The US government just made a very large bet on giant carbon-sucking machines known as Direct Air Capture (DAC) technology as a climate solution by planning to spend $1.2 billion on two projects led by Occidental Petroleum, Oxy, and Climeworks. 

The Department of Energy (DOE) awarded the grant to Project Cypress in Louisiana, a DAC facility run by Battelle, Climeworks, and Heirloom Carbon Technologies. The other DAC plant is in Texas overseen by Occidental Petroleum’s (Oxy) subsidiary 1PointFive, alongside Carbon Engineering and Worley.

Together, the two pioneer DAC hubs will remove over 2 million tons of CO2 from the atmosphere each year.

Leading the Game-Changing Carbon Removal Technology

Rising global temperatures and the lack of rapid carbon reduction efforts put carbon removal into the spotlight. Climate scientists at the UN panel say that billions of tons of carbon must be drawn out of the air every year to stay within the critical 1.5°C threshold. 

Direct air capture is one of the emerging carbon removal technologies. 

The $1.2bln move places the United States as the world leader in testing DAC as a climate change solution. It represents the first phase of the $3.5 billion funding program of the DOE for developing DAC hubs. The funds were set aside by the Biden Administration last year through the Bipartisan Infrastructure Law. 

The billion-dollar investment is the first and largest governmental support worldwide for the nascent carbon capture technology. Speaking for the government’s decision at the reporters’ call, Energy Secretary Jennifer Granholm said:

“These hubs are going to help us prove out the potential of this game-changing technology…If we deploy this at scale, this technology can help us make serious headway toward our net-zero emissions goals while we are still focused on deploying, deploying, deploying more clean energy at the same time” 

She further noted that once the projects come to life, they can remove emissions equal to taking 500,000 gas-powered cars off the road. 

Rolling Out Support For DAC 

The Energy Department has also rolled out several initiatives that will bring the cost of DAC technology down to below $100/metric ton of CO2 within the decade. These efforts include a $35 million procurement program for carbon credits and grants for 14 feasibility studies and 5 engineering and design studies.

Last year, the agency launched 4 programs with $3.7 billion in funding to ramp up the carbon removal industry in the country.

This recent rollout is part of the larger program to develop 4 direct air capture hubs over the next decade. Each of them has the potential to remove and store at least 1 million tons of carbon a year. 

The funding is the biggest-ever investment in engineered carbon removal – DAC. It also includes funding for another 19 conceptual and engineering studies of future DAC facilities.

The two awarded DAC plants are on a different scale and use different carbon removal technologies. 

Climeworks’ Project Cypress 

The Louisiana DAC plant, run by Battelle, will store 1 million tons of CO2 annually. But it will employ technology from two DAC companies – Climeworks and Heirloom. They use solid sorbents in capturing carbon dioxide which is released and pumped underground.

Climeworks runs the largest DAC plant ORCA in Iceland. The company uses giant fans to suck in huge quantities of air through a special chemical that filters out CO2. The captured air is heated to release the pure CO2 stream that is pumped deep underground, where it becomes stone.

Heirloom’s DAC tech employs the natural carbon mineralization process, speeding it up from millions of years to just days. The company is using a powder from crushed limestone, and mixes it with water to act like a sponge that absorbs CO2 quickly. 

Climeworks said its DAC hub construction will start as soon as possible, depending on several factors. They target to begin capturing in 2025 or 2026. 

Both versions of DAC technology have been tested and are considered mature, but still need scaling up to lower costs. 

Oxy DAC Facility

Occidental will build the other DAC plant in Texas. The facility will use Carbon Engineering’s (CE) DAC technology which also uses fans powered by solar energy to draw in air. 

The liquid sorbents suck in carbon that will be heated to get pure CO2 that would be injected underground or used in making valuable products. The image shows how CE’s direct air capture technology works. 

