A good origin story for a startup begins with a founder dropping out of college, and this one is no different. Before launching a novel treatment system for processing industrial waste, Seth Knutson dropped out of business school in the United States and moved to China. He was running a reverse logistics company when he had the uncomfortable realization that all was not as he thought it was.

Reverse logistics, for the uninitiated, is reusing parts or recycling materials to make new products. Knutson’s enterprise bought up old hardware from U.S. data centers, shipped it to Hong Kong, dismantled it, and sold it to Chinese customers.

“I thought it was an environmental company until I saw huge fields of discarded, low-value scrap,” Knutson says. “My customers were ripping out the high-value stuff and dumping the rest.”

With that awareness, Knutson began to investigate the disposal of solid waste in China. What he discovered led him to change course and establish a company to, as he puts it, “solve the problem”. He went to work building a pyrolysis reactor—a machine that effectively incinerates solid industrial waste, neutralizes its toxic elements, and harvests useful materials. Knutson built a prototype in his Hong Kong apartment, but that is as far as it went. He needed help.

This origin story also begins with another type of founder in the world of startups: a graduate. In 2010, Kaiqi Shi began a doctoral program in chemical engineering at the University of Nottingham, Ningbo, the British university’s campus near Shanghai. Shi was among the pioneers of the university’s research into microwave pyrolysis. He built a lab, then in 2015, he helped found a separate research center, the New Materials Institute.

A typical wastewater plant in China will produce 400 to 500 cubic meters of sludge cake per day—enough to fill an Olympic-size swimming pool.

In a series of documented experiments, Shi and his colleagues revealed the power of microwave pyrolysis to convert dangerous materials into benign char and useful byproducts. As noted in his published research, the process harvests more resources than the traditional pyrolysis process while consuming less energy. It may even produce more energy than it requires. The advantage over traditional pyrolysis is not just a matter of the quantity of outputs, but also their quality.

Knutson moved to Ningbo in 2013 to begin an environmental science program at Nottingham. There he met Shi, not yet a doctor then, and the pair launched an industrial sludge treatment startup called Innov8tia. They recruited Jessica He, an undergraduate business student, to round out their skill set.

The three now comprise a lean team leading Innov8tia into a new phase of growth. The company completed the Laudato Si’ Challenge accelerator program in Rome in December 2017. They left with $100,000 in financing. Now they have a new headquarters, a 530-square-meter warehouse in the Ningbo National Hi-Tech Zone—a government-operated technology park. Their neighbors include 30 other startups, all better funded than they are, Knutson says. And the team has started navigating potential contracts with companies that produce toxic sludge.

Dumping heaps of sludge

This startup’s origin story actually has roots in a much earlier time. Thirty years ago, the solid waste churning out of China’s industries began to mount in tandem with China’s charging economy. The country’s most visible environmental concern has been its air, and urban smog has dominated headlines and policy discussion. But soil and water contamination have also been on the rise. The problem is harder to see and harder to clean up.

Mining and smelting industries in southern China are blamed for heavy metal contamination of the region’s soil. Soil sampling has revealed increasing concentrations of cadmium, mercury, arsenic and lead, not only near mines, but in industrial regions all over the country. The volume of industrial waste has increased by more than 11 percent each year from 2001 to 2013, according to the China Statistical Yearbook on the Environment, 2014. In 2001, China’s industries produced less than one billion metric tons of solid waste, and by 2013 they were spewing out 3.3 billion metric tons per year. Most of it has been coming from five industries: steel, coal, other metals and mining, electricity generation and chemical industries. In 2013, these industries produced 2.8 billion tons of solid waste, which comprises 88.7 percent of the national total.

The sludge problem is really bad, says David Leung, founder of Onyx Environmental Products and advisor to Innov8tia. Onyx makes ultraviolet disinfection equipment to treat municipal wastewater. UV disinfection is the last step before returning the water from sewage back to rivers and oceans. Onyx treats more than 10 percent of all of China’s treated wastewater. Through his work, Leung has seen the mountains of sludge that China produces. Municipal sludge is different from industrial sludge, but the two can be handled—and mishandled—similarly. In China, the two are also frequently mixed together, Leung says. Thus, the country’s handling of sewage paints a picture of how it handles toxic industrial waste.

Sewage, or municipal wastewater, undergoes treatments to separate liquids from solids. About 20 to 30 percent of industrial waste is solid, and that gets pressed into what is called a “sludge cake”. A typical wastewater plant that treats 100,000 cubic meters of waste per day, out of which it will produce 400 to 500 cubic meters of sludge cake.

“Most of these sludge cakes are being trucked or barged to legal or illegal dump sites, which have not been properly prepared to prevent water from seeping into soil,” Leung says, meaning there is little to prevent the pollutants from contaminating groundwater.

Compounding the problem, the municipal sludge may be laced with a high concentration of heavy metals. When the heavy metal content is within nationally mandated safety limits, the dried sludge can be used as fertilizer. “But in China, industrial wastewater is usually mixed with municipal wastewater. The sludge from mixed wastewater usually contains heavy metals exceeding limits. Incineration is the only viable disposal,” Leung says.

