Barriers to the Timely Deployment of Climate Infrastructure

1. “Code Red for Humanity”

Prime Coalition

Author: Karine Khatcherian
April 2022

Released the report “Barriers to the Timely Deployment of Climate Infrastructure“.

The article below is from the report, where we have added some of the local benefits that South Carolina offers, made conclusions based on the report, and several other sources of information on why South Carolina is the best state for The Oaktree to set up our first plant (they are all refferred to by links to the source), and vhy we will make The Oaktree, as a fully commercial company extremely competitive when it comes to both the solution as well as price..

In August 2021, U.N. Secretary General António Guterres described the latest Intergovernmental Panel
on Climate Change (“IPCC”) report on climate as a “code red for humanity.” The report stated that
“Global warming of 1.5°C and 2°C will be exceeded during the 21st century unless deep reductions in
carbon dioxide (CO2) and other greenhouse gas emissions occur in the coming decades.”6 He added:
“If we combine forces now, we can avert climate catastrophe. But, as today’s report makes clear, there
is no time for delay and no room for excuses.”

1,1°C The increase in temperature since pre-industrial times
2,400 bn tonnes CO2 humans have emitted to date
500 bn tonnes more Would leave only a 50-50 chance of staying under 1.5°C
40 bn tonnes Rough amount of CO2 humanity emits every year

Solving the emissions reduction puzzle will require an all-hands-on-deck approach, with a combination

of (a) accelerating the deployment of renewable energy, electric vehicles, and energy efficiency

measures, (b) reshaping industries and value chains, including for agriculture, transportation,

manufacturing processes and hard-to-abate industries such as cement, steel, glass and others, and

2. Macro Perspective

Solving the global climate challenge demands large-scale technological and market innovation and transitions in virtually all sectors of the economy. Innovation in most of these sectors is not a new phenomenon.

Today, the scale of innovation needed to solve the climate crisis needs to be transformational as well as incremental.
Efficiency improvements alone are not sufficient. Yet, for companies in the S&P 500, average R&D spending in 2020 was close to 0% of revenues for Utilities (0.0%), Industrials (0.7%), and the Energy sector (0.1%) (compared to 10.2% in Healthcare and 11.4% in Information Technology, and 5% for Tesla, for example). Furthermore, some of these transformations — while essential — also threaten the fundamental business for incumbents.
Most of the transformational innovation thus seems to be happening in the hands of young, undercapitalized startups,

3. Investment Ecosystem for Climate Solutions

Risk/size/return profile fits with neither mainstream VC nor Project Finance

A helicopter view of the ecosystem where VCs and Project Finance capital providers currently
play supports the empirical conclusions:

Project Finance capital providers typically focus on low risk, low return, and large investments (with long term horizons for equity investors).
VC investors typically focus on high risk, high return, and historically small investment sizes20 (and a short term horizon), using a portfolio diversification approach to meet overall return targets.

4. The Oaktree South Carolina solution

In South Carolina there is a way that we don’t see in other states, we call it The Oaktree Solution.

By combining Project Finance, Corporate financing, Tax credits, and Tax equity from the state as well as federal Tax Credits, loans from DOE, and:

Using proven technology that is put together in a new way, using Industry Standard 4.1, to automate and continuously improve the operation, we are risk mitigating.
Using internationally experienced management from various sectors, and partnering with American companies who are at the forefront of their field.
Partnering with SRNL to develop new algae strings, as well as biomanufacturing processes.
Partnering with SCRA to promote as well as stay in contact with the latest solutions.
Collaborating with UofSC’s energy scientists.
Establishing The Oaktree in the for new companies business friendly South Carolina.
Working closly with DHEC to develop new processes to ensure the well-being of our current workforce as well as coming generation of citizens.
Using the tools that South Carolina offers to new companies when it comes to workforce development.
Working closely with SC Afterschool Alliance and SRNL to offer more of the State kids STEM training.
Offer 6-months paid parental leave for better business results.
Finally, by signing several long-term offtake agreements, both on our feedstock as well as our output.

The Oaktree’s Effect on the Paris Agreement (see EPA fig above):

Reducing GHG in Power Genearation – The Oaktree is carbon-negative
Reducing GHG, medical residue, heavy metals and toxins from water treatment
Agriculture, Biochar sequesters carbon dioxide not only when produced, but also an additional 50% after being placed in the soil, improves the nutrient density in the yields, reduces the runoff from the soil, and works as a buffer by absorbing and holding water, which helps versus exessive rain and drought.
Reducing GHG in multiple ways for several Industrial manufacturing, also reducing the usage of environmentally unfriendly materials.
Reducing GHG in transportation via Industry Standard 4.1 where The Oaktree continuously works with minimizing transportation, and potentially through the production of biofuel.

The Oaktree will:

Reduce (GHG) Green House gases from wastewater plants.
Destroy PFAS
Produce industrial-scale of Biochar
Ash can be used as feedstock for algae farming as limestone replacement in agriculture, or as a binder in cement.
Reducing and destructing GHG, several other toxins such as PFAS, and medical residues from Landfill leachate.
Producing at an industrial scale raw material for advanced biomaterial, an area where the US has to catch up not to fall behind China.
Producing energy at a scale where we can replace coal plants without increasing the cost for our citizens or our companies, enabling SC to not only be the Greenest state but also the most competitive (Note: The Oaktree way compared to solar and wind, generates a lot of new jobs for our State).

By doing all of the above, we see that we can mitigate both the technological, as well as the financial risks from high to low/moderate. With this, there’s a good chance that South Carolina for the first time ever, becomes a leader and not an importer, or follower of global technological leadership.
The Oaktree matches most of the tax credits requirements that the South Carolina Department Of Commerce as well as the Federal puts up, which helps to push the financial risk downwards, something that established corporations don’t,. On top of the Tax credits, South Carolina offers a Tax Equity solution in terms of JEDA Bonds, which few states in the US do. In most cases, The Oaktree will also be located in so-called Opportunity Zones, which gives an additional reduction of the financial risk, at the same time The Oaktree gives back through job generation. All of the above is what we call, The Oaktree Solution.

Final words
We are grateful for all the support that we have received and sincerely hope that it will grow as The Oaktree grows, so we together can make South Carolina competetive on the global market as well as the Greenest State in the US.