Transforming CO 2 from a liability into an asset at significant market scale

Transcription

1 Transforming CO 2 from a liability into an asset at significant market scale Bernard J. David Chairman, CO 2 Sciences National Academy of Sciences 1 February

2 The Global CO 2 Initiative is developing and commercializing the $1 trillion market for CO 2 based products. CO 2 based products use recycled CO 2 as a key ingredient. 2

3 The Challenge Rapidly increasing global CO 2 emissions Annual CO 2 emissions: 35.9 gigatons Mass equivalent: 1.1 billion garbage trucks Annual Increase: 1.9% CO 2 stays in the atmosphere for hundreds of years 400 PPM 275 PPM Source: Global Carbon Project, 2015 Carbon Budget 3

4 Climate Change is a Tragedy of the Commons An economic theory of a situation within a sharedresource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action. 4

5 The world is currently headed for 4-6ºC global warming by 2100 based on CO 2 emissions scenarios to 2050 IPCC envisages the need for large-scale deployment of net-negative CO2 emissions technologies by mid-century to meet stringent climate mitigation goals These CO2 removal technologies complement low or zerocarbon energy technologies. January 2016 Average growth rate 1 % per annum To prevent global temperature increase above 2 degrees Celsius by 2100, we must deploy technologies that remove carbon dioxide. Scenarios that exclude CO2-based products can t deliver this targeted amount. 5

6 Climate Change is a Social Challenge driven by time

7 Addressing the challenge creates a market opportunity Creating CO2-based products are one part of the climate solution Adaptation Managing impacts of climate change Decarbonization Energy efficiency Clean renewable energy Capture and Storage Long-term sequestration Capture and Use Creating valuable CO2-based products ADAPTATION MITIGATION MITIGATION MITIGATION Increasingly necessary Progress, but not fast enough Necessary but costly Market-driven solution 7

8 Yet, Market Opportunities are Driven by Two Things: a) A need in either an existing market or a new market, and b) A willingness to pay something to meet that need 8

9 There are approximately 25 different types of products that can be made using CO2 These products already exist there is a need The only difference is using CO2 as a feedstock to make them 9

10 25 different products can be made using CO2 These products already exist there is a need. The only difference is using CO2 as a feedstock to make them Construction Materials Cement and concrete Asphalt Aggregate Timber/super hardwood Fuel Synthetic (methanol, butanol, natural gas, syngas, etc.) Micro-algae fuel Macro-algae fuel New materials Carbon fiber Carbon nanotubes and fullerenes Graphene Industrial gas & fluids Enhanced oil recovery Enhanced coal bed methane recovery Enhanced water recovery Semiconductor fabrication Power cycles Source: CO2-based products market analysis by McKinsey and Company and CO2 Sciences, Inc. Plastics Polyurethene foams Polycarbonate (glass replacement) Acrylonitrile butadiene styrene Many more Chemicals Preservatives (formic acid) Medicinal Antifreeze (ethylene glycol) Carbon black Many more Agriculture & food Algae-based food or animal feed Microbial fertilizer Biochar, bio-pesticides, bio-cosmetics ANNUAL MARKET SIZE: $800 billion - $1.2 trillion ANNUAL CO2 CONSUMPTION 3-6 gigatons per year 10

11 To make products using CO 2 as a feedstock, what would manufacturers be willing to pay for CO 2? Willingness to pay Source: CO2-based products market analysis by McKinsey and Company and CO2 Sciences, Inc.

12 Why would manufacturers switch from the existing feedstock they use to CO 2? If using CO 2 created a superior product If creating a CO 2 based product cost less than the existing one It is easy for the manufacturer to do so

13 Do we know if we have a better and cheaper feedstock to make these existing products? First, we have to answer the question: Can it be done i.e. can we actually make the product using CO 2 as a feedstock? If it can be done, then we ask, can it be done cost-effectively The Need for a A Globally Standard Techno-Economic Analysis (TEA) to assess technical and economic (commercial) feasibility 13

14 The Added Social Dimension Does the CO 2 based product actually use more carbon than it takes to create it? What is the carbon reduction potential? A Globally Standard Life Cycle Analysis (LCA) allows us to understand if we use more or less CO 2 in creating the product than the product consumes 14

15 So Where Do CO 2 -based Products Stand Today? A couple of hundred CO 2 -based products (within the 25 product types) are in development throughout the world Various stages of development: R&D through commercialization None yet run through a globally standardized TEA or LCA Standards can help to accelerate markets 15

16 CO2-based product technology readiness 16

17 What Accelerates these Products from Proof of Concept through Commercial Deployment Rapidly? Doing Things Differently People Technology Funds Innovation at every step 17

18 What Accelerates these Products from Proof of Concept through Commercial Deployment Rapidly? Doing Things Differently People Smart, practical, experienced people with a sheer determination to succeed Different types of people (and organizations) to play the correct role in developing the CO 2 based products from concept through commercialization Innovation at every step 18

19 What Accelerates these Products from Proof of Concept through Commercial Deployment Rapidly? Doing Things Differently Technology Truly innovative technology that creates superior products that are economically appealing and easily substituted for existing feedstock Technology that shines when run through both a TEA and LCA analysis Innovation at every step 19

20 What Accelerates these Products from Proof of Concept through Commercial Deployment Rapidly? Doing Things Differently Funds Different types of funding for early stage R&D versus broad scale commercialization Innovation at every step 20

21 Different parties in the eco-system play different roles to develop the market Drive technology development and commercialization. Inventors and academics catalyze early stage technologies For-profit Non-profit Bring technologies to market scale. For-profit Non-profit For-profit Philanthropic investments to fund research and development. CO 2 -based products Support early stage technologies. Participate in impact investing. Non-profit For-profit For-profit Non-profit Bring resources and mission-aligned support. Non-profit For-profit Non-profit Support early stage technologies. Provide policy/ regulatory incentives. 21

22 all along the value chain 22

23 Issues to Address to Accelerate the Deployment of CO 2 -based products People Need to increase the number of talented people working in the field Technology Need to reduce the cost of captured CO 2 Need to improve technology of CO 2 reduction and electrolysis to form H 2 Funds Need to attract more R&D and commercialization funding from investors, corporations, individuals, foundations and governments Market Lack of access to feedstocks address the need for access of inexpensive, large scale quantities of CO 2 CO 2 -based products have to compete with conventional and bio-based feed-stocks. These options are often lower in cost. Policy There is a lack of a long-term policy framework. Need to explore both incentives and credits as well as a carbon price. 23

24 At the highest level, three steps are needed to build the CO 2 -based product market 1 2 Acknowledgement To make CO 2 -based products a part of the mainstream dialogue on how to address climate change Research and Development To reduce costs and expand the options for using CO 2 Socially Driven Socially & Market Driven 3 Commercialization To scale CO 2 -based products in areas where there is a strong business case Market Driven 24

25 Financial returns and climate impact Realizing the power of a market-based solution 25