Carbon dioxide has long been the villain of the world’s energy outlook. But what if it is more complex? What if industry’s most notorious waste product could be something more – could actually have value?
From sustainable aviation fuel (SAF) to construction materials, to foodstuffs and more – companies are rethinking CO2 as a feedstock for the circular economy. Carbon capture and utilisation (CCU) is not new, but could play a crucial role in delivering net zero and challenges the idea that emissions must simply be buried.
Size of the prize
To have any chance at achieving net zero by 2050, the world will need to tackle its CO2 problem. The largest share of this is likely to be via carbon capture and storage (CCS), rather than CCU.
The International Energy Agency puts current capacity at around 50 million tonnes per year (tpy). It projects this will reach 435mn tpy by 2030.
Sasol carbon manager Kevin Dale raises some questions around how much CO2 an economy could use.
“It has an appeal in these early stages because you can potentially produce a product with value,” he says. “For instance, we could make calcium carbonate grains, powders that can be used as fillers in products, paints or whatever. But the scale is going to be a problem.”
He also cites other opportunities such as e-fuels or battery electrolytes. “But we need to be talking about putting away multiple gigatonnes via CCS. To put away very, very large quantities, what the geological storage offers is scale.”
But that is not to say there is no case for utilisation. For one thing, it puts a value on a waste product. But it also helps start to tackle the world’s CO2 problem, rather than just waiting for a perfect solution.
Thinking of carbon from a top-down perspective is daunting, but a number of companies are already working on viable plans.
Where the emissions are
LanzaTech is one company that is working on “recycling” carbon emissions. “Every time we use carbon above ground, it’s carbon we keep in the ground, right?” says CEO Jennifer Holmgren.
“Our feeling is we need to reuse as much carbon as possible to prevent us continuing to depend on newly produced fossil fuels. That is our master plan: keep it in the ground.”
She adds that everybody is “well meaning and wants perfect solutions. But by only dreaming of unicorns, we do nothing. Waiting for a silver bullet, which is going to take maybe five years, maybe more, is not enough.”
LanzaTech has six commercially operating plants: four in China, one in Belgium with Arcelor Mittal and one in India. It works by fermenting gases, taking feedstock from steel mills, petrochemical plants or waste biomass.
“We’re on a path for installed capacity of 300,000 tonnes of ethanol and 500,000 tonnes of CO2 abated. That’s not bad. We can take that ethanol and make aviation fuel, so we can make sustainable aviation fuel [SAF] from that ethanol.”
Location is important, in terms of access to resources and competitiveness. Holmgren explains the move into China has been driven by targeting of steel mills, with the country producing 50% of the world’s steel.
In the US, meanwhile, ethanol from corn and sugarcane receive “massive incentives and we would be at a competitive disadvantage. You still have to sell the product.”
Capture cost
8 Rivers is another company working on the question of CO2. While it has direct air capture (DAC) technologies, perhaps the most interesting is its Allam-Fetvedt Cycle (AFC) power plan.
This involves the production of a supercritical CO2 fluid, which drives a turbine to produce power. The by-products are water and CO2 with sufficient purity to be captured in pipelines for disposal or use.
“The cost of CO2 capture… is directly correlated with the concentration of CO2 in your effluent,” 8 Rivers president Damian Beauchamp says. “The higher the concentration of CO2, typically the lower the cost to capture, it seems very intuitive. So the best answer is to have the effluent be 100% pure CO2.”
Beauchamp also notes the appeal of CO2 as a working fluid. “We found that it has particular heat-transfer properties that are quite beneficial and can help drive energy efficiency – help keep the heat in the system. And keeping the heat is essential to driving up the overall efficiency of our systems.”
CO2 has a higher mass than nitrogen, making it a better choice to drive turbines, he says.
“In the first instance, we took CO2 through a turbine to produce power. And then on the back end, we recovered heat, then we compressed and pumped the CO2 back up to the turbine. Then we said, well, what if we took out a turbine and put a reformer?”
8 Rivers, he says, is “innovating on process models. Looking at how you use existing equipment and arranging it in new ways to have different outcomes.”
The company’s AFC technology includes an option to use biomass, providing a net negative carbon intensive fuel.
Cash for growth
Speaking before the flurry of executive orders from President Donald Trump, Holmgren says there was “absolutely” scope for expansion into Europe and North America. “I’m going to go wherever people are willing to do something,” she says.
LanzaTech has struck deals with potential financial backers for projects, such as Olayan Group in Saudi Arabia and Brookfield.
“They’ll finance a project if I get it ready. They won’t take any risk. But they’re quite keen to work on the process. If you de-risk your technology and you can get a project lined up, that would be a path that would work.”
LanzaTech went public via a SPAC in 2023. Holmgren says the plan had been to become a “leader in the public transition market. But, to be frank, it’s a difficult market right now as people are stepping back on the transition. Everybody’s slowing down. What the market really wants is profitability.”
Despite the challenges, the company is still finding new ways to accomplish its goals, with a project in Norway announced in 2024. In January, it set out a plan to spin out a unit with a financing group.
8 Rivers is interested in an IPO, but “I don’t think it’s a requirement”, president Damian Beauchamp says.
“What we want to do is build a foundation of stable revenue with a clear path for growing that over time, prior to [an IPO]. There are benefits to being public and there are benefits to being private.”
Big plans
Beauchamp says that staying private played into 8 Rivers ability to stay agile.
“We’re simultaneously developing a suite of technologies that address 70% of the emissions across the world, as far as sectors are concerned that are contributing to emissions,” he says.
“If we’re successful in getting three of those delivered as first of a kind, we’ll have such a head start. The amount of data we’re going to have on CO2 as a working fluid is going to give us such an advantage, because no other companies have that volume of information around how CO2 behaves. That is going to give us a significant technical advantage.”
The challenge of construction is one that all innovators face, when they need to move from research into commerciality.
Inflation “really slows you down”, Holmgren says. “When the cost of a project is high it makes it all harder, particularly securing finance”.
For the LanzaTech executive, this is where “governments have been super helpful”, she says. Increasingly, they have been willing to move from just supporting R&D to helping “finance demonstration plants and first-of-a-kind commercial plans”.
Holmgren says the biggest challenge was “building enough plants to become profitable”.
“There is no problem that doesn’t violate the laws of physics that is intractable in my mind. We just have to make a decision that we’re going to solve the problem,” Holmgren says.
Making the play
CCS, it is clear, will handle most of the heavy lifting in terms of storing CO2. But CCU has a part to play – not least in convincing investors and consumers of new ways of thinking about the circular economy.
Progress has been made in the last few years, with companies working to demonstrate that CCU can be technically viable and potentially profitable – particularly when winning support from governments and financiers.
The sector will need to scale up to achieve profitability, to bring in reliable financing in the face of scepticism and to keep on innovating to bring down costs. Biomass adds another potentially promising angle, opening the door to negative emissions combined with valuable products.
CCU may not be the silver bullet for climate change, but it represents an important piece of the decarbonisation puzzle that is ready for deployment today. As LanzaTech’s Holmgren aptly puts it, waiting for perfect solutions risks doing nothing at all.
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