Is Carbon Capture the superhero the planet ordered, or just another high-cost sidekick in the Greentech saga? With the potential to slash 1 billion tons of CO2 annually by 2030 and 6 billion by 2050, Carbon Capture could significantly cut down our greenhouse guffaws. Bill Gates would give it a thumbs up for surpassing his personal relevance hurdle of eliminating over 1% of global GHG emissions. However, selling this concept is tougher than peddling solar panels on a rainy day in London. The current market demand for captured CO2—mainly from the fertilizer sector and oil recovery—is a mere drop in the ocean, totaling only 230 Mt, while we need to siphon off at least 500 Mt annually to make a dent.
Carbon capture utilization and storage chain, IEA
Investor’s Corner
Let’s peek into what the moneybags are doing. Over the past eight years, PitchBook Inc tells us that a modest crowd of 92 carbon capture ventures scooped up nearly $8 billion. Last year, big fish like CarbonEngineering and LanzaTech alone gulped down $3.2 billion of that pie. Meanwhile, the electric vehicle sector was partying with nearly $70 billion across 900 deals in just one year. Clearly, carbon capture is more of an acquired taste in the investor's menu, not quite the main course yet.
Direct Air Capture (DAC) Drama
Direct Air Capture is like that expensive gym membership you buy at New Year’s—it promises a lot but depends on your commitment. Leading the charge are LanzaTech, Carbon Engineering, and Climeworks, sucking CO2 straight from the sky. But here’s the rub: making money off DAC is like squeezing water from a stone, with carbon prices needing to breach the $400 per ton mark. And energy? DAC could hog up to 4% of global energy just to hit its targets by 2030. The International Energy Agency fantasizes that by 2035, we’ll need over 40% of our clean energy dedicated to DAC—talk about an energy guzzler.
CCUS: The Grown-Up in the Room
Carbon Capture, Utilization, and Storage (CCUS) is like the sensible sibling, catching emissions red-handed at the source. With 45 projects up and running and double that number in the pipeline, the IEA hopes for 1000 operational projects by 2030. Key players in this arena include waste management and "blue" hydrogen—though neither is cheap. Tacking CCUS onto a waste plant inflates costs by about 35%, and blue hydrogen costs twice as much as its grey counterpart. Only a hefty carbon price tag ($80 to $120 per ton of CO2, depending on whom you ask) could justify these expenses, making it a high-stakes game of policy poker.
Creative Carbon Uses
On a lighter note, who knew carbon could be so chic? Startups like LanzaTech are turning this black sheep into synthetic fuels, chic fabrics, and even building blocks for carbonated concrete, giving traditional cement a run for its money. At prices, competitive with regular cement, carbonated concrete could cement itself in the market as early as 2027.
Conclusion
So, is CCUS ready for the big leagues? It’s a mixed bag. Its cross-industry appeal spreads the bets and lowers the risks, but everything hangs by the thread of carbon pricing. The EU seems to be putting its money where its mouth is with the CBAM, while the US dangles carrots like the IRA. Yet, as any seasoned investor knows, betting solely on government consistency is riskier than investing in tech startups. My money’s on EU-centric projects or any venture aiming at European shores. The old continent might just be where carbon capture finds its footing—or at least, where the incentives align.