, so of course, we cannot stop a steel mill or a paper mill or something like that due to some hiccup on our side.

00:08:51: So that's why it's also important to have this redundancy.

00:08:56: Okay, gotcha.

00:08:57: And also like being able to produce it on site, that means that we don't need to upgrade the gas and by that we can really have a cost efficient solution and be competitive also on that side.

00:09:11: Right, which is equally important, right?

00:09:13: It's sort of not just the redundancy part but then I guess equally if not the most important part is the price that you're able to compare or that you're able to compete with the natural gas prices there.

00:09:27: Yeah I mean I've learned a new word and that's the the energy trilemma where you combined the the issue of having sustainable energy having affordable energy and having a security of supply and and those three is what we actually meet here.

00:09:51: Great.

00:09:51: And then if we turn slightly back, what was the initial spark for the company?

00:10:00: Because we described the problem now in the solution, but what was the story to get to that point?

00:10:07: where you are now?

00:10:08: Yeah, it has been quite a journey for me, because we started back in two thousand and

00:10:15: eight.

00:10:15: Right, so quite some time already.

00:10:17: Yeah, it is.

00:10:18: And it was actually a spinoff from a university in Sweden, Luleå Technical University.

00:10:25: And where the focus was on small-scale gasification and more focused on combined heating power or like district heating for smaller villages or for an industry site and do that more cost efficient.

00:10:42: So then we have taken the long road going through like prototyping, piloting, having a full-scale demo plant in Petio, where was actually a combined heat and power plant connected to the district heating grid delivering heat and power.

00:11:00: And then now having a commercial plant, one you have here in G-Synos, the earth land for a softened out of tissue mill.

00:11:11: We are now building a plant for IKEA in Poland.

00:11:16: where we will take the residues from the furniture production and turn that into power and heat back to the plant.

00:11:23: And we are also building a plant for Elkowire, which is a copper wire producer, where we will replace the fossil natural gas they use to melt the copper in their copper wire production.

00:11:40: Right, so it feels like you already have solid saw the customer demand.

00:11:45: What's sort of?

00:11:47: also maybe looking back at over the last three to five years, how would you say the market has changed there?

00:11:53: Because I guess what we've seen, you know, with Russia's invasion in Ukraine, this been a regular topic on this podcast again, especially for everyone in energy, it has changed the energy market at least quite a bit in terms of the dilemma that you described, you know, security prices and so on.

00:12:13: How would you say that?

00:12:16: has that changed in any way?

00:12:18: the uptake of your solution in the sense that customers not realized right natural gas is maybe actually as Available as they thought or as cheap as they thought.

00:12:27: so that's might have helped you in your business case.

00:12:31: Maybe just give us a bit of background how you see this and

00:12:34: definitely I think that is the.

00:12:37: it was actually a real awakening where many actors really realize what you said there as well that whoa actually natural gas is not always there either.

00:12:49: I remember us when we arranged the deal together with Elkowire from our side.

00:12:56: we didn't see that perspective as much as they did like they said.

00:13:00: that I mean being dependent on the natural gas grid and if something happens on the natural gas supply it's actually the government to decide who will get the natural gas and in that situation you might not be prioritized and then you would be out of gas.

00:13:18: so having a local supply of biomass would have a better security.

00:13:26: and looking at the broader picture I mean we have seen a transition going back from the Paris Agreement.

00:13:35: in two thousand fifteen, there was a starting to become more focused on sustainability and CO² reduction.

00:13:44: And then it has shifted along the way going from making up plans, setting up goals and getting closer to actually the goals they put up there and then realizing, okay, we need to start doing something to taking some action, getting a bit of more urgency.

00:14:02: Then the cost spikes in in two thousand twenty two shifted the focus on finding other solutions in terms of the prices.

00:14:12: And now then more on resilience.

00:14:14: is there the buzzword.

00:14:15: The

00:14:15: new buzzword.

00:14:18: And how do you see the market now?

00:14:19: I mean, from what you described earlier, it seems like you.

00:14:23: I think you described this really well in your sort of a solution description.

00:14:28: I guess you could sell to anyone.

00:14:31: using right now natural gas as a supply, they have space requirements and so on.

00:14:38: I get that too, to have your facility or I guess close to them, but sort of in the broad picture, anyone who uses fossil gas right now, they could have you instead.

00:14:50: Are there certain areas that you focus on?

00:14:52: and sort of?

00:14:52: with the whole shift to more resilience, is the market equally exciting for you, I think slower, I think faster, maybe gives a bit of insertion to how you see

00:15:02: that.

00:15:03: I mean, the sweet spot where we fit best, this customer has a demand of between four point five megawatts, which is the size we have for the plant in Chisa, up to twenty or maybe up to forty megawatts of gas.

