Global uptake in funding Carbon Capture
If the world stopped emitting Greenhouse Gasses (GHG) tomorrow, we would still need to remove tons of CO2e from the atmosphere to avoid catastrophic global warming. Since 1850, we have emitted 2,500,000,000,000 tons of CO2e into the atmosphere, and we continue to dump in 50B tons of CO2e per year. To keep the global temperature increase beneath 1.5ºC, we will need to stop GHG emissions while simultaneously removing ~10-20% of global emissions annually.
Carbon capture and storage (CCS) is one of the technologies with the potential to reduce the amount of carbon in our atmosphere, and in terms of VC investment, there’s been a global uptake in funding for companies working with CCS.
In 2021, the global capacity of planned CCS projects grew 50% over 9 months, reaching 111M tonnes. While the beginning of Q2 2022 has seen the biggest carbon removal startup deal ever with carbon capture company Climeworks raising $650M. Additionally, there is an advance market commitment (a pledge to guarantee a market) of $925M to advance carbon removal technology by companies that include Stripe, Alphabet, Shopify, Meta, and McKinsey.
This is not the first time the world has shown great interest in the technology. In 2011, the planned capacity was even higher than the heights of 2021. However, the cost paired with the lack of incentives to continually develop the technology meant that many high-profiled projects failed, leaving the optimism surrounding CCS in the dust.
What is Carbon Capture and Storage?
CCS is the process of capturing and storing carbon dioxide (CO₂) either directly from flue stacks at power plants, chemical plants, or cement production. Carbon capture can also capture CO₂ from the air using direct air capture (DAC). Currently, the most effective way of capturing carbon is using point source technology rather than direct air capture.
CCS consists of three main steps: capture, transport and storage.
1) Capturing CO₂
At the source: There are three categories of technology used to capture CO₂ at the source: post-combustion carbon capture, pre-combustion carbon capture, and oxy-fuel combustion.
For post-combustion carbon capture, CO₂ is separated from the exhaust of a combustion process. Pre-combustion capture technologies involve gasifying fuel and separating the CO₂. It is less costly than other options; however, it can only be built into new facilities. For oxy-fuel combustion, fuel is burned in a nearly pure-oxygen environment rather than regular air, resulting in a more concentrated stream of CO₂, which is easier to capture.
Direct Air Capture: Removing carbon dioxide already released into the air through direct air capture (DAC) using either a liquid absorption or solid adsorption process. DAC captures CO₂ directly from the air where the concentrations of CO₂ are around 0.04% compared to up to 20% at point sources.
Once the CO₂ is captured, it is compressed into a liquid state and transported by pipeline, ship, or road tanker.
CO₂ is injected into deep, underground geological formations, where it is stored long-term. Storage sites used for CO₂ include former oil and gas reservoirs, deep saline formations, and coal beds and must be at least 800 meters deep.
Carbon Capture and Utilization
Storing is not the only option for captured carbon. In some cases, carbon can be recycled for utilization, either to manufacture goods or for industrial processes. Different CO₂ uses have different levels of emissions reductions. Some uses, like soda carbonation, release their CO2 immediately and are, therefore, not acceptable as utilization options.
One of the primary uses of CO₂ is for enhanced oil recovery (EOR), a method of oil extraction that uses CO₂ and water to drive oil up the well, improving oil recovery and sequestering the CO₂ underground. Selling CO₂ for EOR and other uses can provide revenue to CCS facilities, incentivizing the implementation of CCS technologies.
The vast majority of the CO₂ that will be captured will go into permanent storage. It is estimated that we can currently utilize less than 10%.