⛽️ A read on CCUS (CO2 capture, utilization, and storage) & it's potential in the Asia-Pacific region in 2024 - Part II.
You thought the space of Sustainable Aviation Fuels (SAFs) was hot? Wait to hear about CCUS, Co2 utilization and EOR. Welcome to the 2024's world of climate tech and it's latest investment trends.
The carbon capture, utilization and storage (CCUS) market has been growing exponentially since 2015. At this rate, global carbon capture technology should increase by sixfold in its capacity by 2030. A big driver for this growth is unlocking Asia-Pacific’s CCUS potential. And a few players are already working on making this a trillion-dollar industry.
Today, you are jumping with me into the CCUS rabbit hole. Let’s go!
👩🏻🔬 Hmmm. What are you talking about?
RWE, the UK’s leading electricity generator, is focused on developing decarbonization technologies to support the UK’s target of a decarbonized power system by 2035 and its goal to be carbon neutral by 2040. Recently, the company announced new development proposals for three new carbon capture projects across the UK.
These projects capture up to 11 million tonnes of CO2 per year and raise the current capacity by up to 4.7 GW.
Currently, they are testing the feasibility of their existing carbon capture technology with the possibility of retrofitting it.
RWE is also in the process of developing a proposal for a new gas-fired carbon capture power station.
In May 2023, Asia’s largest carbon capture and utilization project demonstration took place in a coal-based power plant in China. China Energy Investment’s Jiangsu Taizhou branch successfully captured CO2 by liquefying carbon dioxide gas, creating liquid carbon dioxide with a purity of more than 99.5%. This accelerated the industrialized and clustered development of coal-fired carbon capture, utilization, and storage. Following this, CHN Energy’s carbon capture, utilization, and storage project was officially put into operation, with a capacity of 0.5 million tonnes per year.
There are several types of carbon capture technologies designed to capture carbon dioxide (CO2) emissions from various sources. Additionally, each CCS technology comes with its own set of advantages and challenges:
1)Post-Combustion Capture (PCC):
The system: Captures CO2 after the combustion of fossil fuels in power plants or industrial processes. PCC works to separate CO2 from flue gasses using solvents or absorption materials.
Pros: PCC is seen as an easily retrofittable technology that can be applied to existing plants and facilities. PCC is also flexible enough to be compatible with a range of fossil fuels including coal or natural gas. This makes PCC a convenient solution regardless of industry type or energy source. Due to these benefits, PCC is currently the most widely adopted carbon capture technology.
Cons: PCC is a comparably expensive and energy-intensive process. Tremendous amounts of research have been and continue to be conducted on the technologies involved in PCC.
2)Pre-Combustion Capture:
The system: Captures CO2 before the combustion process, often used in integrated gasification combined cycle (IGCC) power plants. It works by converting fossil fuels into synthesis gas (syngas), allowing for the separation of CO2.
Pros: The main benefit of pre-combustion capture is its high capture efficiency. Once set up, it can capture carbon at a lower price point when compared to post-combustion capture.
Cons: The process of setting up pre-combustion capture infrastructure is very complex and involves a lot of extra equipment. This means that the initial setup cost is very high when compared to other carbon capture methods. This cost coupled with very limited retrofitting potential in existing facilities means pre-combustion capture has struggled with the adoption.
3)Direct Air Capture (DAC)
The system: Direct air capture typically involves large-scale facilities equipped with chemical processes or technologies that can capture CO2 directly from the ambient air. The captured CO2 can then be stored underground, utilized in various industrial processes, or converted into products. While DAC is still a relatively emerging technology, it is gaining attention as a complementary approach to traditional carbon capture methods.
Pros: DAC facilities can be deployed in a decentralized manner, allowing for placement in areas with high atmospheric CO2 concentrations or locations where traditional capture at the source is not feasible. DAC also addresses historical or legacy emissions that are already present in the atmosphere. It offers a way to remove CO2 that has accumulated over time, in addition to mitigating ongoing emissions.
Cons: DAC is currently an expensive technology, and the cost per ton of captured CO2 is higher compared to other carbon capture methods. It currently costs approximately 250 - 600 to capture a single tonne of carbon compared to ~50$ with reforestation. What's more, to have a meaningful impact on atmospheric CO2 levels, DAC facilities need to be deployed at a large scale. Achieving this scale requires significant investments and infrastructure development.
4) Enhanced Oil Recovery (EOR):
The system: Enhanced Oil Recovery (EOR) involves injecting substances like carbon dioxide (CO2) into oil reservoirs to increase the flow of oil. CO2 reduces the oil's viscosity, making it easier to extract.
Pros: EOR can boost oil recovery rates by up to 60% or more, making it valuable for extending the life of mature oil fields. It also offers potential for carbon storage by permanently sequestering CO2 underground.
Cons: Success depends on geological factors and infrastructure availability. EOR can be costly, requiring significant upfront investment. Environmental concerns include CO2 sourcing and potential impacts like induced seismicity.
💡 What to do with the CO2, then?
Yes, my friend, using Co2… could be making a lot of money!
Carbon utilization refers to the process of converting carbon dioxide (CO2), a greenhouse gas implicated in climate change, into useful products or materials rather than simply releasing into the atmosphere.
This approach aims to not only mitigate CO2 emissions but also create economic value from what was once considered a waste product. There are various methods for carbon utilization, including carbonation, where CO2 is reacted with minerals to form stable carbonates used in construction materials like concrete, thereby sequestering the carbon indefinitely.
