125 Jim Mann, using biochar and enhanced weathering to super charge the carbon potential of ecosystem regeneration

 Jim Mann, founder of The Future Forest Company, joins us to talk about the wonders of enhanced weathering co-deployed with biochar and why this experiment deserves billions of dollars of investment.
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What is the role of profit in scaling regeneration? How do we sell credits for biochar? What is enhanced weathering and why does it matter? How can we deploy billions in restoring ecosystems, increasing biodiversity, and storing a lot of carbon permanently? Listen to the experience of The Future Forest Company.

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Transcript

SPEAKER_01 0:00

How can we deploy billions in restoring ecosystems, increasing biodiversity and storing a lot of carbon permanently? Reforestation, agroforestry, biochar and enhanced weathering might do the trick. And it all starts in Scotland. Welcome to another episode of investors, big and small, and consumers start paying much more attention to the dirt slash soil underneath our feet. In March last year, we launched our membership community to make it easy for fans to support our work. And so many of you have joined as a member. We've launched different types of benefits, exclusive content, Q&A webinars with former guests, ask me anything sessions, plus so much more to come in the future. For more information on the different tiers, benefits and how to become a member, check gumroad.com slash investing region egg or find the link below. Thank you. So welcome to another episode today with the founder of the Future Forest Company, Jim Mann. Welcome, Jim. Hi, how are you doing? I'm very well. And I am very excited for this interview. I think we've been in touch for many, many months. I mean, a lot of things happened in our personal lives that led to a slower than usual, probably recording of this. I'm very excited for this. We're at the end of June 2021. And I'm very excited for this recording. But I want to start a bit with your background story. Why did you end up building the Future Forest Company? Or why did you end up building a forest company focusing on soil focus on regeneration? Because it's not what where let's say you spend most of your working life?

SPEAKER_00 1:58

No, but it does take me back to my roots. So originally, well, I grew up on a dairy farm in the north of England. Then I went to study ecology at university and that's kind of where I went off track, I guess. I set up my first business to pay. How does that

SPEAKER_01 2:13

always happen? Like I've heard that story many times. I grew up on a farm where I was a lot in nature. I went studying something very connected to that and then it didn't, like I didn't. Didn't happen. There are not enough jobs. What's the point there?

SPEAKER_00 2:24

Well, there weren't then and mean I guess it's probably fortunate because the jobs then were testing water for water boards you know ecologists didn't really you know a very small cohort there were I think 19 people who specialized in ecology at my university or in my year and there weren't great job prospects for it I doubt if more than two of them have actually ended up as ecologists back then probably in this case better I

SPEAKER_01 2:48

would say in your case definitely better

SPEAKER_00 2:50

it's given me a different background that I can then apply I think so yeah I think it was probably future But I then set up my first business to pay my way through university. And that led me down a business track rather than using the ecology. So I have an ecology degree that I hadn't used for many years, 15, 20 years. I knew about climate change quite early on. So I was well educated in what was happening. But I was also confident that governments would sort that because that's really government's job. And as you watch that over 15 years and see that nothing is happening, then you start to think that maybe actually there's other ways to do it. And that's where I ended up five years ago with a good income, not needing to actually go to work for that income so that I could sort of spend time unpaid, really figuring out what I wanted to be doing and combining. At the time, the ecology back with scaling to tackle climate change, so planting deciduous forest profitably was what I decided that I thought the world needed.

SPEAKER_01 3:54

And

SPEAKER_00 3:54

just

SPEAKER_01 3:54

to unpack that a bit, You said I've looked at basically governments not taking action over 15 and over 20 years. That's a slow process. Do you remember, like you can get very annoyed by that and then not take action because it's so slow. It's like basically seeing, seeing erosion happen. Like you see it happening over time, but it's not something that's in your face every day, except when there's COP 21 or COP 20 or whatever. Was there a specific moment that you said, again, now I have to do something or was it that moment where you arrived? Okay. Now I have the space because I have the resources to, to unpaid look at that. Or was it a combination of the two or just a gradual process? I'm always interested in these moments. Like, did you see at some point a speech that politician and you thought okay he or she is really not taking probably he really not taking it seriously let's go and do something or was it a gradual process that led you into this

SPEAKER_00 4:43

very much gradual and there's no light bulb moment i'm afraid and more just you recognize it's happening and i think park that and decide that you know it's okay because it'll get worse and then someone will take action and things get worse and no one takes action and and things progressively then get worse again and no one takes action. And eventually you start to look at, or in my case, I started to look at the root cause of that. So why aren't these people who, who clearly know they've got the science, they've had the science for 40 years. And

SPEAKER_01 5:15

more actually, if you look like the original, I saw somebody on LinkedIn posting, I think somebody in New Zealand, like it was in 1912. So more than 109 years ago, probably burning this amount of coal is going to heat up the planet by this amount, et cetera, et cetera. So there was a a very clear greenhouse effect analysis already more than 100 years ago. So it's not that we didn't know, but yeah, we don't and still didn't do anything.

SPEAKER_00 5:40

And we're still not acting. You know, you can't take a view of what's happening today as real action. It's not at the scale that the problem demands. So we're still in that cycle of whether it's denial or inaction. But if you look at political cycles, you start to realize why they're so ill-equipped to deal with a problem of this scale. And over the time horizons, it's going to be on somebody else's watch that the real problems happen. And that means that they tend to focus on the economy or trivial things by comparison, and they're not well set up to actually take on something at this scale.

