The carbon management economy

Jay Owen SRI/ESG News, Resource Efficiency, Earth Systems Science, Latest Headlines

“This report on all the groups rushing into the direct carbon capture game, indicates they are off in the wrong direction: following the money, government subsidies and expensive unnecessary technological contraption to pull CO2 out of the air, with various methods of storing it underground. This is 20th century industrial thinking, aimed to bail out many fossilized industries.

We favor alternative which capture ambient CO2 and use it in more creative ways: for producing protein foods, as by Air Protein, creating diamonds and other gems, as in Sky Diamonds and other lab-grown identical gems ( www.ethicmarkgems.com), using CO2 to make cement, as well as just keeping fossil reserves in the ground as possible future feedstocks.

Carbon is a valuable element and there is no need to try risky, costly, deep storage methods, when Nature’s methods of storing CO2 in plants on land and in oceans, creating human foods so much more efficient. See our Green Transition Scoreboard® annual reports since 2009, recently:  “Capturing CO2 While Improving Human Nutrition & Health” (2018) (free download at www.ethicalmarkets.com as well as our TV show playing “Investing in Saltwater Agriculture“ with NASA Chief Scientist Dennis Bushnell).

We also recommend the latest RethinkX report: “RethinkX: How Humanity Can Choose to Reduce Emissions 90% by 2035 through Disruption of Energy, Transportation and Food With Existing Technologies“ (2021).

~Hazel Henderson, Editor“

 

Wednesday, August 18, 2021

The carbon management economy

It’s not the law of the land yet, but one of the most potentially impactful aspects of the bipartisan infrastructure bill for climate techies is the groundwork it lays for new economic opportunities based on capturing and sequestering carbon emissions.

The support for the so-called carbon management economy takes many shapes within the bill, and is largely based on the SCALE Act reintroduced earlier this year by senators on both sides of the aisle. (SCALE stands for Storing CO2 and Lowering Emissions). Some of the biggest monetary data points include:

  • More than $8.5 billion in funding for industrial and direct air carbon capture technologies, including not just the equipment to suck up CO2 emissions but also transportation networks and pipelines to get it to places where it can be stored.
  • A pool of $3.5 billion to create four regional hubs for direct air capture (DAC), each of which can draw down at least million metric tons of CO2 annually (for perspective, that’s the emissions generated by about 120,000 U.S. homes).
  • Roughly $2.5 billion over the next five years to help the Department of Energy create storage facilities for the captured carbon — not just in geologic formations but also in products such as cement or plastic.

An analysis by the Bipartisan Policy Center, Clean Air Task Force and Third Way estimates that these sorts of policies could create thousands of U.S. jobs — up to 13,000 annually, not including the potential for employment related to industrial factory retrofits or for building DAC plants. Even before it was passed, the Carbon Capture Coalition orchestrated a letter of support for the infrastructure investments as well as for enhancements to the 45Q tax provision, which provides incentives for corporations to build carbon capture facilities. (The letter is signed by more than 170 organizations from transport companies such as United Airlines to unions like United Steelworkers and companies in infrastructure including LafargeHolcim and Honeywell.)

“Enactment of the bipartisan infrastructure provisions and key complementary tax measures outlined in the letter could deliver economy-wide deployment resulting in an estimated 13-fold increase in carbon management capacity and annual emissions reductions of 210-250 million metric tons by 2045, spurring continued innovation and improved performance, while driving down costs and preserving and creating high-wage jobs that families and communities across the nation depend on,” noted Brad Crabtree, director of the coalition, in a statement.

To help me mull the implications of the pending legislation, especially alongside the Intergovernmental Panel on Climate Change’s new assessment of where the world stands on climate change, I chatted with experts from the World Resources Institute (WRI) and the Clean Air Task Force (CATF). Among other things, I asked them to address criticism from some environmental groups that are skeptical about how much money to invest in carbon capture, which could be seen as perpetuating the prolonged use of fossil fuels.

Dan Lashof, director of WRI for the United States, said fast permitting for carbon capture hubs as well as the infrastructure necessary for getting captured CO2 to places where it can be managed will both be critical for meeting the goals of the Paris Agreement. He pointed to the International Energy Agency’s strong advocacy of carbon capture and storage infrastructure, alongside accelerated investments in solar and wind generation capacity as one reason this investment is so important. “Even if we eliminated fossil fuels overnight, we would still need these things,” Lashof told me.

Lee Beck, international director of carbon capture for CATF, said achieving the scale of carbon removal needed to limit global temperature increases to 1.5 degrees Celsius by 2050 will require the construction of thousands of facilities in the U.S., which will feed into networks that can benefit from shared costs. That’s the approach being used in Europe with Norway’s emerging Northern Lights carbon capture and storage project, backed by Shell, Total and Equinor. Industrial facilities across the region have committed to transporting captured CO2 to the site. It’s possible that a similar model could emerge in the U.S., Beck suggested. The clustering effect is already happening in places like Texas, Nebraska, North Dakota and Illinois.

Alongside the infrastructure plans, Beck said a critical factor for success will be enhancements to the 45Q federal tax incentive. “The way we are approaching the crisis is a very technology-forward way,” she said, adding: “Innovation alone isn’t sufficient.”

Among the changes being advocated in the Carbon Capture Coalition letter are a direct pay option for the incentive that will help those exempt from federal tax liability, a 10-year extension of the construction window for facilities, and a boost in the credit values including to a range of $60 to $130 per metric ton, depending on the capture and storage method.

All of these ideas, of course, are purely hypothetical until the bill (along with the massive $3.5 trillion proposed budget that includes even more climate tech and infrastructure measures) is considered and passed by the U.S. House of Representatives and President Biden signs off. That body is due back in Washington, D.C. in late August, so this could take weeks.

Dispatches and data points:

  • Food for thought: Apeel, which makes coatings to extend the life of fruits and vegetables post-harvest, has raised another $250 million in venture capital led by returning investor Temasek, boosting its valuation to more than $2 billion. The company is now operating within 30 supply networks in eight countries (via Blog).
  • From Google to startup: Google’s first hire focused on data center energy, Neha Palmer, recently left the tech giant to become CEO of a startup focused on electric vehicle charging. She chats with me on last week’s podcast about how Terrawatt Infrastructure is working on the critical challenge of building EV charging networks for corporate truck and delivery fleets.
  • Up in the air: Satellite intelligence company Spire Global, which tracks weather, aviation and maritime data, went public via a SPAC merger that valued it at around $1.6 billion (via CNBC).
  • Harvested: Cox Enterprises, which has invested more than $1 billion in climate tech ventures, has acquired indoor agricultural company BrightFarms (via PR).
  • Build it and they will subscribe: Renewable energy developer Nexamp, which recently announced one of the biggest U.S. community solar agreements with Walmart, raised $240 million in an equity deal with Generate Capital plus another $440 million in debt financing coordinated by MUFG Union Bank (via PR).
  • Just for fun: For those interested in word origins, or you just need a cheat sheet on how to talk about climate tech, this Beyond the Buzzword” video primer by GreenBiz contributor Ben Soltoff is worth a view.