CO₂ commodity, natural resource and investment perspective - Eaglesinvestors

You can capture carbon dioxide from the air to reduce the greenhouse effect. Economically viable, CO₂ becomes a resource, and above all, now considered as CO₂ commodity. Last July climate scientists linked the heatwave to global warming.

CO₂, the main cause of the greenhouse effect that increases temperatures, was in short supply in European industries. In the absence of sufficient production, brewers like Heineken, soda producers like Coca-Cola and other agriculture food users have had to reduce their production. Let’s now determinate the potential of CO₂ commodity.

CO₂ commodity and natural resource

This shortage of CO₂ quickly passed. But does it suggest that if there is too much carbon dioxide emitted into the atmosphere, it may be useful to capture and value it? This is what researchers and companies do. Especially since the CO₂ recovery prospects go beyond agri-food use alone.

The challenges are both technical and economic. Although CO₂ went from 344 parts per million (ppm) in 1984 to 407 ppm last July. This still represents only 0.04% of the atmosphere. It remains difficult to capture a diluted substance and concentrate it. Logically, CO₂ capture systems have therefore first approached highly emitting industrial plants. Such as cement plants, refineries, etc. to capture the fumes.

Even in this configuration, it was extremely expensive. In Norway, Mongstad’s gigantic project for capturing and storing CO₂ from a refinery and a gas plant swallowed up over a billion euros before finally being abandoned in 2013 as an industrial facility, even if research continues.

CO₂ commodity and technology

Much more modestly, startups have built models that include CO₂ valuation and modularity. Starting from small units, they have the opportunity to grow according to the economic viability of the projects. This is the case of Carbon Clean Solutions in India or Net Power in the United States. Others went even further with technologies capable of capturing CO₂ in ambient air such as Carbon Engineering in Canada, Global Thermostat in the United States and Climeworks in Switzerland.


CO₂ commodity

Founded in 2009 on the basis of research conducted at ETHZ, Climeworks has developed a module that sucks in air and filters that retain carbon. A year ago she built the first commercial facility in Hinwil near Zurich. With its 18 modules, it has since withdrawn 900 tons of the atmosphere and re-injected them into a nearby greenhouse to fertilize the vegetable crop. The company built a second facility in Iceland. It is as part of the CarbFix2 project in collaboration with Reykjavik Energy. For this time to store CO₂ in underground rock.

A third installation is planned for November but the first two underline the conditions under which these technologies are economically viable. In Hinwil, the system benefits from the almost free energy produced by the recovery of waste heat from a neighboring waste disposal facility and in Iceland from geothermal energy. Moreover, the first project, carbon neutral, to the customers of the greenhouse.

The second, negative in CO₂ commodity, receives funding from NGOs or sensitized individuals such as eco-adventurers Robert and Barney Swan, who offset the emissions of their aircraft to Antarctica before reaching the South Pole at noon. using only renewable energies.

CO₂ commodity partnership

Naturally, even though Climeworks is preparing to expand it, this carbon offsetting market remains derisory with respect to the nearly 40 billion tonnes of CO2 emitted per year worldwide. This is why the valuation of this gas is central, and therefore its price.

Climeworks spokesperson, Louise Charles explains that the ton of CO₂ produced by the company is really worth. We are planning eight generations and a price of 100 euros per ton for the last with a goal of 200 euros in two to three years. This development is critical.  100 euros is also the anticipated price for the emission rights traded on the European CO₂ commodity Exchange by 2030.

CO₂ commodity and perspectives in Billions

Still, even if this stock market has increased significantly this year, the ton of CO₂ is still only 17.80 euros. And the entire European market for CO₂ for agri-food use weighs only 20 million tonnes. To upgrade its value, the CO₂ captured needs other outlets. They are close to touching this time with prospects in billions of dollars.

Climeworks, also in partnership with Audi, is involved in three European projects. It’s an indication of the potential future of CO₂ commodity. Store & Go aims to convert intermittently renewable electricity into hydrogen and then, by combining it with CO₂, into synthetic methane (usable as natural gas). The Silicon project is seeking to transform CO₂ into chemicals. Kopernikus adds the goal of producing fuels.

If we use renewable electricity, we can perfectly produce fuels and other interesting chemicals from CO₂ captured in the atmosphere. The scientist thus managed last year, at EPFL, to create a cheap catalyst (copper and tin). It breaks the CO₂ to produce carbon monoxide, which, combined with hydrogen, allows make hydrocarbons.

Marcel Schreier is now pursuing his research to improve these processes at MIT. It is in collaboration with giants of the oil industry. Indeed, they have also an interest in this carbon-neutral system that keeps the current distribution infrastructure. The challenge remains gigantic but its technical and economic rationality makes it more likely that the political promises with no future that follow from Kyoto to Paris.

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