Why We Invested in AlgaFilm Technologies

A little bit of history - fertilizers became really important in the 1800s as the global population doubled to two billion people. The main source of nitrogen fertilizers (other than manures) was guano heaps - yes, massive heaps of bird droppings, often from remote islands, and countries competed to find new resources. In fact, in 1856 the US government passed the Guano Islands Act (GIA), which allowed any citizen that came across a guano heap to claim it for the US, which led to increasing the US by over 100 guano rich islands, rocks, and keys in the Pacific and the Caribbean.[1] 

The problem was that there was only so much guano, and it was on a trend to run out in a few decades - which would lead to mass starvation and population decline. Intellectuals and world leaders were worried. Making ammonia (NH3) synthetically by combining nitrogen gas (N2) and hydrogen (H2) was the obvious solution, but the N≡N bond is a triple bond and really strong, it’s quite hard to break, and despite research efforts, no one had come close. Thankfully, prof. Fritz Haber’s work led to a discovery, and Carl Bosch of BASF drove an incredible chemical engineering program to refine, scale-up, and commercialize the synthetic ammonia process now known as Haber-Bosch.[2],[3],[4]

The other main component in fertilizers is phosphorus, which is found in phosphate rock and mined. Phosphate was abundant, which was good because there is no substitute (our DNA needs it) and, being a basic element, it can’t be produced synthetically. But we find ourselves today with those phosphate resources dwindling in quality and accessibility, increasing in cost, and the chorus of those calling for accelerating phosphorus recovery is growing louder.

Synthetic fertilizers have enabled the human population to continue growing exponentially while improving global nutrition. The problem is the natural balance of our ecosystems was never meant for this much synthetic nitrogen and phosphorus, so those sources for food have now become poisons in our watersheds.  The Stockholm Resilience Center uses a Planetary Boundary framework to identify nine key processes that regulate the stability and resilience of earth - it lists global nitrogen and phosphorus flows as processes that exceed planetary capacity.[5]

We now face a dilemma. If we reduce nitrogen and phosphorus use, we risk being able to feed and nourish lots of people. But if we continue to pollute waterways with nitrogen and phosphorus, we cause a slew of environmental problems, including toxic algal blooms, depletion of dissolved oxygen in watersheds leading to eutrophication and fish kills, shifts in pH, impairment of drinking water sources and increased greenhouse gas emissions[6] - effects which ironically impair our food supplies and hurt economies. It’s a Catch-22. And caught in this problem are the “point sources” for discharge to the environment, which are municipal wastewater treatment plants (WWTPs), because if you think about it, that’s where all the nitrogen (N) and phosphorus (P) ultimately ends up. And as a community grows in population, so does its discharge of these “nutrients” into rivers, and that pollution is compounded by discharge from other WWTPs and agricultural operations leading to heightened nutrient pollution for that local watershed.[7] But many WWTPs are in a tough spot - they can’t afford the costs to substantially revamp their WWTPs for increased nutrient discharge, and this problem is especially acute for smaller to medium sized wastewater utilities. And they can’t try to increase their tax base to pay for the expensive upgrades by encouraging more development because all those extra homes would mean more nutrients going to the WWTP. If only there was an inexpensive, deployable solution to not only remove the nutrients down to discharge limits but also recover the nutrients (which are a valuable and finite resource) - and since we’re dreaming, in a sustainable, carbon negative way.

Enter Algafilm Technologies Ltd., a profoundly simple, elegant, patented algae-based nutrient removal and recovery technology that’s significantly advantaged over legacy technologies - and is inherently carbon negative. They deploy “Algae Forests”, which is their system of inverted cones with a green algae biofilm that take-up N and P while producing oxygen (O2) as the algae grow - photosynthesis at its finest. That oxygen can then be used in place of energy-consuming blowers to aerate activated sludge processes and the algae become a carbonaceous energy source that can be used for a variety of downstream purposes including to make biogas and biofuels. It’s a brilliant solution to a deeply complex problem and we couldn’t be more excited to grow alongside them. Here’s why we invested. 

When You Start with Genius, Let Alone a Team of Them..

AlgaFilm Technologies is the brainchild of Pierre Côté, who is the most accomplished innovator in the wastewater space of our time. Pierre is a PhD engineer (thesis on hazardous wastewater stabilization), who joined Zenon in 1989, where he invented & led the technical commercialization of several now ubiquitous innovations, including the ZeeWeed UF membranes that created the hollow fiber UF segment, the modern and practical version of the Membrane Bioreactor (MBR) that Zenon scaled, and he has the patents for the practical membrane aerated biofilm reactor (MABR) and was instrumental in GE Water’s commercialization of that technology. Pierre has excellent entrepreneurial instincts and a keen ability to understand markets and see pain points and conceptualize new possibilities. His passion is focused on finding better, more economical and sustainable ways of doing things in the simplest way possible. He is his own toughest critic and sets a very high bar for any new concept to overcome before he will advance it out of the lab. And he’s someone that everyone loves to be around and work with. After iterating on the idea for a few years and proving to himself that the idea made sense, he pulled in four other accomplished wastewater veterans to join him in the quest: Ahren Britton, the former CTO of Ostara, to serve as CEO; Robert Beres, former Chairman at Hydromantis; Steven Pedersen, former Zenon lead engineer on ZeeWeed and MBR development; and Rocco Mazzaferro, former initial membrane manufacturing leader at Zenon. They’re as good as it gets and we’re thrilled to work with them on something this important.

