The start-up that promises ‘guilt-free flying’

Greetings from Los Angeles, where I arrived to attend the Milken conference. A hot topic of discussion at this year’s event is the state of artificial intelligence and the tremendous progress OpenAI has made with the ChatGPT tool. This is creating heated speculation about the battles between Microsoft and Google – not to mention Amazon and Facebook – for market share in the AI ​​sphere.

However, these issues are also causing discussion in the world of sustainability for two distinct reasons. One is that entrepreneurs are developing AI tools to help investors monitor ESG-related risks (a topic Moral Money will write about later this week). Second, some investors question whether they should consider tech companies’ attitudes toward AI when deciding whether or not to include them in ESG baskets. Nicolai Tangen, head of Norwegian sovereign wealth fund, ESG leader, kicked off late last week when he revealed that the fund will set guidelines for “ethical” AI for the more than 9,000 companies it invests in. Few of the other major asset managers at Milken have commented on this yet. But there is growing pressure for them to follow suit.

Meanwhile, in today’s newsletter we explore two more new innovations: the battle to develop guilt-free flight on sustainable jet fuel and a heated debate over the ethics of developing techniques to resurrect long-dead species like the woolly mammoth. The latter (like AI) may not be a classic area of ​​ESG; but it shows how the concept of “ethical” business and finance is changing, with the acceleration of innovation. As always, let us know what you think about mammoths, robots, planes, or whatever. (Gillian Tett)

As pressure mounts to meet global net zero goals, carbon markets are in the spotlight. Approaches range from cap-and-trade compliance schemes to voluntary carbon markets and domestic carbon prices. Meanwhile, some argue that to reduce emissions at a sufficient scale and rate, carbon taxes are essential. The next FT Moral Money forum report will explore options and examine opportunities. And we want to hear from you. Are you in favor of carbon taxes? Can voluntary markets overcome quality problems? Will compliance markets do more to push businesses to decarbonise? Share your thoughts Here.

Fasten your seat belts for hydrogen-powered aircraft

For decades, it seemed the prospects for hydrogen flight had crashed and burned along with the Hindenburg, the German airship that met a fiery end in 1937.

But through investments in start-up ZeroAvia, companies from Amazon to Shell are betting that hydrogen can once again be at the forefront of global aviation.

“This is the start of guilt-free flying, if you will,” ZeroAvia founder Val Miftakhov told me, standing in a hangar in the English Cotswolds.

A physicist trained in Russia and then at Princeton University, Miftakhov went on to work at McKinsey and Google before founding eMotorWerks, which created one of the world’s largest electric vehicle charging networks. After selling that company to Italy’s Enel in 2017, Miftakhov turned his attention to aviation.

As the auto industry was embarking on a major shift away from fossil fuels, Miftakhov, an amateur pilot, was struck by how nothing like this seemed to be in sight for airplanes, which produce about 3% of global carbon emissions.

He soon set his sights on hydrogen fuel cells. The batteries are too heavy for all but the shortest flights. And greener forms of combustion — whether of “sustainable aviation fuel” made using captured carbon, or pure hydrogen — would still produce the contrail exhaust that accounts for a big chunk of aviation’s global warming effect.

His team has made rapid progress on the fuel cell, which combines hydrogen with oxygen to create electricity that then powers an engine. Test flights of a six-seat plane powered by a combination of hydrogen fuel cells and batteries began in 2019, though they suffered a setback in 2021 when a test pilot was forced to crash land. after the electricity outage.

Since January they have been carrying out a test flight of a 20-seat aircraft with an engine powered by a hydrogen fuel cell. For now, the other is a conventional gasoline-powered one, but Miftakhov says the company is on track to have a fully hydrogen-powered system for 20-seat aircraft on the market in 2025. After that they want an engine for a 70-seat in sale in 2027, with one for regional jets – which can carry up to 100 people – to follow in 2029.

All of this will require clearance from regulators, first and foremost in the UK, where ZeroAvia has set up its test center near the Cotswolds Airport in Gloucestershire, lured by a first taste of financial support from the UK government. Once given the regulatory green light, sales will follow quickly, Miftakhov hopes, citing interest from American, United, Alaska airlines and IAG parent company British Airways, all of which have invested in ZeroAvia.

