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Two articles crossed my desk this morning that illustrate the uncertainty within clean technology. The headlines read:
Β πΌ πππ©ππππ ππ€π§ πΎππ§ππ€π£ πππ’π€π«ππ‘ (Bloomberg)
Β πΎππ§ππ€π£ πππ₯π©πͺπ§π πππ©π¨ π ππ§π€π¬π©π π¨π₯πͺπ§π© ππ¨ πππ£ππ£ππππ‘ ππ£π π€π©πππ§ ππππ©π€π§π¨ ππ‘πππ£ (Trellis Group)
Β Before diving into the articles let me say that Iβm a proponent of carbon capture technologies. I have no idea which ones, if any, can succeed. What I do know is that the current climate strategy isnβt going to reduce emissions fast enough. Carbon capture offers the potential to buy the world time.
Β The Bloomberg article summarized the Trump administration pulling support for carbon removal projects. It noted that there are around 800 carbon removal startups being funded by venture capitalists and corporations seeking to offset their carbon footprints. However, it went on to say that without government backing these startups wonβt succeed in scaling.
Β I disagree.
Β Government support is nice to have, but most successful startups donβtβ rely on government funding. Clean technology is somewhat different in that many require significant amounts of capital just to get beyond the proof-of-concept stage. Getting past the βweβve tested in a lab and it worksβ stage is essential to open up the wallets of private funding sources.
Β Bloomberg cited Climeworks as an example. Climeworkβs direct air capture (DAC) approach is extremely capital intensive, and as yet, hasnβt proven it can be financially viable. I donβt think it ever will, but there are other approaches that do show promise. That brings us to the βglass half fullβ tale.
Β The Trellis article highlighted that operational capture and sequestration projects are growing at a record pace β up more than 50% between 2023 and 2024.
Β It noted that like most nascent technologies, improvements are being achieved. But more importantly, it hit the point key to the success of the market: the economic incentives are aligning.
Β Enter AI.
Β AI will change the world in a multitude of ways and one may be to provide the financial impetus to get technologies like, biochar, advanced rock weathering, and ocean alkalinity enhancement to scale.
Β Demand drivers, not government funding, is the key. And AI and data centers may be just the demand driver the carbon capture market needs. Itβs why companies like Microsoft β which needs to offset its growing carbon footprint - are betting heavy on capture technologies. All the hyper-scalers are in the same boat.
Β What I see are technologies that show great promise, and quickly growing demand from deep-pocketed entities with a vested interest in their success. That is infinitely more important than fickle government funding.
Β #carboncapture, #biochar #carbonremoval #arw
Graph Source: Global CCS Institute