SPEAKER_01 6:18

And some would argue companies aren't either focused on, in many cases, short-term results. In many cases, the market is demanding quotes. I mean, we're sending out CEOs that are making bold claims about food and agriculture, sustainable I'm just looking at Unilever and Danone that have been pressured on certain things, and I'm sure there are others. So you, with a business background and an ecology background, obviously, decided to start a future forest company. In essence, a thing that is slow. How did that come about? Apart from the fact that it's obviously necessary, why did you choose that piece of the whole ecology spectrum that you could have chosen back then?

SPEAKER_00 6:56

Because we've actually got two big problems, which are firstly climate change. change and the way we view the world as an organization is that our number one goal is to tackle climate change, to remove CO2 from the atmosphere at scale. And secondly, we look at the biodiversity crisis and restoring ecological systems, particularly native forests, is a very good tool for that. And it could be other, you know, we talk about forests as sort of the emotional attachment people have is often with trees, but it could be any ecosystem that you're restoring to bring that biodiversity back. And thirdly, it profits it. And I explored all different models from educating sort of training people. Would it be a training center? Would it be an NGO? And putting pressure onto governments to actually get them to act. But what I felt was that there was nobody actually doing or not enough people actually doing. And I'm discovering that there are quite a lot of people actually doing now. Luckily. Yeah. And we need more of them, vastly more of them. But action was the point that seemed to be missing. Building something that could genuinely scale was a big gap in things. There were lots of people educating, lots of people training and it seemed like the default in regenerative ag was people would have a farm and then teach other people and that can have impact and it takes time for a movement like that to spread but actually having something that could be scaled and therefore could be repeatedly done felt like a bigger and more important way to tackle things.

SPEAKER_01 8:31

So let's talk about what you are doing and what is being repeatedly done at the moment what is the future forest company let's unpack that a bit what you you mentioned scale a number of times biodiversity native forests i think people are very curious and region drag people are very curious about what you're currently building

SPEAKER_00 8:49

yes we ended up a bit off track and that was with the realization having worked out how to profitably reforest and we realized or i realized that actually there isn't enough land on the planet and the competition for land on this planet is too intense and causes social problems if you start taking land away from people. So actually realizing that and that reforestation alone wasn't a solution was a key moment. So what we're now doing is we continue to reforest. We continue to restore ecosystems and try and minimize leakage. And I'm sure we can come on to that in more detail. But we also co-deploy biochar production and enhanced weathering. That means we can 10x the carbon removal on any piece of land without having negative impacts

SPEAKER_01 9:36

elsewhere. So you went for, let's say, the biochar and enhanced weathering. And let's explore that in a sec. Also, what that exactly means to basically 10x the potential carbon removal, which means you need less land to reforest. That's right. Or you store a lot more carbon. It works on both sides, obviously. So what are you doing with biochar and enhanced weathering? And what is enhanced weathering, first of all?

SPEAKER_00 10:00

So biochar, we're taking forestry waste. We're just getting started on that on our first site for it. So this is the brash that's left behind when trees are felled for commercial timber and we're harvesting that to turn into biochar which stores the carbon for a lot longer than if that brash is left on the forest floor which is typically what happens. So as that brash rots over 15-20 years it will release most of the carbon back into the atmosphere either as CO2 or as methane. By fixing it through biochar process that carbon carbon will stay as effectively a powdered charcoal, which we can put back into the soil where it helps improve the soil, but also stores the carbon for hundreds, if not thousands of years. Preventing

SPEAKER_01 10:44

the rotting and storing the carbon. I mean, the rotting is part of a natural cycle, but of course, if you start cutting the trees, you're increasing the amount of rotting quite exponentially. If you start also pruning them and making sure that the forest is healthy, there's a lot of waste I can imagine.

SPEAKER_00 11:01

And when the clear felling, which is the model with Sitka Spruce in Scotland, about a quarter of the biomass that's been accumulated in that area will be left on the forest floor, won't be extracted as timber. So it's significant volumes of timber. It's not usable timber in most cases, but it's significant amounts of biomass that you can then fix to prevent that release of CO2.

SPEAKER_01 11:23

And you get paid for it because the biochar, you can turn it into a carbon credit, basically, as the biochar is stored and hasn't been, won't rot. as the timber would have. So that's a huge amount of CO2 greenhouse gases prevented to go up in the air.

SPEAKER_00 11:36

That's right. And that's largely our core business model is carbon credits and carbon removal.

SPEAKER_01 11:42

How has that market been? Because there's, I think, an enormous interest at the moment. I can sense an amount of cowboys entering the space as well, which is crazy. At the same time, we need it. We absolutely need a healthy carbon market. What have you seen in this space? And then we get to enhanced weathering. Don't worry, listeners, we're getting there. But I'm very curious of, I think people would already be curious that you can actually sell carbon credits coming from biochar is something that sounds super interesting

SPEAKER_00 12:08

well biochar is a pretty good one because you can measure it well and the permanence is well understood

SPEAKER_01 12:14

you can measure the tonnage you have to yeah it has to go through your hands anyway left or

SPEAKER_00 12:19

right yeah and where i'm more skeptical is things like soil carbon which i'm sure is a big thing for a lot of the audience but the problem i have with both soil carbon and tree carbon and we do sell tree carbon and soil carbon as well. But the problem I have with both of those is if you change the management practice, that can be reversed very quickly. Management practice could be as simple with the tree as the chainsaw and a match. And a plow. Yeah. And a plow for the soil, you can reverse that carbon capture very quickly.

