Carbon Strategies Taking off, but Remain Expensive

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--A consortium of U.S.-based clean technology companies said they would use federal funds and private investments to develop a direct air capture (DAC) hub in Louisiana, part of the growing trend in decarbonization strategies.

Project Cypress is a partnership including clean tech companies Climeworks and Heirloom, with support from non-profit Battelle. The partnership said it received an initial award of $50 million from the Department of Energy's Office of Clean Energy Demonstrations, adding to the expected $51 million in private investments, to support the initial phase of the DAC hub.

By 2030, the partners said the facility could be removing 1 million tons of carbon dioxide from the ambient air per year.

"The carbon dioxide (CO2) removal technologies will be powered by renewable energy and will verifiably remove CO2 from the atmosphere and store it safely underground where it cannot worsen climate impacts," the partnership explained. "Louisiana has the ideal elements to support the scaling of carbon removal and storage technologies, featuring a long history serving as an energy leader in the U.S."

DAC is different from other forms of carbon sequestration in that it pulls CO2 directly out of the air from any location. Other forms are generally associated with the direct source of emissions, such as a steel plant.

According to the International Energy Agency (IEA), DAC is by far the most expensive way to capture carbon. The carbon floating around in the atmosphere is much less concentrated than plant emissions, so DAC also requires more energy to function.

Speaking at the CERAWeek energy conference in Houston earlier this month, U.S. Energy Secretary Jennifer Granholm said the federal government is aligned squarely behind carbon sequestration strategies.

"Across Texas and Louisiana, the Department of Energy currently has plans to award over $8 billion to carbon reduction and clean energy infrastructure projects," she said.

In the U.S. market, Industrial Info has identified 243 projects related to some form of carbon sequestration technology with a combined $144.85 billion in value.

Overseas, SLB (NYSE:SLB) (Houston, Texas), formerly Schlumberger, said it would spend around $380 million to acquire an 80% stake in Norway's Aker Carbon Capture. Rich in oil and gas, and an important exporter to the European economy, Norway aims to lower its overall carbon footprint by electrifying various offshore production platforms and through carbon sequestration in the North Sea.

Olivier Le Peuch, SLB's chief executive officer, said that, like DAC, carbon capture storage and utilization (CCUS) needs more investments to make a real impact on climate change.

"For CCUS to have the expected impact on supporting global net-zero ambitions, it will need to scale up 100-200 times in less than three decades," he said. "Crucial to this scale-up is the ability to lower capture costs, which often represent as much as 50-70% of the total spend of a CCUS project."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).