Podcast Summary: Inevitable (an MCJ Podcast)
Episode: "Why Circularity Fuels Started with Diamonds to Scale Sustainable Jet Fuel"
Date: September 16, 2025
Host: Cody Simms
Guest: Dr. Steven Beaton, Co-founder & CEO at Circularity Fuels
Episode Overview
This episode features Dr. Steven Beaton, founder and CEO of Circularity Fuels, who discusses his strategic and methodical approach to building a next-generation clean fuels company. The conversation delves into Dr. Beaton’s diverse background (chemistry PhD, US Air Force fuels expert), Circularity Fuels’ unique business model, and the company’s unconventional choice to enter the market via high-value methane for lab-grown diamonds before scaling to the sustainable aviation fuel (SAF) sector.
Key Discussion Points and Insights
1. Dr. Steven Beaton’s Background and Motivation
- Origin Story: Inspired by the aftermath of 9/11 and its relationship to oil dependency, Dr. Beaton set out from a young age to "invent a way to get the world off of oil." (03:16)
- Early Technical Interests: Started hydrogen projects in high school science fairs, attended the Air Force Academy, and pursued a PhD in hydrogen catalysis at Oxford.
- Military Service: Led quality control labs for jet fuel in the US Air Force, later helping establish the Air Force's E-Fuels program. Emphasized how fuel logistics influence military strategy and resilience (12:04).
“I wanted to invent a way to get the world off of oil.”
— Dr. Steven Beaton (03:16)
2. The Fundamentals of Jet Fuel and SAF (Sustainable Aviation Fuel)
- Chemistry Explained: Clear breakdown of how jet fuel’s hydrocarbon chain length distinguishes it from gasoline and diesel (08:56).
- SAF Overview: Most SAF today is derived from used cooking oil ("HEFA" process), but emerging markets include synthetic (electric) SAF made from CO2 and H2.
“Sustainable aviation fuel in general is molecularly the same as regular jet fuel... but comes from a source that is not fossil fuels.”
— Dr. Steven Beaton (14:58)
- Why SAF for Military: The Air Force’s main driver for SAF was not sustainability but "resilience"—on-site fuel production to avoid vulnerable supply chains in conflict zones (13:08).
3. Lessons from Cleantech 1.0 and Market Entry Strategy
- Vulnerability of Biofuels Startups: Beaton witnessed the collapse of early clean tech ventures unable to compete with commodity fossil fuel prices after the fracking revolution.
- Vertical Integration Principle: Emphasized that to succeed in this market, a company must control the entire value chain to optimize costs and process efficiency (21:20).
- Selection of Beachhead Market: Decided on high purity methane for lab-grown diamonds, which is sold at a massive premium ($80,000/ton vs. $200/ton for natural gas), avoiding the classic “compete on commodity price” trap (22:45).
- Unique Reactor Technology: Circularity Fuels developed a compact reactor capable of recycling diamond machine exhaust – methane, ethane, propane, butane – back into ultra-high purity methane (29:12).
"Fuels can't be my first product... Fuel is a terrible first product."
— Dr. Steven Beaton (22:40)
4. High Purity Methane and the Lab-Grown Diamond Market
- Problem & Solution: Lab-grown diamonds require incredibly pure methane; most of the carbon is wasted and vented as lower-value hydrocarbons. Circularity Fuels’ miniaturized reactors recapture, convert, and purify this exhaust.
- Product-Market Fit: Immediate and substantial value for diamond growers (80-90% cost reduction vs. traditional providers).
- Market Size and Opportunity: While a relatively small US market ($30M-$40M/year), enormous growth potential if diamond-based semiconductors for AI chips materialize (34:57).
“We will be with both of these products coupled together, 80 or 90% cheaper than high purity methane derived from fossil fuels.”
— Dr. Steven Beaton (31:53)
5. Pathway to Sustainable Aviation Fuel (SAF) and Biogas
- Why Move Beyond Methane: Liquid fuels command far higher prices than methane or natural gas; syngas (an intermediate in both markets) forms a technical bridge (35:29).
- Current Approach: Using biogas (from waste sources like dairy and landfills) as feedstock for SAF via the Fischer–Tropsch process.