SPEAKER_01 12:48

How do you tackle that in your sites and your operation? That fear, rightfully so, is there for many clients that say, I would love to, I've been working on my carbon budget of my company and this is just this last, the ideal case, this last piece that I cannot, I need to offset it. I cannot reduce it. I need to offset it and I'm working or I need to almost inset it. I need to work with this first. or this ecosystem. But yeah, I want to make sure that it's going to stay up also after 20 years and more, because we all know these examples of, yeah, of course, we paid for the trees to stay there. And then somebody changed their management practices, aka a chainsaw or a plow. So what is the solution there that you found to make sure that that can ever happen?

SPEAKER_00 13:25

So from our side, there's a couple of things. We're very careful about where we operate. We want to operate where there is a strong rule of law, where ownership of land means that we've got... good control over it into perpetuity so that if we plant a forest, that forest will be left there. We're not having to put armed guards around our forest to stop illegal logging or anything like that. And you own the land in all cases? We do. We buy the land in all cases to make sure that we have that level of ownership. It might not be that we'll always buy it going forward, but we will want to know that we have control over that land into the distant future. And the other things we do to try and ensure permanence are we pick the location for the tree planting in particular where we've got a very low risk of forest fire. If you've ever been to Scotland you'll know that a drought here is two or three days on the west coast of Scotland between rainfall and the chance of a forest fire.

SPEAKER_01 14:26

Unfortunately many places aren't like that. Exactly. We can all see the droughts and the huge heat waves in the US at the moment and I'm sure we'll have an interesting summer in many places in Europe as well So yeah, that's tricky.

SPEAKER_00 14:39

So we try and avoid areas where there's a high risk to our forests. The permanence on soil, again, if you've got a good rule of law and you're putting a forest over the top of it, that soil is pretty secure and soil carbon therefore has a higher value. So you're able

SPEAKER_01 14:56

to sell the soil carbon as well as the tree carbon on the same project. Yeah. And then the biochar and the enhanced weathering will get to that. Correct. So it's almost four layer... And you're not even talking about biodiversity yet, but there will be interesting credits as well.

SPEAKER_00 15:10

Exactly. And biodiversity is another potential area to monetize as we do this. So yeah, that's basically how we try and protect it. We're very careful about our location selection.

SPEAKER_01 15:20

And the enhanced weathering, what is that? The biochar we covered briefly. I know there's a whole world of biochar fans out there and biochar gurus, but this is a very interesting angle. It also helps the soil, as I know. But what is enhanced weathering?

SPEAKER_00 15:34

So enhanced weathering is based on natural rock weathering process. Just divert into a quick chemistry lesson, but I'll keep it lightweight for you. So as rainwater falls through the atmosphere, it dissolves CO2 and that leads to a weak carbonic acid. That carbonic acid, so all rainfall is slightly acidic as a carbonic acid, and that will create a chemical reaction with basic rocks. So alkali rocks, which precipitates certain types of rock will then precipitate carbonates, which is a permanent store of the CO2. So this actually removes CO2 from the atmosphere.

SPEAKER_01 16:11

So certain places, rain can store CO2. That's right. If it hits the right rock at the right time, etc. That's it. So Scotland is like a massive carbon sink.

SPEAKER_00 16:21

Well, it should be, but you've got to intervene if you want it to work at really big scale.

SPEAKER_01 16:25

Hence the enhanced piece, yeah.

SPEAKER_00 16:27

So as things stand, this cycle globally removes between 10 and 100 million metric tons of CO2 from our atmosphere every year. It's one of the key geological sinks for carbon dioxide from our atmosphere, which is why we haven't yet fully cooked. To increase that cycle and the speed of that cycle, we take certain types of rock, we grind them up into a fine dust, and we put them onto the ground. And then we wait for it to rain. And that increases the rate of the reaction and allows us to remove a lot more co2 from the atmosphere through that process

SPEAKER_01 17:04

so together with the biochar you're saying at 10x just to put it in perspective like let's talk about an acre or a hectare in scotland what's your average carbon potential there if things are good or things are average let's say what do you see

SPEAKER_00 17:19

so you're looking about well at 400 you'll get about 400 tons of carbon in a standing per hectare in a standing forest somewhere around there. Per year? No, total 400 tons once it's fully grown. Which is 10 years or 15, 20, what's there? If you're planting deciduous forest like we are, you'll be talking 60 years to get to that sort of carbon balance. It can go higher with deciduous forest as well. But if you've got something like Sitka spruce, again, that'll grow quicker and store that carbon. With enhanced weathering, depending on how you view that, maybe six tons per year or something around that. that level we can get 13 tons a year of carbon removal from enhanced weathering and biochar is more reliant on feedstock we could put down quite a lot of biochar on the ground if we can get access to enough feedstock the big difference is that enhanced weathering is permanent once that process has occurred that carbon dioxide is locked up in geological formations so you're talking hundred thousand years to a million years depending on which pathway it goes but but all of that carbon is permanently removed. So in human terms, we don't have to worry about it again.

