Expert Voices: Energy Impact Partners' Hans Kobler
This week we're talking with Hans Kobler, co-founder and managing partner of Energy Impact Partners, one of the leading clean energy and climate tech investment firms.
Why he matters: EIP is among the most closely watched funders in the space. The firm has $2.5 billion AUM.
What do you see as the big story this week?: Direct air capture (DAC), including some big capital announcements for Climeworks.
What would you add to the narrative?: DAC is the current darling of the climate tech world, which is kind of an odd phenomenon.
- Nearly all global net-zero economy models suggest that gigatons of carbon removal will be necessary to achieve 1.5°-2 ° Celsius end-of-century warming scenarios.
- However, there’s plenty of carbon emissions abatement to be done, for at least the next two decades, at far lower cost than even the rosiest projections for most DAC technology.
- We’re beginning to see a few buyers emerge for carbon offsets specifically from DAC — e.g. Stripe, Microsoft — who are willing to pay an extremely high premium for carbon removal, in an effort to buy the technology some momentum down the learning curve. Effectively, this is philanthropic procurement.
- The eventual total addressable market for a DAC winner is theoretically enormous. However, it’s difficult to see who the next significant tranche of buyers will be, while DAC remains much more expensive than nearly any other carbon mitigation measure.
By contrast, what do you feel is being under-covered or under-noticed?
- Heat pumps! So much of climate tech is focused on producing clean electricity. Heat pumps could be one of the best solutions for efficiently using clean electricity to decarbonize everything from residential heating to manufacturing.
- The story of how heat pump technology is improving (quietly, behind the scenes) and the improvements we still need to see (for example, in low GHG refrigerants) has long been under-reported.
In three words, what one change would you make to accelerate investment in sustainable energy/climate tech?
Risk-tolerant project capital.