Carbon Engineering

Carbon Engineering Ltd., based in British Columbia, is nearing the commercialization phase, using DAC to either sequester the CO2 underground or use it to produce transportation fuels. The company has received almost $70 million in private funding since its inception in 2009. The U.S. Department of Energy has contributed funding, as well as the government of Canada. Carbon Engineering has been able to survive the lab-to-marketplace transition because the company has patient, strategic investors who are committed to long-term term success of carbon removal. Its Founder is David Keith, a Harvard professor, and one of the company’s investors is Microsoft’s Bill Gates. In January, oil giants Chevron and Occidental announced that they are investing in Carbon Engineering, giving significant backing to the company’s bottom line and the commercial viability for DAC for the longer term.

 

Carbon Engineering’s first direct air capture pilot began in 2015, and in 2017, the company started using carbon to synthesize liquid transportation fuels. It currently has a pilot program in British Columbia and it is aiming to build a large-scale plant there by 2022.

 

When Carbon Engineering’s technology is used to take CO2 out of the atmosphere and store it underground, the process will create negative emissions. Another market opportunity for Carbon Engineering’s DAC technology is to use the captured CO2 for commercial products, specifically transportation fuels. Even though utilizing the carbon as fuel means it gets re-emitted, the company says that its product is a low-carbon, environmentally friendly alternative to traditional production of fossil fuels.

 

Carbon Engineering is eyeing establishing a foothold in the California market, where the state’s Low Carbon Fuel Standard (LCFS) makes it economically viable to inject carbon underground or sell fuel synthesized from CO2.

 

As noted earlier, Carbon Engineering received a lot of attention last June when it published an article in the scientific journal Joule describing its process for DAC and its ability to reduce costs to below $100 per ton. The company’s analysis, which is the first paper with a breakdown of engineering costs for DAC, shows that the DAC process is cheaper than previously believed. If correct, the company’s estimates, along with Global Thermostat’s, should shift expectations that DAC can become economical in the foreseeable future. In the paper, the authors describe each step involved in DAC and note what hardware is needed throughout the process. When the researchers consider the amount of energy used in the process and the overall capital expenses, they calculate the overall costs, concluding that the range is from $94 to $232 per ton.

 

However, the authors acknowledge the shortcomings of estimating costs at this point in the process toward commercialization:

 

It is difficult to estimate the cost of a technology prior to its widespread deployment. CE [Carbon Engineering] has spent several tens of millions of dollars developing DAC technology, yet our performance and cost estimates still carry substantial uncertainty. Our process design choices were substantially driven by a goal of reducing development risk and reducing the capital cost of early plants, rather than by minimizing energy use or ultimate levelized cost. CE adopted a conservative approach to cost and performance estimation, driven, in part, by controversy around the feasibility and cost of DAC. The process described here should therefore be seen as a low-risk starting point rather than a fully optimized least-cost design.

 

When this study was published, Carbon Engineering and DAC technology, in general, received an increasing amount of positive press. For instance, a headline in The Atlantic said: “Climate Change Can Be Stopped by Turning Air Into Gasoline.” In the article, Keith explained his company’s goals: “What we’ve done is build a [direct-air capture] process that is—as much as possible—built on existing processes and technologies that are widespread in the world. That’s why we think we have a reasonable possibility of scaling up.”

 

With the low-carbon transportation fuels made from the CO2 sucked out of the air, Carbon Engineering hopes to develop a diverse customer base and has taken a step in that direction with its new partnerships with Chevron and Occidental. How realistic the costs that Carbon Engineering cited in Joule and its plans to scale up are difficult to assess at this moment. Critics caution that analyzing such a complex and new process will take time. The company is seeking additional funds to take the final steps to commercialization.