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Origin Materials SPAC

A recent SPAC deal holds promise to transform the building blocks of everyday products into carbon-negative materials. Origin Materials raised $925 million in cash and stock in a Special Purpose Acquisition Company (SPAC) merger with a listing on the Nasdaq in June. 

The California-based firm combines technology and engineering to replace oil as the foundational material of many common products by instead using sustainably harvested wood, agricultural waste, wood waste, and even old cardboard.

Photo Courtesy Michael Jin

“We’ve seen enormous awareness globally with governments, companies, individuals all realizing that climate change is real,” said Rich Riley, Origin’s co-founder, and co-CEO in a recent podcast with McKinsey senior editor Daniel Eisenberg. “We’ve got to reduce our CO2 emissions, we’ve got to transition to sustainable practices, and the role we play is to help companies achieve their net-zero and sustainability goals.”

Half of the greenhouse gas emissions come from power and transportation, which is a subject that gets a lot of attention from the press and investors, he explained. But, he stressed, “There’s the other half that comes from the products that are made that creates fully half of the emissions footprint. And that’s where we help—to reduce the carbon footprint of those materials and products.”

Origin’s earlier clients and investors include Danone, Nestlé Waters, and PepsiCo, who’ve been able to leverage its technology and purchase recyclable, 100% plant-based PET (polyethylene terephthalate) plastic. 

In addition, since announcing its transaction in February, the company has grown its capacity reservations from $1 billion to $3.5 billion. It now includes clients and partnerships such as Ford Motor Company, Mitsubishi Gas Chemical, Solvay, PrimaLoft, Packaging Matters, AECI Much Asphalt, AECI Sans Technical Fiber, and Palantir Technologies.

Origin estimates that the addressable market where its patented technology platform can be used is as high as $1 trillion. It includes sustainable production of various end products, such as plastics, packaging, clothing, textiles, car parts, tires, toys, and carpeting.

For example, its strategic alliance with PrimaLoft has resulted in the development of high-performance, carbon-negative insulating fibers for outdoor gear, fashion, and lifestyle brands, as well as home goods applications such as hypoallergenic insulated bedding. PrimaLoft materials are used by over 900 global brand partners such as Patagonia, L.L. Bean, Lululemon, Stone Island, Adidas, and Nike.

Photo Courtesy Luis Felipe Lins

Origin’s alliance with Ford focuses on the use of carbon-negative PET and sustainable pigments and fillers for SUVs, trucks, and electric vehicles. Origin noted that it believes its materials derived from sustainable wood residues “will be in high demand from the automotive industry as it undertakes a massive global effort to decarbonize its supply chains in search of the ‘zero carbon’ car.”

Origin was founded in 2008 by chemical engineering students from the University of California, Davis. Over the past 10 years, it’s built a platform for transforming the carbon that is found in biomass into useful materials, while at the same time capturing the carbon.

Today, with co-CEOs Bissell and Rich Riley at the helm, in addition to a high-caliber team of executives and board members, Origin has extended its technology to the development of a small commercial demonstration scale facility. 

Bissell said in the podcast that the Covid pandemic “has made human beings understand that perhaps there was more risk in the world than they had realized.”

And this has been reflected in how the world is shifting toward sustainable solutions: “We’re seeing companies finally make decisions—just a tidal wave of infrastructural decisions—around the way that they consume goods and energy and materials,” he said. “We have access now through this SPAC process to more capital than we had before. And the orientation is much more towards executing quickly and effectively.”

On its website, the company says that “in the future, making products won’t be an emissions problem – but an opportunity to capture carbon in durable goods.”


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