Stephen Beaton, a US Air Force veteran and Oxford PhD, has founded Circularity Fuels, a startup that's taking a novel approach to replacing fossil fuels with carbon-neutral methane and lab-grown diamonds. Beaton's passion for finding alternative energy sources was sparked by the 9/11 attacks and the subsequent spike in oil prices, which he saw as a threat to national security.

After leaving the military, Beaton wanted to create a company focused on producing liquid fuels, but he soon realized that fuel is a commodity and a challenging first product. Instead, he turned to lab-grown diamonds, which require methane with extremely low impurities. This methane can sell for anywhere from $40,000 to $80,000 a ton, making it a high-margin luxury product.

Circularity Fuels' innovative process combines hydrogen with carbon from CO2 to produce methane. While this idea isn't new, the company's unique reactor and catalyst make it more efficient and cost-effective. The reactor can capture carbon and produce methane without separate vessels, and it reuses waste heat from the reaction to power the carbon capture equipment, reducing energy consumption by 40% compared to competing CO2-to-fuel pathways.

The startup's catalyst is highly selective, allowing it to produce 99.9999% pure methane at a lower cost than traditional fossil fuels, even with current hydrogen prices. This has significant implications for the energy industry, as Circularity Fuels aims to drive the price of e-fuels down to the point where they can compete with fossil fuels and steal market share.

The company's modular reactor design also enables methane and e-fuel production wherever it's needed, reducing transportation costs and cutting greenhouse gas emissions from leaky infrastructure. This aspect of the technology was a key factor in DCVC's investment in the company, according to partner Zack Bogue.

Circularity Fuels has received significant funding and recognition, including a recent ARPA-E award and grants from the California Energy Commission, the National Science Foundation, and Stanford TomKat Center for Sustainable Energy, totaling $4.9 million. The company was incubated at DCVC, where Beaton is an entrepreneur-in-residence, and received pre-seed funding from the firm.

As the energy industry continues to shift towards more sustainable and environmentally friendly solutions, Circularity Fuels' innovative approach could play a significant role in reducing our reliance on fossil fuels and mitigating climate change. With its unique technology and strong backing, the startup is poised to make a meaningful impact in the years to come.