Carbon Engineering – advancing direct air capture technology

Dominique Barker: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape with a view on addressing current issues in a concise format to help you navigate and take action. I’m your host, Dominique Barker. Please join me as we explore today’s most pressing matters with special guests that will give you some new perspective and help you make sense of what really matters.

Anna Stukas: So it’s really important whenever we look at any carbon removal process that we step back and we talk about the net tons removed.

Dominique Barker: Today we welcome Anna Stukas, VP of Business Development at Carbon Engineering. She has over two decades of experience as a professional engineer, and she bridges the gap between technology and business to overcome the barriers to product commercialization that advances a low carbon future. On today’s episode, we’re going to delve into carbon engineering, discussing their carbon removal technologies and their high quality credits. Anna, thank you for joining us today.

Anna Stukas: Thank you so much for having me, Dominique, it’s a pleasure to be here.

Dominique Barker: So let’s start with a brief overview for our audience. You’re well known company in carbon circles, but not to everyone. Can you talk about Carbon Engineering, what it does and the technology that it’s developed?

Anna Stukas: Absolutely. Carbon Engineering is a Canadian based clean energy company headquartered in beautiful Squamish, British Columbia. We still think of ourselves as a start-up, but we were founded in 2009 by Professor David Keith with a mission of commercializing direct air capture technology at climate relevant scale. So here at Carbon Engineering, our core expertise is a technology that allows you to capture carbon dioxide directly out of the atmosphere, out of the sky. We call this direct air capture or DAC for short. I’m not sure if there’s actually any engineer who can resist a three letter acronym, but I’ll try to keep them out of my podcast. Once we’ve captured that carbon, we can put it safely and securely back underground where it came from, creating the carbon removal or negative emissions that your podcast listeners have heard about in previous episodes. Or we can combine that atmospheric carbon dioxide with clean hydrogen to make low carbon products like sustainable aviation fuel, essentially giving us the tools to create new fuels by recycling the air rather than continuing to pull fossil fuels out of the ground.

Dominique Barker: Great. And Anna, thank you for mentioning, we have done a couple of podcasts with Dr. Walker and Dr. Julio Friedmann on carbon removals and what that means. So feel free to go back and take a look at those in our catalogue. So Carbon Engineering’s technology produces carbon removal credits. What attributes make these credits unique and what is Carbon Engineering’s long term strategy for credit monetization?

Anna Stukas: The first piece about our technology that makes it unique is that from inception we designed our solution to be deployed at climate relevant scale. What that means is that as we work toward deploying this technology commercially together with our partners, we can provide carbon removal at the size and scale that is going to be needed to address the climate crisis. The second critical feature is the ability to store that carbon durably for very, very long periods of time, providing the permanence that is called for by reports like the Oxford Principles for net zero aligned offsetting. In terms of looking at how do we create a business around permanent carbon removal, the first thing to keep in mind is that while we’ve grown tremendously since I joined the company seven years ago and there were only a dozen of us, while we’ve scaled quickly, we recognize that the climate challenge is far too big for us to tackle on our own. We need to work with partners to do that. So by working together with partners to deploy our technology, we can bring our technology to a commercial reality faster. We then look at where can our technology provide the most value? As you’ve heard in your previous podcasts, it’s incredibly important that we do everything we can to reduce our carbon emissions first and then remove the rest. And what we’re seeing and what’s so powerful about direct air capture is that it allows you to decouple your point of emission from your point of collection. So where we’re seeing that come into reality is just last week, the Mission Possible partnership through their Clean Skies for Tomorrow initiative released a report on getting aviation to net zero. And for the first time, that report called out the need for carbon dioxide removal to counterbalance residual emissions. And those residual emissions are forecasted to be in the range of hundreds of millions of tons in 2050. The report also critically recognizes that we can’t just wake up in 2049 and decide that we want that scale of removals to be available to us tomorrow. Instead, we need to invest today to scale those solutions up. And a fantastic example of this is a recent announcement from our partners at Airbus, together with seven airlines who’ve announced that they are exploring options to utilize permanent carbon removal and Carbon Engineering’s technology to add that into their net zero plans for aviation.

Dominique Barker: Yeah. Congratulations on that announcement. We’ll include in the show notes links to that report you mentioned from the Oxford Principles for net zero aligned offsetting which by the way, we recorded last week with one of the authors, Eli Mitchell-Larson. So that’s a coincidence. And also take a look, we’ll include the press release from Airbus, as well as the Mission Possible partnership, a transition strategy report that you mentioned. So thank you for bringing those up and congratulations on that. That’s fantastic. And congratulations to the airline industry because I think they’re going to help mobilize this carbon removal. We need some buyers of these credits. So that’s very much appreciated, their leadership in that. So what is Carbon Engineering’s business model as a technology licensor? How will this approach, along with your relationships with development partners such as Oxy, enable carbon engineering to scale rapidly?

Anna Stukas: As your listeners will have heard on previous episodes of your podcast, the scale of the climate challenge is immense, and that can either be seen as really daunting and really scary or a tremendous opportunity. If we are going to be able to address that opportunity and to scale at the speed and the size that is needed to meaningfully address the climate crisis, we can’t do that alone. So that’s why we’ve adopted a license process business model, where we focus on our core expertise of developing and improving our technology. And then we work with our partners at 1PointFive and Oxy to deploy our technology. And then we complete that team with regional partners who bring local expertise and complementary experience to help us deploy our technology around the world.