Oxy’s DAC plant can also remove 1 million tons of CO2, which can scale up to 30 million tons yearly. This project represents one of the world’s biggest experiments in DAC.

Will DAC Help Take Us to 1.5°C?

Private sector efforts and government support are ramping up to advance carbon removal solutions and DAC gets the most attention. 

According to the International Energy Agency, 130 DAC plants are under development globally. But they’re all small-scale, with a total carbon removal capacity of just 11,000 tons a year. That’s far way down below what’s required – 1 billion tons or 1 gigaton of CO2 annually by 2030.

Critics of this carbon removal technology argue that spending public money on DAC is a waste. They claim that the process consumes so much energy and is one of the most expensive methods of carbon sequestration. Skeptics further say that DAC won’t get us anywhere because of the difficulty in scaling up this technology.

However, DAC proponents counter that without carbon removal like DAC, it would be impossible to achieve the global climate goal. Some say it serves as a “backstop technology” over limitations of natural carbon removal solutions, e.g. land availability.

Other supporters claim that DAC plants need a smaller land area, easier to calculate the amount of carbon captured, and tend to sequester CO2 permanently. 

Amid the debate, other countries are also taking major turns to advance direct air capture and other carbon removal technologies. The EU, UK, and Canada have also recently announced funding support for the technology. 

As temperatures rise and climate disasters get worse, a wider consensus emerges that technologies sucking carbon from the air will be key to curbing global warming.

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Ocean carbon removal startup Running Tide has delivered its first-ever carbon removal credits pre-sold to e-commerce giant Shopify. 

US-based Running Tide is a carbon dioxide removal (CDR) company that sinks wood in the Atlantic Ocean to sequester carbon. Shopify is one of the first buyers of the carbon removal credits generated by the startup’s ocean carbon sequestration. 

Shopify and Running Tide CDR Credits Deal

Running Tide has been exploring an ocean sequestration process involving growing and sinking algae. But for Shopify’s open ocean carbon removal project, only terrestrial wood was sunk. 

The startup has five funding rounds from other major investors, which include Wells Fargo Innovation Incubator and Yes VC. Microsoft, Stripe, and the Chan Zuckerberg Initiative have also agreed to pre-purchase carbon removal credits from the startup. 

Under their deal, Shopify receives 100 of the 275 net tons of carbon removal credits created by Running Tide’s project. The climate startup had sunk 1,000 tons of limestone-coated wood waste to the ocean floor about 100 miles off the coast of Iceland.   

The wood residues, which would have been burned and emit carbon, were from forest trimming operations in Canada and Europe. So, instead of letting them release CO2, Running Tide prevents the emissions by storing the wood in the ocean for thousands of years.

Running Time wood carbon buoys

The carbon removal startup has been working with Shopify since 2020 via the latter’s Sustainability Fund. It’s an initiative founded by the e-commerce giant to provide financial support for carbon removal projects.

The 275 tons of removal are very insignificant when compared to global emissions that need to be removed. It’s also a small fraction of corporate buying of carbon removal where large companies are purchasing million tons of CO2. 

Still, their project is the first-of-its-kind in the carbon sequestration space that has been tested and audited. 

Running Tide’s Unique Approach to CDR 

Running Tide processes carbon-rich forestry residues into carbon buoys, or drifters on which to grow macroalgae. They then coat the carbon buoys with calcium carbonate that stimulates a process known as enhanced alkalinity, a recognized CDR approach to sequestering carbon. 

The limestone coating helps avoid ocean acidification, the startup said.

This unique approach moves the CO2 from the fast carbon cycle (in the atmosphere and biosphere) to the slow carbon cycle (deep into the ocean floor). Geologic processes in the slow carbon cycle facilitate storage of the CO2 for thousands of years. 

Running Tide has designed a system that amplifies natural ocean based CDR. They then deploy their system far from coasts and focus on three key pathways that remove carbon: 

Sinking of terrestrial biomass (wood buoys), 
Dissolution of CO2 in surface waters (calcium carbonate), and 
Photosynthetic fixation and sinking of marine biomass (macroalgae).

