State of Green Business

A conversation on carbon capture: Carbon Engineering's CEO on commercialization, costs

Rendering of Carbon Engineering capture plant
Carbon Engineering
Rendering of CE’s air contactor design. This unit would be one of several that would collectively capture 1 million metric tons of CO2 per year.

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One common theme buried in stories about carbon capture technologies is the massive expense of scaling and commercializing these approaches.

That’s one reason many journalists, including yours truly, took notice of the $68 million funding round disclosed in mid-March by Carbon Engineering, a 10-year-old Canadian company seeking to have at least four commercial plants up and running by 2020.

That money brings Carbon Engineering’s backing up to around $100 million. Among the investors that have put up money are Bill Gates, who has his hand in a number of energy ventures; Murray Edwards, a prominent financier of oil sands projects; Australian mining company BHP; and the venture arms of two U.S. oil and natural gas companies, Occidental Petroleum and Chevron.

Carbon Engineering is focused on two separate but related businesses. Its main focus is designing direct air capture systems that suck carbon dioxide out of the air, using very old industrial processes and systems to turn atmospheric CO2 into a solution that can be either sequestered or used in various industrial applications, like enhanced oil recovery. But the company is also working on technology for using CO2 as one of the feedstocks for creating "clean" synthetic fuels.

When I spoke with Carbon Engineering CEO Steve Oldham about how his company will spend its latest infusion, he cited several priorities, including:

  • Upgrading the company’s existing direct air capture facility in Squamish, British Columbia, so that it can move from pilot operations into one that can operate around the clock.
  • Beginning the design process for more plants in North America, for both its capture and fuel technologies. The most logical sites include existing refineries or locations that have the right geological profile for carbon sequestration. But this stuff needs space: typically, at least 30 acres, based on Carbon Engineering’s existing design.
  • Exploring potential customers for the fuel technology, which probably will find its first applications in aviation.

Oldham, who has a long-time background in software and robotics, raising money for "complex" projects such as satellites, joined the company about a year ago to accelerate commercialization.

"The biggest surprise has been realizing the necessity of the technology that we have and its applicability to the climate change problem is bigger than we expected," he told me, referencing the crucial role that removing atmospheric CO2 will play in mitigating climate change. "Somebody has to be on this side of the problem." Developing new wind and solar farms can go only so far in making an impact, Oldham noted.

The market conditions in North America, at least, are very different now from even just one year ago — thanks in part to the extension of a federal tax credit (known as 45Q) that can be applied to carbon capture and storage projects. One recent analysis by the Clean Air Task Force (CATF) estimated that the legislation that took effect in 2018 could contribute to equipment that could remove nearly 49 million metric tons of carbon annually by 2030. That’s the equivalent of taking 7 million cars off the road.

But wait, there's more! Late last week, a group of senators representing states with substantial fossil fuels interests — including Alaska, West Virginia and Montana — proposed legislation that would direct the Department of Energy to spend up to $5.2 billion through fiscal year 2024 to fund research and pilots of carbon capture and removal technologies.

"Just as was the case with wind and solar technologies in the 1990s, learning by doing and transformational technology investment are the keys to further reducing the costs of [carbon capture and storage] projects," Kurt Waltzer, managing director of CATF, said in a statement. 

Last year, research led by Carbon Engineering’s founder, David Keith, suggested it’s possible to capture carbon emissions directly from the air at a cost of less than $100 per ton. That’s a magic number that startups in this space would love to use in their return-on-investment formulas — previous estimates suggested that the process would cost at least $600 per ton, which would make it far too expensive to be commercially feasible. 

Aside from Carbon Engineering, what’s with the other carbon capture tech startups we’ve been following for several years? Here’s a quick update on its two most direct rivals (on paper, at least):

  • Climeworks: Also focused on capturing CO2 from the air, the Swiss company established a testbed in Iceland in October 2017. More recently, in late 2018, it signed a deal with a Swiss affiliate of Coca-Cola, which plans to use the carbon dioxide captured by Climeworks to put the bubbles and fizz into its beverages. Over the long term, the startup is seeking to capture up to 1 percent of all global emissions by 2025. 
  • Global Thermostat: The nine-year-old company is building a commercial plant in Huntsville, Alabama, at an operating cost of $150 per ton. Like Climeworks, it hopes to sell its captured CO2 to beverage companies both for bubbles and as a material for bottles. Accordingly, it’s also working on smaller scale equipment that can be installed alongside the existing manufacturing lines at bottlers. You also will see Global Thermostat cultivate customers who might use its captured CO2 in building materials, biofertilizers and industrial gases.
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