Tim Thomson of Charm Industrial joins Tom Heintzman, Vice Chair, Energy Transition and Sustainability at CIBC Capital Markets, to discuss why Canada is an attractive market for carbon removal. They explore how Charm, a U.S.-based developer, views the similarities between the Canadian and U.S. markets, the challenges and opportunities to scaling their carbon removal approach in Canada, and how Canadian government policies are attracting developers.
Tom Heintzman: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape. I'm your host, Tom Heintzman. Please join me as we explore today's most pressing issues with special guests that will give you some new perspectives and help you make sense of what really matters.
Tim Thomson: We've been impressed by Canada's approach to policy mechanisms to support CDR. A few examples where I think it's spiked, there's the investment tax credit. They have a CDR procurement program and the establishment of provincial and federal programs, as well as protocols to support CDR deployment are already popping up.
Tom Heintzman: Welcome to our multi-part series on carbon dioxide removal and the carbon markets. Throughout this series, we will examine the status of different carbon capture technologies, key issues impacting the compliance and voluntary markets, and how participants are navigating this landscape in response to evolving policies. For those of you who are newer to carbon, voluntary markets are where companies or individuals voluntarily purchase carbon credits from carbon capture projects in order to offset their own emissions. Compliance markets, on the other hand, are systems set up by government to manage carbon, generally by requiring heavy emitters to buy emissions allowances or carbon credits. On today's episode, we'll examine why Canada is an attractive market for the carbon dioxide removal, or CDR for short, ecosystem. We'll explore how one US-based developer views the similarities between the Canadian and US markets, the challenges and opportunities to scaling their carbon removal approach in Canada, and how Canadian government policies are attracting developers into this market. Please welcome my guest, Tim Thomson, Chief Financial Officer at Charm Industrial, a US-based company focused on carbon dioxide removal solutions by converting waste biomass into bio oil that can be sequestered permanently, and we'll find out shortly, what that mouthful means. Prior to joining Charm in 2022, Tim held finance leadership roles at several high growth companies in the climate sector, including Impossible Foods, Stripe, Plenty, and Meaty. Tim, welcome, and thank you for joining us on the show.
Tim Thomson: Thanks for having me. I really appreciate the opportunity to be here.
Tom Heintzman: Fantastic. Well, let's get right into it. Our listeners will be familiar with the concept of CDR or carbon dioxide removal from previous podcast series on carbon, but Charm is a unique entity in this space. So let's begin with a little context. Can you explain what bio oil is? How Charm is sourcing it and how your carbon removal approach works?
Tim Thomson: That's a great place to start. And maybe starting from how the process actually flows and sourcing biomass to what bio oil is, is how we'll take it. So, at the root of it, Charm relies on plants for carbon capture. So we use residues leftover from some other harvest activity. So things like wildfire fuels reduction or food crop production and we stabilize that carbon before it releases back into the atmosphere as it might in something like a forest fire or in regular decomposition on fields. We actually aim to process this biomass close to its source with mobile modular units. This is important because it helps reduce the cost of transporting low value biomass. Internally, we affectionately refer to biomass as fluffy. It's a low density and shipping has been a challenge for many industries that rely on it historically. So the way you can think about it is by turning it into a more dense material at the site, we're able to meaningfully drive down shipping costs. So when I say process the biomass, we're pyrolyzing it, which effectively produces two products. It's a carbon-rich liquid that smells and looks like barbecue sauce and a biochar. So the biochar actually gets spread on fields to help improve soil health and water retention and is one of the initial sources of carbon credits. But the lion's share of our revenue comes from taking that barbecue sauce or bio oil to an abandoned oil well, where we inject it deep underground to permanently remove that carbon. Amazingly, the bio oil polymerizes underground, which helps guarantee the measurement and verification and also helps properly plug and abandon those vacant wells that are often liabilities on government balance sheets.
