Startups: Carbon Capture and Sequestration

Startups: Carbon Capture and Sequestration

2020 set a new record for venture capital investment in the carbon capture and sequestration (CCS) sector. In that year, €213 million went to hundreds of startups worldwide with the aim to reduce the amount of carbon dioxide (CO2) in the atmosphere. This represents a huge increase since 2018. That year, just €550,000 was invested in CCS companies.1

Funding for carbon capture and storage

Fossil fuel companies demand huge government handouts to fund their CCS projects. In fact, ExxonMobil recently asked the US government to help pay for a USD $100 billion CCS facility.2 ExxonMobil is also part of a consortium with oil major Shell receiving USD $2.4 billion in subsidies for a CCS enterprise in the Netherlands.3 In Western Australia, Chevron’s Gorgon LNG facility is failing to capture and store its CO2 emissions despite receiving AUD $60 million in funding from the federal government.4 

Why are fossil fuel companies receiving so much public funding for CCS?

It is somewhat paradoxical that oil majors are the recipients of huge handouts for carbon capture and sequestration. Firstly, they are some of the wealthiest companies on Earth.5 Secondly, they are responsible for the majority of greenhouse gas emissions. Just 100 fossil fuel companies are the source of over 70 per cent of all emissions.6 Why should public funds be given to the wealthiest and dirtiest companies on the planet?

What is the best investment to prevent climate change?

CCS is a nascent industry with just 21 facilities operating worldwide.7 Consequently, whilst this is a technology with the potential to help mitigate climate change, it is foolish to use billions of taxpayers money on it.

Instead, it would be better to help startups in this sector thrive through regulatory amendments and invest more heavily in renewable energy. Alternatively, the investment could go towards renewable energies, which have huge potential to cut emissions and mitigate climate change.8

What is carbon capture and sequestration?

Carbon capture and sequestration is a climate change mitigation process. It most commonly refers to technologies that capture CO2 from projects that cause significant pollution. These include power plants or industrial facilities which emit large quantities of CO2.9 Subsequently, this makes it easier and cheaper to capture the CO2.10 More than 90 per cent of the CO2 may be captured.11

Greenhouse gas emissions and economics

Once captured, the CO2 is then transported. From an environmental standpoint, the best option is to permanently store the CO2 underground in geological formations. However, it is more economical for companies to sell the captured greenhouse gas for other purposes.

Currently, 80 per cent of the CO2 isolated by CCS technologies is reused for enhanced oil recovery (EOR).12 When captured CO2 is repurposed rather than stored, it is more accurately described as carbon capture, utilisation and sequestration (CCUS).13

CCS in gas reservoirs and oil fields

EOR is a means to extract additional oil from mature oil fields. Injecting the gas underground for EOR does store most of it away. However, it also produces more fossil fuels that release further CO2.14 Though it is the most common use for captured CO2, it is not the only use.

What other uses for carbon dioxide are there?

CO2 can be a valuable resource for a number of different purposes. For example, it is a necessary component in the manufacturing of carbon-neutral synthetic fuels. The process involves synthesising CO2 with hydrogen. Hydrogen is easy to obtain by applying electrolysis to water. The result is an e-fuel that can directly replace fossil fuels. However, unlike their dirty counterparts, synthetic fuels produce fewer particulates and nitrogen oxides.15

CO2 can also be useful when producing building materials, particularly concrete. Startups, like Blue Planet, are employing CO2 in mineralisation. They convert gaseous CO2 into solid mineral carbonates. Then, these mix with cement and water to form concrete.16 

Alternatively, CO2 can substitute water when ‘curing’ concrete during its mixing. This produces a similar mineralisation. But, the concrete it forms is actually harder. Therefore, it uses CO2, creates a better product and saves water. Companies like CarbonCure and Solidia already take advantage of the useful properties captured carbon offers for concrete production.17 This is particularly important from a climate change standpoint given the fact manufacturing concrete causes about eight per cent of global CO2 emissions.18

Why has there been so much interest in carbon capture and sequestration since 2018?

The UN’s Intergovernmental Panel on Climate Change is partially responsible for the recent surge of interest. In 2018, it released a report which warned that we must limit global warming to 1.5°C above pre-industrial levels.19 One way to achieve this goal involves removing 9.7 gigatonnes of CO2 from the atmosphere every year.20 

How much carbon dioxide do we need to sequester to elicit significant change?

