The carbon removal acceleration
Carbon removal solutions are gaining great momentum in the climate tech boom, and the race is accelerating. Venture capital money is being poured into the field, entrepreneurs are building new carbon removal technologies, and some governments have called it their very own “moon landing”. More particularly, direct air capture (DAC) has been the big focus of the industry these past few months.
Firstly, it is important to have a level of understanding of the carbon removal nomenclature. Carbon removal can take many different shapes but has two main angles: nature-based solutions such as reforestation; and technology-based solutions (EESI). Academics and institutions differ in the hierarchies between these technologies. For instance, some consider carbon removal to be the umbrella concept, under which the following solutions fall (EESI), whereas others create a distinction between carbon removal and carbon capture (American University). For the sake of simplicity, this article adopts carbon removal as the umbrella term. There is then the distinction between carbon capture and storage (CCS) and carbon capture, usage, and storage (CCUS). CCS and CCUS play a mitigating role, but they do not remove carbon directly from the atmosphere. We also have the aforementioned DAC solution, as well as bioenergy with carbon capture and storage (BECCS). Both technologies directly create negative emissions, but some institutions consider them as part of the CCUS types of technologies supporting removal (IEA), whereas others create a clear distinction between both (EESI).
The IPCC’s latest AR 6 on climate change mitigation further strengthened the role of carbon dioxide removal solutions to reach the net-zero objective (MIT Technology Review). The day following the release of the report, Climeworks, a Swiss company established in 2009, announced its latest round of funding: a CHF600 million ($650 million) round led by major investors such as Singapore’s GIC, Partners Group, Global Founders Capital, and others (Climeworks). This is by far the largest ever round of funding for a carbon removal company. Beyond the ambitions behind this investment, it is vital to look at this enthusiasm with precaution. Whilst carbon removal technologies such as DAC will likely be unavoidable to reach negative emissions, they also signal the intentions of the large actors in the energy transition.
The big emitters’ favorite climate technology
Carbon removal technologies, and particularly DAC received increased attention from large corporations over the past two years. Beyond financials, carbon removal technologies offer a fantastic way for large Co2 emitters and oil companies to maintain the status quo and avoid the costs of decarbonisation (Financial Post). It is generally agreed that some industries will be very difficult to decarbonise, such as concrete, fertilisers, or long-haul air travel (Climeworks). These giant fans used by DAC are ways for emitting companies to offset their emissions and satisfy their net-zero pledge at scale (NY Times). Yet, we must critically look for solutions and alternatives in these industries, or outside these industries by rapidly modifying our reliance on them, financing new models, and creating policies that support this transition. Furthermore, DAC can directly participate in prolonging the life of the fossil fuel industry. A process, known as enhanced oil recovery (OER) is used by some DAC plants, notably in the USA to inject Co2 into oil reservoirs, to then reuse this oil (Carbon Engineering). Although creating a closed loop of Co2 emissions, such a solution only extends the lifetime of the oil industry and kills incentives to completely move away from oil production and combustion.
Thus, carbon removal technologies should not be considered an alternative to the decarbonisation of our energy mix. Scaling the plants and their capacity to remove millions of tons of Co2 from the atmosphere at a lower cost will take time. Technologies such as BECCS or DAC offer important opportunities for negative emissions, an effort that will take considerable importance in the second half of this century. To achieve negative emissions, we will likely need technological solutions in addition to nature-based ones. Funding for the development of such technologies is important and driving down their costs will be required. Yet, investors, corporations, and policymakers should not consider this to be a way out of the transitioning from our current energy mix.
The elephant in the room: the energy required to run DAC at scale
In addition to being operational and logistical challenges, running DAC plants requires a very large amount of energy. To scale their ability to suck Co2 out of the atmosphere, we would need much more plants, and questions around the possibility to remove, store, and mineralize Co2 is possible across any geology have not yet been resolved (IEA).
The whole objective of building DAC solutions is to completely remove Co2 from the atmosphere, and not create close loops for the gas to be kept in the atmosphere. To do so, plants require heat and electricity, which would need to come from a clean source of energy. In sum, the performance of DAC plants requires access to renewable energies and the performance of this industry is highly dependent on the energy transition. Theoretically, this seems like an obvious statement, however, companies using DAC to offset their emissions would not necessarily be forced to look into the plants’ upstream energy usage. Hence, the energy required to scale this technology is still too high and intricately reliant on the energy mix transition itself. It is an important point to ensure, so emissions are not diverted into the plants’ operations.
In conclusion, companies evolving in the carbon removal space are critical and their work helps drive the overall costs down. Players such as Climeworks or Carbon Engineering in the DAC space are not new, but the increased interest in their offering is intricately linked to two elements: the clearer need for carbon removal to limit temperature rise, and the opportunities they offer to offset emission. It is also vital to note that, when it comes to venture capital money, there is a need to find a better balance between investment in CCS & CCUS, and ecosystem restoration (CTVC). Indeed, CCS & CCUS offer a poor cost to 2030 net-emission reductions ratio. Still, these solutions seem unavoidable over the next 50 to 80 years to limit global temperature rise, and most importantly to reach negative emissions, in particular with DAC (WRI). Yet, they are far from miracle-makers, and could even become detrimental if used as a way for polluters to find their way out of the energy transition. The need for policies and a scalable market will likely be the main challenges of the carbon removal space in the coming years.
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