SPEAKER_01 18:31

Which probably means like why you're able to sell that enhanced weathering credits, even though it's quite experimental, at least at a scale, there are companies or there are buyers of these credits interested in that side of experimentation.

SPEAKER_00 18:43

To a degree, they're funding our research and development at this stage with a high degree of confidence that we'll be able to remove that CO2 for them.

SPEAKER_01 18:52

Are you willing, I mean, obviously say no, if not to share, like what kind of tonnage prices you're getting? Or is that something that you're rather not sure?

SPEAKER_00 19:00

Yeah, it's out in the public domain. So Stripe, who are one of our backers, who some people will know from credit card processing, they have bought credits from us. They've published everything around that. They're very transparent. They're paying us$200 per ton of CO2 for that carbon dioxide removal through enhanced weathering.

SPEAKER_01 19:21

Which is a very significant price per ton, which they hope and you hope probably also comes down at some point. But now Now, do you feel that that's the carbon market's role at the moment? Like there are very good prices for very specific niches at the moment and basically funding a lot of your development and maybe others to really see, okay, how do we do ecosystem restoration and regeneration at scale? And we all know that that market is not going to last forever. It might go up and down. It will be a rough ride. And maybe the biochar market goes up and, you know, it's weathering comes down, et cetera. But do you see that as a short term to kickstart a lot of things or do you see the CO2 or the carbon markets differently?

SPEAKER_00 19:58

No, I see it somewhat differently. I think that permanent carbon removal will continue to be a high-priced product. I think it's in a different asset class to soil and tree carbon, and it rightfully should have a higher price. We have a very, very big problem. Demand, outstrips supply, we could sell 10 times easily the amount of carbon we're producing without any outbound marketing. As things stand, And if you look at all the pledges coming from companies, this is going to grow and grow. But quality, I think, is going to become more and more important in the marketplace because there are too many dodgy schemes. So Kyoto-era credits that are really not worth the junk bonds. They've not really removed any carbon. They're pretty sketchy schemes. I worry, as I alluded to, about soil carbon, particularly in our soils where you can just drag a plow over it and release it again. I'm not saying that farmers intend to do that, but a change in management regime will release that carbon almost virtually immediately.

SPEAKER_01 21:09

So walk us through like an average project. What do we, as this is audio, so make it as visual as possible. What does the land look like when you buy it? And then what happens over the years very quickly and slowly at the same time? How does this change and how is it different from a standard or relatively standard let's say between brackets reforestation project that you that some people might know it might even helped with to plant some trees here and there

SPEAKER_00 21:35

yeah you wouldn't see a huge difference between what we're doing on the ground and and another reforestation project we hope that the trees will grow quicker and we're not far enough into it to know that yet but the biochar acts as a fertilizer as well so so you know the biochar the biochar acts as a soil amendment so it'll help against drought and will store nutrients the enhanced weathering material actually acts as fertilizer. It releases cations, which depending on what state the soil is in, will cause the forest to actually grow quicker as well. So you might see our forests developing quicker, but we're doing the science behind our planting at the moment to demonstrate that. We're not far enough on with this in any location to have that data yet. You would see typically degraded land would be our focus.

SPEAKER_01 22:21

Like an old dairy farm or like a sheep farm, or what would you imagine in Scotland that you're buying?

SPEAKER_00 22:26

Yeah, Yeah, so it's often extensive grazing operations that aren't particularly well managed. So for instance, we have a site where we have about 2000 acres, so 800 hectares. And we think that we're moving on to a rotational grazing model with the livestock to make it far more intensive. We're moving them onto the better land. We'll probably only use a crazy amount of the land, less than 10% of the land to actually graze all the livestock on once we move them onto a rotational grazing. Things like lambing rates are terrible. So just by better look.

SPEAKER_01 23:05

Basically improving, intensifying the farming side of things and then taking the rest into the forestry or reforestation.

SPEAKER_00 23:12

Yeah, to prevent leakage. So what we don't want is the unintended consequences of taking that land out of action. But we also try and introduce, and again, we're too early to know how well this will work, but we're introducing nut crops and fruit crops so that We are displacing some of the meat production, which we don't think is a long-term model that we really want to be doing, but we also don't want to create unintended consequences in clearing of Brazilian rainforest. The classic example and the danger is that we act as do-gooders in Scotland and we plant up 1,000 acres in Scotland, and that requires somewhere around 3,000 acres of Amazonian rainforest to get the same production. That needs clearing, so we've just planted 1,000 acres and cleared 3,000 acres. because of rainforest by accident, which we want to completely avoid. So leakage becomes a really key thing for us to think about. But the more of that we can move to permanent nut crops, for example, the better.

SPEAKER_01 24:08

And so that basically turns it into an agroforestry system and not necessarily just between brackets of forest. Where do you see that going?

SPEAKER_00 24:17

Yeah, and even the grazing system will be agroforestry. So the way we're not quite sure on those bits yet, but we're hoping to actually find regenerative farmers who want who operate those. It's not what we actually do to scale and to have the impact that we want to have. It doesn't fit into our core model. So we're doing that, but we want to find farmers who want those opportunities.

