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What is carbon capture? Eric Toone, investor at Gates’ firm, explains


06/01/2022, Mecklenburg–Western Pomerania. Wismar. Smoke rising from the chimneys at Wismar’s wood-processing plant. Photo: Jens Büttner/dpa-Zentralbild/ZB (Photo by Jens Büttner/picture alliance via Getty Images)

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Eric Toone serves as a technical investor lead. Bill Gates‘ climate tech investment firm, Breakthrough Energy Ventures. Two people must sign off for any deal to be funded. He has approved five carbon capture investment deals, of which four have been made public.

Primary cause of climate change caused by humans is the emission of carbon dioxide through fossil fuel combustion. Carbon capture is a set of methods — some time-tested, some experimental — for reducing carbon dioxide emissions either by removing them at the source or from the atmosphere. In discussions on capture and sequestration technology, the term carbon is frequently used to refer to carbon dioxide.

Toone is aware of the objections to carbon capture technology but he remains optimistic.

He said that one of the biggest concerns is that carbon capture technology could be a moral hazard to CNBC. If carbon capture technology becomes cost effective, then companies might not decarbonize their operations — they’ll just continue emitting and then pulling the carbon they emitted out of the atmosphere, effectively treading water in the emissions race.

Critics argue that companies should instead focus on decarbonizing operations through renewable energy use and energy efficiency.

Toone says this is false dichotomy.

Toone said to CNBC, “It must be all the above.”

This is also the conclusion of the United Nations Intergovernmental Panel on Climate Change.

Carbon dioxide removal is “necessary” for “counterbalancing ‘hard-to-abate’ residual emissions” and it “is also an essential element 34 of scenarios that limit warming to 1.5°C or likely below 2°C by 2100,” the technical summary of the report says.

Who’s paying?

To scale a technology, however, it must be in demand.

You can easily see that there is a demand for low-carbon products. Electric vehicles are more affordable than using fossil fuels to generate electricity. Additionally, improvements in industrial processes and buildings efficiency can save money as well as energy.

Who and what will pay for the removal of carbon dioxide?

Toone said to CNBC that “that’s the $64,000” question.

The voluntary carbon capture market, as it stands now, is open to all companies. Recently, there have been some positive developments in this market. In mid-April for example. the online payments-technology provider StripeWe have partnered with many other tech companies including Google parent. Alphabet and Facebook parent MetaTo invest nearly $1 billion in the growth of carbon-capture markets

Stripe is open to the idea of other companies contributing funds, although he also realizes that government intervention will be necessary. Florian Maganza, Stripe’s CEO, said that government intervention could take the form of funding research or a price for carbon.

The demand side of the equation is still uncertain. There is some demand from industry — the carbonated beverage industry, for example, pays up to $1,000 a ton for carbon dioxide in some markets, while the oil industry pays around $35 a ton for carbon dioxide to use in enhanced oil recovery, Toone explains. However, most carbon capture markets assume that the government will provide incentives or regulation to increase the market’s ability to capture carbon dioxide. As climate change is more evident and becomes a pressing issue, it becomes necessary for governments and other agencies.

“Until society prices carbon — no, there’s no way to make money on carbon capture other than through voluntary markets,” Toone said. It’s Wild West.

There are 25 countries that have their own carbon markets.

“The largest – by far – is China,” Toone told CNBC.

China’s system is focused first on power and then on emission per unit. Each producer will give information about their output, including power and emissions. The credit is based on past output. Producers can either receive or pay credit depending on whether or not they have exceeded or under their allowance. 

The chemical method is hard and costly

Not only is there uncertainty about demand, but many other challenges. It is technically difficult and costly to capture carbon at large scale.

There are basically two components to carbon-capture technology. First, there’s the capturing — it has to be pulled out from the air. Then, there’s the sequestration piece — once you have the carbon captured, you need to put it somewhere.

While direct carbon capture may reduce carbon emission at the site where it is being produced, it is difficult to scale as each plant needs to be retrofitted individually. Additionally, direct carbon capture does not eliminate the carbon dioxide already emitted by other sources during the last 150 year.

To remove carbon that’s already in the atmosphere, you need to rely on photosynthesis from plants —planting trees, for instance — or on chemical technology.

