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Fossil-Fuel Industry Embrace Raises Alarm Bells Over Direct Air Capture

Fossil-Fuel, Direct Air Capture, Carbon, Fossil

By: Reuters – There’s little doubt that direct air capture (DAC) is divisive: on the one hand, it is a relatively simple technology that can, in theory, be deployed anywhere to draw carbon emissions out of the air. On the other, it is expensive, unproven, and, in the view of many, captive to the interests of fossil-fuel producers.

Among its backers is Boston Consulting Group, which argues that carbon dioxide removal (CDR) technologies are essential to delivering the “net” in net zero, helping to offset hard-to-abate industries and to reduce the build-up of historic emissions already present in the atmosphere.

Direct air capture, it says, has significant advantages over other CDR approaches in terms of scalability, permanence, and verifiability. “DAC is more than 100 times as land-efficient as reforestation, making it a more scalable solution. It can sequester emissions for many centuries, making it the most permanent of all removal options. Tracking how much CO2 has been removed is straightforward, making it more verifiable than ocean alkalinization. As a result, even though it is still nascent, DAC could play a critical role in delivering on net zero,” the group says.

Mineral RightsDAC is still in its very earliest stages, with only 18 facilities in operation, capturing just 10,000 metric tons, a year. Nearly half of that amount, 4,000 tons is being stored at Climeworks’ Orca plant in Iceland, which opened in 2021. Read more

But many more are in the pipeline, some of which are due to come online in the next couple of years. The largest of these is by 1PointFive, a subsidiary of Occidental’s Oxy Low Carbon Ventures and Carbon Engineering. Its facility in Texas, which will capture CO2 and use some of it for enhanced oil recovery, is due to start operating in 2025 and capture up to 500,000 tons of CO2 a year.

Developers had been encouraged by a wave of government largesse for the technology, particularly in the U.S. Biden administration’s infrastructure bill last year, which authorized $3.5 billion to create four commercial-scale DAC hubs. In August the Department of Energy announced the first $1.2 million for the first hubs, in Texas and Louisiana. It has also increased its 45Q tax credit to $180 per ton for CO2 captured via DAC.

Meanwhile, the European Commission has a target to store up to 50 metric tons of carbon dioxide equivalent (MtCO2) a year by 2030, including from DAC, and the UK announced 20 billion pounds in funding for carbon capture, utilization, and storage (CCUS), including DAC, in March 2023. Rolls-Royce is one beneficiary, having secured 3 million pounds to build a DAC demonstration plant that will be operational by the end of the year.

Canada offers a tax credit of around 60% for DAC projects, while Japan’s carbon capture roadmap has a target of capturing 6 to 12 MtCO2 per year by 2030.

Matt Kirley, manager for climate-aligned industries at the Rocky Mountain Institute (RMI) likens it to “solar in the early 2000s”.

The prodigious amounts of energy required to capture CO2 from the air, which accounts for only 0.04% of the atmosphere, mean the first-of-a-kind costs for DAC technologies range from $180 to $2,750 a ton. Still, there seems to be no shortage of corporate funding. Companies have pledged $1 billion to advance market commitments through organizations such as Frontier, as well as privately.

Amazon, for example, recently pledged to buy 250,000 tons of credits over 10 years from 1PointFive. Partners Group has signed a deal with Climeworks to remove 7,000 tons of CO2 from the atmosphere, while Microsoft has signed a long-term contract to purchase up to 315,000 metric tons of CO2 from San Francisco startup Heirloom, which uses limestone to remove CO2 from the atmosphere. Heirloom is part of Project Cypress in Louisiana, one of the first DAC hubs to get Department of Energy funding.

The software giant has also signed a 10,000-ton removal deal with Climeworks, which is a partner in Project Cypress, and is buying an undisclosed number of carbon credits from CarbonCapture, whose Wyoming-based, modular, low-temperature Project Bison is the largest single DAC project planned in the world and aims to store 5 million tons of atmospheric CO2 per year by 2030.

Amazon has also invested in CarbonCapture to buy 100,000 tons of credits for its suppliers and selling partners. Other large buyers of credits include Airbus, Stripe, Boston Consulting Group, UBS, and Swiss Re.

