R&D is under way in Germany to see whether CO2 emitted from power plants or other facilities could become a useful feedstock for manufacturing chemicals.
This could have several advantages over producing fuels from CO2, while providing modest emission reduction benefits.
In my last post I explained why it is unlikely that fossil fuels could be phased out rapidly enough to threaten the current valuations of oil and gas firms. But if carbon-based fuels will be with us for some time, that leaves open the large question of what to do about the CO2 emitted when they are burned, particularly from stationary installations like factories and power plants. The long-mooted approach of carbon capture and sequestration (CCS) still faces significant obstacles in terms of cost and social acceptance. That makes CO2 utilization efforts such as those underway in Germany especially intriguing as a way of turning lemons into lemonade.
It’s impossible to predict today whether any of the CO2 utilization processes that German companies and universities are pursuing will ever become commercial. However, they share some key advantages over “classic” CCS and various efforts to produce fuels and other chemicals from CO2 captured directly from the atmosphere:
- Producing chemicals, rather than fuels, finesses a fundamental obstacle to recycling CO2. Thermodynamics dictate that reversing the results of combustion requires more energy than the fuels released when burned. As long as most energy globally comes from fossil fuels, it will be hard to come out ahead from an energy, emissions or cost perspective when turning CO2 back into fuels. However, if the output is valuable chemicals, that energy deficit might not be such a hindrance.
- The target chemicals for these projects, including polyols, polypropylene carbonate, and acrylates, are widely used and have a global market. While most don’t quite fall into the category of premium specialty chemicals, they are unlikely to become as commoditized as motor fuels. So while cost is an important consideration, there’s probably a bit more leeway for a new process to compete and become successful.
- The scale of production for these chemicals is much smaller than for motor fuels, by orders of magnitude. That means that a company investing in producing them from CO2 can hope to capture meaningful revenue and market share with a manageable scale-up from the laboratory. Yet they’re not so small that a single new plant on a scale large enough to demonstrate CO2 utilization would swamp the global market and destroy the margins that made the investment attractive in the first place.
- These projects appear to be focused mainly on using the CO2 effluent from other industrial processes or power generation, ranging from 4-14% for power plants and up to 90% for some industrial processes, rather than having to collect it from the atmosphere, where it is present at just 0.04%. Starting with a CO2 concentration 100-1000 times higher than in air entails much less surface area for absorption, and likely lower energy consumption and overall capture cost.
- Germany is committed to significant CO2 reduction, but the German public seems uncomfortable with the prospect of burying CO2 underground. Lacking large numbers of mature oil fields that could be revived by CO2 injection, a commercial-scale CO2 utilization industry would solve Germany’s problem of what to do with at least some of the CO2 it will eventually want to capture from the country's coal- and gas-fired power plants and other sources.
In the meantime, turning some CO2 that would otherwise end up in the atmosphere into organic chemicals that will end up in more durable products seems worth pursuing. If these processes can become commercial, they will help move us in the right direction, and more cost-effectively than some other approaches receiving large ongoing government subsidies, rather than the modest seed money involved in these cases. I’ll be very interested to see how these efforts turn out.
A different version of this posting was previously published on Energy Trends Insider.