SPEAKER_01 24:39

And just in terms of scale, how many hectares or acres are you currently owning? Just to give a sense of this isn't a few here and there.

SPEAKER_00 24:47

No, it's growing quite rapidly. So at last count, I think we've got about 5,000 hectares under management. And that's over two-year period. And we're currently seeking debt funding to expand that further with an intention of getting to 50,000 hectares as fast as we possibly can. Because you

SPEAKER_01 25:07

said there's such a demand for the credits you're producing. Can you walk us through, because it was going to be my next question, but how do you finance it? You mentioned debt funding. What does a typical structure look like and where do you see that going? Because we've mentioned scale quite a bit at the beginning of this interview to see where you can see this model or these models, because they're they're all context specific go and what's the role of because you mentioned profit also at the beginning what's the role of money there

SPEAKER_00 25:33

so at the moment we typically are financing this through high net worths who are lending us money and getting a commercial return on it and we secure their money on the asset so that they've got an asset backed security effectively and earning interest from us and the company itself is funded through equity investment and we've been very successful with the equity investment to date, but we also are generating cash from sale of credits and building out the operations there. Further forward, we see this as an institutional investment proposition. So the difficulty with institutional investment is that's not an early stage thing. You need to get to a certain size before it's of interest.

SPEAKER_01 26:19

What do you think that size is? What are you currently targeting in depth and how many X do you need to go before institutional will become interested?

SPEAKER_00 26:27

We think you need to get to what certainly needs to be several tens of millions of dollars before larger institutions are interested. We are now having conversations with institutions who can deploy slightly smaller checks, but also some that potentially can do the$100 million checks that we ultimately want to be taking for land purchases.

SPEAKER_01 26:49

Again, as debt, meaning buying the land, doing that process, earning an interest on that. And then the land stays with the Future Forest Company, as we discussed before.

SPEAKER_00 27:01

That's right. And we always have that hold over the land. So that land's coming back to us, as long as we don't default on our debt, obviously. But to date, that's not been a problem. But yeah, it's a case of using debt to buy the land so we can generate the revenue to pay back.

SPEAKER_01 27:50

And most of the revenue comes from the credits, right? And we'll continue to generate, I mean, 60 years is a long period before it hits the plateau. And then we might have figured out a lot of other ways by then to add on to the biochar and enhanced weathering to speed that up even further. So it's basically how many X do you need to grow? Like you're doing a couple of million now in depth or looking for a couple of million you need to go to, you said, 20, 30, 50 before these bigger insurance companies, et cetera, become interested, or they're already talking to you and they might want to get you there because that will be even more interesting.

SPEAKER_00 28:21

Yeah, they're starting to talk to us now. And we have institutions who potentially will write us tens of millions of checks. We're not at the stage yet where anybody's knocking our door down to give us 100 million pound checks. But hopefully we're not that far off it.

SPEAKER_01 28:34

Because the demand is there, just to be clear. The demand of credits is there. And is the land also there to get your hands on in those places with the right rule of law and the right weather where fires are not so dangerous?

SPEAKER_00 28:45

The land is there. We have the pipelines. We have our investment thesis behind that. We know which sort of areas of the world we want to invest in. want to operate in. It won't obviously just be Scotland.

SPEAKER_01 28:55

Scotland is big, but not

SPEAKER_00 28:56

that big. It's nowhere near big enough for what we're trying to achieve. So we have target areas where we want to buy land and we're building out the organization that will be capable of managing that. So yeah, I think...

SPEAKER_01 29:08

Yeah, because massive tree plantation plus, of course, you have to find the farmers, but still potentially managing animals at the beginning, planting tree crops like nut trees. Are you going to harvest that as well? Are you going to go into the agriculture, the food side of things, or how do you see that

SPEAKER_00 29:22

working? We don't see that as part of our core business. I think we'll have to demonstrate that, prove that out. But we hope that, again, that we can find partners who want to do that. We think that part of the barrier to regenerative agriculture is access to land. And whilst we're doing the other things, we can facilitate that. So when you get into farming, you've got to know that land. You've got to really build a bond with that land. And that's hard to do. as a large organization, I think it's far better to have farmers who know the area that they're farming. So hopefully we'll be able to facilitate that. Otherwise you end up in a one size fits all cropping system, which we all know exists and has big farming operators on it and brings with it a range of other problems.

SPEAKER_01 30:13

Have you seen that already? Like the local community or around the properties you've bought? I mean, 5,000 is not a small number. How has been the response and the willingness or potential interest to engage, to work with you, to work potentially the land in a different way than it was found before? I

SPEAKER_00 30:29

think it's always mixed. There's people who have a traditional view or a view of how the world's always been around them and don't want that to change. There are also people who get excited by a vision of a different future. So I think it's always going to be something where we try and take people with us. but you're never going to please everybody all the time.

SPEAKER_01 30:56

No, you shouldn't, otherwise you're doing something wrong. And where do you see, I mean, you mentioned leakage a few times, obviously, or potentially don't want to create this ecosystem with a big fence around it, obviously protected, but where do you see this agroforestry or the food piece with the nuts, et cetera? What else do you see there potentially in these ecosystems that could produce calories for us to eat? Are there any other things you're working on there to enhance, to not damage, obviously, the biochar and the enhanced weathering, but also to create other income streams or other usage of the land and only the biodiversity, which is extremely important, but not the only uses.

