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This week is all about climate change and what Manta Biofuel is doing to help stop it. Working toward a future where our energy sources are sustainable and our planet is preserved for future generations, Manta Biofuel has created a new, carbon-neutral way to fuel our livelihoods. And it's done it in a way you've probably never heard of. Using algae, Manta Biofuel has, for the first time, created a cost-competitive, renewable replacement for crude oil that can power our cars, planes, homes, etc. If it's powered by crude oil, Manta's algae-based biofuel can replace it.

There's a lot to unpack in this one. Let's get to it.
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Deep dive - Manta Biofuel

The problem – A world in desperate need of cleaner energy
The greenhouse gases emitted as a byproduct of our energy sources are causing irreversible damage to our planet. Drawing dangerously closer to what scientists have called the sixth mass extinction, we have only just begun to fix the most pressing challenge of our time. While still salvageable, global climate change has worsened dramatically over the past three decades as the earth has warmed to unprecedented levels.
  • Trapping heat in our environment, 2019 U.S. greenhouse gas emissions totaled 14.5 trillion pounds. Over the last 150 years, mankind is responsible for almost all of the increase in greenhouse gas emissions.
Because of how gases are trapped in our atmosphere, even if we stopped emitting harmful gases altogether, we’d continue to see the repercussions for decades. Though experts don’t yet believe we’ve hit a point of no return, time is quickly running out. At a 2019 United Nations Assembly, world leaders were warned they only had 11 years left to prevent irreversible damage resulting from climate change. In his 2020 presidential campaign, Bernie Sanders similarly stated there were “less than 11 years left to transform our energy system away from fossil fuels if we are going to leave this planet healthy and habitable”.
  • In a 2018 report, the United Nations explained that CO2 emissions would need to be on path to fall by about 45% by 2030 in order to meet 2050 goals made by the Paris climate agreement.
In order to meet goals set by the Paris climate agreement, countries need to be reaching net zero emissions by 2050. Though doable, an achievement of this magnitude will only be possible by dramatically reinventing where we source our energy from. Should these goals not be met, resulting in warming of more than 1.5°C, the repercussions are feared to be devastating and irreversible. Primary risks include sea-level rise, extreme weather, biodiversity loss, and food scarcity.
  • What’s most often thought of when it comes to living more sustainably and combatting climate change is the use of electric cars and the elimination of plastic waste. As consumers, these are the areas of our lives that naturally receive the most attention. It’s easy to think about living more sustainably by riding a bike to work or recycling because these are changes that any individual can make in their own lives. And thanks to innovators like Elon Musk, making environmentally friendly decisions (like driving an electric car) can even be preferred over the alternative, less sustainable option.
Though these are important initiatives and steps to continue taking, there’s so much more to what’s harming our environment than this.
As you could have likely guessed already, greenhouse gas emissions from transportation primarily originate from burning fossil fuels for cars, trucks, ships, trains, and planes. What you may have not been aware of, however, is the central role that fossil fuels play across these other sources as well. Approximately 62% of the gases we emit from electricity production are attributable to burning fossil fuels. And for industry, emissions primarily come from burning fossil fuels for energy.
  • With fossil fuels being the common denominator across the three largest sources of emission, it should be no surprise that greenhouse gasses from commercial and residential (the market that Manta Biofuel is initially focusing on) are primarily generated from burning fossil fuels for heat.
According to a 2018 NRDC study, oil, coal, and gas are relied on for roughly 80% of our energy needs. As a result, fossil fuels account for over 75% of U.S. greenhouse gas emissions. Despite how harmful fossil fuel emissions are, this figure doesn’t even account for the irreparable damage that they cause to the planet’s land and water resources.
 Unearthing, processing, and moving underground oil, gas, and coal deposits take a tremendous toll on our landscapes. In the case of strip mining, entire swaths of terrain are blasted away to expose underground resources. Even after operations cease, the land will never return to its original state. Among other things, this has effectively erased many wildlife species and habitats from the face of the earth.
