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04 September 2024
Host Elena Lambros sits down with John Mellowes, the chief engineer and co-founder of BioCarbon, an innovative Australian company that is turning low-value biomass streams into high-value carbon renewal products through advanced manufacturing.
In this episode, John discusses the importance of decarbonising the steel industry, which is responsible for 7-9% of the world's CO2 emissions, and shares insights into BioCarbon's groundbreaking technology that converts biomass into charcoal and then into products that can replace coal in steel-making.
Throughout, John emphasises the importance of embracing and supporting even small steps towards sustainability, warning against letting perfect be the enemy of the good, and encourages listeners to appreciate and build upon incremental improvements in the industry.
For more insights on how innovative companies are revolutionising their way to net zero, subscribe to Ashurst ESG Matters on Apple Podcasts, Spotify, or your preferred podcast platform.
Elena Lambros:
Hello, and welcome to ESG Matters at Ashurst. I'm Elena Lambros, Ashurst Risk Advisory Climate Change and Sustainability partner. Welcome to our latest episode of Game Changers and Transition Makers.
In this episode, I'm joined by John Mellowes, the chief engineer and co-founder of BioCarbon, an innovative Australian company producing valuable carbon renewal products from low-value biomass streams using advanced manufacturing.
Hi, John. Welcome to the podcast, and we're so happy to have you here today.
John Mellowes:
Thanks for having me on.
Elena Lambros:
So I thought the first thing we'd do is we'd like you to tell us a little bit about yourself and a little bit about your business, BioCarbon, just so the listeners can understand what it's about and where you've come from.
John Mellowes:
Yeah. I'm just an ordinary old Northern Beaches boy. I grew up in Manly and went to uni, did civil engineering, which taught me a couple of things. Mainly, don't fight nature because it'll always win. And secondly, trust the numbers, which by default is trust the facts, and they've guided me in what I do, basically.
BioCarbon is a project between a bunch of people, but most particularly a great friend of mine, Chad Sheppard and I, and another guy, Kannappar Mukunthan, hard name to say. We've developed a technology. Well, two parcels of IP really. One is a machine that makes charcoal very efficiently, cheaply. We don't need lots of other equipment. This one little piece of machinery does it all. And the second is a process for converting that charcoal into products for use in steel-making, which replace coal.
Elena Lambros:
John, I'd love to hear your thoughts on why decarbonised steel. Why is that a focus area for you?
John Mellowes:
Yes, definitely. It's important for a couple of reasons. Firstly, steel produces 7 to 9% of the world's CO2 emissions. If it was a country, it's third or fourth on the list kind of thing. It's a big emitter.
Secondly, it is foundation stone of every modern economy. If we don't have steel, we are living in the Stone Age. I often in dinner parties put people to sleep by saying, "How far do you think you are ever from steel?" And they go, "Oh, well, when I go walking in the bush, I'm miles from it." You go, "No, no, you're not, because what about the keys in your pocket or the zipper on your jumper?" Everything you can think of, just about, has steel in it or was made with steel. It's so ingrained in everything we do, it's incredible. When you really analyse it and think it through, steel is absolutely vital to our modern way of life.
Elena Lambros:
Yeah, it's absolutely hard to imagine a world without it, right?
John Mellowes:
Yeah, it's impossible.
Elena Lambros:
So that's amazing. You're talking about something that's been really topical in terms of meeting net-zero targets, and that's really around steel-making and how you can make it more carbon-neutral. Could you maybe just tell people a little about how it does that and what the process is that you go through to make that happen?
John Mellowes:
Yeah, sure. Maybe to start with steel-making, there's essentially two pathways to making steel. And one is from iron ore, one is from generally scrap metal or an iron-based input. The iron ore pathway uses enormous amounts of coal, like for a ton of steel you need about 700 kilos - 750 kilos maybe of coal. And of course that emits enormous amounts of CO2. The other pathway using an electric arc furnace where you recycle steel essentially uses a lot less coal. In fact, it's only about 15 kilos per ton of steel.
Elena Lambros:
That's significantly a lot less, right?
John Mellowes:
It's significantly less, and that's right. So if you can use green electricity in your electric arc furnace, you're a hell of a long way to decarbonising the steel part. The only problem is we don't have enough scrap in the system to supply the world steel. We're always needing more steel because things are growing. China, India, Africa are all consuming lots of steel, which is a good thing, by the way.
So anyway, back to the electric arc furnace, that little 15 kilos of carbon, once they use green electricity, they need to replace that. And that's where we've stepped in, because it's a very high spec carbon. And what that carbon does, it just aids the making of the steel. I won't get too technical because I could go on for hours and people will fall asleep. But anyway, so that carbon, that coke that's used in electric arc furnace in steel-making is quite high spec. And we need to start firstly with a really high, what they call fixed carbon charcoal, which is one of the benefits of our machine. We've got 95% fixed carbon in our charcoal. So when I say fixed carbon, it's carbon that if you heat it up, it won't evaporate. It's fixed. It's solid, if you know what I mean.
