Ending Global Warming: The Economist – Carbon Capture

The November 20 issue of The Economist has two articles gushing about the good that can be accomplished by removing CO2 from our atmosphere.

For several years now, I have been advocating carbon capture as the way to minimize global warming.  It seems sometimes as the effort has been no more than a small voice crying in the human wilderness of experts and doomsayers.

My thinking, I hope, has been informed by the Caux Round Table approach to problems – what we have done to ourselves, we can undo with application of our inventive genius and our moral sense.  Thus, if the technology of industrialization put too much CO2 and other greenhouse gases in the atmosphere, different, newly invented technology can take it back out.

A fixation on successful carbon capture and removal for reuse or sequestering would be a most constructive outcome of the COP28 meeting in Dubai.

Since producing too much CO2 creates a public “bad” – a non-rivalrous negative dynamic threatening all of humanity – its removal from the atmosphere would be a public “good.”  In conventional thinking about how to create public goods for all of us to enjoy simultaneously, we have long looked to the production of such goods by public utilities.  So, why not have governments fund and operate carbon removal facilities as public utilities, charging society for the costs of improving our lives in common?

Opening up such a possibility, The Economist said:

Few of those who have mouthed commitments to net zero appreciate how central greenhouse-gas removal is to the notion; of those who do, few recognise quite how vast the challenge is.  Emission cuts of 90% would still see enough gas entering the atmosphere for a balancing level of removals to be a huge undertaking.

Studies by the Intergovernmental Panel on Climate Change suggest that if the planet is to stand a decent chance of staying below the 2°C limit on warming, it would be wise to plan on removing an additional 5bn tonnes of carbon dioxide from the atmosphere every year.

.. humankind’s transfer of fossil-fuel carbon from its quiet rest in the solid Earth to the hurly-burly of the atmosphere.  Roughly 1trn tons of carbon dioxide have accumulated there thanks to human activity.  The total is growing by a bit less than 20bn tons a year.

… the rate at which the world’s biosphere photosynthesises is almost exactly the rate at which life’s other processes return carbon dioxide to the atmosphere.  With carbon dioxide from fossil fuels added to the natural emissions, photosynthesis has valiantly tried to keep up, sucking back down as much as it can.  But it cannot do enough.  It only absorbs about a third of the emissions from human industry and agriculture.

In Notrees, in a remote corner of the Texas oil patch, 1PointFive, an arm of Occidental Petroleum, an American oil firm and of Carbon Engineering, a Canadian startup backed by Bill Gates has built the world’s first commercial-scale “direct air capture” (dac) plant.

Like a tree, dac sucks carbon dioxide from the air, concentrates it and makes it available for some use.  In the natural case, that use is creating organic molecules through photosynthesis. For dac, it can be things for which humans already use CO2, like adding fizz to drinks, spurring plant growth in greenhouses or, in Occidental’s case, injecting it into oilfields to squeeze more drops of crude from the deposits.

Yet, some of the 500,000 tonnes of CO2 that the Notrees plant will capture annually, once fully operational in 2025, will be pumped beneath the plains.

Carbon Engineering and its rivals, like Climeworks, a Swiss firm, Global Thermostat, a Californian one and myriad startups worldwide, are attracting capital.  Occidental plans to build 100 large-scale dac facilities by 2035.  Others are trying to mop up CO2 produced by power plants and industrial processes before it enters the atmosphere, an approach known as carbon capture and storage.  In April, ExxonMobil unveiled plans for its newish low-carbon division, whose long-term goal is to offer such decarbonisation as a service for industrial customers in sectors like steel and cement, where emissions are otherwise hard to abate.  The oil giant thinks this sector could be raking in annual revenues of $6trn globally by 2050.

Svante, a Canadian startup, uses inexpensive materials to capture CO2 from dirty industrial flue gas for around $50 a tonne (though that excludes transport and storage).  Other companies are converting the captured carbon into products which they then hope to sell at a profit.  CarbonFree, which works with U.S. Steel and BP, a British oil-and-gas company, takes CO2 from industrial processes and turns it into speciality chemicals.  LanzaTech, which has a commercial-scale partnership with ArcelorMittal, a European steel giant and several Chinese industrial firms, builds bioreactors that convert industrial carbon emissions into useful materials.  Some make their way into portable carbon stores, such as Lululemon yoga pants.

One obvious way to promote the industry would be to make carbon polluters pay a high enough fee for every tonne of carbon they emit that it would be in their interest to pay carbon removers to mop it all up, either at the source or from the atmosphere.

Buyers of carbon credits are starting to line up.  Tech firms, keen to burnish their progressive credentials, are leading the way.  On May 15, Microsoft said it would purchase (for an undisclosed sum) 2.7m tons of carbon captured over a decade from biomass-burning power plants run by Orsted, a Danish clean-energy firm and pumped underneath the North Sea by a consortium involving Equinor, Shell and TotalEnergies, three European oil giants.  On May 18, Frontier, a buyers’ club with a $1bn carbon-removal pot bankrolled mainly by Alphabet, Meta, Stripe and Shopify, announced a $53m deal with Charm Industrial.  The firm will remove 112,000 tons of CO2 between 2024 and 2030 by converting agricultural waste, which would otherwise emit carbon as it decomposes, into an oil that can be stored underground.

Big tech is not alone.  NextGen, a joint venture between Mitsubishi Corporation, a Japanese conglomerate and South Pole, a Swiss developer of carbon-removal projects, intends to acquire over 1m tons in certified CO2-removal credits by 2025 and sell them on to others.  It has just announced the purchase of nearly 200,000 tons’ worth of such credits from 1PointFive and two other ventures.  The end-buyers include SwissRe and UBS, two Swiss financial giants, Mitsuoki Lines, a Japanese shipping firm and Boston Consulting Group.  On May 23, JPMorgan Chase, America’s biggest bank, said it would spend over $200m in the coming years on buying credits from carbon-removal firms.

Also in recent days, taking advantage of the attention focused on COP28, the consulting firm McKinsey published a report on the status of carbon capture, which you can find here.

According to McKinsey, a CDR industry capable of delivering gigaton-scale removals at net-zero levels could be worth up to $1.2 trillion by 2050.  This industry would require input and support from a range of players, including investors, suppliers, buyers, traders and other intermediaries, with substantial potential value pools estimated for each.