Hello and good day! Your Protocol Climate team is here to dive into today’s climate news. We’re talking all about carbon, including a chat with the CEO of Carbon Clean, which just raised a record $150 million for its CCS technology, and looking at a fight over carbon offsets that has huge implications for Big Tech. Plus, why $100 per ton is the CDR industry’s holy grail. Grab a burrito (breakfast or otherwise) and read on!
Taking CCS mainstream Carbon dioxide removal gets a lot of attention in the tech world. But carbon capture at the source is increasingly attractive for hard-to-abate industries like steel and cement that will play a huge role in building our future. Yet point-source carbon capture has proven challenging to scale. And it’s controversial in part due to the industries it serves; cement and steel makers are two sectors that don’t have many other options. But it’s the increasing interest in the fossil fuel industry that’s drawn scrutiny given that readily available alternatives exist. One company, Carbon Clean, is leading the charge to bring down costs. The U.K.-based company raised a $150 million series C round earlier this year, which the startup said is the largest-ever funding round for a point-source company. CEO Aniruddha Sharma spoke with Protocol about the challenges the industry faces as well as its relationship with the fossil fuel industry. This interview has been edited and condensed for clarity. What’s the most challenging part of carbon capture that you’re still working through? Scale up is the most challenging part. The technology is working right now. Going from here to the next level of scale up, maybe 10 times bigger, is going to be interesting and challenging, both because you’re trying to increase the equipment size and you’re trying to increase our supply chain. Once you’ve got the materials, then you need a workshop or machining capacity capability that can actually produce the equipment specifically for you. But in the current atmosphere, that’s not something that’s necessarily available. So we’re spending a lot of time on how we scale up both the supply chain and the equipment and the delivery capability. You just raised a $150 million series C led by Chevron. A bulk of your investment comes from fossil fuel companies, including Saudi Aramco and Equinor. How do you make sure your work isn’t just a way for them to pay to continue polluting? People realize that there is a need to reduce dependence on fossil fuels and reduce carbon dioxide emissions and work toward the energy transition. From our perspective, whenever you partner with companies like Chevron, we always look for proof in the pudding. Chevron has committed $10 billion to Chevron New Energies, which is solely working on decarbonization. If it has the biggest footprint today, it’s the one that needs the most help decarbonizing. How much should your corporate clients be relying on your services when it comes to reaching their net zero or decarbonization goals? In other words, what proportion of their drawdown should come from emissions reductions versus paying for point-source carbon capture? I generally advise our customers to diversify their options. I tell my customers that in 2024, get one unit at your site and spend 10% of your money for decarbonization using one of our carbon capture boxes, spend 10% for another form of decarbonization, and another 10% for electrification, and maybe another 10% for biomass. Try all the options across the board so that within a year or two, you know which one or two options to scale up. Maybe carbon capture and electrification are the best options for you. If you’re in California, green hydrogen carbon capture is the perfect option for you, so we’re not saying that ours is the only solution. Read the full interview here.— Michelle Ma The carbon offset fight is heating up There’s a major fight brewing over what kind of standards will govern the carbon offset market. And it could get ugly. A group of independent experts looking to clean up the market’s checkered record and the biggest carbon credit issuer on the voluntary market is trying to influence efforts to define what counts as a quality credit. The outcome could make or break an industry increasingly central to tech companies working to meet their net zero goals. Carbon offsets are the Wild West. Despite the prominent role they play in Big Tech’s climate plans, there’s shockingly little governance of what’s expected to be a $550 billion market by midcentury. Absent global standard-setting, it is possible that there won’t be enough quality offsets. Heck, there are already numerous questions about dodgy offsets in the current market. An independent council’s attempt to set more rigorous standards is the source of recently emerged tension. On one side, there’s Verra, which issues roughly two-thirds of the carbon credits on the voluntary market. It essentially represents the market’s status quo.On the other, there’s a group of experts and academics, notably the group CarbonPlan, that is calling for strong standards.And in the middle, there’s the Integrity Council for the Voluntary Carbon Market, which recently proposed standards to govern the industry. Verra isn’t happy with the proposed standards, which would essentially give carbon credits a thumbs-up if they meet certain criteria. “We don’t wish to see good projects unable to move ahead because the methodology they are using is waiting too long in line for its assessment,” Andrew Howard, Verra’s senior director for climate policy and strategy, told Protocol, adding that he is “confident” that Verra's program would meet the criteria for quality.Verra would rather the Integrity Council evaluate entire programs than individual credit types and methodologies. CarbonPlan said that approach “doesn’t pass the laugh test,” given that it would force the council to give the whole swath of Verra credits a thumbs-up without acknowledging how much, for instance, a renewable energy credit’s methodology might differ from that of a forestry credit. All this could put the independence of the Integrity Council at risk. And given that the integrity of carbon markets is essential to ensuring Big Tech can reach net zero (after lowering emissions as much as possible, of course), the stakes couldn’t be higher. Read the full story here.