A Backbone for the Circular Economy, Kore Infrastructure Turns Trash Into Treasure

By May 19, 2022 10   min read  (1747 words)

May 19, 2022 |

Fuel Cells Works, A Backbone for the Circular Economy, Kore Infrastructure Turns Trash Into Treasure

“One man’s trash is another’s treasure” is the old saying, and in nature this is absolutely true.

In a natural system, waste takes care of itself. An animal or plant dies in the forest, and within a short time, every gram of its body and all of the sugars and fats containing stored energy is transferred to other plants and animals.

Modern cities do not operate on this model, however. Stuff gets thrown out (wrapped in congealed fossil fuel bags man and set out at the curb in congealed fossil fuel boxes) then gets transported to a centralized dumping spot (Not In My Back Yard!), where it slowly decomposes, sending plumes of methane into the atmosphere (which is already overly crowded with other greenhouse gases) and often leaching dangerous chemicals into the soil.

According to the EPA, each year, we toss out about 300 million tons of waste. To put this in context, that is the equivalent of throwing away 27,000 Eiffel Towers every year – nearly 5 pounds per person per day! About a third of that waste gets recycled or composted, but that still means that 18,000 Eiffel Towers worth of trash is landfilled, and all the energy contained within that trash is left to seep out into the environment over time.

Clearly, this model of waste disposal – implicitly based on the centralization and specialization paradigm of the Industrial Revolution – has problems.

Even after netting out recycled and composted waste, globally, humans throw away the equivalent of … [+] GETTY IMAGES

Considering this background, you can see why I was so excited to learn about a company in southern California called Kore Infrastructure that is turning the present, unworkable model for waste disposal on its head.

Kore* has created a capital-lite modular system that extracts usable energy from waste in the form of biogas that can be converted into hydrogen (which Kore calls UltraGreen Hydrogen) or renewable natural gas (RNG.) Hydrogen can be used in industrial processes like steel and cement manufacturing and in fuel cell electric cars, trucks, buses, and trains.

One of the most amazing features of the Kore system is that it is completely self-contained. After its initial start-up, ongoing operations of the Kore facility are powered entirely by a small portion of the energy it extracts from the waste being fed to it. Other than the energy the system produces, Kore’s only biproduct is something called “biochar,” a stable lattice of carbon atoms that can be used as a soil amendment in agriculture or which could be used in place of coal in an iron smelter or other installation that needs industrial heat.

Fuel Cells Works, A Backbone for the Circular Economy, Kore Infrastructure Turns Trash Into Treasure

Biochar is extremely porous, so when applied as a soil amendment in agricultural settings, effectively holds water and nutrients, thus reducing runoff and increasing drought resistance of crops. It is rich in carbon and can sequester carbon in soils for thousands of years. It can also be burned as a cleaner alternative to coal for manufacturing steel. WIKIPEDIA.ORG

In other words, Kore has developed a truly circular economy solution for waste disposal that operates in a way much closer to that in nature – every gram in the materials fed into Kore’s facility is productively used and every joule of energy stored within its feedstock does some productive work.

The secret behind Kore’s technology is a process known as pyrolysis. Pyrolysis involves superheating a substance in an environment devoid of oxygen. Without oxygen, the material does not burn; rather it breaks down into its chemical components.**

When organic materials are pyrolyzed, the chemical breakdown yields energy-rich gases such as hydrogen and methane and the carbon-containing “backbone” of the material, which is the biochar.

Because Kore uses pyrolysis to do its work, a Kore facility produces no smoke or other off-gases. Its cleanliness is truly spectacular – so much so that it was able to site its first full-scale facility on a SoCalGas site just blocks from downtown Los Angeles – a city with notoriously strict air quality regulations. (Kore’s Instagram feed has a nice video with drone footage of the completely non-emitting LA plant.)

Fuel Cells Works, A Backbone for the Circular Economy, Kore Infrastructure Turns Trash Into Treasure

Kore Infrastructure’s Los Angeles plant with the skyline of the City of Angels in the background. Notice that Kore’s facility abuts a Waste Management collection facility. KOREINFRASTRUCTURE.COM

Some of you old-timers who remember the heady days of Green Tech in the mid-aughts might be suffering from a bit of PTSD right now. Back in the day, a Vinod Khosla-supported start-up called KiOR raised a lot of money, made a lot of promises about a “catalytic pyrolysis” process that would transform biowaste into liquid fuel, went public, then almost immediately imploded.

Knowing the KiOR story and not having a very well-refined sense of social niceties, I asked Kore’s founder and CEO, Cornelius Shields, if he thought I was born yesterday.