Dominique Barker: Okay. Thank you. Now I’d like to get into a trickier area. Direct air capture is an energy intensive process. So what is your current policy around securing a sufficient supply of renewable power for your facilities? And how do you account for the key inputs such as natural gas?

Anna Stukas: So it’s really important, whenever we look at any carbon removal process, that we step back and we talk about the net tons removed. We need to look at the full lifecycle of that process all the way from air to rock. So any time that we talk about carbon removed, we’re talking about the net tons that include any of the associated emissions that might otherwise be tied in to our process. Wherever possible, we want to locate and utilize renewable electricity as close to the source as possible. One of the brilliant things about direct air capture technology and the fact that carbon dioxide is almost uniformly spread around the globe is that we can locate our plants where there is the best opportunity to access that plentiful, low cost renewable electricity. And in that way, we can actually help to accelerate the rollout of renewable electricity deployment. When it comes to the use of natural gas, we have two types of energy that we use in our process. We have electrical energy and we have thermal energy. Today, we do use natural gas to provide that thermal energy. And again, this comes back to the net tons removed. So when we use the natural gas to provide the thermal energy or the heat, we burn it in a pure oxygen environment. That allows us to co capture all of our combustion emissions and store all of the combustion carbon dioxide back underground where it came from, together with the atmosphere at carbon dioxide. And that allows us to optimize our life cycle effectiveness of the entire process.

Dominique Barker: Thank you. You explain that so well as an engineer. Thank you very much for that. What key factors have allowed carbon engineering to offer its technology at affordable prices and what is still needed to accelerate its cost reduction?

Anna Stukas: From inception, we started thinking about our technology by designing it for climate relevant scale. What that means is that we look to other industries to borrow existing equipment with industrial precedents wherever possible. The second key piece of that is that our solution is modular where it matters. And to break that down, what that means is that at the front end of our process, where we need to process huge quantities of atmospheric air, we have a modular system based on an industrial cooling tower that can be mass manufactured. Think of gigafactories of DAC solutions. In the back end of our process, we have centralized processing that allows us to do those energy intensive processes at very large scale and take advantage of the economies of scale that come with it. We then adopt an approach with a standardized design into which we roll out our technology improvements as quickly as we possibly can. When it comes to accelerating cost reduction, there are three critical pieces, the first of which is offtake or demand for the permanent carbon removal that we can provide. And we’ve seen such a great example of that this week with the leadership that Airbus and others in the aviation industry have taken. The second piece is we actually need to deploy our technology at commercial scale. The first project of any type of technology is always going to be harder and it’s always going to cost more. But you can never start to drive costs down if you don’t get that first one done. So we need to do that first commercial deployment. The third factor comes in with our Carbon Engineering Innovation Centre here in Squamish, British Columbia, and that is our permanent home for research and development that is going to allow us to do the continuous innovation that is needed to develop and improve and roll out our next generations of technology as quickly as possible.

Dominique Barker: Thank you. I understand that Carbon Engineering has a low carbon intensity fuel. Can you speak about it and speak about how it may be supported by Canada’s upcoming clean fuel standard?

Anna Stukas: Absolutely. And to put this in perspective about why do we need some form of standard to incentivize the adoption of clean fuel, it’s important to remember that any time that we want to take carbon and hydrogen and knit those two things together to create fuels, that takes energy. In the case of fossil fuels, we take for granted the hundreds of millions of years of geologic energy that the Earth has essentially given us for free. But when we go to make those fuels from their base ingredients, we need to add energy in. Wherever possible, we also need to make sure that that energy is sustainable. What that means is that we see what’s called a green premium or a price differential between making sustainable synthetic fuels and pulling them out of the ground. Policies or what Mark Jaccard, who’s a professor at Simon Fraser University, might call flex regs like Canada’s Clean Fuel Standard, or the low carbon fuel standard we have here in British Columbia or in California, is that they are critical tools to help us to close that green premium and make it possible to sell those clean fuels into the markets today.

Dominique Barker: How does public policy in the US, such as 45Q and the Department of Energy support for DAC hubs, I think it was $3.5 billion, how does that factor into Carbon Engineering’s plans for scaling? And I do want to note that the DOE I participated in a call recently on carbon negative technologies, and their goal is to get carbon removal to under $100 a ton. How does Carbon Engineering deal with that or plan to scale?

Anna Stukas: Absolutely fantastic to see governments leaning in like this and critically to see the support coming for that large scale commercial deployment. As I mentioned earlier, if you never build your first commercial plant, you can’t start driving down the cost curve. So seeing that government support to help us get to those initial commercial deployments is pivotal. And it’s one of the reasons why we have been working together with our partners at 1PointFive on the front end engineering for our first commercial project that’s targeted for deployment in Texas.

Dominique Barker: Well, that’s great. Well, thank you very much for participating in our podcast today, Anna. And I wish you and Carbon Engineering all the best in order to achieve the goals that you have. They’re ambitious, but I think they’re doable and they’re certainly necessary. So thank you for you and for Carbon Engineering. And we look forward to hearing more about it in the future.

Anna Stukas: And thank you so much for having me. If I could leave the audience with one key takeaway, it’s that direct air capture isn’t science fiction. It’s feasible, it’s affordable, and it’s available today. And if you or any of your listeners are interested in joining us and taking action, you can do that. So I’d welcome and encourage anyone to feel free to reach out if they’re interested in adding permanent carbon removal to their net zero plans. Thank you.

Dominique Barker: Please join us next time as we tackle some of sustainability’s biggest questions, providing different perspectives to help you move forward. I’m your host, Dominique Barker, and this is The Sustainability Agenda.

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