— Lisa Martine Jenkins A MESSAGE FROM GOALS HOUSE It's becoming increasingly appreciated among the broader business and NGO community that the planet and people elements of sustainability are mutually dependent, and as such a focus on one at the exclusion of the other will be fruitless. But balancing profit and sustainability progress remains a more thorny debate. Learn more One big number: $100 Carbon dioxide removal service buyers and sellers are focused on one metric: $100 per ton. It’s one of Frontier’s stated criteria that the fund uses to evaluate its advance purchases. In a survey of the long-duration carbon removal community, CarbonPlan found that stakeholders are focused on the $100 benchmark. The Department of Energy even announced that it would be investing in carbon removal research to bring the cost of the technology down to $100 per ton. Where did that number come from? In short, it’s the cost per ton of removal services that it would take for the CDR industry to reach commercial viability. It’s based on a handful of factors. It’s the point at which carbon removal becomes affordable at the scale needed to make it a meaningful tool to reach net zero (and, eventually, negative emissions), Shuchi Talati, a senior visiting scholar at Carbon180, told Protocol. It evolved from modeling and policy conversations, and is aligned with other existing costs, like the European Union’s carbon price (which will likely reach that number in a decade). It’s also tied to the social cost of carbon, a metric that measures the economic damage a ton of carbon emitted causes. Estimates of the social cost of carbon keep increasing as climate damages become clearer.Another reason could be much simpler. The climate community could just be taking its cue from the DOE, anchoring its own targets to the agency’s 2021 Carbon Negative Shot target, which was set for $100 per ton, CarbonPlan’s Danny Cullenward wrote in an email to Protocol. So far, no one has come anywhere close to reaching that target. Currently, most carbon removal services cost well above $100 per ton, although the Inflation Reduction Act’s updated 45Q tax credit of up to $180 per ton for direct air capture could help some startups get closer to achieving that target. “$100 per ton is an extremely ambitious 10-year target, likely probably more of a 15- to 20-year target,” Talati said. But she thinks it’s “important to be ambitious,” and “there’s a lot of momentum around CDR and getting these technologies to scale.” The world could have to remove billions of tons of carbon pollution per year from the atmosphere by midcentury depending on how fast emissions fall in the interim. That makes the momentum behind scaling CDR all the more important. — Michelle Ma Hot links New York is playing follow the leader. The state became the second in the nation to ban the sale of new gas- and diesel-powered cars by 2035, taking a page from California’s playbook. NASA is joining the critical mineral hunt. The space agency is using its airpower to help, mounting infrared technology to a small plane to monitor where minerals might be hiding in the Southwest. Wanted: electricians. If the U.S. wants to electrify everything, it’s going to need more people who understand how to do that in the first place. And that means training and hiring many more electricians. DOE wants your clean tech thoughts. The Biden administration is weighing its options for boosting production of renewable energy tech under the Defense Production Act, and it is open to public input. It’s officially leaf-blower season. Electric options are increasingly hitting the market, and it’s about time. (Did you know one hour of keeping autumn leaves at bay emits as much smog-forming emissions as a 1,100-mile drive in a Toyota Camry? Now you do! Use this information wisely.) A MESSAGE FROM GOALS HOUSE Currently, much of the ‘E’ in ESG is focussed on climate only, and it is essential that companies also focus on biodiversity, recognizing nature-climate linkages in order to optimize mitigation and build resilience. ESG will prepare us for the necessary paradigm shift, driven by increasing external pressures forced upon us as a result of short-term profits. Learn more
Carbon dioxide removal gets a lot of attention in the tech world. But carbon capture at the source is increasingly attractive for hard-to-abate industries like steel and cement that will play a huge role in building our future.
Yet point-source carbon capture has proven challenging to scale. And it’s controversial in part due to the industries it serves; cement and steel makers are two sectors that don’t have many other options. But it’s the increasing interest in the fossil fuel industry that’s drawn scrutiny given that readily available alternatives exist.
One company, Carbon Clean, is leading the charge to bring down costs. The U.K.-based company raised a $150 million series C round earlier this year, which the startup said is the largest-ever funding round for a point-source company. CEO Aniruddha Sharma spoke with Protocol about the challenges the industry faces as well as its relationship with the fossil fuel industry.
This interview has been edited and condensed for clarity.
What’s the most challenging part of carbon capture that you’re still working through?
Scale up is the most challenging part. The technology is working right now. Going from here to the next level of scale up, maybe 10 times bigger, is going to be interesting and challenging, both because you’re trying to increase the equipment size and you’re trying to increase our supply chain. Once you’ve got the materials, then you need a workshop or machining capacity capability that can actually produce the equipment specifically for you. But in the current atmosphere, that’s not something that’s necessarily available. So we’re spending a lot of time on how we scale up both the supply chain and the equipment and the delivery capability.