Chemical carbon capture requires that air passes through a technical apparatus in order for the carbon dioxide to bind with any chemical. This technical apparatus is very energy-intensive to move enough air.

Toone stated, “When carbon dioxide levels are only 400 parts per Million in the air, that means it takes me an extremely large amount of time to get it over these structures.”

To capture one million tons, or one megaton, of carbon dioxide in a year, an operation would need to move 46,000 cubic meters of air per second — and that’s assuming it captures 100% of the carbon dioxide in the air, Toone told CNBC, according to his own calculations. You would capture half of carbon dioxide. This means you would need to transport more than 100,000 cubic metres per second.

That’s just one megaton.

U.S. Government has set a goal of removing multiple gigatons (or one billion metric tonnes) of carbon dioxide from our atmosphere by 2050, and storing it for $100/ton less. This is the goal of The Department of Energy. Carbon Negative Earthshot.

For the carbon capture project to be successful, the amount of carbon emissions created to make the energy to operate the carbon capture machinery must be less than the carbon dioxide captured by the contraption — otherwise the whole effort is null and void.

Toone stated that “Yes, the numbers get quite scary.”

Toone says that there are currently two leading companies in this field. Carbon Engineering Climeworks. (Breakthrough does not invest in any of these.

Climeworks factory is shown with the fans facing the collector. The fan draws in the ambient air and releases it. Climeworks factory is in ICELAND containers, similar to maritime transport. The container stacks up in pairs at 10 metres (33.3 feet).
The collector’s fans draw air from the surrounding area and then release the CO2 through the ventilators in the back. (Photo: Halldor KOLBEINS / AFP). (Photo by HALLDOR KOLBEINS/AFP via Getty Images).

Halldor Kolbeins | Afp | Getty Images

Climeworks currently has the ability to capture carbon dioxide from approximately $600-$800 per pound. Judith HebekeuserClimeworks communications manager told CNBC. This cost would drop to $250-$300 per ton by 2030, if Climeworks has a production capacity of thousands of tons. The industry should mature as it is expected and costs will drop to $100-200 per ton.

Toone claims that $100/ton is an achievable goal for the U.S. government.

Toone pointed out that “the cost of solar has dropped 300-fold since 1975.” Toone noted that it passes the “giggle test”.

There are two main ways that carbon can be stored once it is taken from the atmosphere: geologic or biologic. Biologic carbon sequestration refers to the storage of carbon dioxide from the atmosphere in the form of plants, soil or wood. Geologic carbon storage is the underground storage of carbon dioxide. To achieve this, companies pump carbon dioxide into underground caves or blend it with another liquid, and then pump it into porous rock formations. The CO2 will “mineralize” over time.

Climeworks’ first Icelandic commercial carbon removal plant takes in the carbon dioxide and then gives it back to a partner business. CarbfixThis injects the carbon underground into water, where it reacts with basaltic. Hebekeuser explained to CNBC that the carbon becomes solid rock over the following two years. Climeworks’ main focus is on permanent storage. However, Climeworks can also consider making other fuels, such as carbon-upcycled products, or renewable energy.

The verification question

Toone stated that there are many other methods, most of which are not chemical, that can be used to reduce the cost of $100 per ton. However, verification of these methods is difficult for many.

One example is the planting of trees. Trees die. They are burned by forest fires and then they are cut down to make lumber.

These companies are like PachamaBreakthrough Investment Portfolio’s forestry team is working on determining how much carbon can be captured per acre.

A second example is to use calcium silicate (a naturally occurring chemical) and place it on the shore. Calcium silicate reacts in ocean water with carbon dioxide to create calcium carbonate. It is an insoluble substance that sinks into the ocean bottom. Toone who is a biologist, stated that the ocean will keep pulling more carbon dioxide from the atmosphere to maintain equilibrium. chemistry professor at Duke University for almost three decadesBe sure to register with Breakthrough before you join.

However, without verification these methods are not viable.

Toone said that the times we live in are absurdly optimistic. People won’t pay to have carbon captured if they feel that it is a fraud. We have to get society on board with this. So I believe validation and verification are very important.”