3 Follow up Questions to “Can carbon emissions become a revenue stream?”

In a recent blog post at CleanEdge, Ron Pernick posed the question, “Can carbon emissions become a revenue stream?” The answer to that specific question is an unambiguous “yes.” This chart from the US National Energy Technology Lab (NETL) does a fairly comprehensive job of showing the many ways in which carbon emissions could turn into revenue:

Image

 

I think Pernick was really trying to get at the following three followup questions:

1. Can carbon emissions profitably be converted into useful products?

It frequently takes a lot of energy (and up front capital expenditure) to separate CO2 emissions from the other emissions produced by a power plant or other industrial facility. Then, it can take even more energy to convert that CO2 into the useful end product. The resulting end products don’t exactly sell into particularly enticing markets either: high commoditization and low potential for brand distinction (e.g. as a “green” product) mark many of these industries. This makes the amount of revenue that one can get from CO2 quite low. In the US, prices for CO2 range from $20/ton to over $100/ton depending on where that CO2 comes from (natural sources are much cheaper than anthropogenic sources), but probably average closer to $30-40/ton for most major production facilities located near a CO2 pipeline (with niche uses paying higher premiums to have the CO2 trucked to their production facilities). With capture costs estimated at $50-150/ton for power plants, the economics for beneficial utilization of CO2 are difficult to pencil out.   Bottom line: The reason we don’t see more beneficial reuse of carbon emission today isn’t for lack of revenue sources, but rather because of the high costs associated with getting low amounts revenue.

2. How much carbon can we beneficially reuse?

To put this question in context, Ken Caldeira noted at his presentation at Berkeley this past February that the average American consumes over 100/lb CO2 per day.  CO2 consumption towers over that for other items, like food (about 5 lbs/day), plastics (about 1/lb day), cement (about 1 lb/day), etc. We would need large reductions in our CO2 emissions and/or large increases in our consumption of goods that can be made with CO2 to even begin to beneficially reuse a significant portion of the CO2 emissions that we generate. Not that we shouldn’t necessarily do both, but its important to understand the scale of CO2 emissions that we generate and why most have suggested that underground storage of CO2 emissions is the best place to have immediate, large scale impacts on net emissions.

3. Can we sequester CO2 in the process of beneficial reuse?

Many of the uses for CO2 listed by NETL do not sequester CO2 (e.g. greenhouses, carbonated beverages, biofuel production, etc.). This isn’t necessarily a bad thing — reusing anthropogenic CO2 emissions reduces the carbon footprint of these goods. But this footprint can be reduced even further if those CO2 emissions are used in final goods like cement and plastics that remain in solid form for decades or longer. The holy grail, of course, is using biomass power or direct air capture devices to generate the CO2 used in the production of products like cement and plastics to create negative emissions, but we unfortunately are still a ways off from seeing this type of carbon removal at scale.

Advertisements

One thought on “3 Follow up Questions to “Can carbon emissions become a revenue stream?”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s