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Direct air capture of CO2 is becoming a business, for better or worse

Marc Gunther's picture
FORTUNE magazine

Marc Gunther is a writer and speaker who focuses on business and the environment. He worked for 12 years as a senior writer at FORTUNE magazine, where he is now a contributing editor. His most...

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  • Mar 12, 2012


Klaus Lackner

Since 1999, when Columbia University physicist Klaus Lackner wrote the first scientific paper [PDF, download] about capturing carbon dioxide from the air, his unlikely idea has grown into a nascent industry. Four start-up companies, including his own, Kilimanjaro Energy, are working on technologies to extract CO2 from the atmosphere using chemical processes. The air-capture start-ups are funded by billionaires (Bill Gates, Edgar Bronfman Jr.) and venture capitalists (Arch Venture Partners), and they are attracting interest from private equity firms (Warburg Pincus), investment banks (Goldman Sachs), energy companies (Summit Power) and a military contractor (Boeing).

This week, a group of about 70 entrepreneurs, academics, investors and partners gathered in Calgary, Alberta, for the first-ever North American conference devoted to air capture. (Someone said it felt like history in the making. That remains to be seen.) As the industry’s pioneer, Lackner, who is affiliated with Columbia’s Earth Institute, played a prominent role, but he was in no mood to celebrate. While climate change was on the agenda, much of the program focused on the biggest emerging market for air capture technology–namely, using liquid CO2 for enhanced oil recovery.

Kilimanjaro’s CEO, Ned David, said that CO2 could do for the oil business what hydrofracking has done for natural gas, unleashing vast amounts of fossil fuels that might otherwise remain in the ground. “A money gusher,” he called it. Others talked about using air capture to make fuels at the military’s Forward Operating Bases (FOBs) and even, half in jest, to “green” the fizz in Coke and Pepsi.

This, of course, was not what Lackner had in mind way back when. “What makes air capture worth doing is its climate impacts,” he told me. “What will pay for it are these other applications.”

“The real problem I want to solve is not interested in being solved,” he lamented.

The conference was the strongest sign yet that direct air capture is becoming a business–for better or worse. For better? Because air capture technology has enormous potential to reduce CO2 concentrations in the atmosphere, albeit very slowly and at considerable expense. The costs remain unknown, with estimates ranging wildly from $30 per ton of CO2 captured, which is almost surely too low, to more than $600 a ton, which is almost surely too high, although the bigger number comes from a report [PDF, download] from the respected American Physical Society. For worse? Because as air capture transitions from academia into the marketplace, the start-up companies will need to generate revenues to stay alive, even if those revenues enable more oil to be pumped out of the ground. Put another way, air-capture technology has become a solution in search of a market, while its backers wait for the world to get serious about climate threat.

Not coincidentally, all four air-capture start-ups at the conference were founded by academics and financed by well-to-do investors who are concerned about climate. Lackner started Kilimanjaro with the backing of the late Gary Comer, founder of Lands End. David Keith of the University of Calgary and Harvard started Carbon Engineering, with an investment from Gates. Peter Eisenberger and Graciela Chichilnisky started Global Thermostat, where Bronfman is the lead investor and board chair. ClimeWorks was spun out of a ETH Zurich, where its co-founder, Christophe Gebald was a grad student.

A mockup of a Carbon Engineering air capture machine

The start-ups are deploying different, proprietary technologies (see their websites for details) but all share bold, long-term vision: Recycling CO2 from the air and combining it with hydrogen to make zero-carbon hydrocarbons, using low carbon wind, solar or nuclear energy to power the process. “Closing the carbon cycle” is how Eisenberger describes it, and he says air capture will enable any country, anywhere in the world to make its own sustainable transportation fuels. ExxonMobil, where Eisenberger once toiled, would survive, but OPEC would be no more.

But that’s the very long term plan. Meantime, the companies want to capitalize on existing demand for CO2, which is a valuable commodity as well as a waste product. There’s substantial, unmet demand for CO2, most of it from the oil industry, at prices that can occasionally top $100 a ton, all agree. Injecting CO2 into the ground to extract oil, while unseemly at first glance, produces oil with no more than half the carbon footprint of conventional oil, assuming the CO2 stays underground. “There are real environmental benefits,” says Keith, whose plan is to sell the fuel to California, where it would command a premium because of the state’s Low Carbon Fuel Standard. Summit Power, which develops low carbon energy projects, including a $2-billion “clean coal’ project in Texas, is also interested in air capture, said Sasha Mackler, the firm’s vice president for carbon capture.