You just raised a $150 million series C led by Chevron. A bulk of your investment comes from fossil fuel companies, including Saudi Aramco and Equinor. How do you make sure your work isn’t just a way for them to pay to continue polluting?
People realize that there is a need to reduce dependence on fossil fuels and reduce carbon dioxide emissions and work toward the energy transition. From our perspective, whenever you partner with companies like Chevron, we always look for proof in the pudding. Chevron has committed $10 billion to Chevron New Energies, which is solely working on decarbonization. If it has the biggest footprint today, it’s the one that needs the most help decarbonizing.
How much should your corporate clients be relying on your services when it comes to reaching their net zero or decarbonization goals? In other words, what proportion of their drawdown should come from emissions reductions versus paying for point-source carbon capture?
I generally advise our customers to diversify their options. I tell my customers that in 2024, get one unit at your site and spend 10% of your money for decarbonization using one of our carbon capture boxes, spend 10% for another form of decarbonization, and another 10% for electrification, and maybe another 10% for biomass. Try all the options across the board so that within a year or two, you know which one or two options to scale up. Maybe carbon capture and electrification are the best options for you. If you’re in California, green hydrogen carbon capture is the perfect option for you, so we’re not saying that ours is the only solution.
Read the full interview here.
There’s a major fight brewing over what kind of standards will govern the carbon offset market. And it could get ugly.
A group of independent experts looking to clean up the market’s checkered record and the biggest carbon credit issuer on the voluntary market is trying to influence efforts to define what counts as a quality credit. The outcome could make or break an industry increasingly central to tech companies working to meet their net zero goals.
Carbon offsets are the Wild West. Despite the prominent role they play in Big Tech’s climate plans, there’s shockingly little governance of what’s expected to be a $550 billion market by midcentury. Absent global standard-setting, it is possible that there won’t be enough quality offsets. Heck, there are already numerous questions about dodgy offsets in the current market. An independent council’s attempt to set more rigorous standards is the source of recently emerged tension.
Verra isn’t happy with the proposed standards, which would essentially give carbon credits a thumbs-up if they meet certain criteria.
All this could put the independence of the Integrity Council at risk. And given that the integrity of carbon markets is essential to ensuring Big Tech can reach net zero (after lowering emissions as much as possible, of course), the stakes couldn’t be higher.
Read the full story here.
It's becoming increasingly appreciated among the broader business and NGO community that the planet and people elements of sustainability are mutually dependent, and as such a focus on one at the exclusion of the other will be fruitless. But balancing profit and sustainability progress remains a more thorny debate.
Carbon dioxide removal service buyers and sellers are focused on one metric: $100 per ton. It’s one of Frontier’s stated criteria that the fund uses to evaluate its advance purchases. In a survey of the long-duration carbon removal community, CarbonPlan found that stakeholders are focused on the $100 benchmark. The Department of Energy even announced that it would be investing in carbon removal research to bring the cost of the technology down to $100 per ton.
Where did that number come from? In short, it’s the cost per ton of removal services that it would take for the CDR industry to reach commercial viability. It’s based on a handful of factors.
So far, no one has come anywhere close to reaching that target. Currently, most carbon removal services cost well above $100 per ton, although the Inflation Reduction Act’s updated 45Q tax credit of up to $180 per ton for direct air capture could help some startups get closer to achieving that target.
“$100 per ton is an extremely ambitious 10-year target, likely probably more of a 15- to 20-year target,” Talati said. But she thinks it’s “important to be ambitious,” and “there’s a lot of momentum around CDR and getting these technologies to scale.”
The world could have to remove billions of tons of carbon pollution per year from the atmosphere by midcentury depending on how fast emissions fall in the interim. That makes the momentum behind scaling CDR all the more important.
New York is playing follow the leader. The state became the second in the nation to ban the sale of new gas- and diesel-powered cars by 2035, taking a page from California’s playbook.
NASA is joining the critical mineral hunt. The space agency is using its airpower to help, mounting infrared technology to a small plane to monitor where minerals might be hiding in the Southwest.
Wanted: electricians. If the U.S. wants to electrify everything, it’s going to need more people who understand how to do that in the first place. And that means training and hiring many more electricians.
DOE wants your clean tech thoughts. The Biden administration is weighing its options for boosting production of renewable energy tech under the Defense Production Act, and it is open to public input.
It’s officially leaf-blower season. Electric options are increasingly hitting the market, and it’s about time. (Did you know one hour of keeping autumn leaves at bay emits as much smog-forming emissions as a 1,100-mile drive in a Toyota Camry? Now you do! Use this information wisely.)
Currently, much of the ‘E’ in ESG is focussed on climate only, and it is essential that companies also focus on biodiversity, recognizing nature-climate linkages in order to optimize mitigation and build resilience. ESG will prepare us for the necessary paradigm shift, driven by increasing external pressures forced upon us as a result of short-term profits.
Thanks for reading! As ever, you can send any and all feedback to climate@protocol.com. See you Thursday!
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