  • In addition to the land degradation caused by the harvesting of fossil fuels, numerous threats to our waterways are also created. Namely, coal mining operations wash acid runoff into streams, rivers, and lakes; oil spills and leaks pollute drinking water sources and jeopardize entire freshwater or ocean ecosystems, and fracking has been found to contaminate drinking water.
Drilling, fracking, and mining operations generate enormous volumes of wastewater. Contaminated with heavy metals, radioactive materials, and other pollutants, wastewater should ideally be safely stored in open-air pits or underground wells. But of course, that’s not how it always happens. Whether it leaks into waterways, or be directly dumped into them, some 80% of the world’s wastewater makes its way–largely untreated–back into rivers, lakes, and oceans.
  • While most Americans have access to clean drinking water, there will be a day when that won’t be the case (assuming our water pollution continues unchanged). Less than 1% of the earth’s fresh water is actually accessible. By 2050, the global demand for fresh water is expected to be one-third greater than it is now. Without action, it won’t be long until the global water crisis spills into the United States.
It’s not that businesses and individuals don’t want to replace their environmentally harmful practices. And it’s not even that more sustainable options haven’t been created. It’s that many alternatives offered to date have not been economically viable. No matter how efficient or sustainable the solution is, everything has a price. We don’t emit an unfathomable amount of greenhouse gasses because it’s our only option. We do it because it’s the cheapest option.
  • This isn’t to say that we can eliminate 100%, 50%, or even 10% of the gasses we emit overnight. It is to say, however, that the story would likely look a whole lot different if our current solutions weren’t the cheapest ones available.
Democratizing renewable energy
This does not need to be our future. Tackling perhaps the most pressing challenge of our time, innovators like Manta Biofuel are reimagining how energy is produced. Producing a cost-competitive, renewable replacement for crude oil, Manta Biofuel has created an algae biofuel that it believes is capable of democratizing renewable energy production.
  • While others have attempted to create algae biofuel in the past, none have successfully scaled the solution due to a lack of economic viability. Rather than growing algae in expensive, highly-controlled environments, Manta Biofuel has innovated a new, cost-effective way to harvest it.
Algae is a renewable resource that can be grown on non-arable (can’t be farmed) lands. Similar to the shallow ponds used to grow rice paddies, it can be farmed from low-cost, scalable ponds. And because it can grow in both saltwater and brackish waters on non-arable lands, it requires fewer scarce resources than other biofuel feedstocks do. Additionally, algae can double or even triple in biomass in a single day. This would be the equivalent of a tree growing from 8 feet to 16 feet in just one day.
  • Manta’s algae biofuel is a carbon-neutral fuel – meaning no new CO2 gases enter the atmosphere when it’s burned. Just like fossil fuels, algae biofuel emits CO2 gases when it’s consumed. Unlike fossil fuels, however, algae actively remove CO2 from the atmosphere as it grows.
According to the Manta Biofuel team, the energy density of its bio-crude oil is very similar to that of a fossil-based crude oil. Energy density can simply be thought of as the amount of energy in a given mass. To measure how much space will be taken up to generate a given amount of power, scientists use a metric called power density, which is measured in watts per square meter. While fossil fuels can produce 500 to 10,000 watts per square meter, wood and other biomass produce less than 1 watt per square meter.
  • In other words, it takes a whole lot more wood and other biomass to produce one watt of energy than would be required of fossil fuels. The less than impressive power density of biofuels has long been a key point of contention against wider spread biofuel adoption. If a source has a low power density, it likely requires too much space or materials to provide the power that we demand at prices we can afford or in the vast quantities that the world needs. So, if Manta Biofuel really can produce a biofuel with a similar power density to fossil fuels, it could be huge.
  • According to the Department of Energy, algae have the potential to yield at least 30x more energy than land-based crops currently used to produce biofuels.