The ambitious road map of ZeroAvia reflects an increasingly competitive landscape. In March, California-based Universal Hydrogen conducted a test flight in a 40-seat plane with one of its engines powered by a fuel cell. In the meantime (as we have highlighted in a recent edition), many airlines — and aviation regulators — are putting sustainable aviation fuel at the heart of their decarbonization strategy.

But Miftakhov says it’s only a matter of time before the entire aviation industry switches to hydrogen. Coupled with its higher environmental footprint, he argues, it will offer significantly lower costs, such as the “green hydrogen” ecosystem, which produces hydrogen with abundant renewable electricity, mushrooms.

“For heavy-duty applications, hydrogen is the best way to package renewable energy,” he said. “You can fly on electricity, you just need to use the right medium to charge electricity on board the aircraft, and hydrogen is the best way to do that.” (Simon Mundy)

The green investment case for resurrecting mammoths

Why are some environmentally conscious investors taking an interest in the long-extinct woolly mammoth? Ben Lamm, co-founder and chief executive officer of Colossal Biosciences, told me his company was on track to have the first genetically engineered mammoth cubs by 2028, with the help of a major funding round that has gave the start-up a 10-digit dollar valuation.

Founded in 2019 by Lamm — a serial tech entrepreneur — and Harvard Medical School genetics professor George Church, Colossal Biosciences aims to recreate new versions of long-extinct species like the woolly mammoth, dodo and Tasmanian tiger.

The company will do this using cutting-edge technologies in genetic engineering such as Crispr, a genome-editing tool that can be used to make changes to DNA at specific points. The technology will be used to alter the genome of the Asian elephant, the closest living relative of the mammoth, which shares 99.6% of its DNA. By modifying a relatively small number of genes, the team hopes they can create an animal with all the key features of the extinct mammoth.

To understand why scientists are embarking on such a project, we need to look towards the Arctic. Melting permafrost in the Arctic has been found to be a major emitter of greenhouse gases. A study by a Northern Arizona University researcher has found that melting Arctic permafrost could release emissions equivalent to that of a large industrial nation.

This is where the mammoth comes into play. These huge animals weighing up to 8 tons are believed to be part of the solution to melting permafrost; as mammoths and other huge creatures trample the ground, they compact the snow on the surface, helping to cool the ground below.

Indeed, studies conducted in Siberia’s Pleistocene Park — which Colossal Biosciences had worked closely with before the war in Ukraine — found that reintroducing animals managed to cool ground temperatures by up to eight degrees, according to Lamm.

That said, there is still a long way to go. “Even if we have calves in 2028, it will take some time before they are ready to be released back into the wild,” Lamm says. “Any rewilding project, whether it’s an extinct species or a species that we’ve eradicated from an environment like we did with wolves in Yellowstone National Park here in the United States, needs to be approached carefully.”

While the company currently works primarily in Alaska, “our goal is to work with all nations in the Arctic Circle to ensure we reintroduce [the mammoths] over time,” Lamm said.

As of its latest round of fundraising in January, Colossal Biosciences has raised a total of $230 million and has a valuation of $1.45 billion, according to data from PitchBook.

The growing interest in Colossal Biosciences shows that investors are increasingly looking for out-of-the-box climate solutions. Its investors include At One Ventures, a venture capital firm investing in technologies that are regenerative for the planet, as well as Climate Capital, an early-stage technology venture capital firm focusing on companies working to decarbonise the world. global economy.

While there is certainly a lot of hype around the extinction society, there are also many skeptics who warn of the risks it presents. Some even accuse the company of playing God.

“I think we play God every day,” Lamm said. He argues that it would be “unethical not to develop these technologies”, adding that “it is important for us to take advantage of the tools and technologies we have to undo some of the sins of the past or to better help the planet. I think this is our ethical and moral responsibility”. (Kaori Yoshida, Nikkei)

Smart reading

The regulatory web is closing in around companies that have treated climate pledges as an exercise in brand polishing on the cheap, warns Richard Black of the Energy and Climate Intelligence unit.