What it will take to achieve affordable carbon removal

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A pair of companies have begun designing what could become Europe’s largest direct-air capture plant, capable of capturing as much as a million metric tons of carbon dioxide per year and burying it deep beneath the floor of the North Sea. The sequestered climate pollution will be sold as carbon credits, reflecting the rising demands for carbon removal as a drove of nations and corporations lay out net-zero emissions plans that, directly or indirectly, rely heavily on using trees, machines or other means to pull CO2 out of the air. Climate researchers say the world may need billions of tons of carbon dioxide removal annually by midcentury to address the “residual emissions” we can’t affordably clean up by then—from things like aviation and agriculture— and to pull the climate back from extremely dangerous levels of warming. The critical and unanswered question, however, is how much direct-air capture will cost—and whether companies and nations will determine they can afford it. Carbon Engineering and Storegga Geotechnologies’s proposed facility will likely be located in North East Scotland, enabling it to draw on plentiful renewable energy and funnel captured carbon dioxide to nearby sites offshore, the companies said. It’s expected to come online by 2026. “We can’t stop every [source of] emissions,” says Steve Oldham, chief executive of Carbon Engineering, based in British Columbia. “It’s too difficult, too expensive, and too disruptive. That’s where carbon removal comes in. We’re seeing an increasing realization that it’s going to be essential.” Getting to $100 a

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A pair of companies have begun designing what could become Europe’s largest direct-air capture plant, capable of capturing as much as a million metric tons of carbon dioxide per year and burying it deep beneath the floor of the North Sea.

The sequestered climate pollution will be sold as carbon credits, reflecting the rising demands for carbon removal as a drove of nations and corporations lay out net-zero emissions plans that, directly or indirectly, rely heavily on using trees, machines or other means to pull CO2 out of the air.

Climate researchers say the world may need billions of tons of carbon dioxide removal annually by midcentury to address the “residual emissions” we can’t affordably clean up by then—from things like aviation and agriculture— and to pull the climate back from extremely dangerous levels of warming.

The critical and unanswered question, however, is how much direct-air capture will cost—and whether companies and nations will determine they can afford it.

Carbon Engineering and Storegga Geotechnologies’s proposed facility will likely be located in North East Scotland, enabling it to draw on plentiful renewable energy and funnel captured carbon dioxide to nearby sites offshore, the companies said. It’s expected to come online by 2026.

“We can’t stop every [source of] emissions,” says Steve Oldham, chief executive of Carbon Engineering, based in British Columbia. “It’s too difficult, too expensive, and too disruptive. That’s where carbon removal comes in. We’re seeing an increasing realization that it’s going to be essential.”

Getting to $100 a ton

Oldham declines to say how much they plan to charge for carbon removal, and says they don’t yet know the per-ton costs they’ll achieve with the European plant.

But he said the company is confident they’ll eventually reach the direct-air capture cost levels identified in a 2018 analysis in Joule, led by Carbon Engineering founder and Harvard professor David Keith. It put the range at between $94 and $232 per ton once the technology reaches commercial scale.

Steve Oldham CEO of Carbon Engineering
Steve Oldham, CEO of Carbon Engineering
COURTESY: CARBON ENGINEERING

Getting to $100 per ton is essentially the point of economic viability, as large US customers generally pay between $65 to $110 for carbon dioxide used for commercial purposes, according to a little-noticed May paper by Habib Azarabadi and direct-air capture pioneer Klaus Lackner, both at Arizona State University’s Center for Negative Carbon Emissions. (The $100 doesn’t incorporate the separate but considerably smaller cost of carbon sequestration.)

At that point, direct-air capture could become a reasonably cost-effective way of addressing the 10% to 20% of emissions that will remain too difficult or expensive to eliminate, and may even compete with the cost of capturing CO2 before it leaves power plants and factories, the authors state.

But the best guess is the sector is nowhere near that level today. In 2019, the Swiss direct-air capture company Climeworks stated its costs were around $500 to $600 per ton.

What it will take to get to that $100 threshold is building a whole bunch of plants, Azarabadi and Lackner found.

Specifically, based on the “learning rates” of successful technologies—or how rapidly costs declined as their manufacturing capacity grew—the study estimates the direct-air capture industry will need to grow by a little more than 300-fold in order to achieve costs of a $100 a ton. Getting there may only require total federal subsidies of anywhere from $50 million to $2 billion, to cover the difference between the actual costs and market rates for commodity CO2.

Lackner says the key question is whether their study applied the right learning curves from successful technologies like solar—where costs roughly dropped 10-fold as scale increased by 1,000-fold—or if direct-air capture falls into a rarer category of technologies where greater learning doesn’t rapidly drive down costs.

“A few hundred million invested in buying down the cost could tell whether this is a good or bad assumption,” Lackner said in an email.

Dreamcatcher

The United Kingdom has set a plan to zero out its emissions by 2050 that will require millions of tons of carbon dioxide removal to balance out the emissions sources likely to still be polluting by then. The government has begun providing millions of dollars to develop a variety of technical approaches to help it hit those targets, including about $350,000 to the Carbon Engineering and Storegga effort, dubbed Project Dreamcatcher.

The plant will likely be located near the so-called Acorn project, developed by Scotland-based Storegga’s subsidiary, Pale Blue Dot Energy. The plan is to produce hydrogen from natural gas extracted from the North Sea, while capturing the emissions released in the process. The project would also repurpose existing oil and gas infrastructure on the northeast tip of Scotland to transport the carbon dioxide, and inject it in sites below the seabed.

The proposed direct-air capture plant could leverage the same infrastructure for its carbon dioxide storage, Oldham says.

The companies initially expect to build a facility capable of capturing 500,000 tons annually, but could eventually double the scale based on market demand. Even the low end would far exceed the otherwise largest European facility underway, Climeworks’ Orca facility in Iceland, slated to remove 4,000 tons annually. Only a handful of other small-scale plants have been built around the world.

The expected capacity of the Scotland plant is essentially the same as Carbon Engineering’s other full-sized facility planned for Texas. It will also begin as a half-a-million-tons-a-year plant with the potential to reach a million. Construction is likely to start on that plant early next year, and it’s expected to begin operation in 2024.

Much of the carbon dioxide captured at that facility, however, will be used for what’s known as enhanced oil recovery, injected underground to free up additional oil from petroleum wells in the Permian Basin. If done carefully, that process could potentially produce “carbon neutral” fuels, which at least don’t add more emissions to the atmosphere than were removed.

Oldham agrees that building more plants will be the key to driving down the sector’s costs, noting Carbon Engineering will see huge declines just from its first plant to the second. How sharply the curve bends from there will depend on how rapidly governments put in place carbon prices or other climate policies that create more demand for carbon removal, by essentially forcing “hard-to-solve” areas like aviation, cement, and steel to start paying someone to clean up their pollution, he adds.

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