Sunday Pick: Tech Solutions (#3): How one of China’s biggest tech companies is tackling carbon removal (with Xu Hao)

0:28Happy Sunday, TED Talks Daily listeners. It's down with Xu Hao, who runs sustainability initiatives at Tencent. Tencent is one of China's largest technological companies. It's behind the popular Chinese messaging app WeChat, the world's largest video game vendor, and is now an up-and-coming force in carbon removal. They discuss the role megacorporations can play in the climate movement, where carbon technology currently is, and how Tencent's video games are an unlikely and exciting source of climate education for hundreds of thousands. TED Tech is a show that features talks and conversations that explore the many ways in which technology impacts society.

1:06If you want to hear more insights like this, listen to TED Tech wherever you get your podcasts and learn about the TED Audio Collective at audiocollective.ted.com. Now on to the episode.

1:27Welcome to TED Tech, a podcast from TED. I'm your host, Sherelle Dorsey. Today, we're continuing our special mini-series about climate solutions and the technology that can lead us into a greener, more equitable future. Across four episodes, we're bringing you conversations from TED's Countdown Climate Summit in Nairobi, Kenya, where some of the world's greatest visionaries shared cutting-edge solutions to the ongoing climate crisis. It's the defining challenge of our time. So how will we meet it? Before we dive into today's conversation, let's pause to consider a sobering fact. Even if we halted all emissions today, the carbon already in our atmosphere would continue to warm the planet for decades to come.

2:18That's why the world's attention is increasingly turning to carbon removal and why leaders like Dr. Xu Hao are so pivotal in shaping the solutions of tomorrow. Dr. Howe serves as Vice President of Sustainable Social Value at Tencent, one of the world's largest technology firms, and the company behind WeChat, with over a billion active users. In this role, he leads Tencent's carbon neutrality lab and directs CarbonX, the company's ambitious platform investing in breakthrough carbon removal and decarbonization technologies, particularly in hard-to-abate sectors like cement, steel, and chemicals.

3:04Under his leadership, Tencent isn't just focused on reducing its own operational emissions. It's actively funding and accelerating early-stage, high-risk climate solutions through its lab, accelerator, and infrastructure tracks, moving ideas from concept to commercialization. Today, we'll explore with Dr. Howe what it takes to push carbon removal technologies from promising prototypes to real-world impact. And because it's important to challenge and contextualize these efforts, we'll also ask, why should a company like Tencent, known more for social platforms and gaming than heavy industry, be so invested in carbon removal?

3:47What role do tech giants truly have to play in the global climate movement? It's an important conversation at a pivotal time, and I'm thrilled to welcome Dr. Xu Hao to help us make sense of what's next. Before we dive in, a quick break to hear from our sponsors.

4:10So, Dr. Hao, first of all, welcome. Yes, my pleasure. Thank you. Thank you so much for joining us. Thank you. CarbonX specifically focuses on hard-to-abate industries and technologies like what's called carbon capture utilization storage or CCUS. What do you see as the single biggest misconception or challenge that needs to be overcome for some of these carbon removal technologies to really achieve widespread adoption and really significantly impact global emissions? The single challenge they face is actually they cost too much today, right? So we really need to push the technology forward so that they can reduce their cost and they can scale up.

4:58Then they can play a big role. So at the moment, we see a lot of the technology are actually coming out of the laboratory in the research institute and become startups or actually integrated into many of the existing hardware bait sectors. and begin to make a material impact. By material impact, I mean, okay, in the lab, you're probably working on kilograms or a few tens, and then going into the industry, you're working with at least 1 ,010 or 10 ,000 or millions of tens. Then it is really helping some of the industry decarbonize. That is important because we have to have the option out there so that the industry knows, okay, I can choose this pathway.

5:42Otherwise, let's say if the technology is not there, you probably have some so-called technology locked-in effect. If you choose a relatively higher carbon technological pathway, you build a plant, that plant will be there for 15, 20, 30 years. Then the emission is almost locked in. And I love that you speak to the ecosystem at large because the more investment, the more time put in, the advancement, the lower the costs. But that opportunity still has to be there. And there's the CarbonX initiative, which funds projects across the labs. Can you share some examples from maybe one of the winning cohorts from this project that embodies this idea of tech for good and this vision around what this kind of innovative approach or potential can be to really scale?

6:31So when we launched the first round of CarbonX, what we found very interesting is look at all the winning startup cohort. Most of them are actually doing carbon utilization in China. And then we think, OK, why is the reason? It's probably because, number one, we don't have a carbon price that covers most part of the economy. We have our carbon market, but it's only covering part of the economy. It's expanding to cover most of the economic activities pretty soon, but at the moment, that didn't cover that part. And secondly, carbon utilization in terms of so-called MRV issues, measurement, reporting, and verification, is complicated.

7:17Because how do you calculate if I use one ton of carbon dioxide from a chimney, how much carbon abatement I have? It's technical and it's complicated. As a result, these guys have to compete head-to-head with the fossil fuel alternative, whether it's make plastic or make calcium carbonate or make building materials, cement. They have to compete head-to-head with the fossil fuel alternative without a price on carbon. And then the good thing about it or exciting, there are actually much more than what we expected startups. They can actually compete with the fossil fuel alternative. They can make cement using steel slug and carbon dioxide at a similar cost or sometimes even less than the fossil fuel alternative.

