Carbon Capture Is Key to Companies’ Net Zero Pledges

Source: By Rochelle Toplensky, Wall Street Journal • Posted: Wednesday, March 17, 2021

Some carbon-dioxide removal techniques that companies rely on to improve their environmental footprints are riskier than others

Nearly 1,400 companies have promised to cut their net carbon dioxide emissions to zero over the coming decades. Photo: christian hartmann/Reuters

Planting trees is a popular choice. Forests absorb CO2 from the atmosphere and certification is well established. But there are drawbacks. The gas is released if they are cut or burned down. Land also is a limited resource, making many goals unrealistic. Greenpeace has estimated that the reforestation targets of just two companies—Italian oil and gas giant Eni and British Airways owner IAG—would use about 12% of land available for new forests globally by 2050.

Another widespread technique is carbon capture and storage, or CCS, where CO2 is removed from factory chimneys and pumped underground or stored in a solid form. The method has been around for decades, but until recently wasn’t widespread. The economics didn’t add up, partly because the carbon prices charged in Europe and the carbon-capture tax credit paid in the U.S. were too low.

That is changing as emissions become more expensive and as costs fall with improving plant design, construction and capture methods. CCS will be useful in producing cleaner hydrogen and in hard-to-green industries such as steel and cement. New, bigger facilities are being built at emissions hubs such as Rotterdam’s port, which cuts costs and increases utilization.

Project economics depend on the volume and purity of CO2 and the distance to the carbon reservoir, but it is “highly likely” a facility can be economic at carbon prices of around $100 a ton, says Syrie Crouch, vice president of CCS at Shell. CCS can give new life to depleted oil and gas reservoirs as carbon sinks, hedge heavy emitters against rising carbon prices and even provide a green revenue source for the technology providers.

A less proven, more expensive method is capturing CO2 directly from the air. Costs are expected to fall with bigger projects and better technology. It requires far less land than other offset methods but is very energy-intensive. It could be cost-effective eventually, but for now remains an unlikely way for companies to net off significant emissions.

Agriculture generates about a fifth of global CO2 emissions, but can also help capture it with regenerative farming techniques, including reduced soil tillage, planting cover crops and cyclical grazing by livestock. Such methods can also cut farmers’ fuel and chemical bills and even provide additional income from selling offset credits.

Farm carbon-credit markets are recent developments, but the farming methods are well established. Many expect a boost from President Biden. Regenerative farming in the U.S. could capture 250 million tons of greenhouse gases annually—around 5% of 2019 domestic emissions—estimates the National Academy of Sciences.

Some industries can shift quickly to renewable electricity, but others will require decades to clean up. As carbon prices rise and emissions regulations tighten, investors will need to pay ever closer attention to how companies get to their trumpeted net-zero commitments.

Write to Rochelle Toplensky at rochelle.toplensky@wsj.com

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