Q: What are the drivers of CCU technology development and adoption? And the barriers?
The biggest driver is the Paris COP 21 agreement, which changed thinking and moved people to take concrete action on climate change. Of the 20 nations participating in the US$120b Mission Innovation initiative to accelerate clean energy innovation, 15 have included carbon capture, utilization and storage development in their technology priorities.
Corporations are taking action. For example, Covestro [formerly Bayer MaterialScience] recently opened an innovative production plant in Germany that makes polyol foam using 20% CO2 as a replacement for crude oil-derived raw materials. This supports long-term sustainability goals, and there’s strong potential for further upscaling if the market accepts this new CO2-based foam.
Solidia is working with industry partners to make cement with up to a 70% lower carbon footprint using CO2 instead of water in its curing process. Skyonic is scaling up technology that converts flue gases from power generation into a variety of building materials.
We see real interest in the market, and the Global CO2 Initiative receives a large number of inquiries that express interest in CCU solutions.
That said, a carbon tax would level the playing field in relation to the incumbent high-carbon feedstocks. Any new technology is likely to be more expensive than the existing one, so sometimes you need initial support to create critical mass.
One of the biggest obstacles is the lack of infrastructure for capturing and transporting CO2. Near-term, the solution is co-location of production with CO2 sources such as power plants or factories. Longer term, a pipeline network that distributes CO2 cheaply will be needed. Yet this is a business opportunity, too.
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Q: How is the Global CO2 Initiative catalyzing and accelerating the CCU development process?
The initiative has two platforms: the nonprofit CO2 Sciences, which will grant up to US$400m in the next 10 years to develop promising early-stage CCU innovations; and a for-profit investment arm to precipitate capital formation that helps bring innovations to commercial scale.
Speed to market is important, given the climate change imperative. That’s why we’re not taking the traditional route of issuing RFPs and spending an eternity assessing grant applications. Instead, we’re partnering with a Silicon Valley company to develop an artificial intelligence tool to quickly identify the innovators with the best prospects.
We’re creating an ontology of all existing CCU literature to assess: 1) what is the level of commercial readiness of a given technology, and 2) what is the level of innovation of that technology? Then we’ll invite the top innovators to propose for funding.
CCU questions for corporations to consider
- What is the opportunity for market-driven decarbonization in our supply chain and direct operations through CCU?
- What are the potential triple-bottom-line impacts from CCU-based revenue generation, market differentiation and emissions reduction?
- What competencies and infrastructure could we leverage to pursue CCU opportunities? Could we realize greater value through cross-industry partnering?
- In light of the CCU opportunity, will climate leading companies shift their sustainability objective from being carbon neutral to being carbon negative?
Generated by EYQ, an EY think tank that explores leading and emerging trends, focusing on “what’s after what’s next?”
Summary
Organizations have an opportunity to adopt CCU as a low carbon strategy and competitive differentiator.