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Carbon Capture and Storage in search of no Mickey Mouse investments

Federica Dalamel de Bournet

The first and main challenge for the deployment of carbon capture and storage (CCS) is arguably the high cost of such large scale technologies. CCS is for deep-pocketed corporates, and governments who see the future of their large emitters at stake in an increasingly environmentally-conscious world. At the Cleantech Forum XXVII in Paris, CCS experts gathered for the “Carbon Capture & Storage: In Search of Risk Finance” panel session. The outcome of the panel talk was clear: CCS is not yet a playground for venture capitalists (VC). The costs involved in building even just a single CCS unit are outside of a VC’s scope.

Small innovation companies in this area are sparse for this exact reason. However, the panel of speakers agreed that this could easily change and become a hot VC investment area within less than 10 years. That depends on the extent research and development moves forward, and on the deployment of commercial-size demonstration projects to prove the technology is a viable one. Interestingly, U.S. West Coast VCs seem to be one length ahead of the others in that they are already looking for good CCS companies to pour their dollars into.

So what fuels CCS at the moment? Below is a list of some of the most significant cash injections in the recent years.

Government spending, including stimulus money, has been key in driving pilot projects:

  • NRG Energy won a US$154 million U.S. government grant in March 2010 for a 60 MW CCS demonstration plant.
  • The Australian government has committed A$100 million annual funding for the Global CCS Institute.
  • Starting in 2013, the EU is expected to consider stored CO2 as not emitted. This will result in a financial incentive to develop CCS for large polluters regulated by the European Emissions Trading Scheme. On the other hand, inclusion of CCS projects for Clean Development Mechanisms and Joint Implementation is still being debated.
  • In early February 2010, the EU agreed to earmark €300 million emission allowances from the EU Emission Trading Scheme to CCS resulting in billions of Euros of funding.

Some corporations with large carbon footprints are also financing CCS by acquiring stakes in CCS companies or by creating partnerships:

  • Coal giant Peabody Energy acquired a US$15 million stake in Calera in February 2010. Calera has developed a technology which converts CO2 into building materials.
  • St. Marys Cement partnered with stealthy Pond Biofuels to capture CO2 from a cement plant in Canada.

As discussed above venture capital investments in CCS technologies are sparse, although some examples exist:

  • US-based Powerspan raised US$50 million in 2009.
  • Australia-based Cool Energy received its first funding from Shell Technology Ventures and the Centre for Energy and Greenhouse Technologies in 2005.

Finally, additional to the fact that CCS requires very large investments, venture capitalists might also hesitate to invest in this sector due to the double risk of technical uncertainty, coupled with the risk that a significant CCS market might not materialize. And the industry being so young, there are few CCS experts within the investing community, leading to limited insight into investment opportunities. Right now, the ball is in the corporates and governments’ camp.

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  • Erich

    Here is a totally “Mickey Mouse” system for carbon capture.
    We all know we are carbon-centered life, we seldom think about the complex web of recycled bio-carbon which is the true center of life. A cradle to cradle, mutually co-evolved biosphere reaching into every crack and crevice on Earth.

    It's hard for most to revere microbes and fungus, but from our toes to our gums (onward), their balanced ecology is our health. The greater earth and soils are just as dependent, at much longer time scales. Our farming for over 10,000 years has been responsible for 2/3rds of our excess greenhouse gases. This soil carbon, converted to carbon dioxide, Methane & Nitrous oxide began a slow stable warming that now accelerates with burning of fossil fuel. Agriculture allowed our cultural accent and Agriculture will now prevent our descent.

    Wise Land management; Organic farming and afforestation can build back our soil carbon,

    Biochar allows the soil food web to build much more recalcitrant organic carbon, ( living biomass & Glomalins) in addition to the carbon in the biochar.

    Every 1 ton of Biomass yields 1/3 ton Charcoal for soil Sequestration (= to 1 Ton CO2e) + Bio-Gas & Bio-oil fuels = to 1MWh exported electricity, so is a totally virtuous, carbon negative energy cycle.

    Biochar viewed as soil Infrastructure; The old saw;
    “Feed the Soil Not the Plants” becomes;
    “Feed, Cloth and House the Soil, utilities included !”.
    Free Carbon Condominiums with carboxyl group fats in the pantry and hydroxyl alcohol in the mini bar.
    Build it and the Wee-Beasties will come.
    Microbes like to sit down when they eat.
    By setting this table we expand husbandry to whole new orders & Kingdoms of life.
    ( These oxidised surface charges; carbonyl. hydroxyl, carboxylic acids, and lactones or quinones, have as well a role as signaling substances towards bacteria, fungi and plants.)

    This is what I try to get across to Farmers, as to how I feel about the act of returning carbon to the soil. An act of penitence and thankfulness for the civilization we have created. Farmers are the Soil Sink Bankers, once carbon has a price, they will be laughing all the way to it.
    Unlike CCS which only reduces emissions, biochar systems draw down CO2 every energy cycle, closing a circle back to support the soil food web. The photosynthetic “capture” collectors are up and running, the “storage” sink is in operation just under our feet. Pyrolysis conversion plants are the only infrastructure we need to build out.

    Since we have filled the air , filling the seas to full, Soil is the Only Beneficial place left.
    Carbon to the Soil, the only ubiquitous and economic place to put it.

    Hope to see you at ISU for the 2010 US Biochar Conference

    Dr. Robert Brown <rcbrown@iastate.edu>, and the team in Ames Iowa are planing the next national biochar conference. The Conference will be June 27-30 in Ames Iowa Hosted by Iowa State University.
    http://www.biorenew.iastate.edu/events/biochar2

    WorldStoves in Haiti ; http://www.charcoalproject.org/2010/05/a-man-a-… and
    The Biochar Fund deserves your attention and support.
    Exceptional results from biochar experiment in Cameroon
    http://scitizen.com/screens/blogPage/viewBlog/s

    NSF Awards $600K to BREAD: Biochar Inoculants for Enabling Smallholder Agriculture
    http://www.nsf.gov/awardsearch/showAward.do?Awa

    Thanks for your efforts.
    Erich

    Erich J. Knight
    Chairman; Markets and Business Opportunities Review Committee
    US BiocharConference, at Iowa State University, June 27-30
    http://www.biorenew.iastate.edu/events/biochar2