The commitments to the nascent industry of carbon removal have boosted its financial backing by about 30 times. Climeworks AG, a Swiss company whose Iceland facility is one of the world’s only operational projects, privately raised $650 million. That’s more than the entire industry raised in its history.
Google parent Alphabet Inc, Facebook operator Meta Platforms, McKinsey & Co, payments processor Stripe Inc. and Canadian e-commerce firm Shopify Inc. committed nearly $1 billion to pay for carbon removal.
What to expect today:
What is carbon removal
Our take - where does the planet optimist stand on this
What is carbon removal?
Carbon removal is similar to carbon capture and storage, which involves catching greenhouse gas emissions from smokestacks and pumping them into the Earth.
Carbon removal methods
Carbon removal methods include
natural strategies like tree restoration and agricultural soil management
high-tech strategies like direct air capture and enhanced mineralization, and,
hybrid strategies like enhanced root crops, bioenergy with carbon capture and storage, and ocean-based carbon removal
Examples of carbon removal technologies
It is a kind of charcoal produced by heating biomass in a low-oxygen environment. When buried into soil, it locks carbon away for decades or centuries while enhancing soil quality.
Bioenergy with carbon capture and storage (BECCS)
It involves growing or collecting biomass, processing it, converting it to biofuels or energy, capturing the resulting carbon dioxide, and storing it underground or in long-lasting products
Coastal blue carbon
It refers to carbon sequestered by restoration and better management of coastal wetlands and seagrass meadows. These areas currently hold large amounts of carbon in biomass and sediments.
Direct air capture with carbon storage (DACCS)
It refers to processes that capture CO2 with purpose-built machines, that captures CO2 from various chemical processes and isolates CO2 thereafter. After capturing, it is stored in long lasting reservoirs.
For the purpose of this article, we will only focus on direct air capture since it seems to be getting the most traction.
Investments by companies
There have been commitments made by several companies to aid CO2 removal projects. Some of the prominent ones are noted below:
$500 million commitment by Alphabet, Microsoft and Salesforce to support CO2 removal projects, along with the launch of a new program that aims to facilitate the purchase of more than 1 million metric tons of verified carbon dioxide removal offsets by 2025.
Stripe announced that it would spend $1 million buying carbon-removal credits
BCG supports the removal of 100,000 metric tons of CO2, while Mitsui and Swiss Re are pledging the removal of 50,000 metric tons or $25 million in investment.
Occidental Petroleum Corp says, it will spend up to $1 billion on a direct-air-capture facility with Canadian startup Carbon Engineering Ltd.
Our take - where does the planet optimist stand?
Looks like everyone wants to contribute towards carbon removal and carbon credits. Even Adam Neumann, the co-founder and former chief executive officer of the co-working provider WeWork, started a carbon credit startup that sells carbon credits and keeps a record of the transactions on the blockchain. It has raised $70 million from venture capitalists.
Should capital be better used
Companies are paying around $200-$600 per ton for carbon removal and some even more. Some companies are trying to reduce this cost by using newer and efficient technology, like Heirloom has done.
This one tonne of carbon can also be removed by 15 tree seedlings grown for 10 years or by 6 mature trees per year. It takes $0.5-$0.85 to plant a sapling, $0.2 - $0.3 for planting a tree. Even if we account for average land costs and maintenance (negligible), we believe this cost would not cross $3 per ton of carbon removed. Compare that to the $200 - $600 / ton companies are paying right now. Can you imagine the capital you would save by simply planting trees?
People in this industry argue that the technology is still nascent but estimates by one startup show that even in mature stage carbon removal will cost $50 / ton. Given the astronomical investments in carbon removal, we simply ask the question - should capital be better used?
Scalability is still a question
If you look at the history of carbon capture and storage (CCS), what you see is nearly two decades of a solution in search of a cure.
The prohibitive costs of CCS mean they cannot play any significant role in the rapid reduction of global emissions necessary to limit warming to 1.5°C, as specified by the Paris agreement
Despite the existence of the technology for decades and billions of dollars in government subsidies to date, deployment of CCS at a scalable level still faces challenges of expenses and feasibility
Researchers also found that it was incapable of operating with zero emissions
Innovations hold promise
A California-based startup, Heirloom Carbon Technologies has found a way to use limestone, a cheap and widely available material, to remove carbon dioxide directly from the air. For the same, it has raised $3 million from investors. It said it can pull off carbon removal for $50 a ton, and aims to remove one billion tons by 2035.
Their technology enhances the natural process, called carbon mineralization, to help minerals absorb CO2 from the ambient air in days, rather than years. By combining the best of engineering and nature, they can offer the most cost-effective and scalable Direct Air Capture solution in the world. The speed of removal should justify the cost of removal.
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