Businesses Aim to Pull Greenhouse Gases From the Air. It’s a Gamble.

Source: By Brad Plumer and Christopher Flavelle, New York Times • Posted: Tuesday, January 19, 2021

A surge of corporate money could soon transform carbon removal from science fiction to reality. But there are risks: The very idea could offer industry an excuse to maintain dangerous habits.

A direct air capture system, developed by the Swiss company Climeworks, on the roof of a trash incinerator in Zurich.
Orjan Ellingvag/Alamy

Using technology to suck carbon dioxide out of the sky has long been dismissed as an impractical way to fight climate change — physically possible, but far too expensive to be of much use.

But as global warming accelerates and society continues to emit greenhouse gases at a dangerous rate, the idea is gaining support from a surprising source: large companies facing pressure to act on climate.

A growing number of corporations are pouring money into so-called engineered carbon removal — for example, using giant fans to pull carbon dioxide from the air and trap it. The companies say these techniques, by offsetting emissions they can’t otherwise cut, may be the only way to fulfill lofty “net zero” pledges.

Occidental Petroleum and United Airlines are investing in a large “direct air capture” plant in Texas that will use fans and chemical agents to scrub carbon dioxide from the sky and inject it underground. Stripe and Shopify, two e-commerce companies, have each begun spending at least $1 million per year on start-ups working on carbon removal techniques, such as sequestering the gas in concrete for buildings. Microsoft will soon announce detailed plans to pay to remove one million tons of carbon dioxide.

The United Nations-backed Intergovernmental Panel on Climate Change has said nations may need to remove between 100 billion and 1 trillion tons of carbon dioxide from the atmosphere this century to avert the worst effects of climate change — far more than can be absorbed by simply planting more trees. But many carbon removal technologies remain too expensive for widespread use, often costing $600 or more per ton of carbon.

The hope, companies say, is that early investments can help drive down prices to something more palatable — say, $100 per ton or less — much as investments in wind and solar have made those energy sources cheaper over time.

But there are risks, too. As more companies pledge to zero out their emissions by 2050, some experts warn that they could hide behind the uncertain promise of removing carbon later to avoid cutting emissions deeply today.

“Carbon removal shouldn’t be seen as a get-out-of-jail-free card,” said Jennifer Wilcox, a leading expert on the technology at the University of Pennsylvania. “It has a role to play, particularly for sectors that are very difficult to decarbonize, but it shouldn’t be an excuse for everyone to keep emitting greenhouse gases indefinitely.”

‘We have to try’

There’s widespread agreement that companies pledging to address climate change should first do everything possible to slash their emissions — say, by using more renewable power or improving energy efficiency. Most of the time, it’s easier to prevent emissions in the first place than it is to pull back carbon dioxide after it’s diffused into the atmosphere.

But that still leaves significant sources of emissions that have no easy solutions, like cement manufacturing, long-distance shipping or air travel.

United Airlines, for instance, has vowed to become carbon-neutral by 2050 and is exploring ways to cut emissions, such as more efficient aircraft and sustainable biofuels. Yet those strategies may not be enough, the airline says, which is why it also investing in direct air capture.

“If we want to make aviation sustainable, everything has to be on the table,” said Lauren Riley, managing director of global environmental affairs at United. “Carbon removal might not be a silver bullet, but we have to try.”

Traditionally, many corporations have sought to offset their hard-to-cut emissions with natural solutions, such as paying landowners to protect forests or plant trees, which absorb carbon from the air. But trees have drawbacks: there’s only so much land available and forests can burn in wildfires, releasing carbon back into the atmosphere. Scientists have warnedthat nature-based offsets are an imperfect fix that can be tricky to verify.

Those drawbacks have spurred interest in engineered carbon removal, using technologies to pull carbon dioxide from the atmosphere and lock it away underground or turn it into minerals, where it is likely to remain for tens of thousands of years.

Charm Industrial is converting crop waste into an oil that can be injected underground, rather than letting it decay and release carbon into the atmosphere.
Charm Industrial, via Reuters

There are working prototypes of such devices. But for years, engineers developing carbon removal struggled to find investors.

“It’s a chicken-or-egg problem,” said Nan Ransohoff, head of climate at Stripe, an online payments company based in San Francisco. “The best way to bring down the cost is to start deploying these technologies at scale. But until there are actual customers, no one’s going to build them.”

