After capturing carbon dioxide from the air, oceans, industrial processes, or through pre-combustion separation, the next critical step is deciding what to actually do with it.
Capture and sequestration processes are often closely linked, particularly in the case of nature-based solutions which use natural processes in order to increase the volume of CO2 which can be captured by the ocean (see our previous article), soil, and plants. Here, capture and sequestration are effectively the same process, and hence this CO2 is not destined for utilisation. In the case of DAC and non-biological point-source capture processes, the capture and sequestration processes are separated – this is where a decision can be made on whether to give the CO2 a second life, or permanently sequester it underground via a geological storage process.
Currently, utilisation of CO2 stands at approximately 230 million tonnes p.a., with the majority being channelled into urea production for the fertiliser industry as well as enhanced oil recovery.[1] However, this figure falls significantly short of the volume we expect to capture by 2050, in order to achieve net zero emissions. It is expected that an expansion in the utilisation use cases will help address part of this shortfall, with the substantial remainder addressed through sequestration.
Sequestration – locking Away Carbon
Sequestration refers to storing captured CO2 in a manner that permanently removes it from the atmosphere (or at least for an extended period of time). The fundamental aim for actively reducing atmospheric CO2 levels is to move carbon from the fast cycle — where it circulates rapidly between the atmosphere, biosphere, and oceans—into the slow cycle, where it remains sequestered for long durations, instead of the inverse, which occurs when we burn fossil fuels.
It’s crucial to distinguish between biogenic CO2 (originating from natural sources like biomass within the fast carbon cycle) and fossil or anthropogenic CO2 (previously part of the slow carbon cycle). Biogenic CO2 sequestration has a carbon-negative impact, while sequestering anthropogenic CO2 is carbon-neutral. This distinction becomes particularly significant when considering the use of captured CO2 in synthetic hydrocarbons, which ultimately leads to the re-release of captured CO2 into the atmosphere – If the CO2 is anthropogenic in source, we are still moving carbon from the slow to the fast cycle through the combustion process.
Soil carbon – Cultivating a Carbon Sink
Soil carbon sequestration involves storing CO2 in organic soil matter through land management practices such as no-till farming and cover cropping. While these practices can be costly and require meticulous planning and management, they offer significant potential for carbon sequestration.
Pioneering start-ups are leading the charge in advancing soil carbon sequestration. These companies are developing solutions to sequester carbon at scale, without disrupting agricultural operations. For instance, Australian start-up CarbonBuilder is transforming carbon farming with a technology that coats seeds with a fungal inoculum, enhancing plants’ capacity to sequester carbon in the soil. The company has secured $100 million (AUD 150 million) in funding and established two cutting-edge R&D hubs in Australia and the US.[2] Farmers across Australia, the US, Canada and Brazil are now participating in large-scale pilot programs, exploring the potential of this groundbreaking approach to sustainable agriculture.
US-based Andes has developed an innovative method using naturally occurring microorganisms to store atmospheric CO2 in the soil. In early 2023, the company received the first investment from the $100 million Yamaha Motor Sustainability Fund, established to invest in early-stage companies working to address climate change.[3]
Another notable emerging player in the field of soil carbon sequestration is Cquesta which recently raised $5 million in seed funding. The company has developed a unique approach which focuses on deep-rooted crops to capture carbon. This innovative approach contributes to carbon sequestration and generates additional revenue for farmers through carbon credits, a win-win for both the environment and farmers.[4]
Reforestation – Nature’s Carbon Capture Technology
Forests, the largest terrestrial sink, act as giant sponges, absorbing carbon dioxide and releasing oxygen. They are the most effective natural systems for removing carbon dioxide from the atmosphere and storing it on land. This makes reforestation critical and urgent for carbon capture and mitigating climate change.
World Tree is at the forefront of carbon forestry projects which prioritise the protection of native forests, renewable timber production, and carbon sequestration. These projects are designed to generate financial returns and produce nature-based carbon credits for sale in the carbon offset market. The company’s Empress Farms project is particularly innovative, as it uses Empress trees which are rapidly growing and highly effective at removing carbon from the atmosphere.
