Carbon Engineering

Market position

The company is described as one of a handful of companies globally working on direct air capture and was the only Canadian finalist in the US$25 million Virgin Earth Challenge. Occidental's Texas project under construction is expected to have a capture cost of US$300 to US$425 per tonne, which the Financial Post notes is still lower than abatement costs for certain other hard-to-decarbonize sources; high cost is cited as the main drawback of direct air capture relative to other carbon removal options.

Carbon Engineering's approach uses standardized processes and proven industrial equipment, an integrated liquid-solvent two-cycle DAC design, and the option to convert captured CO2 into drop-in synthetic fuels. Its Squamish Innovation Centre provides a fully integrated plant for validating technology improvements, and after the acquisition it pairs this R&D capability with Occidental's carbon management, geological storage and large-scale project delivery experience.

Technology

The DAC system integrates two coupled cycles. In the first, an "air contactor" absorbs CO2 from ambient air into an alkaline hydroxide solution, covered by patents including US20140271379A1 and US20150329369A1. The second cycle regenerates the capture liquid and delivers pure CO2 as an end product. The cycles run continuously, requiring energy, water and small material make-up streams as inputs and producing a concentrated CO2 stream. The "air to fuel" process combines captured atmospheric CO2 with hydrogen produced by water electrolysis using renewable electricity to make gasoline, diesel or Jet A fuels compatible with existing engines. Individual DAC facilities are designed to be scalable to capture up to one million tonnes of CO2 per year.

Go-to-market

Commercialization proceeds through Occidental and its 1PointFive subsidiary, which deploy Carbon Engineering's technology in large commercial plants; the partnership began in 2019 with a jointly announced billion-dollar Permian Basin DAC project, and Occidental plans roughly 100 megatonne-scale DAC projects by 2035, including a U.S. Gulf Coast DAC hub supported by a US$1.2 billion U.S. Department of Energy grant for two hubs announced August 11, 2023.

Buyers of carbon removal and CO2 supply, including energy and industrial companies seeking permanent geological storage or enhanced oil recovery feedstock, and transportation fuel markets served by low-carbon synthetic fuels.

Geography

Headquarters and R&D operations are in Squamish, British Columbia, Canada, where the pilot plant and Innovation Centre are located; the company was originally based in Calgary, Alberta. All Carbon Engineering roles are based in Canada unless otherwise stated, working with international teams, and the technology is being deployed abroad through Occidental and 1PointFive, including projects in the Permian Basin and near the U.S. Gulf Coast.

History

The company was founded in 2009 and was based in Calgary, Alberta in its early years. In January 2015 it began installing its first end-to-end pilot plant in the 'Blue Barn' on the Squamish Oceanfront lands, and the plant began removing CO2 from the atmosphere that year at roughly one tonne of CO2 per day. In 2017 fuel synthesis capability was added to the pilot plant, and CO2 was converted into fuel for the first time in December 2017. Data from the pilot informed a 2018 paper by Keith and colleagues estimating capture costs of US$94 to US$233 per tonne. In May 2019 the company partnered with Oxy Low Carbon Ventures to design and engineer a large-scale DAC plant in the Permian Basin, initially sized at 500,000 tonnes of CO2 per year and expanded in September 2019 to a design capacity of about one million tonnes per year. A leadership transition was announced in January 2022. Occidental announced its acquisition of the company in August 2023 and completed it on November 3, 2023.

Risks & controversies

Direct air capture's principal drawback is its relatively high cost, with Occidental expecting US$300 to US$425 per tonne for the Texas project under construction, and project economics depend on policy support such as California LCFS credits and U.S. federal storage tax credits. Captured CO2 may be used for enhanced oil recovery, and the company's investor base has included fossil fuel producers Chevron, Occidental Petroleum and BHP. The first commercial project timeline has moved, with operations targeted for 2024 in earlier reporting and later reported as not expected before 2025.