Tom Heintzman: And Tim, you used the word polymerized. Can you just define that for both for me and for the audience?
Tim Thomson: That's right. It basically kind of solidifies underground. So as it gets more and more viscous and moves around less. And so essentially it's a good stabilizing factor within the well.
Tom Heintzman: Fantastic. Okay, I get that. Now, can you give us a sense of the geographies you're currently working in and how your technology and business model could translate to the Canadian market?
Tim Thomson: Yeah, for sure. So right now we're currently running a 24-7 bio oil and biochar production facility in Colorado, which we actually believe is one of the largest in production carbon removal facilities on the planet. We've actually partnered with a handful of states for injection that includes Kansas and Louisiana. And on Louisiana, we actually just recently announced that on our blog that we entered over the last month or so. There's a lot of pattern recognition, I would say, between the Canadian market and the US market, which makes Canada a next logical expansion. A couple of examples are there's certainly no shortage of biomass in Canada with its vast forests. There's also a robust historical oil and gas industry with plenty of infrastructure and knowledge, and I would say there's a lot of strong industrial partners that could help us succeed in that market.
Tom Heintzman: And is biomass predominantly wood and forests or do you use other waste agricultural products, for instance?
Tim Thomson: Yeah, we use a range. So we use fuel load reduction. So think things that help reduce or create fire breaks as we're trying to mitigate forest fires, which has a tremendous amount of benefit. But we also look at things like corn stover, sugar cane, bagasse, wheat straw, and all of those things that have been harvested annually and have massive amounts of volume that can be kind of put in a more stable form factor with the biochar and the bio oil.
Tom Heintzman: That's great. So Canada, does it pose any unique challenges for Charm's carbon removal approach? For instance, how might increasing severity and frequency of forest fires affect your use or the availability of biomass that you might want to use? And conversely, how does bio oil sequestration play a role in carbon capture and storage projects within Canada's oil industry?
Tim Thomson: Yeah so, as I just mentioned, one of our primary feedstocks is low value biomass removed from overstocked forest that help improve resilience. So if you think about that, it helps restore the ecosystem. It reduces fire intensity, and there's a lot of incredible contractors that do work to basically help mitigate or minimize the amount of forest fires in the market. So processing that feedstock has a ton of benefits. The first is obviously reducing risks to lives, communities, and property. It also has preservation of more healthy trees and the overall entire ecosystem that's already sequestering carbon. The second is it actually has very strong health benefits. It creates better air quality. There's less dense smoke that improves kind of quality of life benefits and has clear healthcare benefits. So as a result, the biomass potential in Canada is huge, right? The forest fire problem has been getting worse and worse on an annual basis, and there's already a really strong and robust agricultural and forestry sector for us to partner with. So we see ourselves working hand in hand with those groups that are helping to mitigate the forest fire challenges that have been ramping up for the last several years. So it aligns well with what we've been processing in the Rockies in Colorado, with the help of incredible forestry collaboratives and partners like Altitude Forestry. We'd love to replicate that same pipeline in Canada, supporting that forest health, those resilience goals, and really helping to reduce the negative impacts of wildfire smoke. On the oil side of things, I think it's often shocking to people how many abandoned wells are available in the US and Canada. I think most people have heard a lot about the requirements in direct air capture or carbon capture and storage, which those processes have a lot of cost and nuance. They require special geological formations due to how big. what we call like the plume size of supercritical CO2 is because it's a gas it wants to expand and also the potential for the risk of leakage because that gas wants to rise. If you think about bio oil, it's super dense, it sinks and it sinks and it, as I said, it polymerizes underground, which really makes the technical requirements on injection much simpler. We actually say putting oil back in the ground, it's kind of putting the same content back into the reservoir wells that was there previously. So if you think about like Alberta, for instance, there's something like 4,000 orphaned wells already there. There's also a lot of oil and gas infrastructure that will reach the end of life and need decommissioning, and that is on the order of magnitude of hundreds of thousands of wells in the region that are currently being processed. So It's actually like an incredibly advantageous approach in the regions we operate with the bio oil because we're able to utilize the same workforce in the region and benefit from their expertise to help with scale up as well as kind of utilize those assets and partner with those companies in that region. And we also don't need pipelines to move the product. So it means less infrastructure, minimal impact on land use overall. So if you can't tell, like we're very excited on the Canadian side of the market because there's obviously tremendous amount of oil and gas infrastructure for us to leverage for our process as well as a ton of potential biomass.