Mike Hemsley, deputy director of the Energy Transitions Commission, says it is possible that the industry will manage to scale up to 50 to 60 million tons a year by 2030, and then 2 to 3 gigatons (Gt) by 2050. “I don’t really see any barriers. You just need clean energy and space. There is plenty of storage capacity. There are large-scale projects coming online that will allow the capture of 1 million tons a year.”

But while fossil fuel industry investment and expertise is speeding the development of the technology, it is also ringing alarm bells among environmental groups and civil society.

Occidental Oil, which invested $1.1 billion to purchase Carbon Engineering earlier this year, is not the only oil and gas player. Chevron also has an equity investment in Carbon Engineering, while Exxon, which has a joint research agreement with Global Thermostat, told Reuters that it is also developing DAC technology.

Mark Jacobson, professor of civil and environmental engineering at Stanford University, says that with 75% of CO2 captured today being used for enhanced oil recovery (EOR), DAC is simply allowing emissions to continue.

“It is so much simpler just to use solar power to produce green hydrogen,” he told the Cleantech Talk podcast. “Stopping the emission of a ton of CO2 is exactly the same as taking a ton out of the air. It’s much more efficient to stop emitting.”

Jonathan Foley, executive director of climate solution group Project Drawdown agrees, describing DAC as “the outdoor version of CCS (carbon capture and storage)”. “It’s even more difficult than CCS to remove 420 parts per million of CO2 from the atmosphere. It doesn’t work at all,” he adds.

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He is scathing about 1Point Five getting U.S. government funding to develop a DAC hub in south Texas. “Why are we subsidizing fossil fuel companies, which are the most profitable in history, to extend their lifespan by decades? We should be spending that money on real solutions: energy efficiency, renewables, retrofitting homes, and fixing agriculture,” Foley said.

Instead, he argues, there should be more focus on nature-based solutions. “Yes, there are problems in ensuring they can lock away carbon permanently, but we can improve that if we put our focus into it.”

In an emailed statement, a spokesman for Occidental said the 1 million tons of CO2 that 1PointFive and its partners would be capturing at the south Texas DAC hub would be “sequestered in saline formations not associated with oil and gas production”.

However, it has another commercial-scale DAC plant already under construction in the Permian Basin called Stratos. “For Stratos, we have multiple options for captured CO2 from DAC, including offering carbon dioxide removal credits (CDRs) generated from pure sequestration of CO2 in saline reservoirs. … At Stratos, we also have pathways to generate low-carbon products, such as net-zero oil through EOR, which could make use of Oxy’s existing fields and facilities, and lower-carbon aviation fuel through air-to-fuels.”

Occidental eventually plans to build around 100 DAC plants as part of its commitment to produce “net-zero” oil, Reuters reports.

Christoph Gebald, chief executive of Climeworks, is at pains to put clear blue water between his technology and the fossil fuel industry.

Climeworks is a partner in three DAC hubs that have been selected for potential funding from the U.S. government, in Louisiana, California, and North Dakota, but none is involved with enhanced oil recovery and all are dedicated to permanently removing CO2, Gebald said.

And though he would not rule out tapping into the oil and gas sector’s expertise and workforce for permitting permanent storage, or CO2 transport, he said Climeworks would avoid doing so.

He said he could understand why environmental groups were concerned about DAC being a fig leaf for continued oil and gas production, but the economics do not add up. “We have 50 billion tons of CO2 emissions (per year), right? … DAC is simply way too costly to compensate for all of the emissions.”

Even if the technology costs $250 per ton, a quarter of what it costs today, that bill to offset fossil fuel emissions would still amount to an impossibly large sum of $12.5 trillion, he reasons. “If we do what we need to do, which is 90% emissions reduction and 10% removal, $12.5 trillion becomes $1.25 trillion, which is 1.2% of GDP. And that is exactly what we are spending globally on waste management.”

RMI’s Kirley agrees that scaling up direct air capture will be necessary to avoid catastrophic heating of the planet, and funding must begin going into it now. “The world won’t meet its net-zero targets without scalable, non-biological CDR. Taking action this decade is critical to achieving scale by 2050.”

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