Pioneers of Carbon Dioxide Removal See Boon for Renewables

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By Bobby Magill

Three companies—Climeworks AG, Global Thermostat LLC, and Carbon Engineering Ltd.—are betting that a puzzling paradox underlying international climate goals is a business opportunity that can help curb global warming and expand renewable power worldwide.

The paradox of the science underlying the Paris climate agreement is that quitting fossil fuels and slashing climate pollution to zero won’t prevent global warming from exceeding 2 degrees Celsius (3.6 degrees Fahrenheit).

Humanity also will have to invent a way to clean the atmosphere of at least some of the carbon pollution put there since the beginning of the Industrial Revolution.

That means physically removing carbon dioxide from the air on a global scale later this century and stashing the carbon somewhere safely forever using a process that also is carbon-free, or nearly so.

Scrubbing the atmosphere of carbon pollution is something that’s never been proved to work at a large enough scale to lessen the threat of climate change. But the climate math doesn’t add up without it.

“What this means is, actually this is a massive new and emerging and growing market for renewable energy,” said Julio Friedmann, a lead author of a 2017 United Nations Environment Program report on global options for emissions reductions. Friedmann is one of a team the Energy Futures Initiative calls its distinguished associates.

“Renewables—and carbon-free energy in general—is essential to making all of this work,” he told Bloomberg Environment.

There are no reliable estimates for how much renewable power would be necessary to scale up carbon-removal technology, but a 2017 United Nations report outlined its potential.

The UN Environment Program report estimated that by 2050, about 8 gigatons of carbon dioxide must be removed from the atmosphere annually, or about 25 percent of the global energy sector’s 2016 total carbon emissions, according to climate models. About 20 years’ worth of climate pollution will have to be cleaned from the atmosphere by the end of the century.

‘Cleaning’ the Atmosphere

Scientists call this “negative” carbon emissions, but three companies call it a business plan.

“There is a compelling need to both reduce emissions and clean up existing atmospheric carbon dioxide,” Steve Oldham, chief executive officer of British Columbia-based Carbon Engineering, told Bloomberg Environment. “Our technology is focusing on atmospheric carbon removal and doing that en masse. Our belief is that because of the importance of that activity, it will get valued higher than other forms of carbon capture.”

Companies developing direct-air-capture technology are attempting to prove their technology works by trying to enter existing markets for carbon dioxide before later scaling up and possibly capturing and sequestering atmospheric carbon for a profit.

Carbon Engineering’s business model, in a nutshell, is this: Prove that physically sucking carbon dioxide from the air can be profitable and scaled up, in part by turning the carbon into transportation fuel that’s processed using wind and solar power. Once carbon removal is proved to work and a price is put on carbon, the company can sequester the carbon it captures for a profit.

The company’s “air-to-fuels” process involves electrolyzing water using wind or solar power to generate hydrogen. The hydrogen is processed with the captured carbon dioxide through a series of chemical reactions to generate hydrocarbons, which it plans to refine into diesel and jet fuel.

Carbon Engineering envisions each of its fuel processing plants to require up to 250 megawatts of solar, wind, or other low-carbon power—a demand for renewables that will add up quickly as new plants are built, Oldham said.

Carbon for Consumer Products

Climeworks, based in Zurich, and New York City-based Global Thermostat are taking the same basic idea to supply carbon dioxide for use in consumer products, synthetic fuels, water desalination plants, or greenhouses.

“The idea for the technology, which I co-invented, is to remove CO2 from the atmosphere and convert it into dollar bills,” Graciela Chichilnisky, CEO of Global Thermostat, told Bloomberg Environment. “It is a fantastic business opportunity because catastrophic climate change is very serious and costing trillions and trillions of dollars. Therefore, there’s a huge market demand.”

Global Thermostat’s technology uses a carbon-absorbing “sponge” that removes carbon dioxide from the air and is powered by residual, or wasted, heat from a fossil fuel or solar power plant, she said.

Most of the energy electric power plants use is wasted as heat, which can be captured and used for heating, cooling, and other industrial processes.

Climeworks’ Switzerland carbon-removal project uses waste heat from a nearby electric power plant to remove carbon dioxide from the air for use in a nearby greenhouse to boost plant photosynthesis. The company also has a project in Iceland that uses geothermal energy to directly capture carbon and sequester it permanently in underground volcanic rock.