The core principle of Running Tide’s system is the creation of simple and modular components like carbon buoys that can be placed in ocean currents. They remain buoyant for a certain amount of time, disperse in the currents, and then go down to the seafloor.

Wood buoys for deployment

As the carbon buoys drift, they either alkalinize the ocean via mineral dissolution or remove carbon by growing macroalgae. When sunk, the buoys bring both terrestrial and marine biomass to the ocean floor. 

The company said that the formula they use in calculating the amount of sequestered carbon reflects the weight of the sunk wood and the amount of limestone dissolved. They determine that through cameras. 

Asserting the credibility of their approach to CDR, Running Tide’s CEO CEO Marty Odlin noted that:

“From the best available science, which is what we operate on, we have achieved a high degree of permanence and low risk of reversal [for the carbon].” 

Running Tide leverages the expertise of independent, 3rd-party ocean and climate scientists with in-house engineers to design their CDR system. Odlin said their project adhered to the Scientific Advisory Board standards and was reviewed by an independent science review board.

Deloitte, a leading audit services provider, is the official verifier for their Shopify deal. 

What Are The Gaps to Fill-in?

Running Tide has developed measurement, reporting, and verification (MRV) technologies to monitor the location, timing, and progress of CDR deployments. 

Though there is a 3rd-party auditor, there’s no normal avenues for verification yet as there are no similar projects to compare with. So the companies determine the number of ocean carbon removal credits by using a methodology they both developed. 

They will share their framework to other ocean CDR companies considering a similar process, they said. 

However, Running Tide doesn’t monitor the exact ecosystems where it’s sinking the carbon buoys at this time. That’s because their current work is still small-scale, which makes it hard to measure their exact impact at the moment. 

This is why others think that the startup needs to have verification in place to bring more confidence into their CDR system. This will also help inform others working on CDR solutions and ensure the approach is safe for the ocean. Shopify seconded saying that it’s “a big-time learning opportunity” for scientific experts to get their eyes on. 

The e-commerce didn’t exactly say how much they paid Running Tide for the CDR credits. But the latter said that they’re charging between $250 and $350 per tonne of carbon removal credits.

In March, Microsoft paid Running Time to remove 12,000 tons of CO2 over the next two years. But they also didn’t disclose the amount of their payment. 

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There’s an old saying in the news and media – ‘If it bleeds, it leads’

What this means is that the more violent or sensational a story is, it’s always prioritized and framed accordingly so.

Why? Because such things drive views.

And no other industry gets this poor framing more so than the mining sector…

Pundits in the media always make headlines stating how awful and ugly the mining sector is.

Whether it’s “polluting the environment” or “child-labor infractions” or a “form of imperialism”.

We’ve heard it all.And while there are instances of such issues, these headlines end up leading the masses to believe that all mining is evil and should be avoided.

But this is all an illusion – formulated to drive views.It reminds me of what one of our favorite classical economists – Fredric Bastiat – once said.

The difference between a good economist and a bad economist is that:

The bad considers only the visible effects.
While the good considers both the visible effects, and also those which are necessary to foresee

So while the pundits only focus on the bad aspects of mining – good investors will see through the noise and focus on the benefits and upside of it all.

And this is why you’ll see through the ‘Great Lithium Mining Illusion’.

Many Believe Lithium Mining is “Dirty” – But That’s Outdated Thinking

The long-held view has been that lithium mining is “dirty” and detrimental to the environment.

And while it’s not exactly great for the soil (neither is farming for that matter) – it’s not nearly as bad as many make it out to be.

To give you a comparison – it’s far less destructive to the environment than oil fracking is.

But recently – we’ve seen even greater increases in technology and efficiency that will help the social perception of lithium mining.

In fact – multiple European Union officials (many with aggressive pro-environment stances) now say that it’s “crucial” to show local populations that lithium mining is no longer a “dirty operation”.

