Updates from the birth of an industry
The carbon removal future is brighter than many think, but supporting it is more about funding R&D than removing CO2 today.
This week Stripe announced its second purchase round of carbon removal, supporting six new companies. Just a few days earlier the UK Government announced its support to 24 design studies in their Direct air capture and greenhouse gas removal programme, two of which also were supported by Stripe.
What is commercially available to actually buy meaningful amounts of removals from right now hasn’t changed much since 2020. Producers of permanent removals that have ongoing operations and existing customers are in DACCS, biochar, bio-oil, and mineralization, but the volumes available are very low and the producers are mostly sold out and are offering contracts for future production.
Grant-makers or credit buyers?
It is clear that there are many more opportunities to support research into new opportunities and develop lab-scale ideas into a first pilot than there are to actually remove carbon at scale today. Out of the 26 applications, Stripe got very few offers to remove CO2 in 2021 or 2022, Many more are pitching labwork or demo/pilots plant being built.
Stripe focuses on early-stage companies and is putting pride in being a company’s first buyer. They have also introduced an R&D grant, but you could argue that Stripe's purchase of early pilot-plant tonnes also is a form of research support rather than removal as a service. Their call for proposals is set up to purchase tonnes though while the UK Governments programme is a designed to support research.
This presents thorny questions for how companies best can support removals. Should they take a similar role as government grantmakers to research, or focus on being an early buyer of the methods that have already have a viable derisked product? There is no evident answer to this question, but it should be recognized that these are two different types of processes. Carbon plan lays this out in their learnings from Stripe's proposals: “a volume-sale framework does not necessarily solicit the kinds of information needed to identify a robust research approach.” And as the science writer James Temple points out some methods are riskier than others when it comes to environmental and social effects and shouldn’t be used to sell removal as a service before more answers are given.
The future looks bright
Among the projects supported by Stripe and the UK government, there are plenty of promising ideas and new companies. For example, a lot is happening in Direct air capture. Mission Zero brings an exciting electrodialysis approach with much lower energy requirements than today's technology. And Heirloom uses a method that passively captures carbon with minerals that are then calcinated and re-looped. Origen uses a similar process.
Many methods are working with ocean CO2 capture. Seachange and Planetary Hydrogen are using scaleable electrochemical approaches to ocean CO2 capture. Running Tide grows kelp that is sunk to the bottom of the deep ocean. Out of the blue is another interesting idea capturing CO2 in water with filters similar to direct air capture. There are also several new biomass sequestration and mineralization solutions pitched that also look promising.
All methods described above have a projected cost of under 100 USD/t CO2 captured and stored, some sooner than later. This gives reason for optimism, and it would be good if these promising prospects for removals were more widely known.
I often encounter people who are making recommendations for 2050 based on the state of carbon removal in 2015. For example, some NGOs are arguing against carbon removal as a solution altogether since they make an assumption that it will all be large-scale BECCS. I’ve heard a lot of language on removals being a “pie in the sky” and can’t possibly be a meaningful part of the solution. Although there is a lot of work still to be done, such bearishness on removals is mistaken, and we shouldn’t let our lack of imagination set the limits.
I think few people have the ability to take into account the fact that a large part of the things we will use in our daily lives in 30 years are not yet invented. And it’s the same thing with carbon removal. The extreme development we’ve seen in the last couple of years, bringing completely new solutions on how carbon can be captured and stored, bodes very well for the future. And even though the companies funded by Stripe look very promising I think there is a very large chance we will see future companies finding even cheaper solutions and scaling even quicker.
This should not be an excuse for inaction today though. I also hear a lot of voices saying we should wait with supporting carbon removal until they are cheaper. But surprisingly few people appreciate the fact that they won’t get cheaper if no one supports the research or buys the tonnes at an early stage. CarbonPlan’s visualization of price and volume in the bids to Stripe is a nice illustration of this, (although it of course doesn’t say anything about causation.)
You won’t of course produce much carbon in the lab or in a demo plant and the first few tonnes will be very expensive. Most carbon removal companies also present a very clear path to lower costs as production grows and economies of scale kick in. But for that to happen there needs to exist early supporters of carbon removal, be it as grantmakers or buyers. Everyone can’t sit and wait for lower prices. Stripe, Shopify, Microsoft, SwissRe and now Klarna/Milkywire are making a large difference here.
Interestingly the needed scale to bring prices down differs between solutions. Solvent-based direct air capture (like Carbon engineering) for example needs massive plant removing hundreds of thousands of tons of CO2 to be economical, BECCS similarly needs large scale. But Mission Zero, for example, indicates that they can reach a price of below 100 USD on a small plant of only 500/t CO2 per year. That would make the scale-up of removals a whole lot easier. (Mission zeros method needs to be tested in practice though.)
When talking about removals one also needs to mention that companies' and countries' first priority should be reducing emissions. And it’s important not to forget that other types of climate finance also needed protecting and restoring nature, and on decarbonization.
Right now I am working on a portfolio by the impact platform Milkywire that aims to reflect the wide needs for climate finance within restoring and protecting nature, permanent carbon removal solutions, and decarbonization (including policy change). The portfolio is being designed as an alternative to offsets and the fintech Klarna is donating $1 million in 2021 to it and annually based on their internal tax on carbon. Suggestions for projects to support are appreciated.
An important thing everyone can do to support removals is to make them more well-known. A lot of people, including politicians and corporate leaders have still never heard of carbon removal, and very few know about all the new methods being developed. It’s only when you are informed about the possibilities and risks that you will be able to make the right decisions.
Version 1.02, Minor edits have been made. Please let me know if you see information that is wrong or assumptions you think are false.
