Like many of my CDR industry colleagues, I’ve been openly skeptical of the idea that carbon utilisation can or should help scale carbon removal. From its thermodynamic inefficiency to the moral hazard of trying to “use” something instead of totally eliminating it, there are many marks against utilisation as a catalytic force for CDR as a whole,  So when colleagues asked me to facilitate a workshop on this very subject at The Sink, our side-event at The Drop, I took some convincing.

My ingoing bias: Using captured CO2 doesn’t stack up. E-fuels and e-chemicals consume vastly much more energy than they provide. CDR + electrification or even CDR + traditional fuels are a better use of resources, whether viewed through a carbon or an energy lens. This is mostly down to the cost and scarcity of green hydrogen and the cost and complexity of many transformation solutions, as lucidly argued by Robert Höglund, Paul Martin and Michael Liebreich.

The workshop didn’t change my view on thermodynamic inefficiency, but it did help me understand that removal and utilisation needn’t be at odds and can be powerful complements. What I learned: There is no carbon removal without carbon utilisation. 

The diversity of removal and utilisation methods is — like the carbon system itself — so immense that we cannot think about markets, feedstocks, geographies, and regulatory regimes in rigid terms of “A leads to B” or “B is superior to A.” Even if durable carbon removal is your only goal, disregarding the role of utilisation is short-sighted.

The discussion group included buyers, DAC companies, biomass CDR companies, philanthropic finance, advocacy groups, advisors and researchers. We chose to define the scope of our discussion as climate-positive CO2 product sales, excluding ex-situ mineralisation (which may offer some functional benefits but is typical mostly about CO2 storage) and Enhanced Oil Recovery.

What I took away:

1. No room for sanctimony.

In the early days of CDR, producers may have looked down on peers who sold CO₂ for utilisation, or feared that CDR buyers in the voluntary market might be put off by dual business models (indeed one workshop participant confirmed they had experienced this first hand). Any such stigma is past its sell-by date. Our group was unanimous that utilisation sales should be fair game. Anything that helps finance the scale up of our capex-hungry sector while reducing total emissions (ie not EOR!) is A Good Thing.

2. If there’s a time for utilisation, it’s now.

It may make for good press, but in reality it’s inefficient to force sequestration on early stage companies. Perhaps DACCS hubs should be DACCU hubs in the short term, supplying CO2 into local markets? When DACCS and BECCS scale, they will need appropriate co-located sequestration solutions. Today, such storage sites are in short supply and siting pilots based on storing a few tens or hundreds of tons of CO₂ makes no sense.

3. Utilisation ≠ Transformation.

When they hear “utilisation” I suspect that many people (myself included) picture a big Fisher-Tropsch installation or a new-fangled electrosynthesis process transforming carbon and hydrogen into petrochemicals. Several participants pointed out lucrative CO₂ utilisation opportunities that are much more straightforward.

• CO2 enrichment for greenhouses represents an easy opportunity to displace CO₂ from fossil sources. This market is local and fragmented, but offers many multi-kiloton scale opportunities for opportunistic new entrants who might be excited to colocate and remove the need for compression and transport.

• The F&B sector is several times larger again, though high prices paid by end customers also come with stringent standards and expensive pre-processing. Wholesale prices are less exciting; one panelist stressed that incumbent gas suppliers’ pricing power makes it hard for new entrants to compete. We shared hope that a critical mass of new supply could drive more competition and openness.

4. It pays to diversify.

A given molecule can only go one way. But for most companies with the ability to remove carbon, the best business models are likely to be combination plays, balancing outputs between product, energy and removal depending on local context. This might mean sliding the scale between producing energy and doing CDR in a BECCS plant, tweaking kiln settings to adjust the ratio of product and energy yields for a biochar operator or selling some proportion of CO₂ output from a DAC plant to match a local hydrogen supply for e-fuels. One workshop participant from the timber industry pointed out that it’s not economic to make wooden furniture today without also monetising wood waste - his elegant summary gave me the title for this post. These models not only help businesses adapt, they also help to make them more attractive to finance providers concerned about fragile offtake markets.

5. Regulation matters even more than thermodynamics.

Whatever you make of the theoretical arguments about efficiency, most current and planned regulations covering shipping and aviation favour decarbonisation through fuel-shifting (vs separate removal). This creates a large and underserved market for sustainable fuels with reputable customers willing to pay. If you’re capturing carbon, that’s not something you can afford to ignore.

6. Local beats global for now.

Local context is everything. There will be many contexts in which utilisation makes more sense than storage, and some where expensive transformation will be logical too. Hydrogen supply is likely to be a bigger driver in these decisions than CO₂ (should carbon transformation really be called hydrogen transformation?). If geologic H₂ starts to come online in a meaningful way, then colocating carbon capture and producing e-methanol could simplify transport and make it easier to monetise.

7. The market will figure it out.

In the end, the right constellation of solutions will prevail, so long as policy protects technology neutrality - within carbon removal and beyond. While it may be tempting to theorise the perfect interplay between carbon removal and utilisation, we don’t have to second guess how all these forces will net out.

A big thank you to everyone who took part, and especially Ben Tincq from Marble who helped me prepare for the workshop and prompted several fascinating insights on the day. I learned a bunch, but the real lesson was how much smart thinking this community is capable of and how many of us share common goals and interests.

I haven’t attributed the views expressed here to our participants - though I doubt many would be shy about their opinions I didn’t think to get their permission 😳. Hopefully they will recognise their valuable contributions and see them fairly represented here.