Kilimanjaro’s Ned David, for his part, talked about capturing CO2 to feed algae, a business he knows well as a co-founder of algae start-up Sapphire Energy. Global Thermostat, too, is working on an algae project, with startup Algae Systems and IHI, a Japanese industrial conglomerate. Boeing, meanwhile, is talking to all of the startups about developing ways to make fuels for the army at remote military bases or the navy on aircraft carriers. Military buyers are willing to pay a premium for fuel, particularly if they can eliminate long, costly and dangerous supply lines.

Goldman Sachs and Warburg Pincus didn’t show up in Calgary, but insiders tell me that Goldman is advising Global Thermostat, as it negotiates with an array of partners and potential investors, including Warburg, which is talking about a $75-million equity investment in GT. One investor who did make the trip was Nigel Tuersley, a London-based entrepreneur and ecologist who plans to buy a stake in Keith’s Carbon Engineering. “I’m impressed by the tenacity and the sheer inventiveness of the people here,” Tuersley said. “This is very exciting virgin territory, and it has all the hallmarks of a potentially important industry.”

Steve Hamburg

Environmentalists still need some convincing. David Hawkins, the veteran climate campaigner with the Natural Resources Defense Council, observed that air capture has “morphed very rapidly from a technology whose purpose is to remove CO2 to a technology whose purpose is to produce CO2.” There’s a risk, he said, that commercial imperatives could lead the startups to drift away from their environmental mission. “We didn’t decide to pursue scrubbers by relying on the market for gypsum as the driver,” he said.

Steve Hamburg, chief scientist of the Environmental Defense Fund, said the air-capture industry needs to be clear about how it is measuring CO2 benefits, if any, and transparent about its needs for energy, water and land.

“It’s a promising technology,” Hamburg acknowledged. “But promising for what?”

[You can read more about air capture, climate politics and geoengineering in my new Kindle Single ebook, Suck It Up: How capturing carbon from the air can help solve the climate crisis, on sale at Amazon for $1.99.]

Here’s a great video from Carbon Engineering, explaining how the technology and the business will work:


Bill Woods's picture
Bill Woods on Mar 12, 2012

Won’t it be a lot cheaper to extract CO2 from the exhaust of fossil-fuel plants than from the air? The concentration is so much higher.

Marc Gunther's picture
Marc Gunther on Mar 12, 2012

Bill, you’re right, I think, almost everyone in the air capture industry says it would be cheaper to extract CO2 from coal or natural gas plants where concentrations are much higher. (About 12% for coal, 4% for natural gas.) A handful, notably Peter Eisenberger, think air capture can be done at no higher cost, for reasons not going into here.

The value of direct air capture of CO2 is that it can offset dispersed emissions from cars, trucks, planes, ships, small factories etc. Air capture plants can also be located anywhere, so they can run on cheap or close-to-free natural gas (stranded gas) or solar in the desert, and because they can be located anywhere, they can become a supply of CO2 if it is needed for EOR that’s some distance from fossil fuel plants.

Make sense?

It also turns out that air capture could be a lower cost way of reducing CO2 than some of the more expensive forms of renewable energy.

Erich J. Knight's picture
Erich J. Knight on Mar 17, 2012

I’m a general advocate of soil-C sequestration solutions,
These CDR processes are up against three Biochar companies and the Savory Institute (Soil-C building with ruminant grassing practice) for the the Virgin Prize. $25 million..
Virgin Earth Challenge;

The Virgin CCS folks look costly & complicated, with novel never explained materials, the BECCS folks are just a Consortium of biomass Combustion companies,
It will be hard  to beat the Olivine – SmartStones, ( ) with Biochar Agriculture & biofuels, but then again , we can beat biochar, literally with smart stones,  having them work together in the soil with Savory ruminants grassing over it all.
The Biochar companies in OZ, where they pay farmers for soil-C, put the price at $20 / Ton CO2e. 

Carbon Engineering doesn’t give CO2/ton price or Nat-gas use, their numbers must be good to be finalist.

The Carbon Engineering Design

This adsorption-desorption process that occurs on a novel filter material (“sorbent”). During adsorption, atmospheric CO2 is chemically bound to the sorbent’s surface. Once the sorbent is saturated with CO2, the CO2 is driven off the sorbent through heating the sorbent to around 60-100°C,

This process claims it  can remove 5lb of CO2 per kWh of electricity, as opposed to coal-fired power stations which currently (in the US) emit 2 lb of CO2 for every kWh of electricity created.
Graciela Chichilnisky’s innovation: carbon capturing

Kilimanjaro Energy
 Dr Klaus Lackner’s artificial  “humidity swing” trees look complicated & expensive

Marc Gunther's picture
Thank Marc for the Post!
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