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The Future Of Carbon Capture Is In The Air

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While renewable energy is now widely accepted as the cheapest form of electricity generation, energy demand growth, government growth requirements and the need for a just transition mean fossil fuels will still have a role. But for that to work with climate goals, carbon capture and storage (CCS) technology must be mainstreamed. In Iceland, Climeworks is showing how direct air capture/storage (DAC) could change the game.  

The IEA has shifted its position significantly on renewable energy, following some years of criticism regarding the accuracy of its projection for renewable energy growth. This year's World Energy Outlook (WEO) confirmed that the cost of solar electricity is between 20-50% cheaper than estimates made in the 2019 WEO, dependent on the region, with similarly large reductions in the estimated costs of onshore and offshore wind. It also stated that by 2030, 75% of global electricity must come from low-carbon sources, up from a figure of 40% in 2019.

2020 has been the first year where wind and solar account for the majority of new global electricity generation capacity, but the fossil fuel industry is still slow to change. Some of the oil majors, in large part due to increasing investor concern about the financial impact of climate risk, are reassessing their strategies. Last year BP even stated that oil use may even have peaked and in June 2020 announced it was writing down or reducing the value of its assets by between $13 billion and $17.5 billion, due to a combination of COVID and reduced oil demand. Even if oil use is reduced however, if we are to meet carbon budget requirements by 2050 and achieve a net zero economy, much greater focus needs to be given to carbon capture and storage

Work on energy related emissions reductions prevent new CO2 from entering the atmosphere, but climate scientists agree that removing historic emissions is crucial to limit global warming to the Paris Agreement goal of 1.5°C. That means not just preventing new emissions through energy deployment but finding ways to remove historical emissions.

Christoph Gebald, co-CEO and co-founder of Climeworks said, “Breaking ground on the construction of Orca marks an exciting milestone for Climeworks and an important step in the fight against climate change. Climeworks’ new plant Orca demonstrates that scalable, pure carbon dioxide removal via direct air capture is possible. And we are excited to be a vital part in kickstarting the carbon dioxide removal industry.”

There has been significant movement in the CCS market recently. In the UK, as part of its recently announced green infrastructure plans, the government has promised £1 billion to set up four industrial clusters for CCS. The Norwegian government is working with Equinor, Shell and Total on a project intended to standardise and scale carbon capture, transportation and storage in Europe. The Northern Lights project is expected to capture CO2 from industry in the Oslo-fjord region, following which the carbon will be liquefied and shipped to an onshore terminal on the Norwegian west coast and then taken out to the North Sea for long term subsea storage.

What makes Climeworks use of DAC so interesting is that it doesn't just work in removing emissions associated specifically with power generation, but can capture emissions directly from the air. Climeworks new plant, named Orca, will combine Swiss-based Climeworks' direct air capture technology with the underground storage of carbon dioxide provided by Iceland’s Carbfix and the plant should be online in spring 2021. The technology has been designed to be modular to achieve short construction times, which could be a key enabler for scaling the technology in the future. The company is also powering the plant with clean energy from ON Power’s Hellisheidi Geothermal Power Plan, minimising the plant’s impact. This is the company’s largest plant so far, intended to capture around 4,000 tons of CO2 per year.

It's not alone of course. In Canada, Carbon Engineering says its technology can be scaled up to remove up to 1 million tonnes of CO2 from the air annually, with a large-scale plant in development with Occidental Petroleum OXY , with a completion date reported to be 2026. The company is also working with Pale Blue Dot Energy to explore the creation of a CCS hub in Scotland, and the launch of the UK’s first DAC system.

What is interesting about Climeworks approach, and DAC in particular, is its use in offsetting through the generation of carbon neutral products as well as in minimising power related emissions – addressing both requirements for effective climate action. For Climework’s, CO2 that is not captured and stored is intended to be upcycled into products including carbon-neutral fuels and material. And this ‘use’ option is one of the most interesting aspects of their approach. There is a growing market for corporations to provide access to offsets to their customers.

Swedish digital start-up Mentimeter recently announced plans to offset its emissions through the purchase of 65 tonnes equivalent of credits from the Nordic DAC Group, which is planning a fully operational DAC plant using Carbon Engineering’s technology by 2023. At the other end of the scale, US payment processing software company Stripe has launched a service, Stripe Climate, which allows users to part payment towards carbon offsets. Having invested $1 million in buying those credits over the last year, it has helped to fund Climeworks development as well as others.

“No single business can create enough demand to scale carbon removal on its own. But the millions of businesses running on Stripe, collectively, can help grow and sustain this new industry,” said Nan Ransohoff, Head of Climate at Stripe. “Our goal is to create a large market for carbon removal. If successful, this market will accelerate the availability of low-cost, permanent carbon removal technologies, and increase the likelihood that the world has the portfolio of solutions needed to avoid the most catastrophic effects of climate change.”

Stripe is not focused solely on DAC as it has also bought credits from CarbonCure, which injects carbon into concrete; Project Vesta, which uses a common mineral to convert carbon in the ocean into limestone on the seafloor; and Charm Industrial, which produces an oil from biomass and then injects it deep into the earth. What matters here is that with a mainstream company willing to buy in at an early stage, this can help accelerate each technology to scale. According to the company, since August, more than 25 beta users of Stripe Climate have already committed hundreds of thousands of dollars to carbon removal technologies.

According to the IEA, DAC is "one of few technology options available to remove CO2 from the atmosphere". Fifteen direct air capture plants are currently operational in Europe, the United States and Canada. Most of these plants are small and sell the captured CO2 for use – such as for carbonating drinks.

The key questions as to how successful DAC technology will prove are going to be time and cost. Climeworks has said it expects to be able to reduce the cost of extracting a ton of carbon dioxide from $1,000 to $100 within a decade. As ever this will be dependent on the right kind of policy support and investment, to replicate the cost curve that solar and wind technologies have followed.

The other enemy is time. There is widespread agreement that to hit 2050 targets of net zero emissions, we have ten years to get on the right path to achieve that goal. With battery storage improving in efficiency and falling in cost, with green hydrogen becoming an increasingly viable option for a net zero approach, DAC and CCS have got to prove themselves, and fast.

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