Some of the uses for the carbon captured from the air, such as carbonated beverages and transportation fuel, are not carbon negative, but they could displace fossil fuels and new climate pollution, said Friedmann, who called some of these uses “catch and release.”

For carbon removal and sequestration to work in the long run, there needs to a price on carbon, Climeworks CEO Jan Wurzbacher told Bloomberg Environment.

“In the meantime, we are targeting different groups,” including companies that have carbon reduction goals and want to pay to sequester carbon dioxide from the ambient air, or private individuals who want to offset the climate impact of their private jets, Wurzbacher said.

“We need to market what we are doing as a premium product,” he said.

High Risk, Low Confidence

Companies’ enthusiasm for carbon dioxide removal is rooted in the details of the science behind the Paris Agreement, which calls for fossil fuel use to be curtailed too slowly to prevent global warming from exceeding 2 degrees Celsius.

Humanity’s remaining option—removing carbon dioxide from the air—could mean using any of 19 untested techniques, including repurposing land for new forests on a nearly continental scale, “fertilizing” the ocean to absorb more carbon dioxide, or growing trees to be harvested for bioenergy and then capturing and sequestering the resulting emissions.

Or, it could mean directly removing carbon from the atmosphere using techniques that Climeworks, Global Thermostat, and Carbon Engineering are perfecting.

But relying on carbon removal to halt climate change is a risky bet. A subgroup of the Intergovernmental Panel on Climate Change, which determined that the 2-degree target might be nearly impossible to meet without carbon removal, said in its 2014 global climate report that carbon-removal techniques are “unlikely to present an option for rapidly preventing climate change.”

The panel said it has “very low” confidence that carbon removal will work at all because there are too many uncertainties about how much carbon would have to be removed to combat climate change and offset carbon dioxide that’s released naturally by the land and oceans. Many of the techniques would require a possibly unrealistic level of geoengineering that humanity may not be prepared for, the panel said.

The European Academies Science Advisory Council concluded in February that the pact’s reliance on “hypothetical” technologies makes its negative emissions scenarios “overly optimistic.” Relying on carbon removal technology is a moral hazard because it suggests that cutting carbon emissions is less urgent than it really is, the council said.

“The concern from a risk management standpoint is that if people rely on negative emissions technology and use it as an excuse not to reduce emissions rapidly, then we could end up in a trap where we haven’t developed the technology we need to continue to reduce emissions,” Jonathan Koomey, a researcher and lecturer on climate solutions, told Bloomberg Environment.

“You’re betting the planet on our ability to do this thing which is largely untested at scale and requires a massive investment in entirely new industry,” he said.

Nonetheless, it’s important to study negative emissions technologies because they may be needed to cut carbon in the atmosphere, but companies trying it are unlikey to succeed until a price is put on carbon, Koomey said.

Tax Credit

The direct-air-capture technology the companies are developing is as advanced today as solar panels and wind turbines were 20 years ago, according to Friedmann.

“We have to scale up all [carbon] removal approaches. All of them have limits. All of them are nascent. All of them have some mix of technical or societal or political or financial issues. There’s nothing in physics or chemistry that says we can’t scale up,” he said.

“There’s a question again of will humans do the things that are necessary,” said Friedmann, a former Obama administration Energy Department official who owns a firm carbon removal consulting firm called Carbon Wrangler.

Congress gave developers a boost in the 2018 budget bill signed into law in February, which included a tax credit for new direct-air-capture plants and other carbon capture and sequestration facilities built before 2024.

The tax credit was originally part of a bill called the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions Act, or the FUTURE Act, and known within the industry as 45Q for its section in the budget bill.

It favors industrial direct-air-capture techniques and excludes any method that uses “natural photosynthesis” such as planting new forests to capture carbon dioxide in tree trunks and soil.

“45Q is a production tax credit for carbon capture,” which has the potential to grow direct-air-capture just as quickly as investment tax credits for solar grew that industry, Matt Lucas, associate director of the Center for Carbon Removal, told Bloomberg Environment.

Direct-air-capture is like solar, wind, and batteries: With the help of public policies such as the tax credit, economies of scale eventually will bring down costs, he said.

“The Future Act tax credit therefore [will] accelerate the adoption of DAC [direct-air-capture] and the removal of CO2 from the atmosphere,” Chichilnisky said.

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