- Current Demo: Demonstrated conversion of real, raw biogas from a California dairy farm into syngas and SAF at small pilot scale (half-gallon/day), with plans to scale to commercial-size pilots by 2029 (42:29).
“We have a reactor now that’s been proven to work for tens of thousands of hours in demanding commercial environments. Let's go chase SAF.”
— Dr. Steven Beaton (36:25)
- Market Incentives: Current US and California regulations create a lucrative market for RNG and SAF, especially via transport credits and low-carbon fuel standards.
6. Business Model and Financing
- Dual Track Model: Sells reactors or offers methane as a service with offtake agreements; flexible to diamond customers’ preferences.
- Grant Funding: Successfully raised $3M in venture investment (including from MCJ and DCVC) and $5M in non-dilutive grants (ARPA-E, NSF, California Energy Commission), leveraging both climate and semiconductor/digital market narratives.
- Strategic VC Internship: Used a strategic internship at DCVC to learn venture mechanics and secure lead investment (46:08).
"The ability to switch between those vocabularies [climate and semiconductor] has been very helpful as we write grants between administrations."
— Dr. Steven Beaton (48:59)
7. Vision and Focus
- Laser Focused Execution: Maintains strong discipline to avoid distractions from the core technical and commercial milestones; focuses first on diamonds, then SAF (50:35).
- Potential for Defense and Rocket Fuel Markets: The technology’s flexibility could serve future Department of Defense contracts or rocket fuel applications (51:48).
Notable Quotes & Memorable Moments
-
“I think a large part of that is I've spent so long in clean fuels and renewable energy that I've had a lot of time to think about how the ideal clean fuels company in my mind should go to market.”
— Dr. Steven Beaton (02:56) -
“If you were a base in the center of Iraq and you had to convoy that fuel in, the Pentagon frequently calculated the fully burdened cost of that fuel at more than $50 a gallon... 40% of all casualties in Iraq were due to water and fuel convoys.”
— Dr. Steven Beaton (18:30) -
“Best use for any energetic hydrocarbon waste is to turn it into a hydrocarbon fuel rather than just simply burn it for electrons. We can get clean electrons either through nuclear, through wind, through solar, batteries—a lot cheaper than burning biogas.”
— Dr. Steven Beaton (41:49) -
“Our goal is to hit parity. The reason why Circularity Fuels exists is that we want to compete with fossil fuels on price.”
— Dr. Steven Beaton (44:01) -
“Certainty is valuable. And if you burn SAF, you know that that carbon is forever removed... you are certain that it’s permanent when you don’t burn a gallon of fossil jet.”
— Dr. Steven Beaton (45:08)
Timestamps for Key Segments
- Dr. Beaton’s Origin Story/Military & Fuels Background: 03:16 – 11:09
- Jet Fuel Chemistry and Military Use: 08:56 – 10:47
- SAF Overview & Military Motivation: 12:04 – 14:49
- Strategic Go-To-Market/High Purity Methane for Diamonds: 21:20 – 29:12
- Lab-Grown Diamond Reactor Product: 29:12 – 32:30
- Transitioning from Diamonds to SAF/Biogas: 35:29 – 42:29
- Pilot Results & Scale-up Plans: 42:29 – 43:43
- SAF Market Economics & Carbon Removals: 43:43 – 45:35
- Non-dilutive Funding & Strategic VC Internship: 46:08 – 48:59
- Dual Market Focus/Execution: 50:35 – 52:49
- Closing Remarks/Company Vision: 52:51 – End
Tone and Style
The conversation is highly technical yet accessible, blending military and entrepreneurial pragmatism with hard science. Dr. Beaton’s responses are clear, deliberate, and methodical—matching his CEO approach. The hosts keep the energy light but focused, offering clarifying questions, humor, and real-world analogies (video games, popcorn-smelling jet fuel) to make the dense subject matter engaging.
For those seeking to understand how a clean fuels startup can break the old cleantech mold, and why diamonds might fuel the path to decarbonizing aviation, this episode offers a blueprint in both strategic focus and entrepreneurial creativity.