CO2 UTILIZATION MARKETS HELPING TO INCENTIVIZE AIR CAPTURE TECHS

Tamar Hallerman
GHG Monitor
8/30/13

Niche markets and venture capital dollars are helping the developers of direct air capture technologies move forward with scale-up work at a time when government grants are few and far between, according to some supporters. After a period of relative stagnation following the collapse of climate negotiations in the U.S. Congress and the United Nations, some supporters said they are starting to see several direct air capture (DAC) technologies emerge, responding to demand from CO2 utilization markets like enhanced oil recovery and algae-based biofuels.  “Several technologies are developing fast, and we will see significant deployment in niche markets very soon, which will drive costs down and lead to efficiencies in those technologies,” Tim Fox, head of Energy and Environment at the Institution of Mechanical Engineers in the U.K., said in a recent speech in Washington, D.C.

DAC technology developers—as well as all clean energy boosters—had hoped that major political and economic drivers would come to fruition in 2009, when a cap-and-trade proposal was being seriously considered in the U.S. Congress and international negotiators attempted at that year’s U.N. climate summit in Copenhagen to hammer out a global, legally-binding climate agreement. “The thinking was that we would end up with fixed requirements ... that would ultimately mean that industries would be forced to carry out abatement. Since some industries can’t use renewable energy technologies or do not have access to CCS infrastructure for abatement, there would need some other way of abating their CO2 emissions. Taking CO2 out of the air offered a potential solution,” Fox said. But since DAC “fundamentally needs a high carbon price to drive it,” he said, many projects ground to a halt following the collapse of talks in both the U.S. and the U.N. in 2009.

Early Support for DAC

But in the years since, growing niche markets like EOR and algae biofuels, combined with venture capital from wealthy benefactors, have helped spark some movement in the development of DAC technologies, according to Fox. Developers are “moving very rapidly toward creating very plausible demonstration plants that will enable them to produce CO2 streams that can be used commercially in niche markets,” he said. Columbia University’s Klaus Lackner, who founded Kilimanjaro Energy, which is developing a DAC technology that uses a humidity swing absorption technique to separate CO2 from the air, said that climate change needs to be the ultimate driver for investing in DAC, but that such niche markets can provide a useful role in prompting the demonstration of new technologies in their early phases. “I think the big challenge you need to convince people of is that [DAC] can actually be done, and I think the niche applications are important for that reason,” Lackner said in an interview. “While you could lose sight of the larger climate issue, in the short term it’s helping you pay for your technologies.”

Kilimanjaro Energy, along with its contemporaries, has also seen some key early support from deep-pocketed venture capitalists in recent years. Kilimanjaro has received support from groups like ARCH Venture Partners in recent years, while the Calgary, Alberta-based Carbon Engineering, which is developing a liquid-based DAC technique based largely on existing technologies, has relied on support from private investors like Bill Gates and Canadian oil sands magnate N. Murray Edwards. The firm’s president, Harvard University’s David Keith, said in an interview that the money is helping go toward a 1,000 tonne per year-scale pilot unit at the University of Calgary that is expected to start testing next year.

Previously Existing Technologies

Supporters of DAC say the technology requires little R&D and is based largely on pre-existing technologies. “Most of the technology involved is very well understood. It’s just about improving that and using that engineering innovatively rather than having to create brand new technologies,” Fox said. However, the biggest roadblocks exist surrounding the technologies’ energy penalties, since it does take quite a bit of energy to separate CO2 from the atmosphere, where it is relatively dilute compared to flue gas. “Not only is [DAC] expensive, but it’s not so easy to take a CO2 molecule out of the air without putting one back in the process since it takes quite a bit of energy to do the job,” said Robert Socolow, a professor at Princeton University who co-authored a highly cited 2011 report on DAC from the American Physical Society.

Most of the DAC technologies being developed today are differing in what they are doing to cut down on that energy penalty. Keith said Carbon Engineering’s liquid-based system, which utilizes potassium hydroxide-based sorbents commonly used in the paper industry, is more efficient than the largely solid-based systems others are testing. “We’re trying to reduce the risk by being as disciplined as we can about really doing kind of classic, simple chemical engineering. Everywhere we can we’re trying not to innovate or do radical new things, but simply to bring to market something that’s as low risk as possible,” he said. Kilimanjaro is using a humidity swing absorption material for CO2 separation that captures the CO2 when dry and releases it when wet, an alternative to heating the material and using a lot of energy.

Different Cost Estimates

With such drastically different technologies being developed, mainly behind closed doors, early cost estimates for DAC technologies have varied greatly. Some early reports have estimated quite high costs on average, sparking criticism from technology developers. A Massachusetts Institute of Technology study concluded that the cost of DAC technology is somewhere in the neighborhood of $1,000 per tonne, and that unless the systems are powered entirely by zero-emissions sources of power like solar or wind, the technology is not worth pursuing at this point barring a major technological breakthrough in the field. Meanwhile, a highly-cited report from the American Physical Society estimated costs to be about $600 per tonne of CO2 captured for the average DAC system.

Developers, meanwhile, have refuted those results and have said that they could realistically bring the cost of DAC to roughly $100 per tonne, on par with current estimates for carbon capture and storage technologies. Lackner said it is too early for people to dismiss DAC and compared the fledging technology to solar photovoltaic panels and wind turbines years ago, where learning by doing quickly brought costs down. “Historically, in new technologies costs have dropped 10 to 100-fold as technologies got better, and my view of that is what will happen with” direct air capture technology, Lackner said. “Solar photovoltaic panels today are 100 times cheaper today than they were initially, and windmills are 50 times cheaper. This curve has happened, and it has to happen here [with DAC] too.”

Technology of Last Resort?

The technology in recent years has seen some political hype in the U.S. Some politicians have looked toward the development of DAC technology as a potential last-ditch effort to halt climate change, particularly useful for emissions from small point sources like buildings and automobiles that are too expensive to capture as opposed to a larger source such as a power plant. In 2009, then-Energy Secretary Steven Chu and White House Science Advisor John Holdren both mentioned the technology as a potential mitigation method. Congress has also expressed some interest in the technology in recent years. The Senate Energy and Natural Resources Committee passed a bipartisan bill in 2011, the “Carbon Dioxide Capture Technology Prize Act,” that would have offered $10 million worth of inducement prizes to the first researchers to successfully develop bench- and demonstration-scale DAC technologies. But after clearing the energy panel, the bill was never considered by the full Senate and has not been reintroduced to date in the current 113th Congress.

But critics of DAC technologies have been far and wide. Some environmentalists have argued that such technologies could enable governments to further punt action on climate change in the near term if DAC exists as a back-stop action. Others have argued that it should not be utilized until all other methods of emissions reduction and mitigation are exhausted. “When we are finally dealing with climate change, we will be unrolling, over quite a few decades, a series of strategies, and direct air capture may be part of it, but I don’t think we should be distracted by it very much right now. We shouldn’t be ignoring it, either, but there are so many more prior things to deal with, especially CCS,” Socolow said.

Even some SAC supporters acknowledge that it will most likely be a technology of last resort in the fight against climate change. “Ultimately, what you can say about this air capture technology is that it’s going to be the most expensive way to abate carbon emissions. It’s going to be somewhere to the right of CCS in terms of cost,” Fox said. But Lackner said that the technology will be needed at some point and that it subsequently should be pursued. “I see direct air capture as the player that rounds out the option space,” he said. “If you don’t have air capture and CCS, then I could make the argument that you cannot solve the climate problem.”