Walmart Inc. is teaming up with a California startup to test technology that removes carbon dioxide from its supply chain, with plans to eventually turn that CO2 into yarn for clothing.
As part of a pilot project with San Leandro-based Rubi Laboratories Inc., Walmart will identify factories in its supply chain where carbon dioxide in waste gases can be captured using Rubi’s reactor systems. The majority of the world’s captured CO2 is currently used for oil extraction, according to the Global CCS Institute, but Rubi’s system uses biochemical processes to convert the gas to cellulose, the main substance in the walls of plant cells. It’s a technique inspired by the way trees use carbon dioxide to grow.
That cellulose is used to produce lyocell yarn, which can be made into textiles. After performance testing, Walmart and Rubi plan to develop a prototype apparel collection, according to a joint statement released Thursday. The pilot project runs through the end of 2024.
The goal is to “find a greener way to manufacture apparel,” Andrea Albright, Walmart’s executive vice president of sourcing, said in an interview. “If we can pull CO2 out of the atmosphere and put it into a raw material in a way that doesn’t cause an abundance of electricity usage or other implications, that’s compelling to us.”That’s still a big if. Rubi Chief Executive Officer Neeka Mashouf, who founded the company with her twin sister Leila in 2021, says its equipment should be able to capture 90% of a factory’s carbon emissions. The startup has raised $13.5 million from investors that include Talis Capital, Patagonia Inc.’s Tin Shed Ventures and Sweden’s H&M Group, and has partnerships with brands such as Nuuly by Urban Outfitters Inc. But while Rubi has successfully created yarn out of carbon emissions, it has yet to do so at scale.
Carbon capture, too, is dealing with growing pains. Direct air capture alone could be a nearly $1 trillion business in the next decade, according to BloombergNEF, but cost and scalability remain open questions. The nascent technology has also drawn fire from environmentalists who say it can be misconstrued as a license to continue burning fossil fuels.
Walmart is among many large companies looking to cut emissions to reach climate goals. In 2020, the Bentonville, Arkansas-based retailer said it planned to achieve net zero emissions across its operations — known as Scope 1 and Scope 2 emissions — by 2040. That target would zero out just 5% of Walmart’s total emissions, though. To address Scope 3, emissions generated by suppliers and customers, Walmart launched Project Gigaton in 2017. Today that initiative has about 5,200 suppliers engaged in the goal of reducing or avoiding 1 billion metric tons of carbon dioxide equivalent by 2030. But for now, the company’s supply chains still rely heavily on manufacturing processes that generate carbon.
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Price could prove another challenge for Walmart and Rubi: Walmart shoppers are used to affordable clothing. Albright said she’s confident the retailer will be able to turn a profit on apparel from its Rubi collaboration, and Neeka Mashouf says Rubi expect to be cost-competitive with existing textiles. Although Neeka and her sister came to the startup world from a science and engineering background, they learned about the fashion business growing up around their family’s brand, Bebe Stores.
“Affordability is really key,” Mashouf said. “We developed the technology to focus on making that possible from a unit-economics perspective.”