From Big Oil to Big Tech, companies are rushing in to a new kind of business they believe will keep their industry surviving in the new net-zero economy: carbon capture.
So-called carbon capture initiatives typically involve actively drawing carbon dioxide out of the air or scrubbing the heat-trapping greenhouse gas out of the emissions from factories and power plants. While the technology has been used for decades by oil manufacturers to pump more oil, only in the last several years have other industries started to embrace the technology as a way of combating climate change.
With the oil market still fragile after inventories reached historic highs early in the pandemic, carbon capture has become a major draw for fossil fuel titans as they scramble to stay afloat in a new green economy.
Darren Woods, chairman and CEO of ExxonMobil, told investors in March the company expects the market for carbon capture to grow by 35 percent each year, reaching $2 trillion by 2040. The company this week proposed a $100 billion carbon capture hub in Houston that it estimates would capture and store about 50 million metric tons of carbon a year by 2030 and possibly 100 million metric tons by 2040.
ExxonMobil is urging President Joe Biden to introduce tax breaks and a price on carbon that will help create a market for the company's new carbon capture business.
BP plans to capture up to 10 million tons of carbon each year through its carbon capture project in North East England called Net Zero Teesside.
“CCUS technology (carbon capture, utilization and storage) is ready to deploy now,” Joshua Hicks, a spokesperson for BP, told NBC News in an emailed statement. “We will continue to work with governments and corporations to create the business models essential for scaling up carbon capture deployment.”
Microsoft is exploring carbon capture through a negative emission project at a biomass plant in Denmark, the company announced last month. Tide, owned by Procter & Gamble, is studying carbon capture technology as part of its commitment to halve greenhouse gases at its plants by 2030.
LVMH Moët Hennessy Louis Vuitton director Antoine Arnault told investors last week that it will reduce its carbon emissions by 50 percent by 2026 through using 100 percent renewable energy and helping to “improve the soil's ability to capture carbon.”
“This is an ambitious project, but we need to have a holistic approach,” Arnault said.
The demand for carbon capture technology has boomed since 2018, when the United Nations Intergovernmental Panel on Climate Change issued a report that said the world would need to take “unprecedented” steps to avert the most catastrophic effects of climate change. The report warned that limiting global warming to 1.5 degrees Celsius by 2100 will require “large-scale deployment of carbon dioxide removal measures.”
It may be necessary to remove up to 10 billion tons of carbon dioxide from the atmosphere each year by 2050 to keep warming below 1.5 degrees Celsius.
Climate models have suggested that even after transitioning to renewable energy and adopting other mitigation measures, it may be necessary to remove up to 10 billion tons of carbon dioxide from the atmosphere each year by 2050 to keep warming below 1.5 degrees Celsius.
That stark realization has fueled something of a paradigm shift, said Peter Kelemen, a professor of Earth and environmental sciences at Columbia University.
“People’s thinking has evolved in terms of assessing the value of mitigation,” he said. “It comes from a clear-eyed assessment of what it takes to get global warming below 2 degrees C. There’s the thought that we should spend whatever it takes to keep warming below that level.”
But some scientists and industry watchers say that without carbon pricing, capturing carbon can become too costly and difficult to scale up. By one measure, an estimated 2,000-plus large-scale carbon capture facilities must be deployed by 2050, requiring hundreds of billions of dollars in investment and a hundredfold increase in the number of carbon capture and storage facilities in operation, according to Guloren Turan, general manager of advocacy with the Global CCS Institute, a climate change think tank.
To capture carbon from flue gas, a liquid solvent is used to absorb the carbon dioxide. Then the mixture is heated to remove the carbon dioxide for storage, which requires staggering levels of energy, said Joan Brennecke, a professor of chemical engineering at The University of Texas at Austin.
“We need to have cap-and-trade or a carbon tax,” she said. “There needs to be incentives for companies to invest money in this.”
At the federal level, Biden aims to cut the country’s greenhouse gas emissions in half, compared to 2005 levels, by 2030. To reach that goal, the administration announced a new international climate finance plan on Thursday that would spur the private sector to contribute to climate solutions across the country and developing nations.
Treasury Secretary Janet Yellen said Thursday the agency has requested $1.2 billion from the administration for the green climate fund to spur private investment and $485 million to fund multilateral climate initiatives.
"We need to ensure that the financing will be there, both public and private, to meet the moment on climate change, and to help us seize the opportunity for good jobs, strong economies and a more secure world," Biden said Thursday.
Whether more clean energy policy at the state and federal levels will be enough to decarbonize the grid by 2035 remains to be seen, said Adam Wilson, U.S. renewable energy analyst at S&P Global Market Intelligence.
“Current market forces will take the industry a long way on the path of a clean energy sector,” he said. “But it will likely take breakthroughs in emerging technologies to get to the finish line.”