Tom Heintzman: Tim, I'm also interested in the work Charm is doing outside of your traditional business model to help decarbonize hard to abate sectors like steel and cement. Can you talk a bit about some of the pathways you're working on and the types of customers you're aiming to help?
Tim Thomson: Our carbon removal pathway is highly unique because at the end of the day, you're left with two incredible byproducts in biochar and bio oil. Those things are energy poor, but they're actually extremely rich in carbon content, which makes them comparable to fossil oil and coal and non-energy industrial applications. At Charm, the goal has always been to scale up volumes and drive down costs so that we can of begin moving those materials into hard to abate sectors and further amplify the impact of our process. So the carbon removal markets, it means to really achieve that, right? As we continue to scale up, we get more and more volume the way you can think about it could be used to supply a plant similar to the way there is for fossil oil or coal. We think we're uniquely positioned to do this well because we have both biochar and bio oil, which effectively allows us to maximize the carbon retention out of a single ton of biomass versus if we just produced one or the other product. So like in the near term, think char has a ton of interesting uses in the material sector and we can price it at parity with the replaced commodities due to the supporting economics from the bio oil. And this will reduce the barriers to adoption for industrial partners and allow us to start working with their existing assets with limited to no switching costs. The thing that we've talked about the most that we're perhaps the most excited about is that we can actually use our bio oil and iron making. So we've demonstrated through multiple methods that the bio oil can be used as a natural gas replacement in direct reduction iron that effectively creates a pathway to carbon negative steel. And if you think about the iron making industry, it's $850 billion, give or take in the global market. And it's something like 5 to 8% of global emissions. So it would be a huge opportunity to decarbonize a material sector like that. That's still growing. And what I love about our approach is because our process has lower energy requirements than many other pathways. If you think about the renewable needs and things like that with hydrogen. It opens up a ton of overlap with where the existing iron making facilities are globally. And so to bring it back to Canada, there's obviously a robust steel industry in Canada that we'd be quite keen on partnering with, and as our like production in the region starts to ramp up and the cost of our bio oil starts to come down.
Tom Heintzman: And Tim, maybe you could just explain to me would a steel facility use the bio oil? Like what part in the process or role does it play?
Tim Thomson: Yeah, believe it or not, there's a lot of different opportunities that we've looked at. The one that we've talked about the most is essentially like gasifying the bio oil and using it as a natural gas replacement in direct reduction iron. So you're essentially using it as a reducing agent to make the metallurgical iron. And it's a favorable treatment even if you think about things relative to hydrogen processes, for instance, that need carbon streams added to it. Ours has that sort natural benefit in that process. And so we're quite keen on that pathway. And then there's been a number of other opportunities that we've looked at, including using our char and things like that with electric arc furnaces.
Tom Heintzman: Got it, and I guess the char could also be used in the cement making process as sort of in replacement for aggregate. Is that fair?
Tim Thomson: Yeah, there's a bunch of different ways that have kind of been publicly talked about it. As we said, we think there's just a lot of range of opportunities for char as a coal replacement, and one of the things that because we have this sort of, we call it the Charm duo on that product, we're kind of uniquely positioned to try to go after a couple of those markets.
Tom Heintzman: Fantastic. Well, speaking of customers, CDR solutions often require agreements with buyers, such as off-take agreements, to help stimulate interest from investors and lenders. And we've talked on this show about a number of the large buyers, Microsoft, the Frontier Consortium. Can you highlight some examples of companies buying your carbon removal solution today and why these early purchases are so important to the CDR industry?