Other sources have echoed Leung’s account of sludge dumping. “To dispose of 500 tons of toxic sludge in the south China city of Guangzhou, all you need is a hired boat and a little money for petrol,” Yang Dazheng and colleagues write in Chinadialogue. Meanwhile, the Woodrow Wilson Center’s New Security Beat blog calls China’s sludge “a toxic cocktail cheaper to dump than to treat.”

Industrial sludge high in heavy metals has contributed to the contamination of China’s farmland. As much as 19.4 percent of the country’s arable land is polluted with cadmium, copper, nickel, arsenic, mercury and lead, according to the National Soil Pollution Survey that was published in 2014.

The government has noticed. Cheap though it may be to dump their sludge, companies have recently begun to pay a price in fines and other punishment. A crackdown on polluters caught up 12,000 officials and 18,000 companies in late 2017, part of a nationwide effort to clean the air, soil and water.

Knutson believes the new pressure on China’s industry will lead more toxic sludge producers to seek treatment options. And he and his team have a system that they can install right in the plant at the source of the sludge.

Microwaving a solution

Pyrolysis is a long-established technology in the field of sludge treatment. Traditional pyrolysis is a process for heating organic materials in an oxygen-free reactor. The content inside the reactor then decomposes without combusting, and what emerges after are several transformed products, some of which can be useful. Biomass, such as wood or human or animal waste, converts inside a reactor into carbon-rich biochar and into gases such as hydrogen and syngas, or carbon monoxide. Biochar can fertilize soil and increase water retention. It can also serve as a filter for drinking water and other liquids. Hydrogen is used in the petroleum and chemical industries, and also as a coolant. And syngas has a range of industrial uses, including chemical manufacturing, medicine, and even meatpacking.

Innov8tia’s contribution to the pyrolysis field is its microwave-based technology. Microwave pyrolysis is similar to traditional pyrolysis, but it is faster, more energy efficient, and yields more usable products. There is also better control over the heating process in microwave pyrolysis, because microwaves can directly target the material in the reactor, and they can heat it and stop heating it almost instantly. Conventional systems rely on a heating source outside of the reactor that must heat the container holding the material to be pyrolyzed. Heat gradually builds and gradually dissipates. The difference is comparable to heat in a microwave oven versus a toaster oven.

According to Innov8tia’s estimates, a pesticide factory would spend $1.9 million over 10 years on Innov8tia’s microwave pyrolysis system, compared to $8.8 million on waste disposal fees.

The result is that microwave systems have better yields of valuable gases and char. By mass, microwaves can convert more than 50 percent of the feedstock to gas, and 70 percent of the volume of gas produced can be hydrogen and carbon monoxide. The systems also produce less carbon dioxide and less oil than traditional systems. Oil produced through pyrolysis is acidic and low in energy calories, thus not as valuable as gases produced through the process.

Another output from of pyrolysis is carbon fiber. Carbon fibers, which have useful applications as composites and electrode materials, can form on char surfaces during conventional pyrolysis, but microwave systems appear to take the process to another level. Shi and his colleagues at Nottingham have demonstrated the formation of multi-walled carbon nanotubes when they pyrolyze feedstock with high carbon content. In the experiments they published, the researchers pyrolyzed gumwood at 500 degrees Celsius in a microwave reactor, yielding nanotubes with a diameter of 50 to 200 nanometers on five to 10 percent of the char.

Tallied up, the pyrolytic products from a microwave system are worth more money than those produced conventionally. Innov8tia’s tests show that their microwave pyrolysis reactors are at least 20 percent more energy efficient than conventional systems, too. Microwave systems require eight kilowatts per kilogram (kW/kg) of power while conventional pyrolysis requires 10kW/kg of power, meaning that their systems use 20 percent less energy to heat waste to the same temperature as conventional reactors.

In all, the microwave systems produce more than 70 useful chemicals, such as levoglucosenone, furfural, phenolic compounds, D-allose, cresols, vanillin and others. Their values range from US$1,200 to $250,000 per ton.

The difference a catalyst makes

Test runs of two small-scale versions of Innov8tia’s reactors have yielded promising results, according to the company. The Innov8tia team procured 100kg of sludge from a pesticide factory in Yancheng City, north of Shanghai, and analyzed it in their lab. The sludge contained 43 percent organic material, 34 percent inorganic material, and 23 percent water.

The two reactors Innov8tia used for processing sludge samples had different configurations. The first was a mid-sized version of Innov8tia’s commercial model and capable of treating between one and 20kg of sludge per hour. The second system was tiny, built only for lab testing, and contained nickel-aluminum oxide to use as a catalyst.

The mid-sized reactor treated two kilograms of sludge, resulting in 65 percent gas, 35 percent char, and zero percent oil, by mass. The gas produced was 56.6 percent carbon monoxide, 23.8 percent methane, 4.3 percent hydrogen, along with several hydrocarbons. Much of the remainder—15.4 percent—was carbon dioxide.