In the US, Mast Reforestation offers end-to-end reforestation solutions for wildfire-ravaged areas. Their vertically integrated approach encompasses seed production, drone-based aerial seeding, and carbon credit management. With over $50 million in funding, including a recent $15 million financing deal with Carbon Streaming, Mast is rapidly expanding its post-wildfire reforestation projects.[5] This holistic approach not only aids in carbon sequestration but also helps in restoring ecosystems, damaged by increasingly frequent and severe wildfires.
Geological storage – Underground Carbon Vaults
Geological storage is a method of permanently sequestering carbon dioxide deep underground. The process typically involves injecting captured CO2 over a kilometre beneath the Earth’s surface into porous rock formations. The technique leverages natural geological features to trap CO2 securely for thousands of years.
The US Inflation Reduction Act (IRA) provides significant incentives for geological sequestration through the 45Q tax credit, offering up to $180 per ton of CO2 captured by direct air capture and stored underground. This financial support has spurred investment in the technology and created opportunities for companies to monetise their projects through carbon offset markets and commercial agreements with large carbon emitters seeking to offset their footprint.
Storegga is a leading independent carbon reduction and removal provider in the UK has attracted significant investments from major players like Snam, Singapore’s sovereign wealth fund, Mitsui & Co. Ltd, and Macquarie’s Commodities and Global Markets Group.[6] Storegga’s subsidiary, Pale Blue Dot, is spearheading the company’s flagship Acorn CCS and Hydrogen Project in Scotland. This ambitious CO2 transportation and storage system is scheduled to begin operations in the mid-2020s and could store at least half of the UK’s 10 Mt/yr CO2 goal by 2030, with potential expansion to 20 Mt/yr by the mid-2030s.[7]
Another UK company making waves is 44.01, which recently concluded a $37m Series A investment round to drive technology development, commercialisation, and international expansion.[8] The funding follows the successful trials in Oman and the UAE for the mineralisation technology that converts carbon dioxide into rocks, offering a novel approach to carbon storage.
CO2 Lock Corp, a subsidiary of Vancouver-based FPX Nickel, is dedicated to establishing standalone operations for permanently storing carbon dioxide in brucite-rich serpentinised peridotite host rock. The company recently achieved a significant milestone by completing a comprehensive field program at its SAM site in British Columbia, including the first-ever successful injection of CO2 into a brucite-rich ultramafic mineral project.[9].
Emerging players developing geological sequestration technologies include US-based Cella and Iceland’s Carbfix. After closing a $3.3 million funding round last year, Cella is working to scale its operations and commercialise its technology across different use cases.[10] Carbix, on the other hand, was selected for a grant award from the EU Innovation Fund to build the Coda Terminal, a large-scale cross-border carbon transport and storage hub in Iceland.[11] The company’s innovative approach was recently awarded two Milestone Prizes within the XPRIZE Carbon Removal competition, funded by Elon Musk and the Musk Foundation.[12]
Utilisation
Various emerging applications for captured CO2, each at different stages of development and commercialisation, are integral to the work of carbon capture companies. These new applications offer capture companies additional ways to generate revenue by creating demand beyond the various credits ,offsets, and tax incentives.
Mineralisation – Giving Carbon a Second Life
While sequestration aims to lock away carbon dioxide, utilisation typically seeks to repurpose it. Mineralization can be seen as a crossover of the two. The mineralisation process used in many sequestration projects can also be applied to non-sequestered carbon, with the resulting aggregates used for cement production, which generates approximately 8% of the world’s CO2 emissions. While using CO2 from industrial processes (anthropogenic CO2) to create products is an improvement over current practices, achieving actual carbon reduction can only be done by using biogenic.
