The idea of capturing carbon emissions has long been touted as key to tackling runaway climate change, but the high cost of developing facilities has meant its rollout has been far slower than hoped.
One group is aiming to galvanise momentum behind carbon capture and generate a multi-billion dollar industry in the process - the Global CO2 Initiative (GCI). Dr Issam Dairanieh, CEO of CO2 Sciences - the nonprofit research and development platform of GCI, spoke to We Mean Business about some of the challenges and opportunities in the sector.
GCI has set itself the bold aim of capturing 10% of annual global CO2 emissions and transforming them into valuable products. Based on today’s levels of around 36 gigatons per year, that would represent some 3.6 gigatons annually. Which, to put into some perspective is slightly more than the whole of the European Union emitted in 2015.
To add another dose of perspective, the current fleet of some 16 carbon capture and storage facilities operational around the world manages to capture around 0.03 gigatons per year. So the scale of change needed to deliver GCI’s transformative goal is not to be underestimated.
However, the scale of the market potential is almost equally eye watering. Judging by a McKinsey & Company report carried out on behalf of GCI, the market could be worth annually between US$800 billion and US$1.1 trillion by 2030.
And the potential applications for re-using carbon are huge. GCI research suggests that captured CO2 can be incorporated into at least 25 different products, including fuels, building materials, chemicals, plastics, agriculture and even food.
The initiative is mobilising funds to help commercialise these new products quickly, granting up to $400 million over the next 10 years. It does this through two platforms. The first is CO2 Sciences, a nonprofit research and development platform, and the second is a for-profit investment platform that focuses on accelerating the commercialization of CO2 based products and services.
There are other organizations seeking to fund CO2 product research, such as Canada's Emissions Reduction Alberta, which is funding up to $35 million, and Oilsands Innovation Alliance, which has paired up with the XPrize Foundation to award $20 million.
One advantage to this pathway for carbon reduction is that, once the technology is mature, market risks are relatively low, according to Dairanieh. This is because products made utilizing CO2 can be introduced at scale using existing market channels so the customers won’t necessarily see a difference between the original product versus the new one containing CO2.
However, the widespread rollout of the technology for carbon capture and use still has several hurdles that need to be overcome.
Dairanieh says that not only does the nascent industry need capital to support R&D, from investors, foundations and governments, but it has to be "patient capital". This is because the development of new technologies is time intensive - typical product development cycles are 20+ years, according to Dairanieh. CO2 Sciences is focused on technologies that are 10 years from commercialization while the investment arm is considering technologies that are near or at market introduction.
Meanwhile, various incentives are needed as many of the carbon conversion technologies are still in development and not competitive at this point, according to Dairanieh. Enacting incentives will help drive adoption and reduce costs, improving the chances of the new technologies being competitive in the marketplace, he added.
However, one of the groups of products that does not require incentives is construction materials made with CO2. Products such as cement and concrete are currently seeing the most progress in terms of utilizing captured CO2.
Cement and concrete produce more than 7% of total CO2 emissions globally, but some market-ready solutions have already demonstrated that products made with captured CO2 have roughly a third of the carbon footprint of standard products.
There are currently multiple efforts to reduce the carbon footprint of cement, according to Dairanieh, including the use of ‘recycled’ and waste materials or by processing cement at lower temperatures.
Meanwhile, there is an opportunity for CO2 consumption in the production of concrete, as CO2 can be used as a curing agent, instead of water. Dairanieh says there is “absolutely a business case for this” as it reduces the use of water, the cost of the product and its carbon footprint.
And utilizing CO2 to produce carbon fiber has huge potential in terms of the amount of stored carbon, but is further behind the product development cycle.
“We expect to fund projects in this area to seed the market and start this exciting opportunity,” Dairanieh said. “If we are successful, we may be able to replace steel with carbon fiber and take out another 6% of the world’s CO2 emissions”.