26th July 2023

Carbon Removal - Big new business?

1PointFive, a division of Occidental Petroleum, an American oil company, and Carbon Engineering, a Canadian startup backed by Bill Gates, are collaborating on a groundbreaking project—an enormous "direct air capture" (DAC) plant.

DAC, like a tree, has the ability to draw carbon dioxide from the atmosphere, concentrate it, and make it usable. This captured carbon dioxide can be employed in various applications, similar to how CO2 is already utilized by humans. For instance, it could be used in the production of organic molecules through photosynthesis. Occidental intends to inject some of the 500,000 tonnes of CO2 captured annually at the Notrees plant, once it reaches full capacity in 2025, into oilfields to enhance crude oil extraction. Other potential uses include adding fizz to beverages and promoting plant growth in greenhouses.

However, the significant advantage of artificial CO2 capture compared to biological plants lies in its potential for indefinite carbon storage. While CO2 stored in biological systems can be released when plants are cut down or burned, the CO2 gathered through DAC can be retained indefinitely. Many companies seeking to offset their carbon emissions but hesitant about nature-based solutions are willing to pay DAC project managers to store their excess carbon emissions.

The interest in carbon removal, whether from the air or industrial sources, is growing rapidly. The Intergovernmental Panel on Climate Change recognizes that to limit global warming to less than 2°C above pre-industrial levels, relying solely on renewables and emission reductions is insufficient. Negative emissions technologies, including DAC and carbon capture and storage (CCS), must play a crucial role.

Advancements in technology and cost reductions are driving the optimism surrounding carbon-removal projects. Both DAC and CCS technologies have become more affordable and efficient, making them increasingly viable options. Startups like Svante are finding ways to capture CO2 from industrial flue gas at lower costs. Some companies are even converting captured carbon into profitable products.

Government support is another factor fueling the expansion of carbon-removal initiatives. Policymakers are considering mechanisms like carbon pricing to incentivize carbon removal and make it economically feasible. State support and investments are crucial in nurturing this burgeoning industry, just as they did with waste management in the past.

Carbon removal is gaining support from diverse sectors, including big tech companies and even the oil industry. Microsoft, Alphabet, Meta, Stripe, Shopify, and other companies are purchasing carbon credits to show their commitment to environmental sustainability. Even oil giants like Occidental, ExxonMobil, and Chevron are getting involved in carbon removal projects. Countries like Saudi Arabia are also stepping up their efforts in increasing CCS capacity.

While critics argue that oil companies' interest in carbon removal is partly driven by a desire to improve their reputation, their involvement is essential due to their significant financial resources and expertise in engineering and geology. The urgent need to address carbon emissions necessitates collaborative efforts from all sectors to achieve meaningful and scalable negative emissions solutions.