Shields told me that he and his team learned a lot from the KiOR debacle, and that one of the main strategic lessons was not to rush a half-baked technology to market. Kore was founded in 2008 and has operated in stealth mode for the last 14 years. In contrast, KiOR was founded in 2007 and IPOd only four and a half years later.

Whereas KiOR was experimenting with the composition of its catalyst (a key component of KiOR’s system that Kore’s pyrolytic process does not use) even as its CEO was ringing the exchange bell, over the last decade and a half, Team Kore put in tens of thousands of man-hours experimenting with different versions of its facility design, negotiating with and considering the concerns of regulators, and lining up powerful commercial partners.

The end result of all Kore’s hard work is a modular system that is safe, self-sufficient, easy to service and repair and which produces carbon-negative fuels and value additive biochar. The plant in Los Angeles has a daily capacity of 24 tons of construction wood waste, deadwood, and agricultural detritus, and will produce 1,000 kg of hydrogen (at a very low price point of around $2 / kg) or 10 million BTU of renewable biogas, and 6 tons of solid carbon char every day.

Shields told me that the company has gone through many iterations of the basic design and learned a great deal with every iteration. Key components are built on skids that can be pulled out to make servicing the parts easier, the hopper can be modified to accept different feedstocks, each component is equipped with monitors to quickly inform an operator of current status, and the entire facility can be sited on an acre or less of ground.

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The Kore facility in Los Angeles has a daily capacity of 24 tons of construction wood waste, deadwood, and agricultural detritus, and will produce 1,000 kg of hydrogen (at a very low price point of around $2 / kg) or 10 million BTU of renewable biogas, and 6 tons of solid carbon char every day. KOREINFRASTRUCTURE.COM

The upside of all this design and redesign work is that the Kore system works great. The downside is that working 14 years to build the first commercial version of its product is diametrically opposed to the Candy Crush Economy model favored by the VC community of building products and rolling them out quickly.

Hard asset investing is not something that comes easily to VCs, many of whom have made their fortunes in the world of software, where a new prototype can be pounded out in a long weekend fueled by pizza and Adderall.

Private equity investors, on the other hand, are generally good at hard asset investing. The problem is that innovation is not something with which they typically feel comfortable. PE folks are the ones who make a living analyzing hard asset businesses with long operating histories and relatively predictable cash flow profiles then figuring out how to structure transactions that will pay off for themselves and their investors.

Show a private equity person a hard asset business with no operating history and a wide range of possible future cash flow scenarios and they’ll look at you as a Labrador Retriever might if commanded to solve a calculus problem.

In the end, Shields, a serial entrepreneur and private investor, has spent a great deal of his own fortune on the development of Kore, and he believes that strategic investors (i.e., corporations whose own businesses might benefit from a given start-up’s innovation) are really the most suitable partner for a business like his.

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Team Kore. Founder and CEO, Cornelius Shields, is fourth from the right in the front row. KOREINFRASTRUCTURE.COM

While Kore’s technology is cool and its grit impressive, the thing I was most cheered by when talking with Shields was the fact that Kore facilities enable a more distributed model for waste “disposal” and energy generation in a world where energy independence and resilience is increasingly critical.

Back in the early days of electrical power, a local waste disposal center would burn trash from the neighborhood, use the heat to boil water, then harness the steam to turn generators to keep those flickery Edison-era lights on.

Obviously, burning organic waste is not what we want to be doing while atmospheric CO2 levels are sitting at 415ppm and burning household trash in the middle of a city would spark the mother of all NIMBY wars.

However, conceptually, the model is very attractive. Local waste is disposed of locally. The waste disposal process is, in turn, integral in generating power for the locality. This is a model that seems well aligned to Dr. Lorenzo Kristov’s work on resilient grids and the enabling open-source innovations of Dr. Shuli Goodman’s LF Energy that I introduced in this column at the beginning of last year.

The big and obvious advantage of Kore’s technology in this sort of locally-distributed system is that greenhouse gases are not released into the atmosphere and no one goes into a NIMBY frenzy.

Shields told me that he could see Kore being adopted by large corporations to serve both as a less expensive alternative to waste disposal as well as a way to produce independent energy for their facilities. The potential for businesses to receive environmental credits also sweetens the pot!

Shields knows, as I know, that we cannot rely on yesterday’s playbook to solve the problems civilization faces today. Localized solutions for waste disposal and energy generation, circular economy models to replace linear economy ones – these are important elements for us if our society is to thrive and survive into the next century.

SOURCE: Forbes


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