SPEAKER_00 31:31

No, but we're clearly creating a timber crop though as well of some sort. And whilst we don't set a stall out as harvesting timber, we're not a forestry company in that way. There's questions about what we do with the forest long-term because you want to be reusing that land ultimately to sequester more carbon. Once a forest hits sort of balance point, It's no longer providing that carbon-removing service. So there's an argument to say that we should be selectively felling. It's not a decision I'll ever have to make with these forests. I'll be long retired, hopefully, but in 60 years' time, I think we probably should be taking a very, very light-touch approach to harvesting high-quality hardwood timber from the forests. It will actually benefit the forests in terms of creating mixed-age forests, so mixed habitats

SPEAKER_01 32:22

Regrowth.

SPEAKER_00 32:24

Yeah. And the regrowth that will come through there creates a new type of habitat, a different type of habitat. In natural forests, you don't have all one age. And that's the problem with planting trees. You tend to plant them all at the same time. They're all going to be the same age. So some selective thinning helps. Some selective harvesting probably will help. But it's also contentious because these aren't easy things to communicate with people. People think that tree is good and cutting tree is bad. So what they don't appreciate is that if we take that timber at the right time probably and make high quality furniture for example as one of the products that might then store that carbon for a further thousand years in people's homes which is what we ultimately want to happen with it and in its place there'll be another tree growing taking four tons of carbon six tons of carbon dioxide per hectare out of the atmosphere every year so i think there's more holistic ways of managing these

SPEAKER_01 33:20

there's a lot of education there

SPEAKER_00 33:22

yeah it's very hard it's hard to communicate that to people but

SPEAKER_01 33:25

i paid for the tree yeah but it's better if we cut it now

SPEAKER_00 33:28

yeah yeah people don't get get that and there's also this very polarized monoculture plantations bad and and mixed species good now we'd much prefer the mixed species because of the biodiversity net gain but at the same time we need more timber um if we're going to displace carbon products carbon heavy products like cement in our building materials so These are really complicated issues and whilst... It's great to tell a simple story from a communications point of view.

SPEAKER_01 34:00

It's usually wrong. Yeah, every complex... I don't remember the quote. I have to find it. Every complex problem has a very simple solution that's also wrong. Yeah. Sounds nice on paper, but it doesn't work. Yeah, and it's for sure creates some issues somewhere else or actually in the same place.

SPEAKER_00 34:17

Ecosystems don't function like that. These are nonlinear sort of relationships and you need to treat them as such. So yeah, I'm glad that's not... not going to be on my watch to decide about felling trees that we've planted. And

SPEAKER_01 34:31

then it might grow so fast that you actually have to. Yeah, that would be a good problem to have. And so how was that journey with, you mentioned, I mean, the depth investors, I can completely understand. They get a nice coupon on their depth and at some point you buy back basically the initial investments, the land stays with you, but they get an interesting, any return at this stage is interesting and there's a good story. But the equity ones, this is a very long-term play. A lot of interesting, let's say, revenue opportunities now revenue coming in etc but i'm imagining you picked your investors as long-term investors with you as well how was that journey where they all did they need a lot of education what was the biggest surprise you got from people wanting to invest but potentially not getting what you were building i'm always curious what the response is from the investment world to things like this holistic compared to a lot of the linear things they might get on their desk

SPEAKER_00 35:38

so the biggest surprise was how easy it was for us to raise investment and how fast it happened

SPEAKER_01 35:45

that's good to hear yeah

SPEAKER_00 35:47

yeah so our first investment came from two meetings in one day and we were over subscribed seven and a half fold wow that was very fortunate the second time but did they all get it or they were just believing you no i think they got the scale of the problem that we're facing and that we were developing models to tackle that without really knowing where we'd end up at that stage and that's that kind of the nice thing with a very early stage investment is it's a bit i guess people are investing in in the vision of where you're going and and they know you're going to deviate from that or they expect you to deviate from that so you get quite a lot of wriggle room going back to raise more money you've got to have something a bit more tangible and we raised the second round of investment and it closed what about three months ago now and again we were pleasantly surprised to significantly over raise and at a very good valuation with some great investors and No, I won't disclose what that is because we've not announced it yet. I wasn't going to ask. Don't worry.

SPEAKER_01 36:48

And

SPEAKER_00 36:48

we probably won't. We won't announce it, I don't

SPEAKER_01 36:50

think. No, but it's very interesting because I think hopefully shows there is a group of investors out there that sees the scale of the problem or all the problems and is willing to place at least some bets and make sure people like you and the whole team can get to work and figure out a lot of things as we don't know a lot of things. But we do know we need a lot more ecosystems and a lot more biodiversity.

SPEAKER_00 37:12

Yeah, for sure. And I think there are investors there who are keen to back the right projects. And I don't think that makes it easy to raise investment. I think there's a piece of understanding how to scale the business, how to grow the business, because that's ultimately where they get the returns from. And

SPEAKER_01 37:34

to ask a few questions that I always like to ask, and not necessarily to end with, but I always like to repeat a few of those and see the response. What do you believe to be true about regenerative agriculture that others don't? So where are you contrarian? This is definitely inspired by John Kempf that always asks a similar question. So where do you see, I can see a number of things. What's the main thing where you see yourself contrarian in, let's say, the whole regeneration movement?