Tim Thomson: We've been incredibly fortunate. Charm's delivering on a number of long-term off-take agreements for companies such as Microsoft, JP Morgan, Google, Stripe, Shopify, and many others. I really think that's a key differentiator that we're delivering now, which demonstrates a capacity to deliver more in the future. I know there's a lot of new technologies that are still kind of getting up and running. So being able to actually tangibly like deliver those certificates has been a huge advantage in building those relationships. In my experience, the buyers approached the CDR off takes from a few different angles. The first kind of mimics what we saw in power purchase agreements. So in the 2000s, PPAs went from nice to have to must have. So I think many buyers see CDR having this same trajectory and I think it's true, especially as more and more regulatory bodies start to mandate carbon removal, voluntary buyers need to act now to really lock up that supply at a known cost and do the long-term capital planning that they need to. The second angle that I think buyers are approaching the market is to really stimulate CDR growth and development basically to capitalize on the future economic benefits of like a robust CDR industry. So in talking to a lot of these early buyers, there's emphasis on building the full ecosystem for this space to make sure that it can experience the growth that many people hope and expect to happen. It's been incredible the amount of support and where these partners have really started to see interesting pathways in which they can they can make an impact. think we made a great video with Workday as an example too, and saying, okay, we're catalyzing a lot of these big job creation with our pathway. That's a great opportunity to think about like where all these existing technologies can also play as those markets continue to expand.
Tom Heintzman: So Tim, one last question for you. Consistent and supportive policies are required in order to grow a robust carbon management sector in Canada. As a developer, are government policies in Canada favorable for your expansion here into this market? Or what new policies or changes would you hope to see?
Tim Thomson: Yeah, Canada has been a leader on carbon removal policies. So overall, I'd say we've been impressed by Canada's approach to policy mechanisms to support CDR. A few examples where I think it's spiked, there's the investment tax credit. They have a CDR procurement program and the establishment of provincial and federal programs, as well as protocols to support CDR deployment are already popping up, which is really exciting to see. If I were to think about the wish list for Charm, the areas that would really help us expand would be tweaking a lot of these existing programs to include bio oil as a viable pathway. I think a lot of these are done in mind with direct air capture or carbon capture and storage. So for instance, like the carbon capture ITC and other programs, should include all forms of CDR and ensure that all these future policies related to it are more tech neutral. I think that principle carries to potential CDR targets, innovation funding, procurement funding streams. Like we really need to make sure that it goes beyond just direct air capture to bring a whole range of technologies into the market. And then I think another area where the market can really differentiate is setting up streamlined permitting pathways for CDR. So bio oil injection is a much less complicated undertaking than what's needed for some of these other pathways. So it should be a more straightforward permitting process and kind of finding those pathways to really help accelerate us to get those wells, get them off the government's balance sheet and plugged in abandoned, which is beneficial for the complete communities in which they're in and they could be leaking methane or any of those different things, I think would be a huge advantage for us to expand quite quickly in the region.
Tom Heintzman: Well, Tim, great chatting with you. Thanks so much for taking the time to join the show today. And thanks to our listeners for tuning in.
Tim Thomson: Yeah, thanks again for having me. This was fun.
Tom Heintzman: If you'd like to learn more about how your business can navigate and participate in carbon dioxide removal in the carbon markets, please join us for CIBC's third annual carbon summit on October 23rd, 2025 in Toronto. The summit brings together global experts across the carbon value chain to examine project development, innovative financing mechanisms, and the transformation of carbon markets and technologies in response to evolving policies. To register, please contact your CIBC Relationship Manager. Please join us next time as we tackle some of sustainability's biggest questions, providing you different perspectives to help you move forward. I'm your host, Tom Heintzman, and this is The Sustainability Agenda.
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