Can carbon-capture startups make it big with small-scale tech?

We need to remove gigatons of CO2 from the atmosphere. These companies think they’ve found a way to do it more affordably.

(Carmine Savarese/Unsplash)
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Adrian Corless, the CEO of CarbonCapture, wants to capture billions of metric tons of carbon dioxide from the atmosphere using devices that can fit on the back of flatbed trucks.

CarbonCapture unstealthed this week with a $35 million round from investors including Prime Movers Lab, Marc Benioff’s Time Ventures and international mining and metals company Rio Tinto. The startup, which came out of the Pasadena, California-based Idealab incubator, has developed a modular direct-air capture (DAC) system that it can manufacture off-site and truck in to capture whatever scale the project demands,” he said. 

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Each module can capture about 100 tons of CO2 per year, according to Corless. That’s a tiny amount compared to the systems being built by the biggest contenders in the field. The first commercial-scale DAC plant from Climeworks, which opened in Iceland earlier this year, is designed to extract 4,000 tons of carbon per year. Carbon Engineering, where Corless formerly served as CEO, is licensing its technology to the joint venture 1PointFive to build a project in Texas for $1 billion that is designed to capture 1 million tons per year. 

But Corless thinks a modular approach could better match the nascent market opportunities for the technology. Carbon capture could be vital to solving the climate crisis, but it still costs too much to meet the price points that developers and government incentive structures can support. 

Other technologies are very complex and take enormous scale to take the cost down,” he said. CarbonCapture, by contrast, expects to have its first functional prototype online by early 2022. The device is being tested with Talon, a metals company that is partnering with investor Rio Tinto on a nickel, copper and cobalt mine in Minnesota. 

According to CarbonCapture’s plan for scaling up that first pilot, within two years, we’ll have a commercial-scale deployment that won’t cost $1 billion,” he said. 

Getting costs down

Many experts believe carbon capture has a key role to play in combating climate change. A 2018 report from the United Nations Intergovernmental Panel on Climate Change found that negative-emissions technologies” are needed to limit global warming to 1.5 degrees Celsius by 2100.

But to reach the scale necessary to make a difference, the costs need to dramatically decline. The direct-air carbon-capture technologies now being built cost between $200 to $600 per ton of CO2 captured, according to data tracked by nonprofit Carbon180 — well above the levels identified as the breakeven point for a commercially viable industry. 

Captured CO2 can be used for commercial purposes — in fact, it’s a potential $1 trillion market in the U.S., according to Carbon180. But for that proposition to be financially viable, carbon-capture costs would have to be between $65 and $110 per ton, according to a May study.

Observers of the industry have coalesced on a $100-per-ton target for carbon-capture technologies to succeed at scale. Corless declined to reveal any cost or pricing data for CarbonCapture’s units, but he said the company has a clear line of sight to get to that $100 threshold.” 

Government incentives or pricing mechanisms to reward projects that can lock the captured carbon underground or otherwise sequester” it from reentering the atmosphere would set a different price. CarbonCapture is exploring the potential of locking its captured carbon dioxide into mineral formations at the Minnesota mining site of its pilot deployment, Corless said. 

The infrastructure and budget reconciliation bills currently being debated in Congress contain billions of dollars for direct-air capture development, as well as changes to tax credits that could dramatically increase their value to smaller-scale projects, said Sasha Mackler, executive director of the Energy Program at the Bipartisan Policy Center. 

It’s hard to find a business case for direct-air capture that does not have a big public policy component to it,” he said, whether that’s tax credits and incentives or a price on carbon. 

In that light, being able to start out with projects being a little smaller could be attractive as a way to get started,” he said. You have to find your near-term niche to move to the next level for your technology development and business development purposes.”

At the same time, there could be billions of tons of CO2 that need to be managed in some way,” Mackler said, either through direct-air capture like CarbonCapture is working on or through point-source carbon capture, which catches CO2 before it’s emitted at sites such as power plants and steel and cement production facilities.

Matching the carbon-capture technology to the jobs at hand 

The point-source carbon-capture business can also benefit from the development of smaller modular units, according to Aniruddha Sharma, CEO of Carbon Clean. The company closed a $30 million round in August from investors including cement giant Cemex, a major emitter of carbon. 

Carbon Clean has significantly reduced the footprint of CO2-scrubbing technology. The company took the same equipment typically installed in huge flue gas towers at plant sites and shrunk it down into rotating machines that can fit into cargo-container-sized vessels. They can be manufactured and tested off-site before they’re shipped and installed. The industry is telling us, We need you to do this to scale up carbon-capture efforts on our end,’” Sharma said in an August interview. 

Major power plants may eventually be suitable targets for engineered carbon-capture systems, he said. But most of the companies Carbon Clean has been talking to, including those in cement, steel, refining [and] petrochemicals,” are emitting much less carbon than those power plants. For example, one large carbon-capture project at a power plant in Texas sequesters up to 1.4 million tons of CO2 annually, in comparison to Carbon Clean’s clients that are focusing on anywhere from 100,000 to half a million tons per year of carbon dioxide,” he said. 

Given the high-priced failures of many large carbon-capture projects, there’s reason for customers to want to test new technologies at smaller scale before committing to a full-scale deployment, he noted. 

Being able to match the scale of a deployment to the local demand for the byproducts of the process is another benefit of the modular approach. For example, the carbon captured by a group of modular units could be incorporated into the mix at a nearby cement manufacturing plant.

What’s more, because CarbonCapture’s process uses minerals known as zeolites to capture carbon dioxide, there’s an opportunity for the startup to produce water as well. That’s because zeolites, already widely used in industrial processes today, attract both water and CO2. That characteristic has been viewed as a negative by other companies contemplating carbon-capture technology, but CarbonCapture is working to turn it into a plus rather than a minus. 

Corless said the company has been able to reduce the scale of water adsorption through a patent-pending two-stage process to allow it to capture between 1 and 5 tons of water for every ton of CO2 it captures. That water could be used in the mineralization process the company is exploring to lock away carbon dioxide at its Minnesota test site, as well as for agricultural uses or even human consumption, he added. 

CarbonCapture's direct-air capture process (CarbonCapture)

Finding moneymaking end uses for byproducts is only one component of the cost challenges faced by carbon-capture technologies, of course. The bigger question is whether these individual technologies can drive down costs as they scale up over time. 

Whether modular systems offer more promise than large centralized systems in reaching these cost reductions achieved through economies of scale will depend on multiple factors, Mackler said. Locations with massive carbon-storage capacity may be better suited to larger-scale systems, while modular systems might be better suited to sites with relatively limited storage potential, for example. 

But I think they both need scale in different ways,” he said. You’re going to see the big process technologies hit their scale as the projects get bigger.” For modular systems, on the other hand, their price point will come down the cost curve the more you manufacture them.” 

Jeff St. John is director of news and special projects at Canary Media.