A Deceptively Simple Approach to Complex Problem

The concept behind AlgaFilm is to deploy an “Algae Forest” of inverted cones, made of a proprietary, engineered material, with a 12:1 material surface area to land surface area that deployed together, each with a green algae biofilm, look like a forest of pine trees. Why the 12:1 surface area to land coverage? Well that’s because it’s where algae work the best - if they face direct sunlight they can get sunburned (really!) so the 12:1 ratio makes them the happiest and makes the tech’s land use most efficient, too. The nutrient rich effluent is introduced to the tops of the engineered cones then flows down where the algae biofilm eats-up the N & P while consuming CO2 from the air to create more biomass. Bacteria symbiotically grow alongside the algae, providing some synergistic treatment, which can be tuned for applications that need additional BOD removal (BOD = biological oxygen demand, i.e. “stuff” in the wastewater). In colder climates, the Algae Forest is installed in a greenhouse, but in warmer climates, or for seasonal (e.g. summer) jobs, the systems are deployed outdoors without a greenhouse. Every few days, a spray bar is passed across the cones, dislodging the biofilm, which falls and is recovered for beneficial use. The process sounds simple, and it is, but is built on a deep foundation of models, materials, chemical engineering, and bioprocessing.

Strong Economic Value Proposition

Algae-based tech is not new - and has disappointed to date. Algae was all the rage in Cleantech 1.0, with the idea that algae, being a photosynthetic, direct air capture CO2 removal technology, could be an ideal platform for producing sustainable fuels and materials at scale. Well, we all know how that played out. Raceway ponds, with a terrible 1:1 surface area ratio, require way too much land, water and nutrients. Photobioreactors, while coming across as advanced and promising, were way too expensive and the use of artificial lighting was not cost effective (or really fitting with providing sustainability benefits, if that artificial lighting was powered from a dirty power grid).

To help cut some costs, the algae tech providers started to look at WWTP effluent, which would supply not only their water but also the source of nutrients. But those processes were still optimized around trying to make algae for use as a fuel, and required a really high “green premium” to make the economics work, and weren’t successful.

A fundamental problem is that economics took a back seat to sustainability benefits. But what’s the point of a sustainable technology if it has such bad economics that it can’t be deployed and consequently the sustainability benefits will never be realized? That’s how the AlgaFilm team approached the problem - with economics first, to have the best available tech for the use cases they are targeting, while being true to their ethos of making the earth a better place.

 That’s why we like AlgaFilm so much - the tech wins on economics alone, without having to factor in any value of the produced algae, any of the sustainability aspects, or any subsidies. Then when you add in the significant impact and sustainability benefits, including the nutrient recovery and the carbon value in the algae, it’s pretty awesome. And, that’s what the best tech should be - inherently economical and environmentally advantaged.

A Competitive Edge in an Urgent, Growing Market

Nutrient discharge regulations have been tightening across the US, for example in the large Mississippi River watershed, the Great Lakes, the Chesapeake Bay area, areas in California, and elsewhere. In Europe, the newly revised Urban Wastewater Treatment Directive (UWWTD) is specifically targeting nutrient removal and interestingly also requires all WWTPs serving populations over 10,000 people to be energy neutral by 2045. The global market for nutrient removal is about $5B/yr today and reports expect the market to grow between 6-12% over the next decade, driven by these regulatory pressures. Algae tech for wastewater treatment is still small, probably under $50m/yr globally, though is actually starting to get some traction in the past three years. The market is primed for a new entrant with a simple, economical, sustainable, purpose-built solution brought forward by a team that knows how to do it and how to speak the language of the wastewater utilities and engineers. 

The AlgaFilm team is doing what it has done before - scaling novel, patented tech in an elegant way that becomes widely deployed as an industry standard. The impact on ecosystems, human health, food supplies and fisheries, water quality and much more is monumental. They’re solving a storied problem with a straight-forward solution that reflects a deep understanding of their customers, and it’s immensely exciting to witness. Pierre, Ahren, and team: thanks for letting us be a part of your journey!

[1] The Guano Islands Act, which is still in force, reads: “Whenever any citizen of the United States discovers a deposit of guano on any island, rock, or key, not within the lawful jurisdiction of any other Government, and not occupied by the citizens of any other Government, and takes peaceable possession thereof, and occupies the same, such island, rock, or key may, at the discretion of the president, be considered as appertaining to the United States.” Interestingly, most of the islands, rocks, or keys that were claimed under this act are not US possessions today.

[2] The importance of the Haber-Bosch process, which is essentially unchanged in the past 100 yrs other than process refinement and increased plant sizes, cannot be overstated. It is still the only commercial ammonia production process today. Over half of the nitrogen in the DNA and proteins in our bodies was produced as ammonia in a Haber-Bosch process. It can be argued that Africa’s poor standard of living is due, in part, to having a dearth of Haber-Bosch plants on the continent and the consequence of that being poor ammonia supply chains and high prices.

[3] Norway had (and has) outstanding hydroelectric resources and the country’s hydroelectric utility, Norsk Hydro, had the idea of using that abundant and inexpensive electricity to make hydrogen gas for ammonia production by developing water splitting technology, aka water electrolysis, leading to the development and commercialization of water electrolysis in 1928.

[4] Fascinatingly, it was the Haber-Bosch process that led to the development of the first commercial electrolyzers. Norway had (and has) outstanding hydroelectric resources and the country’s power utility had the idea of using that abundant and inexpensive electricity to make hydrogen gas from water via water splitting, aka water electrolysis, leading to the development of water electrolysis by Norsk Electric, and that technology is still being sold by NEL.

[5] https://www.stockholmresilience.org/research/planetary-boundaries.html

[6] https://www.linkedin.com/posts/steve-kloos-4136bb3_we-know-that-nutrients-n-p-from-wastewater-activity-7270811940841488385-1LUt

[7] Nutrient discharge standards are typically set for a specific watershed vs for a territory or country, and tend to be tightened over time as population growth and land use changes lead to increased N & P discharge.