Not all renewable energies are equal
As part of its ambitious goal to cut U.S. greenhouse gas emissions by at least 80% over the next 30 years, the NRDC calls for three specific increases in clean energy.
  • “We dramatically expand renewable energy so that renewable energy, as a whole, will account for 80% of our electricity mix by 2050”.
  • “We use near-zero-carbon electricity to displace direct use of fossil fuels. Think electric vehicles that charge overnight using wind power or electric heat pumps instead of natural gas heating in our homes.”
  • “For those stubborn, remaining uses that are currently hard to replace with electricity (e.g., airplanes, trucks, and steel manufacturing), we move to lower-carbon fuels such as clean biofuels produced from sustainable biomass.”
Manta Biofuel’s algae-based fuel is capable of meeting all of these needs with today’s technology. The same cannot be said about any other renewable energy source.
  • The primary challenge faced by other renewable sources (solar, wind, hydro, tidal, and geothermal) is generating large enough quantities of energy to actually replace fossil fuel energy solutions.
Solar energy may be a great way to power a house or a set of lights, but it lacks other widespread applications. With today’s capabilities and infrastructure, the same can be said about every other renewable energy. Hydropower isn’t yet ready to power industrial machines and factories. Geothermal energy isn’t yet ready to power freight. Tidal currents aren’t yet ready to power commercial buildings. The list goes on.
  • The reason for this: the format these energies are presented in and the way in which they’re stored. Mankind has built virtually everything to be powered by liquid fossil fuels. Introducing non-fuel renewable energy involves reconfiguring it all to align with the requirements of that particular energy source. To give this some real-life context, let’s use planes running on jet fuel as an example. If we decide that we want planes to be powered by solar energy, we can’t just harvest solar energy into a liquid format and load it into a plane’s fuel tank.
This is perhaps Manta Biofuel’s largest current advantage over its renewable energy peers. Because its algae-based fuel takes the shape of a liquid fuel identical to what’s been used for as long as energy has been used, the infrastructure required to store and use it has already been built and is widely available. Manta Biofuel’s bio-crude oil can be used to make renewable replacements for all products that come from fossil fuels including renewable gasoline, jet fuel, asphalt, bunker fuel, and heating oil.
  • Overhauling infrastructure to meet the requirements of new renewable energy sources, however, will cost trillions and take years to do. This isn’t the only challenge faced by other renewable energy sources, however. Some power sources require more room to be generated, while some others require more cooperation from mother earth. The wind doesn’t always blow, the sun doesn’t always shine, and there’s only so much land and water to go around.
Tremendous progress has been made toward the development of other renewable energies, but there remains a lack of practical use for them with today’s capabilities.

Manta Biofuel's algae-based future
Solar, wind, hydro, tidal, and geothermal energy will inevitably receive wider adoption as they become more accessible. These energy sources may be what power our cities in the future, but they certainly won’t be capable of doing so without substantial innovation. With today’s infrastructure, there’s very little that they can actually replace relative to how much energy is needed globally.
  • Starting with households and businesses, Manta Biofuel is working toward making algae biofuel a household product (literally) before expanding into larger oil end markets.
Targeting smaller customers with strong sustainability goals, Manta is specifically focused on individuals, households, and businesses purchasing 100-100,000 gallons of heating oil at a time. As production volume grows, the company will enter larger markets such as marine fuels and heavy industry. Replacing fossil fuel at the refinery level will allow it to provide clean energy without spending trillions of dollars to overhaul infrastructure, which is what will be required to implement other renewable energy sources.
  • With an end product that can be used in industries already reliant on fossil fuels, Manta Biofuel’s algae-based biofuel will enable the company to sell into a variety of markets.
Starting with heating oil, Manta Biofuel’s initial market includes 6 million homes and enterprises. With an average contract size of $300-$300,000 per year, the company has estimated the total addressable market to be $10 billion.