Once we've got that fixed carbon, we then need to process that into something that's usable in the arc furnace that in particular in the arc furnace, it needs to be able to last a certain amount of time with the intense heat in there. And it needs to sit in the right level of the arc furnace and also needs to be handle-able without turning to dust before it gets to the arc furnace. They load this stuff with front-end motors and what have you. So we have to make it a bit stronger and a bit denser and a few other things to get it there.
So we've then processed that higher fixed carbon charcoal to make better product. We have to have that high fixed carbon because the steel makers want a high fixed carbon in their coke product. If you don't start high, you can't end up high because you have to add all these other bits and pieces to modify the charcoal. So yeah, that's what we do. We make nice high fixed carbon charcoal, we modify it, and then it replaces the coke and the arc furnace pretty much one for one. They don't have to change their equipment. They don't have to think about it too much. It's really a pretty simple choice for them, and in fact we think we'll be able to do it at the same price as they're currently paying for the coke.
Elena Lambros:
Yeah, that's fascinating and super interesting because people have been talking about the challenge in this, but you're already plugging into existing equipment that they don't have to change and at the same cost price.
So when you were thinking about developing this and talking about your business BioCarbon, is that the need? Is that what you focused on, the need that you were trying to address, or how did you come out with the idea?
John Mellowes:
We started off the process looking at alternative energy supply and using biomass and pyrolyzing it to get charcoal. As part of that process, you get what's called syngas, and we were actually interested in the syngas. And then we came across as a third product that you get out which is called wood vinegar, which has been used or is used now in farming to increase crop yields. So we've been making that stuff and selling it at the same time, which is a whole other story. But I first got interested because of the alternative energy route. Then we got into this wood vinegar and then we're looking around saying, "Okay, how are we going to get this business to a scale where we can produce the products cost effectively? Because messing around with a few tons here and there, we just wasn't going to do it and people weren't going to pay those prices."
So we looked around and someone who's going to take serious tonnages, like 8-10,000 tons of charcoal a year, are pretty rare except for the steel industry. So some of the guys we were working with had a bit of a background in the steel industry. So using that, we went and talked to these guys and they said, "Yep, great idea. We'd love to try and replace the coal we're using or coke." And so we then got a grant from the federal government and processed our charcoal into what we call green charcoal carbon, which is the coke replacement, and it worked very well. And that's where we are today now, searching around to raise some capital to build the first plant.
Elena Lambros:
Yeah, wow. So that was going to be my next question, which is are you focused on doing this in Australia? So is it something that you're looking to start and do wholly in Australia, or is it reliant on offshore?
John Mellowes:
Our pilot plant is currently running. It's in Australia obviously, and our first commercial plant will be in Australia. Australia has remaining two electric arc furnaces. There are others planned, another two at least. So there's some scope there to do a few more plants in Australia, which we'll certainly be pushing. Having said that, Australia is I think 0.3% of the world's steel production, so we are going to have to be overseas before too long.
Elena Lambros:
Yeah. If you really want to make a difference, you've got to go find where that happens, right?
John Mellowes:
We've got international partners who are quite keen to do it, but they just need to see that first commercial plant operating.
Elena Lambros:
Yeah, okay. And then does the Future Made in Australia Act, does that change anything for you at all or help you or support get your business further?
John Mellowes:
Yes, I think it will. The extra funding for ARENA could be of use to us. We'll be talking with them shortly about that. Also, and I'm not sure what effect it was on the National Reconstruction Fund, but that's another source of funding that we're closely looking at. So yeah, I think it will be positive. And in the last year or two, there has been a big change in focus in industry and government, particularly around green steel and green metals. And we've noticed that in a big way, not actually in Australia particularly, but also overseas. I think there's a lot of focus and attention now on how we're going to solve this problem.
Elena Lambros:
Yeah. I'm really happy to see the focus on this because I feel like it's something that's just been spoken at such a high level for a long time without necessarily seeing in the press a lot of traction on it. So then for you and BioCarbon, what will success look like? Where do you want to go and what are you focusing on in terms of expanding or success factors?
John Mellowes:
It's a bit of a moving target and always will be, I guess. That's the beauty of life, isn't it, that you don't stop. But I guess there's three, if you talk short, medium, and long term. Short-term success will be getting that first plant funded and built, and that'll be a really important milestone. Secondly then, building a few plants in Australia to help produce green steel. By the way, coke is used in a lot of other metal refining as well, zinc and copper, et cetera. So there'll be a few more plants that we could possibly do in those industries. And then long term, like everyone, it's a world domination thing is how far can we go and take this around the world?