The lab model with the catalyst performed better, converting more of the sample into valuable gas. In a quartz tube that served as the reactor, a small 10g sample of sludge produced a mixture of 70 percent gases, 29 percent char, and one percent oil, by mass. The composition of the gas mixture contained 42 percent carbon monoxide, 38 percent hydrogen, 5.5 percent methane, and 14.5 percent carbon dioxide, along with other hydrocarbons.

Innov8tia’s team concluded that the catalyst may both improve the reactor’s yield of valuable gases and char, and boost the system’s efficiency by reducing the temperature needed to produce a reaction from 800°C to 600°C.

On a larger scale, Innov8tia is developing its commercial model, called the Resource Recovery System, or R2S for short. If the pesticide factory in Yancheng City were to use the system to handle 300 metric tons of wastewater per day, the wastewater would first enter a dewatering press, which is not sold as part of the R2S, yielding about 12 tons of sludge for the R2S steam dryer. The dryer would then remove 8.6 metric tons of water and send the remaining 3.4 metric tons of sludge into the microwave reactor, with a catalyst.

Then the reactor would strip out 327kg of water, 870kg of char and 30kg of oil. It could produce an estimated 2.1 metric tons of combustible and saleable gases and 83kg of steam. The heat and power unit would use the gases to generate electricity and use some of the steam in the steam dryer. In that way, the system powers itself. Leftover electricity and steam could be diverted for other uses or even for sale.

Innov8tia calculates that this 12-ton-per-day system would generate 532-kilowatt hours (kWh) of electricity after using 1,400 kWh to power itself, and 11,400-megajoules (MJ) of steam after using 1,532 MJ to operate the steam dryer. At the grid rate of $0.13/kWh in Ningbo, the pesticide factory, for example, could earn a net profit of $70 per day from the system.

Over the roughly 10-year lifespan of an R2S, the factory would spend $1.9 million on Innov8tia’s microwave pyrolysis system, compared to $8.8 million on waste disposal fees. In other words, the factory could break even on an R2S in year two and profit thereafter from the use or sale of electricity, steam, and the system’s byproducts, Innov8tia says.

Innov8tia is still in its infancy, and these early findings, while promising, are self-reported. In terms of independent validation, the startup’s prototype technology has gone through several forms of vetting, including independent certification by a group at the Chinese Academy of Science and by a group of Chinese industry experts, the company says. Knutson adds that one of Innov8tia’s patents won an Innovation Award from the Chinese government.

A reactor in every factory

Knutson and colleagues foresee a future where sludge-producing factories are equipped with Innov8tia’s microwave pyrolysis reactors onsite. The company can build its commercial systems to be smaller than incinerators, capable of scaling down to a capacity of one ton per day. And their emissions fall below China’s regulatory limits, in some cases below detectable limits, the company says.

“Using microwaves to heat sludge anaerobically [and] to reduce the sludge to basic heat generating chemicals like methane and hydrogen is a bright and unique idea to solve a problem,” Leung says. “There is no viable and economical alternative: landfill is just deferring the pollution; incineration pollutes air and frequently meets forceful and sometimes violent opposition from local people.” Achieving Innov8tia’s vision of scale is still a way off but participating in the Laudato Si’ Challenge in Rome in 2017 was an important milestone for Innov8tia. The challenge was inspired by Pope Francis, who calls for the world to “care for our common home” and end environmental pollution and global warming. Eric Harr, the co-founder and CEO of the challenge, emphatically embraces that mission and Innov8tia’s potential in achieving it.

"There is no viable and economical alternative for industrial waste treatment: landfill just defers the pollution and incineration pollutes air and frequently meets forceful or violent opposition from local people.”

“To solve humanity’s grandest challenges, we need the boldest and most innovative solutions. Innov8tia is that solution to one of the biggest challenges we face,” Harr says. “They have the tech. Also, they have the people. Seth and his team have proven that they are locked in and relentless.”

Innov8tia graduated from the accelerator with a $100,000 convertible note—a loan that can be converted to company equity if the startup achieves certain growth and fundraising milestones. The accelerator also introduced Innov8tia to potential clients: Knutson met representatives of a transnational service and utility corporation, and Innov8tia has since been testing samples of sludge produced in the company’s Chinese facilities. Knutson declined to disclose the company’s name while pending contracts are on the table.

In its new home in the Ningbo technology park, Innov8tia has analyzed samples from 10 companies in different industries and is trying to raise funding to build a commercial system as a demonstration unit in the facility. Their current demonstration model includes the reactor with catalyst, but it not the heat and power system and steam dryer.

Given how much better funded Innov8tia’s neighbors at Ningbo park are, Knutson says the startup’s admission there by the Chinese government is testament to Innov8tia’s potential for scale and impact. “But because we are solving a major problem for the government, they accepted us assuming we'll be able to raise money to operate.”

Now, Innov8tia’s own grand challenge is to do that.