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Ishan Pandey: Hi Kirill, welcome to our series “Behind the Startup”. Please tell us about yourself and the story behind FuelGems?
Kirill Gichunts: While in undergrad doing business at UC Berkeley, I realized there is no better job than cleantech startups because they help people and the environment and make money.
With this in mind, I went on a career journey to build my knowledge base. I joined a Silicon Valley startup which achieved an exit. Then I did investment banking where I worked on deals worth over $2 billion. Later I became a partner at a venture capital accelerator fund (part of a $3.5 billion investment company), invested in over 15 startups, and achieved an exit.
After this, I began operating in the cleantech space and was fortunate to meet a group of truly brilliant scientists.
We joined forces, and FuelGems was born. I was the driving force for the business side, and they were the driving force for the technology. It was a perfect mix of business and science, and after extensive and groundbreaking R&D, we were able to give life to this incredible product and bring it to market.
Ishan Pandey: According to you, what is the future of energy after COVID-19 and how is it going to impact industries worldwide?
Kirill Gichunts: Energy is the driving force of all economic sectors. While there has been an economic slowdown due to COVID-19, with time markets will recover, and the energy space will rebound and grow.
Even today, cars, ships, trains, and trucks are still heavily used to transport goods and raw materials.
Ishan Pandey: How can fuel nanotechnology reduce greenhouse gasses and emissions?
Kirill Gichunts: The nanoparticles that we designed were shown to increase engine efficiency while reducing fuel consumption by 9%.
Our nanoparticles enable more fuel molecules to burn inside the engine and release more energy rather than escaping the combustion process as pollutants.
We showed a reduction of CO2 by 9%, CO by 15%, and particulate matter by 6% and reduced unburnt hydrocarbons by 50%.
Besides, our nanotechnology improves lubricity and keeps fuel fresh.
Ishan Pandey: Organizations want to be sustainable and reduce their carbon footprint. According to you, what is the potential quantifiable upside of nanoparticle additives for ride-sharing, supply chains, and logistics companies?
Kirill Gichunts: Our technology enables us to manufacture nanoparticles at a very cheap cost. Only a tiny amount of our nanoparticles is needed to treat a massive amount of fuel.
Unlike some nanoparticles that are added to fuel are toxic, the nanoparticles that we have developed are completely safe because they are made from carbon. Given the low price and safety of FuelGems’ technology, it can be used extensively in the $3.5 trillion fuel market.
This means that our nanoparticles can be added to fuel at the refinery level, used for fleets, ride-sharing companies, and in any mode of transport using diesel, gasoline, or biofuel. FuelGems could potentially expand the fuel additive market by $5-10 billion or more.
Think of our product as Intel. The same way Intel is inside computers, FuelGems is inside the fuel.
Ishan Pandey: What is the market size and who are the key vendors in the fuel additives market?
Kirill Gichunts: The fuel additive market is over $45 billion.
Ethanol replaced MTBE to improve gasoline’s cleanliness and is currently added as 10% of gasoline in the US. The ethanol market in the US is over $40 billion annually. Research shows that the classic fuel additive market is about $6 billion.
The key players are Afton Chemical Corporation, Innospec, and The Lubrizol Corporation and few others are Chevron Oronite, Evonik, BASF, Lanxess, Dorf Ketal Chemicals, Infineum, Cummins, Huntsman Corporation, ENI, Dow, and QAFAC. It’s interesting to note that ethanol produces less energy than gasoline; however, when FuelGems is added to ethanol, its performance level is par with gasoline.
Ishan Pandey: According to you, what are the key factors driving the fuel additives market? Further, what would be the impact of electric cars' adoption on the consumption of oil worldwide?
Kirill Gichunts: Stringent environmental regulations drive the need to make fuel cleaner and increase fuel additives' demand. Also increasing the number of cars and trucks will increase fuel consumption as well as fuel additives.
Research shows that electric vehicles will replace gasoline and diesel cars by about 30% by 2050, thus driving down oil consumption.
Overall, the decline in light vehicles will make a dent in the $3.5 trillion fuel market. Even if the market shrinks to $2.5 trillion, it is negligible for FuelGems because at this size it is still enormous. Ships, trains, aeroplanes, trucks and heavy machinery will likely be powered by gasoline or diesel.
From a cleantech perspective, electric cars are as clean as the electricity they use. Over 60% of the world gets its electricity from coal and natural gas and about 20% from nuclear power.
Thus, electric cars are powered mostly by coal and nuclear.
Moreover, the coal and natural gas that produce the electricity for electric vehicles spew about 0.6 pounds of CO2 per mile into the air, while gasoline-powered cars release about 0.7 pounds of CO2 per mile. Using FuelGems fuel additive would make gasoline cars almost as clean as electric cars.
Ishan Pandey: In the Netherlands, organizations are now storing CO2/carbon underground on the ocean floor. Do you think this experiment is safe and a sustainable idea?
Kirill Gichunts: This looks like a novel concept in the initial experimental stage. Much more data on the practical implementation is needed.
Other promising approaches are available, such as converting CO2 to graphite or using biofuel instead of fossil fuels—plants convert CO2 to oxygen.
All of these approaches need to be implemented right away, in parallel, to make an impact. FuelGems is ready to go today, providing excellent possibilities for environmental and economic benefits for diesel, gasoline and biofuel users.
The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Interviewer - Ishan Pandey.