However, the industry faces significant challenges. Estimates for the capital investment needed to build CCS with a capacity of over nine gigatonnes are between USD $1 and $10 trillion.21 At present, the 21 CCS facilities in operation capture a small fraction of the CO2 required to prevent a 1.5°C temperature increase.22 To support a fossil fuel economy without exceeding a catastrophic global increase in temperature would necessitate building 70 to 100 new CCS facilities every year for the next 30 years.23

Even with the billions of dollars being poured into the projects of Shell and ExxonMobil, it seems unlikely that CCS will capture significant quantities of CO2 in the next decade. Startups, in particular, would need enormous growth and worldwide development to pose a serious solution to climate change. 

Startups are using carbon capture and sequestration technology to bury biomass

Different startups have contrasting approaches to carbon capture and sequestration. For example, Charm Industrial converts waste biomass into bio-oil. It then injects the bio-oil underground to sequester it. Alternatively, it may reform it to produce green hydrogen, which can be used as a fuel and industrial chemical.24 

Thinking outside the box in terms of industrial processes

Charm Industrial uses excess sawdust and wood for their biomass. These products are usually left to rot. It plans to use waste agricultural products, such as rice straw, sugar cane bagasse and almond shells in the future.25 The startup is already selling its carbon removal capacity to companies seeking to offset their carbon footprint. For example, Charm has sequestered 377 tonnes of CO2 for financial services company Stripe.26

Other companies are putting carbon capture and sequestration to more innovative uses

Companies such as CCm Technologies use carbon capture and sequestration to accelerate emissions reduction efforts in hard-to-decarbonise sectors. For example, it captures CO2 from industrial power generators. Then, it uses the gas to stabilise materials, such as ammonia and phosphates, from agricultural and industrial waste streams. With this, CCm can create new fertiliser products.27 Their method has a 90 per cent smaller carbon footprint compared to traditional fertiliser manufacturing techniques.28 

CCm is also a partner of UK crisps brand Walkers. The startup takes potato waste from their Leicester factory. Then, it mixes it with CO2 captured from beer fermentation at a brewery to create fertiliser. Spreading this product onto UK fields increases the yield of potatoes. Therefore, it reduces both emissions from the brewery and the fertiliser manufacturing process.29 

To capture CO2, CCm has also developed a highly absorbent fibre. As a result, CO2 becomes permanently fixed to its surface. It can then be used to produce multiple plastics, including polypropylene, polythenes and polyamide.30 With so many creative products, it is unsurprising that CCm has recently won £2 million in new funding from Innovate UK’s Sustainable Innovation Fund.31 Evidently, there are various alternative uses for CO2 besides EOR. Companies like Charm demonstrate the advantages of investing in startups rather than helping filthy rich oil giants to reduce their enormous carbon footprints.

What is next for carbon capture and sequestration?

Approximately 332 companies operate in the carbon capture and sequestration field. They come from 27 different countries. Between them, they have already raised about USD $2.2 billion in capital.32 As the climate situation worsens and governments invest more heavily in mitigation solutions, it is likely that this industry will experience considerable growth. 

Unfortunately, however, oil supermajors are likely to dominate the sector. Fossil fuel companies have the relevant expertise, lobbying power and funding to monopolise CCS. ExxonMobil has an equity share in about 20 per cent of global CCS capacity. It claims responsibility for approximately 40 per cent of all the captured human-caused CO2 in the world.33 This share is set to increase. ExxonMobil has announced plans to invest a further USD $3 billion in lower-emission energy solutions through 2025.34 

Could fossil fuels prevent climate change?

Ultimately, fossil fuel companies have the power to stop climate change. They could stop producing coal, oil and natural gas. This would result in a drastic cut in emissions. Fossil fuel combustion accounts for about 74 per cent of all US greenhouse gas emissions. Greenhouse gas emissions cause 92 per cent of all US human-caused CO2 emissions.35 Oil giants, like ExxonMobil and Shell, are not interested in CCS for the good of the planet. If they were, they would not use four-fifths of the captured carbon for EOR. Their interest is in profit, not repairing the damage they continue to cause.

Fossil fuels and greenhouse gas emissions

We should not rely on carbon capture and sequestration to solve the climate change crisis and to mitigate greenhouse gas emissions. It is a sector already largely under the control of the biggest polluters on the planet. Moreover, it currently captures a tiny fraction of CO2 emissions. The sector’s entire capacity must grow by a factor of 35 in less than 10 years to play a serious role in reducing global warming.36 

Even with huge government handouts to fossil fuel companies, the goal to capture 1.5 gigatonnes of CO2 each year is unlikely to be achieved. A truly green and sustainable future lies with a complete transition away from fossil fuels. We must replace them with renewable energy sources that do not produce vast quantities of greenhouse gases.

Graphic on Startups: Carbon Capture and Sequestration

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