Consumer products can be created by extracting CO2 from the atmosphere

Three ways to turn atmospheric carbon removal from a cost to a revenue generator

Companies can meet carbon-reduction goals and use captured carbon dioxide (CO2) to make products ranging from aviation fuels to cosmetics and vitamins.

In brief

  • New technologies can let companies turn efforts to reduce their carbon footprint into ingredients that help grow their business.
  • Companies can use the CO2 they capture as an ingredient in products like “green” fertilizers, plastics and specialty chemicals. 
  • Many of the technologies are in early stages of development and will need investment to reach scale.

Many companies are leaving an important revenue source untapped: the CO2 that regulators, customers and other stakeholders want them to keep out of the atmosphere. In fact, their steps to save the planet can also help grow the business.

What if the carbon a company produces could not only be mitigated or offset, but actively captured and recycled into products such as skin cream, shampoo, vitamins, sustainable jet fuels and plastics? This is not just futuristic thinking. Companies across industries are using cutting-edge technologies to transform captured CO2 into a tool that can boost revenue. As a bonus, many of these solutions move beyond carbon-neutral into next-generation carbon-negative approaches.

Since CO2 is the largest contributor of greenhouse gases (GHGs), these solutions are essential for CEOs and their teams to consider:

  • Emerging carbon capture, utilization and sequestration (also known as “carbon removal” or “negative emissions”) technologies will be required to keep global warming below the 2.0°C target agreed to in the 2015 Paris Agreement (Figure 1).¹, ²
  • Emerging biotechnology and advanced manufacturing offer companies the ability to not only capitalize on existing offsets by avoiding the use of fossil carbon in their processes, but also generate revenue by actively removing CO2 from the air for use in their products.

But these capabilities – such as the ability to convert captured CO2 into plastics or personal care products, or the use of captured CO2 as an aid in mining battery minerals – need investment to scale up.

GHG emmissions chart outlines

The stakes are getting higher

Consumers increasingly factor environmental impact into their buying decisions and activist investors are waging campaigns based on environmental, social and governance (ESG) concerns. In fact, BlackRock Chairman and CEO Larry Fink said in his 2022 letter to CEOs, “most stakeholders – from shareholders, to employees, to customers, to communities, and regulators – now expect companies to play a role in decarbonizing the global economy.”³

Meanwhile, ESG-focused activist campaigns nearly doubled in the 2022 proxy season, according to EY-Parthenon analysis. European regulations already encourage lower-carbon energy and industrial footprints, setting an emissions reduction target of 55% by 2030 compared with 1990 levels.

Current carbon offsets have questionable effectiveness

Executives have typically relied on emissions reduction efforts combined with a carbon credit system to offset their company’s carbon footprint. Sectors where CO2 abatement is difficult, including heavy industry and aviation, are already adopting new carbon-neutral fuels and buying offsets to negate their carbon footprints. However, it is not always clear how effective these carbon offsets are at mitigating climate change. Since participation in the market for these credits is largely voluntary, it varies significantly by sector, quality, and geography. Effective offsets, such as direct air capture into geological formations, are energy-intensive and expensive. Cheaper offsets, such as in forestry, require long-term management and may still be subject to land use changes or unforeseen fires that could negate them. Offset markets are a step in the right direction, but most depend on avoidance of otherwise burned fossil carbon or rely on impermanent atmospheric removal. In many cases, CEOs and their teams may be focused on cost rather than environmental impact. However, lower-cost and lower-quality offsets are far less likely to realistically meet climate objectives.

Three ways emerging carbon removal technologies can become revenue generators

Focusing on revenue growth instead of costs reveals a new path that executives can follow. Emerging carbon removal technologies have the potential to help companies meet both climate goals and business goals – and it’s already or showing positive results in industries like airlines and personal care.

Examples of such technologies include the following: 

1. Creating consumer products by capturing CO2 from smokestacks or from the atmosphere

Potential benefits

Consumer interest in this space is growing exponentially – it started with niche luxury products labeling their carbon footprints, and it is expanding in mainstream commercial spaces. Captured CO2 can be utilized as a feedstock in bio-based products and incorporated into foods, personal care products, packaging, specialty chemicals, and even meat alternatives, and can displace the use of petrochemical-based products. Tax credits such as 45Q in the US are helpful incentives, but more investment is likely needed to scale these options to broad commercial and climate relevance.