8:12They can make organic material. They can make chemicals using carbon dioxide, cheaper than the traditional way. They are actually making sustainable aviation fuel. Today is still a bit more expensive, but we actually see a viable pathway to really drive down the cost so that they can be competitive one day. So you don't need a carbon price. If we look at electric vehicle, lithium battery, solar and wind, they are now competing head-to-head with the fossil fuel alternative. And then if we look at what are still happening in the laboratory, these guys are probably the next wave. So if we get waves and waves and waves of these emerging low-carbon technologies, then we are really pushing the decarbonization agenda forward.

8:59That really excites us. It excites me that you're excited about this, because I think I probably speak for everyone who's listening in now that we can hear just the enthusiasm and the possibility and the opportunity. And I think so far in this space, it's felt so out of reach to really solve these major challenges. So how do you envision Tencent leveraging some of your strengths in AI and data and cloud computing, particularly for this space of advancing carbon removal and emissions reductions and, you know, really speaking to some of those solutions that you're excited about? Yeah, so we just talked a lot about kind of physical low carbon technology, right?

9:44As a technology company, the other half is sort of digital technology. So our approach is see how we can leverage the digital technology to actually either help the hard to make sectors be more effective, efficient. most likely in many of the cases, being more efficient is actually being lower carbon for them, simply because energy actually is a big part, big share of their operating cost. Or using digital technology, doing something you can't actually do without it. So conceptually, right, digital technology actually improves the ability to doing everything much more granular. If I'm a operator in a plant.

10:29With digital capability, you can do almost everything in a split of a second. Nowadays, with the development of AI, machine learning, you can almost envision that all the plants will be running much more granular, which means the management of the plant will be much more efficient. As a result, they will produce the same amount of output using much less resources. So we call it resource productive operations. And then with a lot of the innovation in the digital space, then you can achieve additional things. For example, there is the concept called virtual power plant. So with more renewable on the grid, flexibility becomes a scarce resource.

11:14So we get flexibility, for example, from batteries or energy storage facilities. But that costs a lot of capex. You need to buy a lot of batteries to put it on the grid so that you are flexible. But then you can try to match the generation and the production of the electricity and the use of the electricity more precisely so that you actually need less battery. So that is so-called virtual power plant. Virtual means if I want you to so-called generate, the user actually use less. If I want you to consume, then the user use more. That can almost only be done by digital technology because we really need a lot of data, a lot of optimization, and also split of second reactions.

12:03So that cannot be done manually. It can only be done digitally. That's only one example. We have so many examples on similar approach. So that is also a big part of the innovation space. And then finally, of course, we have to solve the additional energy consumption as a result of all the development of digital technology, more data centers, more electricity consumption. But the solution is already out there. We just use more renewables, right? So at Tencent, we have this policy saying, okay, any additional energy we use, we will use on renewables. And any renewable we actually get, we use renewables on additional renewable projects.

12:45So we're not only pushing our own decarbonization agenda, we also want to help the renewable industries to get more capacity in the grid. Yeah, and I think that's important to highlight because there is a growing concern about the emissions and the energy utility of the data centers and also where they are being established, how that's disruptive to the environment, I think, from a physical, social aspect. But then, of course, because of all of the growing needs of energy consumption. So pointing to renewables and usage is very prescient. What do you believe is the role of corporations like Tencent in the climate movement today, regardless of their business model or their product?

13:30There is a fairly straightforward or simple logic to this if we look at almost anything, right? So any solution that solves big social or sustainability issues in the very long run will generate business value sooner or quicker. Tencent, we started with a social network. So at that time, it's actually a social issue because if we actually connect people more efficiently, you create a lot of social value, right? I guess the bit different with the normal business is that at the moment, you're probably focusing on how do we create sustainability value first and then try to capture the business value at a later time.

14:18And then the timescale may not be three to five years, where a technology company used to maybe five to 10 years. But if you have that vision or you have that patient, I think we'll get there. So that's why Tencent or like many of our peers are all doing very similar things. So I think it's based on that belief. Tencent has a massive customer base. And you mentioned that your video games can have an impact on climate education and advocacy. So can you speak more to this in the realm of learning? When we start this, right, number one, we have our own decarbonization agenda. As a result, we need to not only make our data center more efficient by renewables, we still have scope three emissions so that we have to leverage carbon credit.

15:08So when we tap into the carbon credit world, we see, okay, a lot of the work is actually protecting some of the ecosystem. And then we realized that in many of our games, the theme of the game actually fits this topic very well because one of the heroes, one hero, his background, maybe he's the son of the forest. The other hero may be guardian of the frozen world. Or maybe some game is about apocalypse, climate change world. So that makes us naturally think, okay, can we leverage some of these themes with the young players in the gaming world with the work we're actually supporting in the physical world?