By the way, here is our market map of the new up-and-coming Co2 utilization startups that recently raised a lot of money:
Another method worth noting involves using CO2 as a feedstock for the production of chemicals and fuels through processes such as carbon capture and utilization (CCU) or electrochemical conversion. For instance, CO2 can be converted into methane, methanol, or even synthetic fuels using renewable energy sources, providing a sustainable alternative to fossil fuels.
CO2 can also be utilized in the agricultural sector by feeding it to algae (See companies like CH4global for example) or certain bacteria, which can convert it into biomass for animal feed or biofuels (See Twelve below). Carbon utilization technologies not only help to reduce greenhouse gas emissions but also offer opportunities for innovation and economic growth in sectors ranging from construction and manufacturing to energy and agriculture.
By turning CO2 from a liability into a valuable resource, carbon utilization holds promise for mitigating climate change while driving innovation and economic development.
Unfulfilled potential in SEA
By 2050, the Asia Pacific region could account for 55% of global carbon capture, utilization, and storage.
However, CCUS in the SEA still needs to be maximized to its full potential and is in the early stages of development. For it to reach these projected levels, it must grow by 450 times its current operational CCUS through targeted investment.
The total number of CCUS projects in Asia-Pacific has tripled since five years ago. One of the main factors for this growth is a competitive cost advantage compared to the oil and gas industry.
The world’s leading Engineering, Procurement and Construction (EPC) companies with the largest shipbuilding capacity in Asia act as added advantages. These capabilities are significantly helpful for CCUS development, which requires infrastructure, rapid technology generation, and scale economies. CCUS projects are long-term projects that require administrative engagement and infrastructure investment, which is an ideal situation for the Asia-Pacific.
However, some obstacles stand in the way of achieving this growth. Primarily, the lack of adjacent long-term sequestration sinks. CCUS projects require depleted oil and gas reserves or geological formations to inject and store the captured carbon. These are plentiful in locations such as Europe and Australia, however, the majority of Asia-Pacific’s industrial point emitters are not close to any feasible locations.
Nevertheless, carbon capture, utilization, and storage have the potential to make a great impact in SEA & APAC. The private and public sectors need to collaborate to support technology development and solutions to overcome obstacles. This is the beginning step of unlocking CCUS’s full potential in the SEA & APAC to create a sustainable future.
🍪 Free Bonus: Fast growing CCUS startups to check out.
San Francisco-based startup Heirloom has raised US$54M to date and takes a unique approach to DAC by “leveraging energetically favorable carbon mineralization reactions that occur in nature”. They use limestone to capture CO2 directly from the atmosphere and then store it underground or repurpose it for concrete. The primary advantage of using limestone as a DAC device is that it is A.) abundant, making up 4% of Earth’s surface, and B.) cheap, costing as little as $10/ton. Whilst limestone typically takes years to capture CO2, Heirloom has proprietary technology which shortens it to just ~three days.
The San Francisco-based DAC startup, Noya has raised US$11M to date. They claim to use materials that are “affordable, readily available, and optimized for carbon capture”. Other advantages of Noya include having a modular design system that allows for easy substitution of components and low iteration costs plus flexible siting meaning their technology can be built effortlessly wherever it is needed.
Based in San Francisco, Twelve stands out in the field of Direct Air Capture (DAC) by utilizing limestone to capture carbon dioxide (CO2) from the atmosphere. Unlike traditional methods, Twelve's approach leverages naturally occurring carbon mineralization reactions, making the process both efficient and cost-effective. With limestone being abundant and affordable (costing as little as $10 per ton), Twelve's proprietary technology can capture CO2 in just around three days, significantly faster than conventional methods. This innovation holds promise for large-scale carbon capture efforts, offering a practical solution to reduce atmospheric CO2 levels and pave the way toward a more sustainable future.
Brilliant Planet is a pioneering company dedicated to combatting climate change through innovative carbon capture and utilization technologies. By harnessing natural processes and cutting-edge technology, they aim to capture carbon dioxide (CO2) from the atmosphere and convert it into valuable resources, such as bio-based materials and renewable fuels. Brilliant Planet has raised significant funding, with investments totaling $30 million to date. Through its interdisciplinary approach, Brilliant Planet seeks to create a more sustainable and resilient future while promoting biodiversity and ecosystem health.
Running Tide is pioneering ocean-based carbon capture technology to combat climate change. Their innovative approach utilizes floating platforms with seaweed farms to absorb CO2 from seawater through photosynthesis. This process effectively sequesters carbon while promoting marine biodiversity. With $54 million in funding secured, Running Tide aims to scale its operations rapidly, offering a promising solution for carbon mitigation and marine conservation.
😎 Meet CCUS founders and co-investors in the Climate Tech Coalition
🌏 The Climate Tech Coalition is a gathering of entrepreneurs, angel investors, family offices, VCs, and Conglomerates CVCs, together all committed to influence $1 billion in climate technology investment, innovations, market expansion and commercialization to build a greener future in the South East Asia Pacific region.
🌱 As of today, the Climate Tech Coalition gathered more than 1300 attendees and members across more than 40 events around the world.
🎯 70% of our members are investors, with the remaining 30% encompassing entrepreneurs, scientific experts, and corporate leaders.
😇 Learn more about the Climate Tech Coalition events, members, activities and how you can get involved:
Thanks for reading, and good luck to your climate positive investments.
Djoann.