Can carbon removal become a trillion-dollar business?
May 21, 2023
Quite possibly—and not before time
The Economist | "Global Thermostat… and myriad startups worldwide, are attracting capital. Occidental plans to build 100 large scale DAC facilities by 2035. Others are trying to mop up CO2 produced by power plants and industrial processes before it enters the atmosphere, an approach known as carbon capture and storage (CCS). In April, ExxonMobil unveiled plans for its newish low-carbon division, whose long-term goal is to offer such decarbonisation as a service for industrial customers in sectors, like steel and cement, where emissions are otherwise hard to abate. The oil giant thinks this sector could be ranking in annual revenues of $6 trillion globally by 2050."
"The emerging view among technologists, investors and buyers is that carbon removal will develop like waste management did decades ago—as an initially costly endeavour that needs public support to get off the ground but can in time turn profitable. Policymakers are coming over to this view."
"Some of the hundreds of billions of dollars in America’s recently approved climate handouts are aimed at bootstrapping the industry into existence. An enhanced tax credit included in one of the laws, the Inflation Reduction Act, provides up to $85 per tonne of CO2 permanently stored, and $60 per tonne of CO2 used for enhanced oil recovery, which also sequesters CO2 (albeit in order to produce more hydrocarbons)."
"Clio Crespy of Guggenheim Securities, an investment firm, calculates that this credit increases the volume of emissions in America that are “in the money” for carbon removal more than tenfold. The EU’s response to America’s climate bonanza is likely to promote carbon removal, too. Earlier this year the EU and Norway announced a “green alliance” to boost regional carbon-capture plans."