US Steel plant in Indiana to host a $150M carbon capture experiment

Martin Keighley, CEO of CarbonFree, thinks his carbon capture company offers a ​“unique proposition” compared to its competitors: It can actually make money, today.

On Wednesday, the San Antonio, Texas-based company announced its first large-scale effort to prove that proposition — a $150 million project at U.S. Steel’s Gary Works blast furnace in Gary, Indiana. When completed in 2026, it will capture 50,000 metric tons per year of the carbon dioxide the plant currently dumps into the atmosphere, ​“mineralize” it, and ultimately turn it into the ubiquitous industrial product calcium carbonate.

The technology is far from a complete solution to the steelmaking facility’s climate impact — let alone its other toxic industrial emissions. The project will capture less than 1 percent of the roughly 10 million metric tons per year of carbon dioxide that Gary Works emits.

But ​“importantly, this is the demonstration of a real commercial solution” for capturing carbon emissions, Keighley said — one that turns what are usually regarded as waste streams into a valuable product that will ideally fund much more CO₂ removal.

CarbonFree’s proprietary SkyCycle technology will essentially treat the steelmaking facility as a provider of raw materials, Keighly said. The company will combine the carbon it captures from blast furnace gas with the calcium it extracts from slag, a byproduct of the steelmaking process. The result is calcium carbonate, an ingredient used in everything from chemicals and construction materials to foods and cosmetics.

Tens of billions of dollars of calcium carbonate is bought and sold across the world every year. The higher-value ​“precipitated calcium carbonate,” or PCC, that CarbonFree is planning to produce is used in foods and pharmaceuticals, and can fetch a price of $500 to $1,000 per metric ton, Keighley said.

At those prices, sales of the roughly 100,000 metric tons per year of calcium carbonate that CarbonFree will produce at Gary Works — 50,000 metric tons of CO₂ plus an equal amount of calcium — could earn back the $150 million investment that CarbonFree and its as-yet undisclosed financial backers are making within a few years.

Capturing carbon, making chemicals

CarbonFree’s business model has a distinct set of economics from typical carbon capture and removal projects, which rely on government subsidies to scrub and store carbon from emissions sources like power plants or factories, or to suck it from the atmosphere itself.

In fact, many of the earliest carbon capture efforts have been costly failures, as with the hundreds of millions of dollars the U.S. government sank into now-shuttered projects at coal-fired power plants. The costs of carbon capture at power plants, refineries, cement and chemical production sites and other heavy emitters remain high, and their future viability very much in question.

Meanwhile, the latest climate science indicates the need for removing carbon from the ambient atmosphere at the scale of tens to hundreds of gigatons — billions of metric tons — per year over the coming decades to keep global warming below catastrophic levels. But the direct air capture (DAC) projects being built in Europe and the U.S., which are distinct from carbon capture projects at industrial facilities, remain expensive and unproven at scale. They’re estimated to cost anywhere from $400 to $1,000 per metric ton of carbon, and are only removing thousands of metric tons per year.

Making sure that captured carbon never re-enters the atmosphere is another major challenge. Carbon capture and removal projects often focus on injecting CO₂ into geological formations deep underground, with a host of complications and uncertainties over the long-term safety and durability.

Despite its issues, supporters of carbon capture say the technology has advanced since its early failures. And beyond the long-term need for removing carbon from the ambient air, some argue that carbon capture is the best near-term pathway to cutting emissions from dirty but essential industrial processes like steelmaking and cement production. That means finding ways to make the technology cost-effective is vital for the industries seeking to make it part of their portfolio of climate solutions.

By contrast with costlier methods, carbon capture and utilization projects like CarbonFree’s approach are meant to put captured carbon dioxide to use in a way that can make projects financially viable. But most of the projects pursuing this path today are planning to inject carbon dioxide into oil and gas wells to increase their productivity — a pathway that’s incompatible with the dire need to halt the extraction and use of planet-warming fossil fuels.

Another increasingly popular approach is to store carbon in cement and concrete. But these are bulk commodities that command relatively low prices — roughly $130 per metric ton in the U.S. — that aren’t much higher than the costs of capturing carbon from cement plants in the first place.