To help break the impasse, Stripe announced in 2019 that it would begin spending at least $1 million annually on carbon removal, without worrying about the price per ton initially. The goal was to evaluate companies working on promising technologies and offer them a reliable stream of income.

After convening outside experts to review applications, Stripe announced its first round of payments last May. That included an agreement with Climeworks, a Swiss start-up that has already built several small direct air capture plants in Europe. Stripe also paid $250,000 to Project Vesta, a nonprofit planning to sprinkle volcanic minerals on beaches, testing to see how much carbon dioxide they absorb as the waves break them down, through a process known as enhanced weathering.

The companies receiving Stripe’s funding say the money has been crucial.

“It’s existential for us,” said Peter Reinhardt, co-founder of Charm Industrial, a start-up that Stripe is paying to remove 416 tons of carbon dioxide at $600 per ton. His company will take crop waste and convert it into an oil that can be injected underground, rather than letting the waste decay and release carbon back into the atmosphere.

Other companies are similarly investing. The German automaker Audi is paying Climeworks to capture and remove 1,000 tons of carbon dioxide from a new direct air capture facility in Iceland, scheduled to come online this year. Climeworks has also signed an agreement with Swiss Re, the insurance giant, which this month created a dedicated funding stream for carbon removal. Shopify, a Canadian e-commerce company, has already committed $1.6 million to various carbon-removal start-ups.

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Christoph Gebald, Climeworks’ co-director, said his company now had more than 50 corporate clients paying to capture and store carbon dioxide. His goal is to build enough facilities to remove 30 million to 50 million tons a year from the atmosphere by 2030.

Dr. Gebald said the burst of interest reflected companies’ realization that demands for climate action will soon outstrip what can be achieved through cutting emissions and planting trees. If businesses hope to remove large amounts of carbon in 10 years, he said, they need to spend now to make sure groups like Climeworks can scale up fast enough.

“There’s no chance biological solutions will do that alone,” Dr. Gebald said.

‘A steep learning curve’

It remains to be seen, however, whether carbon removal companies can lower their prices to a level that’s attractive to the average buyer. Carbon Engineering, a Canadian company supplying the technology for the direct air capture plant in Texas, thinks it can eventually get prices down to $94 to $232 a ton.

“To finance a first plant is expensive,” said Steve Oldham, Carbon Engineering’s chief executive. The Texas facility, part of Occidental Petroleum’s strategy to use direct air capture to offset emissions even as it continues extracting oil, is scheduled to come online by 2025 and remove up to 1 million tons of carbon dioxide annually. “But as we build more plants, I have confidence those costs will come down.”

For some potential customers, price remains an issue. Boston Consulting Group, the management consulting firm, plans to purchase carbon removal to offset any emissions it can’t cut by 2030. But it has set a price target of $80 per ton, on average, and will rely more on cheaper natural solutions, at least initially.

The company plans to invest in engineered removal, said Rich Lesser, Boston Consulting Group’s chief executive, “but it will be a small portion of the mix for awhile because the technology is still nascent.”

For now, most large companies vowing to pursue carbon removal have been vague about what that actually entails, according to an analysis of corporate pledges from American University. Some talk about investing in forests and wetlands, while others are still exploring their options.

Experts say the advantages of engineered carbon removal are often poorly understood. Companies can generally earn as much good will by cheaply planting trees to offset emissions as they can by spending large sums on direct air capture — even if the latter presents a more durable solution.

“The price difference between those two options in the marketplace is enormous,” said Sasha Mackler, director of the energy project at the Bipartisan Policy Center, a research organization in Washington. But as far as most of the public can tell, “it sort of looks like the same thing.”

So persuading companies to pay that extra cost will require educating investors, activists and consumers about why engineered removal can take more carbon dioxide out of the air, and sequester it more reliably, than just planting trees, Mr. Mackler said.

Ultimately, experts say, policymakers may have to step in. In December, Congress authorized $447 million to research and demonstrate large-scale carbon removal. But many companies are unlikely to use it without legal requirements to slash emissions.

“If companies are serious about putting money into carbon removal now and investigating their options, that’s fantastic,” said Simon Nicholson, co-director of American University’s Institute for Carbon Removal Law and Policy. “But if this doesn’t work, or if carbon removal at scale isn’t as cheap as everyone hopes, then what’s Plan B?”