SPEAKER_00 38:00

Yeah, farming is not the revenue. Farming might be the model and might be the desire and might be why people want to do it. But you're selling a commodity at that point. And I think people understand the sort of idea of selling a story and attaching a story to your product. But actually, I think there's going to be far more money in this space for people who are selling other services. And they might be farming still. I hope they'll still be farming because we still need to feed people. But the other value adds around that, carbon, and biodiversity, which we've sort of touched on a couple of times, but I think biodiversity is going to become a huge element of farming. I hope it will, because it will bring farming back to being a positive impact on the landscape, as opposed to what has been, for certainly my lifetime, a negative impact on our landscape.

SPEAKER_01 38:54

A very, very much negative impact, yeah. And if you could change one thing, so if you have a magic wand and you could change one thing in the food agriculture, but let's say the general land use space what would you do

SPEAKER_00 39:06

can i get rid of monsanto of course

SPEAKER_01 39:08

can i just make them disappear but all of the chemical input i mean because there are many others they're not the only one that's i won't be scared like saying let's get rid of this one pesticide which actually is i think of patent and made by a lot of other people and then for sure somebody finds another cocktail that's my fear of naming

SPEAKER_00 39:26

and blaming i say that tongue-in-cheek and i think they symbolize something but in actual fact if we're to feed people and we don't want to call all kinds of social problems, then actually they're part of the ecosystem right now. So the two things I would change, which are very closely related, I would bring in a global carbon tax on everything. Embodied energy in every product we buy everywhere and a biodiversity tax so that both of those products could be monetized by good land managers.

SPEAKER_01 39:59

And this might be actually not so far off, but what, so we take your magic wand away but you are in charge of a one billion dollar or a billion pound sterling or euro whatever you prefer investment fund and you have a potentially long-term view if you want to but it has to be it is a return focused any return what would you focus on what would you invest this amount in would it go to technology would go to buying a lot of land would it go to getting ready for a tax like you just described what would you focus on as a new fund manager that's managing quite a large amount

SPEAKER_00 40:31

i would be buying land that's under convey Sorry, I hate that term. I shouldn't use it. I was going to say into conventional agriculture. It's not conventional. It's

SPEAKER_01 40:38

extractive agriculture.

SPEAKER_00 40:39

Extractive agriculture. Yeah. Chemical agriculture. I'd buy a big swathe of land that are being mismanaged and degraded and

SPEAKER_01 40:47

put them under. Specific places. If you had that freedom to go anywhere, are there specific hotspots where you would act? Would it be Scotland or not?

SPEAKER_00 40:55

Scotland would be one of them. And we have our investment thesis, which I'm not going to get into, but we have a number of other locations. where we would deploy that. A billion dollars wouldn't go that far. I think we'd have that spent within 18

SPEAKER_01 41:09

months for you. I should increase this question to like 10 or 100. It doesn't scare people anymore. I need to change my questions. Okay, listeners, next time, it will be a few zeros more because we printed so much of this stuff. And land is expensive in a lot of places, not all. In a lot of places, a billion doesn't go that far. If I talk to a technologist, it's very different. They would have a lot of different places to put this. As soon as you talk about land, it absorbs it quite quickly and so where do you see we're now just before the summer I mean depends where you are maybe it's already summer or maybe you're in the middle of the winter what is the biggest thing for the next let's say you mentioned 18 months let's use 18 months for you now to go through and if we talk in a year where will you be if we talk like in 12 months or so what's the biggest barrier is it more depth is it depth sorry my depth also but more depth is it more staff what's the biggest barrier more land

SPEAKER_00 41:59

so we're doing quite well I think on scaling up the team at the moment the we will end up growing the team more debt for buying more land certainly more access to land hopefully new ways of us having long term control over land that enable us to scale

SPEAKER_01 42:14

meaning you're potentially not buying but getting control long long long term I'm thinking hundreds of years you don't need to own it which then the billion goes a lot further a

SPEAKER_00 42:24

lot further yeah and I think we'll see a very significant change in the amount of carbon that we're sequestering and we'll probably make some pretty big public commitments to that in the very near future.

SPEAKER_01 42:37

Meaning you're like underestimating currently or you're looking at other technologies or other ways to push that further, the 10x you mentioned?

SPEAKER_00 42:44

No, existing technologies, but with different models to serious scale sooner. And that's the challenge when our objectives are primarily to remove carbon. How do we maximize that carbon removal with... Like how

SPEAKER_01 42:59

do you get biochar everywhere?

SPEAKER_00 43:00

Yeah, how do we stop any waste being burned on a field. No one should be burning their crop waste. Biochar it and make it valuable. And get the carbon credits. Install the carbon and enhance your soil for future generations. Why aren't we all applying mineral fertilizers as opposed to buying NPK fertilizers made from oil? And removing CO2 from the atmosphere at the same time?

