Out of thick air: Converting carbon emissions to fuel

As global temperatures continue to rise, policymakers need new tools to address climate change.

Emerging technologies hold promise, such as recycling captured carbon dioxide (CO₂) emissions then converting them into fuels and chemical products rather than storing them underground.

Recycling may not directly reduce the current concentration of CO₂ in the atmosphere, but it can decrease the production of new emissions.

While CO2 recycling technologies are still at the research-and-development stage, pilot plants and real-world deployments are beginning to emerge with around a dozen startup companies in the U.S. and Canada, such as Twelve and CERT Systems.

The history of research and development on batteries for electric vehicles, for example, shows that technology that once seemed far-fetched can evolve into standard practice.

The federal government can play a crucial role in supporting the research and development of CO₂ recycling by funding academic projects and designing policy frameworks that would incentivize private-sector investments resulting in the creation of new jobs and new industries.

The annual global market for critical clean-energy technologies is projected to reach about US$650 billion by 2030.

In addition, this would help governments across Canada that are looking to move away from a linear economy (i.e., going from resource extraction to production then to use and finally to waste) toward a circular one (i.e., creating a loop by recycling the waste), especially for fossil-fuel products.

The (in)visible accumulating pollutant

CO₂ is the dominant greenhouse gas in the atmosphere. Since the Industrial Revolution, an estimated 1.5 trillion tons have been emitted. The lion’s share comes from burning fossil fuels – coal, oil and gas – and nature simply cannot process it all.

A typical tree can absorb 22 kilograms of CO₂ each year. Yet, we continue to cut trees for lumber and clear land at a faster rate than trees are replenished.

Because we cannot see or smell CO₂, the urgency to cut carbon emissions has taken hold in the public consciousness only recently as increasing concentrations in the atmosphere trigger global temperature increases, with consequences that are palpable to everyday people.

This includes devastating weather patterns and shifting ecosystems that leave large areas of land unsuitable for agriculture or habitation, which is anticipated to lead to climate-driven movement of people on a massive scale (climate migration). 

Circular economy for CO₂

To produce fuels from CO₂, energy is needed, so using renewable energy that would otherwise not be utilized is a good solution.

Canada has one of the world’s cleanest electricity grids, generating approximately 65 per cent of its electricity from renewable sources and an additional 15 per cent from non-carbon-emitting sources.

However, due to Canada’s climate, renewable electricity is more readily available in the summer when there are more sunny days, while the demand for energy is greatest in winter. This gap between production and demand often wastes clean energy on a large scale because conventional batteries are good only for short-term energy storage.

Canada is also at the forefront of CO₂ recycling research.

Electrochemical CO₂ conversion technology, currently in the research-and-development stage, can convert the captured CO₂ from sources of emissions, such as cement and steel industries, to valuable fuels, such as ethanol and propane, or chemical feedstocks, such as ethylene and synthesis gas (a mixture of hydrogen and carbon monoxide).

These fuel products are compatible with the existing infrastructure in the petrochemical sector and sourcing their production from the already emitted CO₂ has the potential to reduce the need for new extraction of oil and gas.

Recycling CO₂ using electricity happens in an electrolyzer, where the reverse reaction of burning – i.e., CO₂ + water + electric energy – is catalyzed to produce fuels and oxygen.

Generation of various products can be targeted by using different designs and materials for making the electrolyzer and adjusting other variables such as electric voltage and current.

Research efforts are focusing on identifying and mitigating various factors that challenge achieving stable high performance for this technology, namely, degradation of the catalyst materials and the impurity of the output products.

The way forward 

Canada is among the top 10 per cent of greenhouse gas emitters per capita in the world and is searching for new tools to help mitigate emissions. While emitting CO₂ incurs costs, current policy frameworks fail to provide an incentive for industries to invest in CO₂ recycling technologies.

Carbon pricing, established through the Greenhouse Gas Pollution Pricing Act provides an incentive to reduce CO₂ emissions.

The minimum national price on carbon pollution today is $80 per ton of CO₂ equivalent with yearly increments of $15 per ton until 2030.

Moreover, for industries with a large carbon footprint, “output-based pricing systems” are in place under which a company incurs a carbon fee if emissions exceed the industry standard threshold or the facility’s annual emission limit.

This incentivizes industries to develop more efficient operations and processes that reduce their emissions and consequently reduce their carbon price payments.

Carbon pricing is based on companies’ used energy and commodity output, but not always on actual emissions unless they are using direct measurement methods such as continuous emission monitoring systems (CEMS), which are not mandatory.

Therefore, companies might not always be paying based on their actual emissions, but rather based on calculations related to energy use and commodity output.

Accordingly, there is no direct policy incentive for them to invest in the development of new technologies that can recycle their CO₂ emissions and produce useful products.

If a technology standard were implemented by the federal government that required the use of a CEMS or alternative systems, the carbon pricing calculations could be based on actual emissions (considering any recycling done).

In this way, companies might be incentivized to invest in innovative technologies, such as CO₂ recycling, which would enable them to reduce their emissions and consequently pay less.

In doing so, this approach could help speed up the development of technologies that disrupt existing reliance on new extraction of fossil fuels and reduce new emissions of CO₂.

This article first appeared Sept. 12, 2024 on Policy Options, a digital magazine published by the Institute for Research on Public Policy. It is republished here under a Creative Commons license.