00:15:26: Quite continuous need and could fluctuate a bit but the less fluctuation the better the better fit it is I think and that means generally more the bigger producing companies in different industries of course but quite big consumers of CO² mainly customers who are within the EU ETS system, the emission trading scheme, who are affected by that.

00:15:59: I think those are the ones that fits like our solution best.

00:16:07: Yeah, good job.

00:16:09: And sort of then turning this once more around, because you mentioned the benefits of your technology, ultimately, you know, it's renewable, so you have no Additional emissions.

00:16:23: you're closing the loop out of a training a a waste product by product into into gas and that gas is then being burned in instead of the fossil gas.

00:16:34: so you know great in terms of an emissions standpoint.

00:16:38: Cost efficient and you know resilient supply chain because the waste is already.

00:16:43: so you take all those boxes.

00:16:46: How is that sentiment been in the market?

00:16:49: have people understood your use piece.

00:16:52: instantly or is that something that you need to explain a lot?

00:16:55: How does that work?

00:16:57: Yeah, good question.

00:16:58: I think one of the main things that we need to educate the customers about is what the benchmarking figures.

00:17:11: I mean, when you look at this and you say, okay, today we are consuming natural gas and they say it costs thirty to forty euros per megawatt hour.

00:17:24: And that's what they have in mind, but it's actually not the full cost of the natural gas.

00:17:32: So what we like to steer the focus is rather on the cost of combustion.

00:17:38: So you have not only the natural gas, then you also pay for grid cost and balancing cost to have it at your site.

00:17:46: And then you have NAD tax as well as the CO-II taxes.

00:17:49: So the full cost of combustion is rather seventy or maybe up to eighty euros per megawatt hour.

00:17:58: And that's a big difference in the benchmarking.

00:18:02: More than double almost, right?

00:18:04: Compared to...

00:18:06: correctly and also looking at the future.

00:18:08: I mean, the spot price for the gas has been quite stable now for a bit of a time, but what is it to foresee in the future, and especially the part coming from the CO₂ cost.

00:18:22: What we see there is that all analysts for the future say the cost of CO₂ will increase.

00:18:28: So the most analysts actually converge in in the twenty-thirty more or less in their futures.

00:18:36: outlook is the.

00:18:38: the e-vts cost for the co-two would be around one hundred and forty five euros per mega euros per ton co-two.

00:18:47: And that's the more or less More than double where it is today.

00:18:51: So of course that part will actually affect the the cost of the alternative

00:18:55: dramatically.

00:18:56: Yeah, and I think it goes back to what you said before right just to think about the The right framework conditions and the right you know, planning horizon to make investment decisions because obviously your customers will invest into your technology, take some time to build it and have it operation and all.

00:19:15: But making a smart move now can actually save you a lot of money further down the road.

00:19:21: I think it's sort of that notion that having that holistic view of it's not just, you know, in twenty twenty five, twenty twenty six, you need to do this or that.

00:19:31: It's rather a long term perspective of where will our business be.

00:19:36: How do we future-proof energy supply that is crucial for our production processes?

00:19:41: Yeah, correct.

00:19:45: Most decisions are based on old systems where you only look at costs.

00:19:52: And you don't always take into account the benefits that you will gain.

00:19:58: I mean, shifting to a more sustainable solution.

00:20:04: can also open up new businesses, it can lead to more sales, lead to higher price and so on.

00:20:11: And usually customers have a hard time to include that potential in the benchmark, so to say.

00:20:20: So really being able to put a value on that would make the choice to go for something renewable much easier as well.

00:20:28: I mean we've seen Like taking ElkWire as an example, the copper producer, we will set up a plan to get it next to.

00:20:37: They are already branding low carbon copper, and they see a value out of low carbon copper.

00:20:48: They can actually have a position towards the customers and sell more due to that.

00:20:53: they have the lowest CO² copper production.

00:20:58: And we see that for other industries as well.

00:21:01: So it's a matter of grabbing that potential.

00:21:05: Yeah, grasping the opportunity there.

00:21:06: Yeah,

00:21:07: right.

00:21:08: And I think it also brings us back to what you described before, that in the industrial heat space, decarbonization or some would say electrification has been really difficult.

00:21:24: And I think, you know, there's this two routes.

00:21:26: So either sort of electrification was one possible route and has its advantages and disadvantages, just depending on where you are, location and so on.

00:21:36: And then I think a very straightforward route for most of your customers will be to say, look, you don't need to change your production process at all.

00:21:46: It's actually bringing in something that you like, which is redundancy.

00:21:49: So if one of your two supply chains fail, there's always going to be the other one.

00:21:54: But it will have a significant impact on your emissions because the gas that you will be burning will be renewable and therefore have no footprint.

00:22:05: And I think that's a very good and holistic and smart way to go about it.

00:22:16: We looked a lot at sort of where you are now, technology and so on.

00:22:20: Let's look ahead.

00:22:22: So if you were to give me an outlook for the next three to five years, where will Miva be, where will US accompany be?