Blue Planet Systems, a California-based company, is a leader in this space. The company has pioneered a patented mineralisation technology that transforms flue gas-captured CO2 into a carbonate-based building material, enabling profitable carbon capture and storage without relying on a carbon price. The company has closed several funding rounds, including from Chevron Corp’s Future Energy Fund.[13]
CarbonCure Technologies has developed a solution that enables concrete producers to use captured carbon dioxide to produce reliable, low-carbon concrete mixes. The company has seen global demand for its solutions grow amid surging demand for greener building materials among architects, engineers, owners, and developers. In 2023, CarbonCure completed an $80 million Series F led By Blue Earth Capital.[14]
UK-based Carbon8 Systems has developed a patented Accelerated Carbonation Technology process, which treats industrial residues, transforming them into valuable, low-carbon products. Carbon8 has signed strategic partnerships with companies worldwide and demonstrated a continued commitment to driving further innovation. Last year, the company received a UK Government grant to accelerate its use of AI and ML in collaboration with Swansea University’s ASTUTE Centre of Excellence.[15]
Canadian Carbon Upcycling is another prominent carbon capture and utilisation technology provider for hard-to-abate sectors, including cement, steel, and mining. The company recently announced its initial delivery of 200 tonnes of CO2-enhanced fly ash to BURNCO Rock Products as part of an initiative to deploy low-carbon concrete in Calgary.[16] The delivery comes after a successful $26 million Series A funding round to support the first commercial-scale carbon capture and utilisation deployments at North American and European cement plants.[17]
Synthetic hydrocarbons and eFuels – Recycling Carbon into Fuel
Synthetic hydrocarbons, or E-fuels, present a highly promising avenue for carbon utilisation. Produced by synthesising green hydrogen—generated through electrolysis—with carbon dioxide, these fuels offer a carbon-neutral alternative when utilising biogenic CO2 or CO2 from direct air capture. They can often seamlessly substitute traditional fossil-based fuels and feedstocks, with applications spanning from chemical manufacturing and maritime transport to mobility and aviation industries.
European regulations, such as reFuelEU, support the demand for eFuels by imposing penalties on emissions and bringing eFuels into a price-competitive range. Unlike biofuels, eFuels can achieve large-scale decarbonisation as the feedstock constraints present in biofuels are not an issue, and they are chemically identical to their fossil-based counterparts. The US supports their production through incentives like IRA 45V, offering $3 per kilogram of green hydrogen produced.
Prometheus Fuels has developed technology which removes CO2 from the air, turning it into zero-net-carbon gasoline designed for use in the mobility sector. The company is a fully integrated player, taking ownership of the capture and transformation process into the eGasoline end-product. The company has garnered significant funding from BMW iVentures, Maersk, et al.[18]
Similarly, with Air-to-Fuel technology, Carbon Engineering can produce efuels such as petrol, diesel, or aviation fuel using CO2, water, and renewable electricity. The company was recently acquired by Occidental Petroleum for $1.1 billion. Through the acquisition, Occidental plans to establish 100 plants which use Direct Air Capture to either geologically sequester, or utilise CO2 to produce concrete, SAF, and feedstock for other utilisation markets.[19]
Carbon Recycling International’s technology solutions enable the production of e-methanol from carbon dioxide and hydrogen. Last year, the company and China’s Jiangsu Sailboat Petrochemical began operations at a CO2-to-methanol plant which recycles 150,000 tonnes of carbon dioxide from waste streams at petrochemical plants.[20] The company has a pipeline of further projects and acts as both a project developer, and technology provider. Swedish start-up Liquid Wind is another player in this space, focusing solely on project development, and recently closing a €4 million Series A funding round.[21] The company’s focus on producing eFuels for the maritime sector where eMethanol is emerging as the low-carbon alternative fuel of choice.
Interestingly, some companies are exploring the use of microbes for sustainable aviation fuel (SAF) and eMethane production. Cemvita, a biotech company based in Houston, uses carbon to biomanufacture sustainable oil and produce SAF. The company has recently made a breakthrough in enabling large-scale production of its sustainable oil from waste carbon sources. This breakthrough paves the way for low-carbon-intensity feedstocks for SAF.[22]
Munich-based Electrochaea has developed a patented biocatalyst which converts green hydrogen and carbon dioxide into BioCat Methane, a pipeline-grade renewable gas. In November last year, the company closed a Series A venture round from a consortium of investors in Germany, Switzerland, and the US.[23]
Catalysing a low-carbon economy – The Road Ahead
The carbon value chain presents immense opportunities for innovative project developers and technology providers who can enable a broad range of utilisation use cases. From mineralisation and synthetic fuels to biological conversion processes, the field of carbon utilisation is ripe with potential for groundbreaking technologies and applications.
However, like the upstream part of the value chain, robust regulatory frameworks and pricing mechanisms are essential, to stimulate the development and deployment of these technologies at scale in the coming years.
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