And when the European Union is actually promoting a form of mining, you know it’s a big deal.

But it’s not just in Europe. . .

For instance, there are three large mining companies based in California’s ‘Lithium Valley’ that aims to establish a method of extracting lithium that won’t have negative impacts on the environment.

In short – these companies plan to use clean energy (such as geothermal power) to directly extract lithium. Avoiding the destruction, waste, and dirty water created by hard rock mining.

Michael McKibben – a geochemist and professor at the University of California – said, “It’s important not to call it mining. . . because compared with conventional lithium mining, this process has minimal environmental impacts.”

Mckinsey & Co. also recently reported that this promising direct lithium extraction (DLE) approach has several potential benefits compared to current projects – some being:

Increased lithium recoveries from around 40% to over 80%.
Eliminating or greatly reducing the footprint of evaporation ponds
Lower the need for fresh water
Lower production times

These are only a few ways that the lithium miners are at work increasing their efficiency while reducing their environmental impact.

And it’s just in time as the world enters the clean-energy revolution – making lithium more needed more than ever before. . .

Lithium: “Mother Nature’s” Answer for Fueling Clean Energy

Lithium is both the lightest metal in the world and also an alkali metal (aka good conductors of heat and electricity).

It’s used to make lightweight alloy metals – which are used in airplanes, armored vehicles, and railways.

It’s even used to help treat depression.

But – over the last decade – lithium’s use as a fuel source for electric vehicles (EVs) and renewable energy grids exploded.

Why?

Because energy storage and renewables are two of the most important sectors in the global push towards becoming ‘net-zero’ (aka cutting greenhouse emissions and the carbon footprint as close to zero as possible).

In fact, it’s not a stretch to say that lithium as a clean energy source is literally revolutionizing the world.

For instance, one of the challenges with renewables has always been that they can’t produce energy steadily.

The sun isn’t always out, limiting solar energy output
And the wind isn’t always blowing, limiting wind turbine output

The obvious solution’s been to store the excess energy and then release it later when needed.

But how?

Well, that’s why lithium batteries are so important.

They’re able to store energy efficiently and be recharged at will (imagine your cellphone or laptop or electric vehicle).

And as battery costs decrease, they will become more accessible for the masses.

This is already happening – and much faster than many realize. . .

To put this into perspective – with modern innovations and greater productive capacity – we’ve seen the cost of using lithium batteries plunge over 97% between 1991 and 2018 (from $7,500 to $181).

That’s 41x cheaper in less than 30 years.

But what’s most promising is the recent rate of declining costs.

Between 2014 and 2018, the cost of lithium-ion batteries dropped 50% in just four years.

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Bayer, Temasek-owned investment company GenZero, and Shell Energy unite to revolutionize paddy rice cultivation in India by coming up with a reliable model to reduce methane emissions and advancing sustainable farming practices.  

Their collaboration will involve support and training for farmers while using Measurement, Reporting & Verification (MRV) tools and remote sensing technology. Their project also includes the support of the renowned scientific institution, the International Rice Research Institute.

Paddy Rice Cultivation Emissions 

Global rice production will grow to meet the increasing demand from a 34% rise in the world population by 2050. This projected increase in production translates to more other greenhouse gas emissions. 

Agriculture is the second largest emitting sector responsible for about 24% of global GHG emissions. The sector contributes between 10-12% of the global anthropogenic (man-made activities) GHG emissions.

Of global agricultural GHG released by rice fields, about 30% and 11% are from methane (CH4) and nitrous oxide (N2O), respectively. Paddy rice cultivation, in particular, represents about 10% of global methane emissions. 

Methane is a more potent GHG with a global warming potential of more than 25x that of carbon dioxide. The image below from a study shows how methane is emitted from paddy rice fields.

Source: Ali et al., 2019

Rice farms take up over 150 million hectares of land worldwide, occupying 15% of the global farmland.

