Exploring Carbon Capture
In 2016, the Earth passed the sobering milestone of an average atmospheric concentration of CO₂ above 400 parts per million (ppm). Back in 1958, when scientists first started tracking CO₂ concentrations, levels were closer to 300ppm. At current growth rates, our atmosphere will reach a CO₂ concentration level of over 500ppm within 50 years, putting us on track to hit a global temperature increase of ~5.5° F by 2070. Such a temperature increase would be catastrophic for society as we know it and would dramatically change where and how people live. One way to lower that concentration is through carbon capture, for which technology already exists and is evolving.
Looking at a range of scenarios outlined by the Intergovernmental Panel on Climate Change (IPCC), the best-case scenario would come from capping emissions right now and decreasing emissions to the point of net negative emissions in 2070, the results of which would keep atmospheric concentration of CO₂ below 400ppm and average temperature increases below 1.8°F. In the most dire scenario, humanity does nothing to curb its emissions, life continues as usual, and the atmosphere reaches a CO₂ concentration of 2,000ppm and temperature increases of 16°F. The consequences of such an increase are near impossible to comprehend.
Given these scenarios, it’s pretty apparent that any livable path forward has to involve some kind of carbon capture technology implemented at a large scale. This reality sparked a curiosity about the current state of carbon capture technology, what current uses for the technology and outputs are, and markets that may emerge from the technology’s use. I always find it helpful to start with definitions, so that’s where I’ll begin.
Carbon Capture and Sequestration (CCS)
CCS is the process of capturing CO₂ formed during energy generation and industrial processes and storing it. In its current state, the technology is capable of capturing up to 100% of carbon from an emitting process. The process of CCS is comprised of 2 main steps — capture and storage. There are 3 main methods of capture:
1. Post-combustion capture: carbon is separated from the exhaust of a combustion process. This is legacy technology that’s used in existing power plants.
2. Pre-combustion capture: converts solid, liquid or gaseous fuel into a mixture of CO₂ and hydrogen through gasification or reforming. This is the most cost-effective capture method but currently costs to retrofit existing facilities with this technology are prohibitively high
3. Oxyfuel combustion: fuel is burned in a near-oxygen environment creating a concentrated stream of carbon that is captured
Following the capture process, CO₂ is liquefied and transported for storage, usually by injection into a deep geological formation (like an old oil reservoir or coal mine).
Carbon Capture and Utilization (CCU)
CCU is similar to CCS in that carbon is captured using one of the 3 processes outlined above but differs from CCS in what happens to the captured carbon product. In CCU, captured CO₂ is used to produce inputs into manufactured goods (like plastic-based products or similar) or is repurposed as raw materials used in industrial production processes. The two main benefits of CCU are that (1) it provides a true long-term storage place for captured CO₂ because it gets recycled into products like concrete, building materials, carbon-based plastics and more, rather than just being stored in the ground (eventually, we will run out of empty geological formations) and (2) it produces an economically valuable output that can be used in place of more harmful materials in production processes and also provides an economic incentive to capture carbon.
Direct Air Capture (DAC)
DAC, in contrast to CCU or CCS, captures CO₂ from the ambient air (rather than a point of emission) and, through a process of chemical reactions, pulls the CO₂ from the air and returns the cleaned air back to the environment, similar to what a tree would do when it captures carbon. The captured carbon is then compressed down and either stored or used. This technology differs from CCU and CCS in that it does not capture CO₂ emitted from a concentrated source like a manufacturing plant or an oil refinery, but rather pulls in CO₂ directly from the air — kind of like a tree, but on a much larger scale. This technology helps us drawdown CO₂ without needing a source of emission, which is powerful when we consider how many historical emissions we need to erase to return the atmosphere to lower carbon concentrations. While it is relatively new technology, there are a few companies (Carbon Engineering, Climeworks, Global Thermostat and more) who have proven technology and a product on the market. Right now, DAC is expensive, and scaling up quickly enough to a size that can meaningfully impact ambient CO₂ concentration are definite challenges going forward. But the implications of the technology are exciting and as a market develops around captured carbon I could see scale accelerate and costs come down.
