Saurabh Tak, Investor at Sagana, attended The Drop 2024 in Sweden, Europe’s leading climate tech event and penned his thoughts on the transition to sustainable technologies.
As the debate on how to limit global temperature rise to 1.5°C continues, time is rapidly running out. In recent years, numerous technologies have been developed in pursuit of sustainable solutions. While consumers have shown a strong interest in eco-friendly options, the challenge remains: greener alternatives often come with a higher cost. Neither consumers nor developers seem willing to shoulder this “green premium.” In response, various entities, including the EU and national governments, have implemented carbon taxes. But is that enough?
Key Challenges –
There are two primary issues:
- Consumer Habits: People are resistant to replacing products they are accustomed to.
- Economic Impact: Carbon taxes alone cannot drive change. Commercial entities will not accept losses in sales due to customers’ reluctance to try something new, especially if it comes at a higher cost.
Understanding the Consumer
At the core of the problem is the consumer. What do they want? They want products that don’t force them to change their habits or pay more for sustainable solutions.
This is where Drop-In Solutions come into play.
What Are Drop-In Solutions?
“Drop-in solutions” are technologies, materials, or products designed to seamlessly replace existing systems without requiring significant changes to infrastructure or processes. These solutions allow businesses to make eco-friendly or efficient improvements with minimal disruption.
Examples of Drop-In Solutions by Industry:
- Packaging: A sustainable material that runs on the same production lines as traditional plastics, requiring no additional infrastructure.
- Chemicals: The same quality and quantity of chemicals produced via a more sustainable process, without compromising on performance.
- Renewable Energy: Drop-in biofuels that can replace conventional fossil fuels in engines and machinery without modification.
Characteristics of Ideal Drop-In Solutions
- User Experience: The product should have the same feel, texture, and properties as the original, so the customer doesn’t notice a difference.
- Cost Parity: At a certain scale, the product should achieve cost parity with traditional alternatives, with a clear path to this goal.
- Minimal Infrastructure Changes: The solution should integrate into existing processes without the need for significant modifications.
Alternatively, the product could be manufactured differently but still retain enough similarity that it doesn’t require an overhaul of the current production process.
Examples of Drop-In Solutions
- Earthodic : Lignin based Biobased and biodegradable coatings that do not affect the recyclability of paper
- New Iridium: Producing Acetic acid and Acrylic acid (and other hydrocarbons) from Oil and Rare Earth metal independent processes
- Macro Oceans : Cellulose-based PFAS replacement
- FineCell : Cellulose-based surfactants and adhesive replacements.
- Renew CO2 : Methylglyoxal produced via an oil-independent process
- Linium Biochemicals : Oil-independent production of Aromatic chemicals from Lignin
- Cellfion : Cellulose-based PFAS replacement for batteries
- MacroCycle Technologies : PET recycling (back to virgin grade)
- Woamy : Natural polymer based foam replacing EPS and PU foam
The Value of Drop-In Solutions
Drop-in solutions simplify the transition to more sustainable technologies. By reducing the complexity and costs associated with these changes, they allow industries to adopt greener alternatives without overhauling their current systems. This makes it easier for both businesses and consumers to embrace sustainability without sacrificing convenience or affordability.
I would love to hear about the drop-in solutions you’ve come across in your industry or daily life. What sustainable replacements have you seen that fit seamlessly into existing systems?
A just transition to a society that values human and planetary health is possible and Sagana is proud to be working with innovative companies and forward thinking investors leading the charge.