In a suburban car park near Seattle Bill Gates recently posed for an unusual photo shoot. Sporting a high-vis jacket and safety boots, the billionaire philanthropist shovelled asphalt from a wheelbarrow into a pothole. Mr Gates was there to tout his investment in a company involved in “carbon utilisation”, a neglected area of climate tech that is heating up.
Capturing carbon dioxide (CO2) from the air will be a crucial part of efforts to slow climate change. Many projects envisage piping the gas to some form of permanent storage (such as salt caverns). Oil companies, which have experience of pumping CO2 into dwindling wells in order to enhance oil recovery, claim to be keen. But less attention has been paid to the many other commercial possibilities. In the group of technologies referred to as carbon capture, utilisation and storage (CCUS), utilisation often gets short shrift.
The asphalt Mr Gates was shovelling was made by Modern Hydrogen, a startup which has raised some $100m from investors. It has developed a compact pyrolysis reactor that can convert methane (from natural gas, say, or from manure) into pure hydrogen fuel and solid carbon. It has already demonstrated the viability of the hydrogen fuel to a power utility and is now scaling up production. Because its kit can fit inside a shipping container, it reckons this will allow customers far from pipelines to have easy access to clean hydrogen on demand. The solid carbon, meanwhile, is now replacing bitumen distilled from crude oil in asphalt for paying customers, which Tony Pan, its co-founder, calls a “high-value application”.
CarbonFree, another startup which counts BP, an oil giant, among its investors, announced a 20-year deal in April to monetise carbon emissions at a US Steel facility in Indiana. The startup plans to invest $150m to deploy its proprietary technology at the mill. This uses calcium extracted from slag (a traditional waste product) and combines it with CO2 captured from blast-furnace gas to make high-quality calcium carbonate, which the startup plans to sell as a food ingredient.
Martin Keighley, CarbonFree’s boss, insists his firm’s technology is profitable without subsidies. Still, government support helps. Dow, an American chemicals firm, has won up to $95m in government funding to build a facility that will capture some 100,000 tonnes of CO2 a year, which it will use to produce electrolyte solutions for lithium-ion batteries.
ArcelorMittal, a European steel colossus, has built a €200m ($220m) carbon-utilisation plant at a steelworks in the city of Ghent in Belgium. The facility relies on novel equipment made by LanzaTech, a biotech firm based in Illinois, which uses a biocatalyst to turn the carbon-rich waste gas from the blast furnaces into ethanol. This can then be used to make sustainable aviation fuel or chemicals.
In 2022 LanzaTech secured $500m in funding from Brookfield, a Canadian asset manager, to scale up its business. Recently it was jointly awarded up to $200m by America’s Department of Energy to convert CO2 captured at a petrochemical plant into ethylene, a useful feedstock. Jennifer Holmgren, LanzaTech’s boss, reckons replacing “fossil carbon” in supply chains is “a $1trn addressable market”.
The International Energy Agency (IEA), an official forecaster, reckons some 230 megatonnes of CO2 are used in industrial applications each year, mainly for pumping into oil wells and as an input for fertiliser. But the IEA sees other uses such as synthetic fuels, chemicals and building materials “gaining momentum”. It estimates that the current global pipeline of utilisation projects would allow nearly 15 megatonnes of CO2 to be captured for these uses by 2030.
That may not sound like much compared with the 37 gigatonnes of CO2 emitted globally last year. But the opportunity will grow as the cost of capturing and recycling carbon continues to fall. In a report published earlier this year, BCG, a consultancy, and the Oil and Gas Climate Initiative (OGCI), a trade body, estimate that between 430 and 840 megatonnes a year of captured CO2 could be used in industrial applications by 2040. MarketsandMarkets, a research firm, predicts that the global carbon-utilisation market will grow in value from roughly $3bn in 2023 to some $13bn by 2030. BCG suggests this could rise to as much as $50bn by 2040.
A report published on August 7th by America’s National Academies of Sciences, Engineering and Medicine, a group of research bodies, examines the role that carbon utilisation could play in decarbonising the economy. Its boffins conclude that by 2050 “the conversion of CO2 into marketable products…can operate at a global annual scale of multiple gigatonnes to provide an alternative, circular-carbon feedstock.” That would certainly be worth picking up a shovel for. ■
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