Making carbon pay

Process industries are caught up in a CO₂ paradox: they urgently need to find ways to reduce carbon emissions, but at the same time, they face shortages of supplies of CO₂ and high costs. 

That means a massive opportunity — given the right technology and financial models — for process businesses to benefit from active management and re-use of carbon. 

In principle, the decarbonisation of industries with high CO₂ emissions footprints can be made affordable through cycles of capture and re-use, with the costs being mitigated by the creation of new products and markets for re-usable carbon (cement manufacture, aviation fuels, building products, to turn into plastics).

If emission reduction and decarbonisation measures fail to fully transform process industries to net-zero by 2050, the residual CO₂ emissions will need to offset via greenhouse gas removal measures.

Support for DAC from governments in the form of research funding alongside tax incentives for businesses will both be needed to accelerate development and take-up

Direct Air Capture (DAC) is an emerging technology that makes it possible to pull huge amounts of CO₂ from the air with only limited need for land and water. What is needed is energy — making the current, early stage, forms of DAC expensive (estimated at around $600 per tonne CO₂ removed). For this reason, there have only been 19 DAC projects in operation over the past decade, accounting for the removal of only 0.01 million tonnes of CO₂ annually — a tiny proportion in the context of the need to achieve an annual CO₂ removal capacity of 980 million tonnes of CO₂ by 2050 (according to the IEA's net zero scenario). 

Support for DAC from governments in the form of research funding alongside tax incentives for businesses will both be needed to accelerate development and take-up. The US and UK are leading the commitment to R&D. In the US, the 45Q tax credits for businesses adopting CO₂ removal have increased substantially from $50/t CO₂ to $180/t CO₂ (if CO₂ is stored). When CO₂ is passed on for re-use, for example, for synthetic aviation fuels, the tax credit has risen from $30/t CO₂ to $60/t CO₂. 

There have been early-stage customers for DAC among ‘name’ organisations. Microsoft, Stripe and Shopify are all considering DAC as part of their net-zero strategies. And again, this is an important stage in terms of encouraging development of new technologies and the scaling up of facilities.

At current demand levels, only around 10% of CO₂ emitted globally can be re-used, meaning real potential for process industries in monetising CO₂ as a product. New opportunities are emerging for CO₂ re-use, for example in the concrete and cement industries, in petrochemicals in producing plastics, and most of all, in the vast market opening up for sustainable aviation fuels (a market expected to be worth $14 billion by 2030).

We’re not there yet. As with so many high-potential technologies, the benefits of DAC for the process sector are being held back by the limited nature of development and adoption. New technologies stay within academic institutions, at small pilot levels, and their full potential isn’t exploited; costs stay high, business viability stays unproven. With the combination of increasing demands to decarbonise and the opening up of CO₂ markets, now is the time for process industries to play their part in building a more positive cycle of DAC development and implementation.

Dr Dawid Hanak is associate professor in energy and process engineering at Cranfield University