Can we limit global warming by producing more?

Only if we capture CO2 while producing the materials that the world increasingly needs. Dr. Issam Dairanieh, CEO, Global CO2 Initiative explains how we could be using, rather than losing, in the battle with C02 emissions

Global warming – smoke from coal power plant

Generated by EYQ, an EY think tank that explores leading and emerging trends, focusing on “what’s after what’s next?”

The logic of global demographic trends can seem inescapable: the more the global population grows, the more resources are consumed and the greater the resulting CO2 emissions.

Carbon capture and utilization (CCU) technologies disrupt this logic by turning CO2 into a resource with commercial value. CCU uses CO2 captured from power generation or industrial processes as a feedstock for essential high-volume materials such as cement, chemicals, plastics, minerals, biomass and fuels. The more such products are made using CCU, the less CO2 goes into the atmosphere.

Still, CCU technologies are nascent and lack the financing and commercialization ecosystem needed to realize their full potential. Enter the Global CO2 Initiative and its R&D platform, CO2 Sciences, led by Dr. Issam Dairanieh, who left a position as head of BP’s corporate venturing unit to bring his technology commercialization experience to the challenge of climate change.

EYQ recently asked Dr. Dairanieh to share his perspective on the opportunity for CCU innovations and his organization’s approach to catalyzing CCU investment and technology development.

Issam Darianieh

EYQ: Why do we need CCU innovations today?

Dairanieh: Looking at the pace of global carbon emissions, it’s clear that to limit global warming to 2° Celsius, we don’t just need carbon neutral technologies, we need carbon negative technologies. Trees are the best carbon negative technology, but unfortunately they’re not very fast.

EYQ: How big is the CCU opportunity?

Dairanieh: We commissioned an exhaustive study to assess the business and environmental potential of using CO2 as the feedstock for 25 major commercial products on the market today.

Making these products with CCU has the potential to consume four gigatons of CO2 annually by 2030. That’s a little bit over 10% of the 36 gigatons emitted per annum today. Commercializing these products has an annual revenue potential of US$800 billion to US$1.1 trillion.

CCU requires changing just one point in your value chain — swapping in CO2 as a feedstock for existing products. Your product, customers, logistics, sales and marketing all remain the same. There is huge opportunity for incumbents to adopt CCU as a low carbon strategy and competitive differentiator.

You can envision interesting cross-sector partnerships between high CO2 emitters and materials companies. Utilities have an opportunity to convert the emissions from their regulated operations into a business opportunity for their non-regulated operations.

EYQ: What are the drivers of CCU technology development and adoption? And the barriers?

Dairanieh: The biggest driver is the Paris COP 21 agreement, which changed thinking and moved people to take concrete action on climate change. Of the 20 nations participating in the US$120b Mission Innovation initiative to accelerate clean energy innovation, 15 have included carbon capture, utilization and storage development in their technology priorities.

Corporations are taking action. For example, Covestro [formerly Bayer MaterialScience] recently opened an innovative production plant in Germany that makes polyol foam using 20% CO2 as a replacement for crude oil-derived raw materials. This supports long-term sustainability goals, and there’s strong potential for further upscaling if the market accepts this new CO2-based foam.

Solidia is working with industry partners to make cement with up to a 70% lower carbon footprint using CO2 instead of water in its curing process. Skyonic is scaling up technology that converts flue gases from power generation into a variety of building materials.

Carbon capture – sparkling water in glass

We see real interest in the market, and the Global CO2 Initiative receives a large number of inquiries that express interest in CCU solutions.

That said, a carbon tax would level the playing field in relation to the incumbent high-carbon feedstocks. Any new technology is likely to be more expensive than the existing one, so sometimes you need initial support to create critical mass.

One of the biggest obstacles is the lack of infrastructure for capturing and transporting CO2. Near-term, the solution is co-location of production with CO2 sources such as power plants or factories. Longer term, a pipeline network that distributes CO2 cheaply will be needed. Yet this is a business opportunity, too.

EYQ: How is the Global CO2 Initiative catalyzing and accelerating the CCU development process?

Dairanieh: The initiative has two platforms: the nonprofit CO2 Sciences, which will grant up to US$400m in the next 10 years to develop promising early-stage CCU innovations; and a for-profit investment arm to precipitate capital formation that helps bring innovations to commercial scale.

Speed to market is important, given the climate change imperative. That’s why we’re not taking the traditional route of issuing RFPs and spending an eternity assessing grant applications. Instead, we’re partnering with a Silicon Valley company to develop an artificial intelligence tool to quickly identify the innovators with the best prospects. We’re creating an ontology of all existing CCU literature to assess 1) what is the level of commercial readiness of a given technology and 2) what is the level of innovation of that technology? Then we’ll invite the top innovators to propose for funding.

CCU questions for corporations to consider:

  • What is the opportunity for market-driven decarbonization in our supply chain and direct operations through CCU?
  • What are the potential triple-bottom-line impacts from CCU-based revenue generation, market differentiation and emissions reduction?
  • What competencies and infrastructure could we leverage to pursue CCU opportunities? Could we realize greater value through cross-industry partnering?
  • In light of the CCU opportunity, will climate leading companies shift their sustainability objective from being carbon neutral to being carbon negative?