Elena Lambros:
Yeah, absolutely. You've got a good start in Australia, so you then as well see where it heads, right?
John Mellowes:
Yeah, true.
Elena Lambros:
Excellent. And then from your perspective, what do you think is really the key in terms of re-imagining what the current systems look like? And then the question I always ask is changing the game in this regard.
John Mellowes:
From our point of view, I guess our success to date has been we haven't asked industry to do impossible things in short periods, but essentially we're saying, "Replace this with this. It'll cost you next to nothing and you'll help solve this problem." And I think that's what we need to do. We often focus or say, "Well, we have to change the whole system, or we have to do..." Yeah, not really. Maybe we can just change it bit by bit, incrementally. There's nothing wrong with incremental change. It's less turbulent. It's easier for people to accept.
Elena Lambros:
I really like that, when you just say it, the way that you laid it out, then I'm like, "That sounds like a pretty simple solution. It works, and why would you not do it?"
John Mellowes:
Look, steel plants have lives of at least 20 years. So if you roll up to the guy and say, "Hey, you've got to shut the steel plant," what's he going to say?
Elena Lambros:
That's right. Great idea.
John Mellowes:
Yeah, that's right. So at the end of the 20 years, he may well be interested in changing his processes and plant because he's got an opportunity to do so then. But right now, no chance.
Elena Lambros:
Yeah, that's right. I think that's a really important point. And then changing tack just slightly, what would be your own personal commitment to net-zero in the next 12 months?
John Mellowes:
Well, my main thing will be keep doing what we're doing. I think it'll make a pretty big impact. Look, this first plant will, we're going to remove about 25,000 tons of CO2 produced every year, so that's...
Elena Lambros:
That makes you feel pretty good, right?
John Mellowes:
Yeah, that's pretty good. That's right.
Elena Lambros:
So that contribution.
John Mellowes:
Yeah. And in other ways though, we've all got to do some stuff that's really boring and simple too. This may sound silly in a way, but I walk a lot. I don't drive my car to the shops. I just walk. It's not that far. Now, I ride my bike. I use the washing line instead of the dryer. This sort of stuff, it helps.
Elena Lambros:
Yeah, that's right. There's some really simple behavioural changes that you can actually make every day. And then finally, if you could provide listeners with one action to take away, what would it be?
John Mellowes:
I think we're all a bit often too judgmental about what other people are doing and what other industries are doing. And I look at the steel industry which produces like 8% of the world's CO2, and they're looking at, in the blast furnace route, changing some of the coal that they're using out for charcoal. And it'll be a pretty small reduction, 2-3% at the start. And you'll hear people say, "Oh, that's not enough. We need to fix this by such and such a date." So they've got to do more. Well, let's understand that 2 or 3% is better than 0%, which is what we had yesterday. Let's take any gains we can get without being negative about it. I think if we're better off, we should take those gains. Don't let perfect be the enemy of better.
Leading on from that, I'd get wary of the term greenwashing. If businesses are trying to be green, that's a good thing. We should all applaud that. If they're being sneaky, yeah, we should pull them up. But often I see on that same vein, you see businesses trying to make an improvement and people say, "Oh, it's just greenwashing." Well, we're better off. We should take what they're giving us. We don't have to be perfect. And if they can make a small improvement now, that might lead to a bigger improvement tomorrow.
Elena Lambros:
Yeah, that's right. You're not going to get to your end result overnight, are you?
John Mellowes:
No.
Elena Lambros:
So I think I really like the way that you put it. Better off is better than perfect, right?
John Mellowes:
You'll never be perfect, never.
Elena Lambros:
There's always different things that you can do it in different ways of doing it, but you need to explore different paths along the way.
John Mellowes:
Take progress wherever it comes.
Elena Lambros:
Great. Thank you. On that note, I will wrap it up. Thanks so much for joining us. I really appreciate having you in here and hearing all about the work that you're doing and the progress that you're making at BioCarbon, and much appreciated to hear from you.
John Mellowes:
Thanks. It's been a pleasure, actually.
Elena Lambros:
Thank you.
Thank you for listening. I hope you found this episode both worthwhile and insightful. To learn more about our podcasts, visit ashurst.com/podcasts. This Game Changers and Transition Makers miniseries follows on from our 30 for Net-Zero 30 series, and I would encourage you to click on the link in the show notes to find out more. To ensure you don't miss any future episodes, subscribe now via Apple Podcasts, Spotify, or wherever you listen to your podcasts. And while you're there, please feel free to leave a rating or a review. In the meantime, thanks again for listening, and goodbye for now.
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