Possible hurdles

CO2-based consumer products are slow to develop and scale. They can suffer from changes in consumer preference or pressures from volatile oil prices – a high oil price pushes the market toward bio-based alternatives, but a low oil price can draw it back to petrochemical feedstocks.

2. Stabilizing soils, decreasing erosion or nutrient loss, and improving agricultural output using captured CO2

Potential benefits

“Green fertilizers” could help improve agricultural yields and soil health, decreasing the dependence on fossil energy to create ammonium fertilizers. Agriculture itself accounts for about 12% of US carbon emissions, mainly in livestock, crops, and associated fertilizers that depend on the use of natural gas in manufacturing. Innovative agricultural technology companies are developing microbial fertilizers using CO2 as a feedstock, building value from the sale of these solutions and potentially removing more atmospheric CO2 once deployed.  Advanced cover crops or biochar (charcoal made from plant material) could be employed, providing a low-cost long-term carbon store and improving soil health, all while increasing yields and revenue from the primary crops.

Possible hurdles

Development of these technologies and novel farming techniques may take significant time to achieve technical viability and market feasibility. While nature-based solutions are more straightforward to implement, they may not offer the more permanent carbon sequestration needed at scale.

3. Improving mining yields of valuable metals essential for batteries and electric vehicles using captured CO2

Potential benefits

The use of captured CO2 as a reagent in mining and metallurgy processes can sequester carbon permanently while increasing the yield of metals such as nickel and cobalt – which are predicted to be in short supply as electric vehicle adoption and home energy storage expand exponentially.

Potential hurdles

The technologies are in early stages and may take significant time to achieve technical viability and market feasibility. Adoption of new technologies is slow in the mining industry, especially in the absence of clear economic or regulatory incentives. 

How to find the best carbon removal technology for your company 

There is no panacea. No carbon removal technology is perfect for every company, and certain carbon removal technologies are not in the stage of development to meaningfully impact a company’s finances or meaningfully affect the environment. CEOs and company leadership likely need to employ a data-driven technical approach to identify, select and implement the best solutions for their companies. 

EY-Parthenon can help identify white spaces for new product development, help companies determine where to best invest for their unique needs, and work with companies to help in scaling and marketing of the solutions.

Key questions for executives to answer:

  • What is the carbon reduction target?
  • Where is the opportunity? Which processes can be changed to a green alternative?
  • Is the technology change economically viable?
  • Is the technology change viable from scientific and technical perspectives?
  • What are the incentives to make the change? Government regulation? Consumer sentiment toward your brand?
  • What strategic partnerships can be used to advance the technology?
  • What risks are involved and how can they be managed?
  • Is the proposed solution “greenwashing,” providing marketing claims that do not impactfully contribute to carbon sequestration goals?

Key KPIs for measuring the success of carbon mitigation solutions

Once carbon mitigation solutions are in place, companies may need to monitor the results to determine whether the change successfully meets both business and environmental goals. While the primary metric relevant to the environment is CO2 reduction over time, business-related KPIs can include the following:

  • CO2 captured or abated per unit sold
  • Increased revenue from products labeled “green” or “carbon-negative”
  • Reduced production cost
  • Improved product performance
  • Higher/premium product price tolerance associated with a “green” label

Deep knowledge of the complex emerging technology space, scale-up processes, techno economics, and life-cycle assessments are necessary in considering CO2-based products.  EY-Parthenon consultants can make proper connections for their clients and perform the necessary due diligence to both meet companies’ climate goals and turn CO2 into a free revenue generator.

Moving beyond offsets now 

Investors and customers are increasingly looking for products with a positive environmental impact. Regulators are taking a closer look at what companies are promising when it comes to the environment, and third-party verification organizations are growing in ability and influence. Offsets are a valuable part of the picture, but moving beyond the use of low-cost offsets is important – by the end of this century, most of the carbon released into the atmosphere each year will need to be removed to keep warming below 2°C. Thus, carbon capture, utilization, and sequestration will need to be one of the world’s largest industries to avoid catastrophic climate change.

Companies can move beyond offsets by taking advantage of new technologies that can have a longer-lasting positive impact on the environment while also helping generate revenue instead of costs. The key is finding partners to help identify the most appropriate and promising technologies for each company to direct their investments.

Thank you to Matt Mattozzi, EY-Parthenon, for contributing to this article.


Companies often focus on the costs of reducing their carbon footprint. But new technologies can help turn the CO2 that they need to keep out of the atmosphere into ingredients for personal care products, jet fuel and can otherwise be used as a way to help generate revenue.

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