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June 8, 2018 4:15 PM, EDT
Canadian Company Tests System That Converts CO2 Into Fuel
Carbon Engineering Ltd.

A Canadian startup is testing a system that sucks carbon dioxide from the air and converts it into fuel for cars and other vehicles.

Carbon Engineering Ltd.’s technique combines several common manufacturing processes and eventually will be able to produce fuel for about $4 a gallon, according to David Keith, a Harvard University professor and co-founder of the company.

With oil prices climbing and U.S. gasoline following suit, that’s a level that could make this alternative fuel competitive. Many companies have developed ways to make fuel from plants, trees, sugarcane waste and other substances instead of petroleum, but the challenge always has been the cost. Carbon Engineering’s technique was developed specifically to address this.

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“This isn’t some new clever piece of science or weird chemical we synthesized in some fancy lab,” Keith said. “The key thing that the company’s done from the beginning is focus on doing this in a way that is industrially scalable.”

The “direct air capture” process starts with common industrial cooling systems and a solution that draws carbon from the air, according to a paper published June 7 in the journal Joule. The carbon is combined with hydrogen to make motor fuel, through a technique used at pulp mills. The most expensive part is the electricity used to extract hydrogen from water.

Pilot Plant

While Carbon Engineering’s $4 price point is about 40% higher than fossil fuels, it may be competitive in markets such as California that require cleaner low-carbon fuels, Keith said. The company has been sucking carbon dioxide from the air since 2015 and producing fuel at a pilot plant in Squamish, British Columbia, since the end of last year.

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Power plants and transportation are the biggest sources of greenhouse gas emissions blamed for climate change. Keith and other scientists are advocating for more resources to study geoengineering techniques to manipulate the climate. Some argue it may be the only way to meet the Paris climate accord’s goal of holding the increase in the average global temperature “well below” 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels.

Paris Targets

Direct air capture of carbon dioxide could help governments meet pollution targets outlined in the Paris accords that otherwise are likely out of reach by just cutting emissions from power plants and cars, Keith said.

While past estimates of direct air capture have run as high as $1,000 a metric ton, according to the paper, Carbon Engineering’s technique comes in at $94 to $232 a ton.

“Our fundamental value proposition for fuel is that we can decarbonize any vehicle,” Carbon Engineering CEO Steve Oldham said.

He added that he’s in talks with oil and natural gas companies interested in using his fuel in markets with carbon restrictions. A plant that can produce 2,000 barrels of fuel a day would cost about $300 million and take about three years to build.

“We have signed agreements with a U.S. company that has very cheap wind power,” Keith said. “They like the investment proposition of taking that now very-low-value wind power, and doing a high-capital-cost investment in us to make this fuel that’s a very high-value fuel. In some ways, you can call it energy arbitrage.”