15:52So that brings us to this idea, okay, can we integrate some of the real knowledge and real climate change elements into our games? So that's why we actually tried earlier this year in Southeast Asia is that one of our games, we're just about to launch a new hero. This hero is actually the son of the forest. So he grew up in the forest. He's friends with all the animals in the forest, and then they face challenges. So we say, okay, in that region, we face a lot of actual challenge, the mongroves, the peatlands, the biodiversity in the sea. And then that's why we integrate a lot of these topics into the gaming world.

16:33And we also promise to the players, if you do this and that, finish all the tasks in the game, we will actually, on your behalf, protect all of those ecosystems and forests. And then we just want to give it a try. And it turns out that over two, three weeks, we got like 20 million plus players actually participated. That may make us really exciting because that's a pathway to the young generation deliver the message the way they like. And it's not boring. I guess another good thing we found out, everybody cares. It's not just China or Asia or Europe or America. Everybody cares. So we plan to do similar things like in older games in parts of the world because everybody really cares.

17:26It's a topic that resonates to our everyday life.

17:34As we look ahead, let's say to 2030, is there one specific technology that you think is really going to move the needle on climate change? For our decarbonization journey, we're going to ratify our commitment by 2030 to be carbon neutral, but we won't stop there because we also committed to the net zero, which is a more strict version of carbon neutral, because we're going to try to reduce all the emissions we possibly can using whatever technology that can be applied. So our own decapitalization journey won't stop at 2030. We're going to continue to push through. So we will also try to push the major low-carbon technology forward.

18:24So at the moment, I think what really is already have a real pathway is everything around electricity. So we have renewables, which is cheaper than fossil fuel. We have storage that can electrify our transportation. And then we have new technology in the energy storage space that we can make our grid flexible so more renewable can be accommodated. And then we have heat pumps that can also decarbonize a lot of our buildings in terms of cooling or district heating. So the whole electrification, renewable energy transition is already there. I think we're pretty sure that it's going to scale up. And then I guess the question is, what is the second wave?

19:13So I believe the second wave is in the so-called hardware-based sectors. It's iron steel, cement, chemicals, paper and pulp, and many other, aluminum, many of them. Because these guys began to have more and more options to actually decarbonize their production. Five years ago, I think there are limited options. Like for iron steel, you probably can produce steel from scrap, but it only has this much scrap available. But today, you can use hydrogen or you can use biochar. There are more and more technology available. So what I'm really excited is this next round of decarbonization technology. They are designed to be carbon neutral or net zero from the very beginning.

20:01I think by 2030, many of them will be much cheaper and much more scalable so that we will see maybe the first generation or second generation of low-carbon technology unicorns grow out of China or anywhere in the world. That will really give us confidence that decarbonization can be achievable. I don't want to bet on any single technology, but I think that group of technology will eventually be there. I'm also curious about, as our kind of last question as we close out here, what are you worried about? You know, there's this great vision for 2030, all of these hopeful opportunities, but obviously there are potential roadblocks, potential challenges.

20:51How you're thinking or considering some of those challenges and those hurdles that are going to need to be overcome in order to realize this vision? So the challenges we face is, number one, I think, we don't really know the right answer. So that's also why I don't want to bet on any single technology, because I don't know who will be the final winner. Someone will say, okay, we will get nuclear fusion in 20 years, and then we don't need all of these solutions, because we get unlimited energy for everyone, and without any emission, we just use hydrogen. We just use nuclear fusion, right? We have almost unlimited nuclear fusion raw material to actually deliver the energy.

21:38But what if it doesn't? Or we might bet on CISUS or might bet on hydrogen, but what if it doesn't materialize? So I think that's the challenging part, is we don't know the right answer, but we don't have time to find out the right answer and then scale up that single right answer. So that's why we need to push all the possibility forward, which makes, I guess, everybody nervous. It makes me really nervous. I appreciate the candor, Dr. Howe, and thank you so much for joining me here today. I'm excited for the goals that you all have set, but I think also the vision and the world that you've painted that allows us to understand that it's going to be a challenge, right?

22:25And that's what hard things are about in figuring this out. We're doing something very new. And yet there's a world full of possibility, which also means that all hands are on deck and everyone's talents can be put to use here. Everybody play our role and take action. We will get there. Thank you so much. Thank you. My pleasure. That's Dr. Xu Hao, Vice President of Sustainable Social Value at Tencent. All right, that's our show. Thanks for listening and thanks for checking out our special series. We'll be back with more interviews from the Countdown Climate Summit in Nairobi, Kenya in the coming weeks.

23:05And if you want to listen to past conversations from the series, you can find them all on the TED Tech feed. In the meantime, you can keep this conversation going with us on our social media accounts at TED and at TED Countdown on Instagram and X. TED Tech is a podcast from TED. This episode was produced by Lucy Little and Trina Menino. Our editor is Alejandra Salazar, and the show is fact-checked by Jen Nam. Special thanks to Constanza Gallardo, Daniela Barroso, Maria Ladias, Tanziga Sangmanivan, and Roxanne Hilash. If you're enjoying the show, make sure to subscribe and leave us a review so other people can find us too.

23:48I'm Sherelle Dorsey. Let's keep digging into the future. Join me next week for more.