00:22:32: Yeah, I mean, we are getting into a more growth phase.

00:22:39: We have now this, like deploying these plants we have in the pipeline now, showing really the production data for the existing plant for the tissue mill, building the plants for IKEA and for Elkowire.

00:22:58: a little bit of different industries as well.

00:23:00: So it's really good references and good companies to work with there.

00:23:03: So that's the important.

00:23:06: And from there on, we also want to grow together with new customers and new projects as well.

00:23:15: In the next phase after that, we believe that to really get a good growth, we need to do that also together with partners.

00:23:25: already today have a better and bigger network within industry customers than we have.

00:23:34: That's what we want to do in the end to deploy this type of solutions, which can contribute quite significantly to decovernization.

00:23:42: Yeah, I think you're right.

00:23:43: Ultimately, it's sort of about finding the fastest and most efficient way to bring your technology to market right under.

00:23:51: I think what a lot of climate companies or climate tech companies experience is.

00:23:57: It's

00:23:59: sales cycles along.

00:24:00: you know customers are hesitant.

00:24:02: It's money that they need to put on the table for these investment decisions Especially your case.

00:24:07: I guess you're it's cupcakes investments.

00:24:10: I don't know if you know?

00:24:13: No, is it optics now?

00:24:15: Yeah, but what we have seen now is that one of the I mean just as you're talking about now that it is about reducing the barriers for the customers.

00:24:25: exactly go there and one way we have seen we can do that is to remove the the capex issue

00:24:32: exactly

00:24:33: by actually us building owning and operating the plant and delivering the end of the long term.

00:24:40: yeah and I mean that we have been able to do that due to having stock owners.

00:24:48: We have the Climate Impact Fund, Just Climate, the AXA Investment Manager to join us also quite recently.

00:24:56: And the most recent news was the support from the European Investment Bank, which these guys also enable us to continue with that business model, which makes it a little bit easier for the customers.

00:25:12: Well, which I think is a perfect example of what I was describing in it, instead of It's about finding the right approach to the market instead of then having cupics heavy investments saying, look, then we're not going to sell you the plant.

00:25:28: We're going to sell you the energy that you need.

00:25:30: So we're going to build it.

00:25:31: We're going to operate it.

00:25:32: And you're just going to pay us for the service, which is probably a lot faster for your customers and a lot less risky in terms of their decision.

00:25:45: A model.

00:25:45: so I think this is really smart and that same goes for the partner way to say like We can do everything on our own.

00:25:50: But maybe it's smart to tap into those different partner networks where someone has a lot of vertical knowledge.

00:25:56: We can tap into this and bring our technology there to market.

00:26:00: Yeah,

00:26:02: and then I mean we started with you with you personally being an optimist.

00:26:08: Maybe this is something that will take up here again towards the end of our conversation.

00:26:15: The question that I always ask to my guests is, you know, it's such a difficult industry.

00:26:22: And, you know, we talked about the war in Ukraine.

00:26:23: We talked about the general market sentiment shift to maybe more resilient supply chains and so on.

00:26:31: So it's a tough and straining market to operate in.

00:26:37: And yet you keep going.

00:26:38: Maybe this is because an optimist, but maybe there's something else.

00:26:40: So my question to you is, what is it that keeps you going and get up in the morning and give it your all again?

00:26:48: Yeah, that's a good question.

00:26:50: Well, I would say that in the end, it's about that.

00:26:54: we know that we are doing good things that can make an impact.

00:27:00: And that in combination of having a really good team that can deliver this and that together with of course your own family that give you the comfort that you are on the right track.

00:27:20: I would say that will be the things that really get you up in the morning and let's do this now.

00:27:28: Well, fingers crossed, I feel like you are on the right track, so fingers crossed that we'll see more of your plans across Europe and globally soon.

00:27:38: I'm excited to follow your progress.

00:27:40: I think it's a smart way to decarbonize these very hard to pay admissions that you mentioned in the beginning of our conversation.

00:27:47: They do make a lot of impact and I think it's one of those areas that's slightly hidden from our day-to-day lives.

00:27:56: When I have guests like you on this show, it's a lot easier to talk.

00:28:01: about UVs because we use them in our daily lives.

00:28:03: or if you were to think about, I don't know, plexiglass food, something that we consume on a daily basis, that's more relatable for the general public.

00:28:13: But as you rightfully pointed out, most products that we use are touched by a flame, somehow in the production process.

00:28:21: And that flame right now is most of the time is powered by natural gas.

00:28:24: And if we can change that, I think that's a really strong.

00:28:28: a mission to follow and to work on every day.

00:28:31: So thank you so much for your time today, Thomas.

00:28:33: Lovely to have you on the show.

00:28:34: Thank you so much for all your insights.

00:28:37: Again, I'm looking forward to seeing you succeed and seeing you grow.

00:28:41: Thank you.