For successful climate-smart rice cultivation, there must be changes in rice management practices to decrease their planet-warming emissions. A robust and scalable approach is needed to encourage methane emissions reductions in paddy rice cultivation. 

Bayer and its partners aim to achieve significant results in decarbonizing rice production, helping enhance soil health while benefiting small farmers. Their project focuses on rice cultivation in India, the second-largest producer of rice globally.

Bayer Climate Strategy for Net Zero

Being the global leader in the agriculture sector under its Crop Science division, Bayer seeks to improve rice management practices by promoting climate-smart activities that economically and environmentally benefit both the farmers and the planet.

For the past 2 years, the company has performed the groundwork needed for the project under its “Sustainable Rice Project” in India. It particularly aims to fight climate change by promoting carbon reductions in growing rice. 

The project encourages rice farmers to adopt new techniques such as Direct Seeded Rice (DSR) and Alternate Wetting & Drying (AWD). DSR is a practice that doesn’t involve transplanting operations and AWD which involves controlled and intermittent flooding. 

Both modern farming practices help reduce the amount of GHG released by rice cultivation while allowing farmers to earn more from their reduced GHG emissions through carbon credits. Each credit represents a tonne of reduced carbon emissions. In voluntary carbon markets, carbon credits are also called carbon offsets. 

Since 2020, Bayer has been rewarding farmers with carbon credits by adopting climate-smart (carbon farming) practices, giving them more revenue. Its Carbon Initiative enables Bayer to develop a science-based and collaborative approach to bringing the carbon market to agriculture.

All these efforts in working closely with the farmers are part of the company’s sustainability commitments and net zero targets. They particularly aimed at reducing in-field GHG emissions (per kilogram of crop yield) by 30% in 2030. 

Bayer Net Zero Pathway

For the same year, Bayer also aims to be climate neutral in its own operations (Scope 1 and 2 emissions). They’re aiming to reduce those emissions by 42% by 2029 compared to the 2019 baseline. 

The company plans to offset any remaining emissions after reduction by purchasing carbon credits specifically from nature-based projects. Carbon farming, also known as regenerative agriculture, is one of the areas that Bayer supports to source its carbon offsets.  

The Methane Emissions Reduction Project

According to the head of Bayer’s Crop Science Division in India, Simon-Thorsten Wiebusch, partnering with GenZero, Shell, and International Rice Research Institute (IRRI) is vital to develop the ecosystem for quicker adoption of sustainable regenerative agricultural practices. He also noted that:

“Bayer’s commitment to rice cultivation is two-fold. Through our focus on rice, we want to solve two of the biggest challenges impacting humanity, namely, food security and climate change.”

Their collaborative initiative aims to gain insights into how carbon farming practices can help mitigate climate change through methane emission reductions.

In its first year, the project will ramp up its scope to cover 25,000 ha. of rice production. In particular, it will cover the Kharif 2023 and Rabi 2023-2024 rice cropping seasons.

The initiative also aims to lower the amount of water consumed by Indian farmers across the country’s water-stressed agricultural regions. More remarkably, it will support smallholder farmers as they transition agriculture to a low-carbon sector, driving their sustainable farming development. 

The success of the project will lead to bigger sustainable rice production programs, more water savings, and improved community livelihoods. 

Finally, the partners have the scientific support of the IRRI for data accuracy and credibility. The institution will perform scientific assessments of GHG reductions, water use reductions, and soil health improvements. 

Remarking on their initiative, Shell executive VP Flora Ji highlighted that this nature-based solution is a crucial tool that will help address climate change while promoting sustainable development. With the project’s outcome, the oil giant aims to continue leveraging “novel technologies to deploy nature-based solutions at scale.”

GenZero’s CEO echoes this goal saying that they’re also seeking to transform rice cultivation by adopting AWD and DSR techniques across smallholder farmers in India. 

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