SPEAKER_01 43:24

Could you see that as spin-offs as well? You're going to work with land you don't own and have that not knowledge of biochar spread and have that enhanced weathering spread beyond your own land and potentially have a lot more impact than you could have on the land you own? Is that something you could see happening? I'm not saying you should be working on it now, probably not.

SPEAKER_00 43:46

We're exploring a number of angles to have more impact. I started this business for impact and try and revisit that on a regular basis as to whether I'm using my time in the most valuable way to create impact and whether the organization as a whole is using its time in the most valuable way to create impact. And sometimes maximizing impact isn't by doing. Even though we started off as a doing organization, there's a point in time when sometimes you're better to find a broader way of interacting with land, in this case, to have a much bigger impact. Leverage.

SPEAKER_01 44:26

Yes. It all comes down to leverage at the

SPEAKER_00 44:28

end. And sometimes you've got to demonstrate before you've got that leverage. And some of the products perhaps we're at a point where yes we want to continue scaling yes we want to continue enhancing and protecting biodiversity and that means operating land but some of the other products perhaps is ways we can use our our know-how the methodologies we're developing and things like that to benefit other people as well

SPEAKER_01 44:52

and with that I think we reach a perfect end of this podcast I don't want to take any more of your time because it's very valuable I want to thank you so much Jim to come on and actually I have one small last Last question. As a small retail investor, do you see any, I mean, you're talking about institutionals and of course some of our pension, I do this often that it's a final question and it's actually not, but do you see any role potentially for ordinary people putting some of their savings in things like this or does it have to go through our pension funds and our insurance companies and our banks, et cetera?

SPEAKER_00 45:22

Yes. And I think we've got to find ways of doing that and we don't have them today.

SPEAKER_01 45:28

Because for the people that are around, like especially the skeptical ones that are nearby, that would be a great way I know many in the energy space, renewable energy space, have successfully tackled the not in my backyard syndrome by letting people invest in the wind turbine nearby or the solar systems. And I think we in the land use space and agriculture space need to do the same. Plus, I really want to as well as a small investor, but I'm just frustrated I can't. That's just my frustration speaking now.

SPEAKER_00 45:53

And is that, do you think there are a lot more people like you

SPEAKER_01 45:56

in that way? I think so. I mean, if you look at, I follow necessarily just the renewable energy space, like the crowd landing space, for instance, and in the Netherlands and in Italy as well and some other places. And you see projects are filling up quickly on the, I would say the right platforms between records, like the ones that have a track record, et cetera. They seem to have a clear lack of projects and puts bigger and bigger ones. I see some 15 million wind parks coming by, 15. So that's serious. Not a lot, but it's serious. It's not a few hundred thousand here and there. And they fill up and they fill up in a couple of weeks and the smaller ones of a million or two fill up in less than a day. And sometimes I'm late if it's like it goes online at 10 in the morning and it's filled up by five past 10. And I'm like, wow, okay, there is money for I think two, no, four, five, 6%, sometimes quite securitized, sometimes not. I mean, it's not the riskier stuff, but there's apparently there's money also from ordinary folks looking for a return and an impact in this case in the energy space. So I would say yes, but I hope I'm right in this case.

SPEAKER_00 46:59

So where we did explore this and we struggled to find a platform that was easy to work with, was a reasonable cost on the finance and decided it was easier working with high net worths at this stage?

SPEAKER_01 47:13

I think there's a combi to be made. Yeah, there's a role for the local crowd or the crowd in general, and there's a role for high net worth and institutional. And it's, I think, finding that balance in the dance to make it go fast enough and not have too much admin and costs, but also make it inclusive enough. And yeah, it's not an easy one.

SPEAKER_00 47:31

And if there's anyone out there with a platform who's listening, who's got a platform that'll do that, you know, get in touch. We'd love to try it. I'd love to democratize the ownership of the land and to allow people to be involved. That's a whole

SPEAKER_01 47:44

other podcast we need to do on that.

SPEAKER_00 47:45

Yeah. There's some interesting bits there that we're trying to look at, but it's about focus as well and trying to keep.

SPEAKER_01 47:52

Yeah, no, of course. I think, I mean, we had Dan Miller of Stuart on the podcast and I think Mimosa, a similar platform in France, just raised money from Astanor, which we didn't have on the podcast yet, Eric, if you're listening, we need to get to you. But there are some people exploring the land use space way less than the energy space. I think we can learn a lot from people there. And I know people at 123 are very interested in the democratization piece as well. So there are people thinking about it, but we can open a bank account with a smartphone in three clicks. Why can't we not invest in these things? It gets really, really frustrating. But yeah, we have to figure it out.

SPEAKER_00 48:26

And fractional ownership becomes a real problem when you get to property. But there are tools to do that now, I think. It just needs to write time commitment to it and focus on it, which might not be us. Which is not now. No, it's definitely not now. Perfect.

SPEAKER_01 48:41

Thank you so much, Jim, for your time. I want to thank you for your commitment to the space, what you're building, your openness and looking forward to check in regularly and see where you're at.

SPEAKER_00 48:50

Thank you for having us on. It's great to speak with you.

SPEAKER_01 48:53

If you found the Investing in Regenerative Agriculture and Food podcast valuable, there are a few simple ways you can use to support it. Number one, rate and review the podcast on your podcast Thank you so much and see you at the next podcast.