  • Heating oil is a product similar to diesel fuel that is sold primarily for use in boilers, furnaces, and water heaters. Nearly all of the heating oil produced in the United States is produced from crude oil. In 2019, residential consumers in the Northeast used ~2.9 billion gallons of heating oil, which is roughly equal to 86% of total U.S. residential sales.
As Manta Biofuel scales its heating oil operations, it intends to move into marine fuel and heavy industry. First targeting marine fuel, Manta Biofuel will look to provide the massive global trade market with a clean energy solution.
  • During just one trip from China to the United States, container ships consume 2 million gallons of fuel. Accounting for 4% of global oil use, over 60 billion gallons of marine oil are used each year. According to the Manta Biofuel team, replacing marine fuel use represents a $270 billion opportunity.
Followed by its marine fuel expansion, Manta Biofuel will target broad oil refinery end markets. With over 1 trillion gallons of oil consumed per year, the opportunity here is limitless.
  • According to the Manta Biofuel team, the main barrier to entering the crude oil market is scale. With most refineries producing 100,000+ barrels of oil per day, Manta Biofuel’s product will only be valuable once it has demonstrated its ability to be produced in meaningful volumes. The company expects to be yielding the output required for this in approximately five years.
The heating oil market, however, does not require the same lofty purchasing volumes. At average wholesale and retail heating oil prices of $85 and $135, per barrel, respectively, heating oil is even more lucrative than crude oil, which is purchased at approximately $60-$70 per barrel.

So, how does Manta Biofuel plan to power the world with algae?
Decentralization. Manta Biofuel’s long-term production model doesn’t include purchasing its own land, building its own ponds, or even harvesting its own algae. Instead, it relies on nationwide partnerships with independent farmers who are looking to harvest their own algae on their own land.
  • With its pilot facility, Manta Biofuel has demonstrated the technical viability of its algae-based fuel. Having identified a 500-acre site in Texas, the next step focuses on utilizing this facility to demonstrate the biofuel’s viability at scale. After demonstrating the economic reward achievable from the biofuel, Manta Biofuel will shift its efforts toward partnering with independent producers and establishing seed sites nationwide.
Rather than manufacturing the biofuel, which has proven to be overly expensive and difficult to scale, Manta Biofuel’s approach is to farm it instead. According to Manta, the Department of Energy found there to be 106 million acres of non-arable land in the U.S. that are available for the production of algae. With its proprietary technology, it intends to use this otherwise useless land to harvest algae biofuel.
  • Manta Biofuel’s magnetic algae harvesting machine uses magnetic beads to pull algae out of the water. To convert the concentrated algae into crude oil, the algae is exposed to high temperature and pressure in a process known as hydrothermal liquefaction. This process is similar to how fossil fuels were formed underground. A full-scale machine can harvest over 200,000 gallons of algae per day.
Depending on the size of the land, the cost of the equipment can vary. For a 12–13-acre production site, the Manta Biofuel team broke it down as follows: including all earthworks, construction, and equipment costs, the upfront expense is approximately $75,000. Including all operating costs (magnetic particles, electricity, etc.) and a reasonable budget for replacement parts, ongoing expenses are approximately $35,000. These are the approximate expenses that farmers choosing to partner with Manta Biofuel can expect.
  • So how long does it take to cover these costs? The short answer is it depends. Dependent on things like sunlight and temperature, algae production varies based on where the algae are being farmed. In Maryland, 1 acre of algae produces approximately 20-25 barrels per year. But in Texas where it's much warmer and sunnier, the Manta Team suggests you could expect at least double the output that could be generated in Maryland.
Returning to the 12-13-acre example above, if you assume Manta Biofuel purchases from its independent farmers at $80 per barrel, this algae production could bring in nearly $50,000 of revenue per year. This does not account for any potential income from government tax credits that may be receivable. As Manta Biofuel scales the production of its machines over time, it expects to be able to greatly improve the payback period of the system.
  • This scenario assumes that the algae farmers would be producing 50 barrels per acre, which is at the high end of what’s achievable, according to Manta Biofuel.