Applications of captured CO₂
Once CO₂ is captured from the atmosphere, there are a range of applications for the captured carbon product. In my opinion, the only way commercialization of carbon capture technology will become widespread is if the captured CO₂ can be used in cost-competitive applications elsewhere. There has to be some market-based prerogative, like cheaper raw materials or inputs to production, to incentivize widespread capture of CO₂ from the atmosphere. Like most things with respect to fixing the climate problem, incentive alignment must be present to ensure long-term, sustainable, competitive solutions are developed.
Researchers from the University of Oxford have investigated just that. Their findings, linked here, are pretty interesting. Based on their work, captured CO₂ has applications from production of chemicals like methanol and urea to different types of polymers, hydrocarbon fuels, and concrete. The cool part about all of these applications is that they would permanently sequester the captured carbon in the produced material and replace demand for other incumbent, energy-inefficient materials.
These are also pretty big markets. For example, global annual concrete production stands at over 10bn tons per year, according to Columbia University, with US production accounting for 5% of that. Concrete production requires cement, and the extraordinarily environmentally unfriendly Portland cement currently used in concrete contributes about 7% of annual global greenhouse gas emissions. Developing a solution for cement-free concrete that utilizes captured carbon solves 2 problems: (1) it creates demand for captured carbon, thereby incentivizing firms to develop a supply of captured carbon and (2) it replaces cement, which is the most environmentally harmful component of concrete. If carbon-based concrete production is price-competitive with traditional cement concrete, then this transition seems likely to be an unstoppable one.
Another huge market is using CO₂ to produce plastic alternatives. In 2018, scientists at Rutgers University discovered how to convert CO₂ into polymers using cheap and widely available catalysts. The process results in linear chain polycarbonates (L-PCs), which are biodegradable and have applications in many areas current plastics are used, especially when mixed with a biopolymer to increase heat resistance. Even more amazingly, L-PCs lend themselves well to existing production processes, meaning adoption of these inputs would not be costly for firms who use traditional plastics. That seems like another dual-solution product: (1) similar to the concrete example above, it generates demand for captured carbon and provides incentives for firms to capture it from the atmosphere and (2) it replaces petroleum-based plastic, which is enormously environmentally unfriendly and contributes to greenhouse gas emissions and landfill mass.
Most excitingly to me, the history of technology and its commercialization into business indicates that we are in very early innings, and that the markets and businesses that will emerge directly from and as a derivative of these technologies are as-yet unimaginable. Take the invention of the internet as a good illustration of what I mean here. When it became the World Wide Web in the 1990s after the early trials of the 1970s and 1980s, nobody could have predicted the massive companies and economic value the internet would drive. Today, the 5 largest American companies by market capitalization are Microsoft, Apple, Amazon, Alphabet, and Facebook, which in total account for $5.4 trillion of value. And all of them were built either built alongside (see Microsoft) or as a result of the invention of the internet. That does not account for the legions of companies — Netflix, Salesforce, ServiceNow, Workday, Atlassian, and many more which materialized in a second wave of technology companies, again that could not have materialized without the internet. And even today, more than 40 years after the birth of the internet, hundreds of startups that could not exist without the internet or the businesses built on top of it are raising capital and growing quickly to solve even more problems.
My main takeaway from this example is that the pace of innovation is relentless, especially when there are markets to be captured and money to be made. I truly believe that something similar could happen in the market of carbon capture and carbon-based products. Our current assumptions about how many companies may demand carbon capture technology, what captured carbon is useful for, and how costly it is to implement will undoubtedly be updated in the future. Those discoveries and the corresponding updates to our paradigmatic assumptions will drive subsequent waves of innovation. When that happens, our chances of mitigating or reversing climate change increase massively. In the next blog, I will dive into a few companies in this space that I find interesting, so stay tuned. And tweet me @thegreengraham or email me at firstname.lastname@example.org if you want to chat about anything written here or future ideas.
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