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The race to combat climate change is accelerating. Every day, large investors and corporations launch strategies to curb emissions and pledge ambitious goals of becoming carbon neutral.
On an episode of “The Daily” podcast earlier this year, the New York Times’ Andrew Ross Sorkin referred to the letter from Blackrock’s chief executive Laurence D. Fink that sent a shockwave through the business world: If corporations don’t factor climate change mitigation into their long term plans, then Blackrock will take action by voting out boards or simply withdrawing investments.
Companies investing in climate change technology
The podcast also asked the pertinent question of whether investment in expensive climate mitigation technology was worthwhile for anyone other than the ten biggest US corporations that can afford to please their customers and employees. After all, China emits more CO2 than the US and the EU together.
Some steps are being taken. “Big oil” led by Shell and Equinor has already announced intentions to eliminate emissions from exploration, but that only represents a small fraction of total emissions from the oil and gas they bring to the market. Airline companies aim for carbon neutrality through offsets. Amazon chief Jeff Bezos pledged a ten-billion-dollar fund to spur investments in renewable energy, forests and efficiency.
CO2 storage technology exists
Microsoft intends to invest in technology that can remove all the atmospheric CO2 the tech giant has emitted since its inception in 1975. Sorkin called Microsoft’s plan to capture carbon and store it safely underground a “breakthrough shoot-the-moon technology”, adding, “but if we’re being honest, it’s not there yet”.
Well, the CCS technologies to capture and store CO2 from natural gas and coal fired power plants, industrial processes and heating and cooling, are already proven and available. There are existing, successful CCS operations in Norway, Canada, the US and Australia.
Plans for clean energy and industry hubs using CCS technologies in the UK and the Netherlands are underway. German Chancellor Angela Merkel recently said CCS will be necessary to reach the 2050 net-zero target.
CCS must be a part of Europe’s ambitious plans
In March, the European Commission President, Ursula von der Leyen, proposed a new climate law that will put a stop to carbon emissions before 2050. Branded as A European Green Deal, it enshrines the goal of becoming the first climate neutral continent by 2050.
To achieve a climate neutral Europe by 2050, the EU must decarbonize energy intensive industries, transport, power as well as heating and cooling sectors. Fossil fuels must be replaced by vast production of clean Hydrogen. As an energy carrier, clean Hydrogen can be produced from renewable energy with electrolysis and from natural gas with CCS technology to remove the CO2. This way, wide-scale CCS deployment will retain and revive European industry, creating thousands of new jobs.
Reducing the cost of CCS at scale is key
Only by reducing costs can CCS be deployed on a wide scale, including by the biggest emitters such as China and India. “For CCS to make a difference, it needs to be dictated by governments across the globe,” said Sirkin. That is an idealist view, and the reality needs to be different. Governments need to take action yes, but there needs to be a business case to truly move the needle.
So how do we make CCS technology cost competitive? The European Union has already showed the way when it in 2009 agreed on renewable targets for 2020 and governments introduced support schemes and incentivized investments. Prices fell as production scaled up and soon renewable energy became a market opportunity, also for US and Chinese manufacturers. Today, the cost of renewable energy competes with fossil energy in many countries.
Leadership from Europe
The EU Innovation Fund provides investment grants to support today’s costly capture technology. Government funded storage hubs, more than 1.5 miles under the seabed of the North Sea between Norway and the UK is planned to be operational by 2023-24. If fully realized, the storage capacity under the North Sea alone is enough to receive and permanently store CO2 from all main emission sources in Europe for decades. It is a way to return CO2 to its original home.
Other means, such as setting up a certificate market, or introducing emission ceilings performance targets, could also be considered. The EU could also set binding targets, introduce emission performance standards, or a certificate mechanism, for deploying CCS technologies in energy intensive industries and waste incineration, where up to 80% of burned waste originates from biogenic sources. Combining CCS with sustainable biogenic sources will remove CO2 from the atmosphere, just like trees do naturally. That is how Microsoft can compensate for its emissions from 1975.
The European Commission is already showing unprecedented political leadership with the proposed carbon border tax to avoid carbon and investment leakages. Such bold steps will be meaningless without decarbonizing European industry.
Every stakeholder in the CCS value chain is ready, willing and able. All we are waiting for is the political leadership to enable broad deployment of what Sorkin termed “shoot-the-moon technology” in order to fulfil the challenging goals of the Paris Agreement.