Partnering with independent farmers from around the country, Manta Biofuel believes its decentralized plan to scale its operations gives it the greatest chance of long-term success. Producing crude oil requires centralization, operational perfection, and hundreds of millions of dollars – all right out of the gate. Manta’s distributed production plan will not only allow it to bypass these requirements but will also open up new revenue streams for the business that would have previously been nonexistent.
 
Business highlights and fundraising initiatives
In 2018, Manta Biofuel completed its first sale to a Maryland homeowner. Initial results were so successful that the users permanently switched to Manta Biofuel. After establishing the biofuel’s technical viability as a renewable alternative to fossil fuels, the team focused on establishing the company’s go-to-market strategy that would allow it to scale its operations.
  • Manta Biofuel has recently received two LOIs to sell 240,000 gallons of renewable oil to the University of Maryland. This $1 million revenue opportunity is a notable step in the right direction as Manta Biofuel looks to duplicate this with additional higher education institutions that share aggressive climate change goals. According to the Manta team, they have grown their pipeline to over 50 qualified leads.
During the Covid-19 pandemic, the company was unable to produce biofuel, so it pivoted to manufacturing PPE. Utilizing its in-house machinery and production capabilities, Manta produced and sold over 50,000 units. In addition to bringing in an extra $60,000 in revenue, this also helped the company bring in an additional $80,000 in grant funding.
  • On the subject of grant funding, Manta Biofuel has been awarded $2.2 million in non-dilutive grant funding from the Department of Energy since 2016. The Department of Energy said the following about Manta Biofuel: “The team has demonstrated that they are capable of growing, harvesting, and converting algal biomass into an ASTM certified fuel oil. This is a significant achievement seldom realized by much larger, better-funded companies working in the industry”.
  • Additionally, it has also been selected into two cleantech accelerators backed by the State of Maryland.
Looking ahead, Manta Biofuel looks to execute the following plan:
May 2021-October 2021: Produce 10,000 gallons of renewable heating oil.
October 2021-December 2021: Sell the heating oil.
October 2021-June 2022: Ramp manufacturing of its dewatering equipment.
January 2022-June 2022: Raise $3-5 million to scale Texas-based production site and cover ongoing operations / R&D.
June 2022-December 2022: Scale-up ~5-20 acres of production at Texas site.
2023: Raise Series A and scale remainder of Texas production site.
2024: Launch farmer-owned production model.


Offering details
With this fundraise, Manta Biofuel is offering anyone who is looking to create a more sustainable future the opportunity to help get its business off the ground. It opened its Reg CF offering on November 4, 2020, and has raised over $1.5 million from more than 3,600 investors to date.
  • With a $6,000,000 valuation cap and a 20% discount, individuals can invest a minimum of $150 into Manta Biofuel via its Crowd SAFE units.
In his interview with Republic, founder and CEO, Ryan Powell, described raising capital as Manta Biofuel’s number one challenge. “At least 40-times more money goes into things like the next dating app or ride-sharing app than renewable energy. While the need for renewable energy is great, there is relatively little capital being invested into early-stage companies.” He went on to say that most investments in renewable energy are currently made in later-stage companies.
  • Continuing as is and funding only the businesses that have been able to sufficiently scale their solution is not enough. More funding for clean energy solutions is needed, and it’s needed now. Whether it be Manta Biofuel or an entirely different clean energy startup, the investment isn’t just about generating a return down the road. It’s also about providing support to the businesses tackling the most urgent challenge of our time.
As put by Powell, “this is where Republic’s democratization of startup investing can really move the needle in cleantech”. Made possible by equity crowdfunding, this is a unique opportunity for individuals to invest in something that presents more than a potential monetary return.
Want me to take a deep dive look into a particular offering, ask any questions, or just reach out and introduce yourself? Shoot me an email at drew@thecrwd.com. Otherwise, I'll see you next week.
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