On the other hand, embedding captured carbon in concrete does lock it from reentering the atmosphere for decades or centuries — an important consideration when assessing the value of carbon utilization strategies.

The long-term benefits of mineralizing captured carbon in calcium carbonate depends on what that chemical is used for, Keighley said. Not all of those uses offer long-term carbon reductions — baking soda, for example, breaks down in a relatively short period of time, re-emitting carbon into the atmosphere.

But other uses have far more durable carbon benefits, he said. Take the calcium carbonate used to make paint. Some paints contain up to 30 percent calcium carbonate by weight, he noted. ​“In the future, you could be painting U.S. Steel’s flue gas on the wall.”

One factor that distinguishes SkyCycle from other approaches to mineralizing captured carbon dioxide is its ​“proprietary magnesium loop” process for producing very high-purity precipitated calcium carbonate, Keighley said. ​“Nobody is doing exactly what we’re doing — we have a highly patented process.”

It may be hard to imagine the calcium fortifying your cereal and orange juice coming from blast furnace gas and slag. But the standard process for making PCC today — roasting limestone in a cement kiln to make calcium oxide, melting it in water to make ​“milk of lime” and bubbling carbon dioxide through it to form the final product — is not not particularly appetizing either, he noted. It’s also emissions-intensive in its own right.

In that sense, CarbonFree’s business model is more like that of a chemical manufacturer than that of an industrial pollution prevention and controls provider, he said. The carbon dioxide emissions and slag-extracted calcium from U.S. Steel represent a ​“20 year guaranteed supply” of the feedstocks of its chemicals production business, he said.

“When you’re investing in a chemical plant, normally 50 percent plus of your costs are your raw materials,” he noted, complete with supply chain disruption and price risks. ​“We don’t have any of that — we’re plugged into the supply and we have a very advantageous cost basis.”

Of course, that long-term supply would require the Gary Works blast furnace to continue operating for the next 20 years. That’s not what many climate activists and environmental justice groups representing Gary residents — who’ve borne the health harms of the facility’s toxic emissions of nitrogen oxides, particulate matter and lead over its more than a century of operations — want to happen.

That tension highlights a broader policy divide around government support for carbon capture and removal technologies like CarbonFree’s. Climate scientists are at odds over how to structure carbon capture incentives in ways that will direct investment toward tackling the toughest climate challenges without giving polluters a means of escaping the costs and responsibilities of curbing their emissions.

Emily Grubert, associate professor of sustainable energy policy at the University of Notre Dame, has broken out carbon capture and removal use cases into those that are counterproductive, such as a means to provide carbon offsets that excuse the continued unabated use of fossil fuels, and those that are necessary — like mitigating emissions from industries that now lack cost-effective and widely commercializable zero-carbon alternatives.

Steelmaking, for its part, has other options besides carbon capture to decarbonize. Last week, the Biden administration offered up to $1 billion in funding to two steelmakers seeking to build low-emissions ironmaking facilities that run on clean hydrogen instead of coal or fossil gas. That low-carbon iron could feed into electric arc furnaces that create steel at much lower carbon intensities than traditional facilities such as Gary Works, particularly when they’re supplied with zero-carbon electricity.

Hilary Lewis, steel campaign director at advocacy organization Industrious Labs, panned the U.S. Steel-CarbonFree project in a statement to Canary Media, highlighting its miniscule reductions of carbon emissions at one of the largest sources of climate pollution in Indiana.

“This is a deeply unserious decarbonization strategy that doesn’t even consider the health impacts of coal-based steelmaking,” Lewis wrote.

U.S. Steel is also working on a carbon-capture project with the Department of Energy at its Braddock, Pennsylvania plant. The Sierra Club noted in a press release last fall that carbon capture is ​“one important component of the steel industry’s path to reducing emissions, but there are many other innovations that need to be deployed quickly and widely, and much more work lies ahead.”

Keighley also conceded that there will be a range of options for heavy industries to cut their carbon emissions beyond his company’s technology. At the same time, he stressed the need for figuring out a way to make carbon capture technologies self-sufficient.

“We’re going to be capturing carbon forever,” he said. ​“We think the only successful form of sustainability is profitable sustainability.”