Ep97: Julio Friedmann "The Carbon Wrangler"

Cleaning Up Episode 97 Edited Highlights – Julio Friedman


Michael Liebreich Could you explain why you call yourself the carbon wrangler?


Julio Friedmann There’s nothing wrong with carbon or even carbon dioxide. We like it just fine in our bodies, which are made of carbon, and in beer. The challenge is if there's too much of it in the wrong place. That's the job of a wrangler. Things like carbon capture and storage, or direct air capture, are carbon wrangling. This is  a problem of stocks and flows. Every year, we add flow to the atmosphere - right now about 40 billion tons of carbon dioxide every year, about 50 billion tons of greenhouse gases total - and there's a stock: what stays in the atmosphere. At the Department of Energy the arithmetic led us all to an uncomfortable conclusion: that reducing was not sufficient, that removal was going to be an important aspect of reaching net-zero. Carbon capture is not a substitute for renewables, we will still need to deploy huge amounts of renewables. It is not a substitute for efficiency, we are still going to have to do a huge amount of efficiency improvements. It is not a substitution for biofuels, or hydrogen, or any of these other things. It is one of the tools in the toolkit


ML In the most recent IEA sustainable development scenario, where you've got emissions falling to net-zero by 2070, carbon capture use and storage is supposed to do 15% of emissions reductions. That’s a huge amount, and yet we have almost none of this happening today.


JF It's required in huge volumes, and we have very little of it today. One of the criticisms of carbon capture is people say, “well, how come we haven't deployed more of it?” There's a very simple answer to that: because we haven't spent the money. Over the past 15 years, the annual expense on carbon capture has been less than 1% of what we have invested in clean energy otherwise. And yet, we're counting on it to do 15% of the work. So of course, it looks like the poor, starving step-child. It is.


ML But the field is also littered with projects that that didn't work. Even some of the ones that were running and prove themselves have now been switched off, have they not?


JF There have been some notable failures. It's important to understand that many of the failures have nothing to do with CCS technology. They have nothing to do with CCS markets. We are currently in a position where, for the past 20 years, the primary model for getting projects on the ground was “here's a big bag of money.” Then they work and work and then they take the big bag of money away. Those projects fail. This is typical of any advanced technology. There have been many similar kinds of failures around nuclear, there have been many similar kinds of failures around advanced solar technologies.


ML But in the meantime, Europe has figured out that its electricity system is going to be largely clean without CCS. If coal plants are closing anyway, why would you throw those bags of money at CCS?


JF Firstly, the killer application is actually things that are much harder to decarbonize than the power sector. Things like cement making, steelmaking, refining, hydrogen production, heavy-duty transportation: there are some things that are just much harder and more expensive to decarbonize. For those, CCS actually offers a fast, cheap way of doing it. One of the big confusions that people have is they think of CCS as a coal technology. It is not a coal technology. We will do CCS on natural gas power systems. We will do CCS on biomass facilities. We're starting to see a lot of that happening now in Europe. Secondly, I think we've seen in Europe this year that the coal plants don't shut down. People imagine we will shut down the coal plants, but we don't actually do it. We don't in Europe, we don't in Asia, we don't need in India, China. And we don't in the US.


ML Let's do some economics on carbon capture. What price is a ton? If you need to capture it, and you need to store it forever, what price do you need?


JF There is no one price. The costs vary considerably as a function of CO2 concentration. From an ethanol plant in the United States, to capture CO2 from the by-product - ethanol - and store it forever is $40 a ton, all-in cost. That includes compression, drilling wells, monitoring, end of life. From a natural gas plant, it's more like $80 to $100. Direct air capture costs today are on the order of $500 a ton. Like other kinds of clean energy, the costs have dropped 50% in the past decade, and are slated to drop another 50% the next decade. With CCS, you're not making something new. You're not making new electricity, you're not making hydrogen, you're just paying a fee for a clean world. And most markets don't recognize a way to do that easily.


ML Since we started on the cost…  you've talked about capturing it from natural gas. It strikes me that most gas used in the power system in future will be intermittent. Is it not much more likely that we’ll pursue blue hydrogen? So, take the gas, take out the CO2 and sequester it, store the hydrogen and wait until it's really valuable on the system.


JF I think we're going to see quite a bit of that. In many geographies, including in Europe, there will only be a little bit of blue hydrogen and a whole lot of green hydrogen. As the prices for green hydrogen come down, you can start with blue hydrogen, and then start replacing the blue hydrogen with green hydrogen, eventually, or some other clean hydrogen variety. At some point, in the future, we will not be doing CCS on power generation, even natural gas plants, ever. I think, though, that people underestimate how long that transition will take.


ML There’s one other issue I want to bring in on the costs. You had a bunch of things that were $40, $60, $80. What level of carbon capture does that include? If you move to autothermal reforming, then you can produce really clean, blue hydrogen with very high levels of capture. But does it cost more?


JF Let me start by saying when we start a conversation about blue hydrogen, we must deal with fugitive methane emissions, or else we're not doing the job. In big chunks of the economy, we have methane leakage below 0.2%. So, we know we can do it. At $4 gas, you can do a new build autothermal reformer with very low upstream leakage and 95% capture for below $2 per kilogram of hydrogen. The stretch goal for green hydrogen is already achievable with blue hydrogen, and the lifecycle footprint of that is better than a solar-based project. It's not better than a wind project, but it is better than a solar project and about the same as a hydro project. So, you can get really clean hydrogen.

ML What would you say to those people who are convinced that the only source of clean hydrogen is green hydrogen?


JF I think that that is not honest accounting. I think there's a lot of value to green hydrogen, but it is also the case that it doesn't work everywhere. Even in places where you have really cheap solar and wind today, you don't have really cheap green hydrogen automatically. You need high capacity factors. You need really cheap supplies, and the number of places in the world where those exist are limited. I think, if you look at a full lifecycle accounting for these things, blue hydrogen can be as clean as any other kind of hydrogen. We could get going with cheaper, faster, better projects if we put some blue hydrogen on the market and move into the decarbonisation space as opposed to production space.


ML How much carbon removal, not just CCS, but actual removal, are we going to be doing?


JF Our company has done some work with Microsoft, they've been very transparent about their numbers. Their total annual emissions are 16 million tons. They can reduce 10. Their irreducible fraction is six. They have no idea how to get rid of those last six. So, that irreducible fraction - let's say they innovate like crazy and cut that in half - they still have 3 million tons of irreducible emissions. That's about 15%. It's a number we keep coming back to. So, if you scale that globally, it is billions of tons of removal.


ML Let’s move onto Direct Air Capture. Climeworks has a project in Iceland pumping CO2 underground into basaltic rock where it's being mineralized, and it's being kept there.

A news story two years ago about Climeworks said that they were capturing CO2 on a commercial basis... I love that, “commercial basis” - this is $600 at the time, per ton of CO2. It was commercial to the extent that you can get subsidies for things, then that makes them commercial. This stuff is wildly expensive, and it's going to remain wildly expensive for some time.


JF I view this very analogously to things like solar panels, wind turbines, gas turbines, all of these things, which began at extremely high prices. And the first commercial solar module that was sold was sold at $300 a watt, which is very expensive, and was bought strictly by a voluntary market.


ML To be fair, you're too much of an engineer and too much of a scientist really to believe that. Direct air capture is about moving large quantities of air. There’s a fantastic calculation by David Cebon who calculated that each gigaton would require 44,000 of the largest jet engines in the world just to move the air around. Surely it’s never going to be cheap?


JF I would quibble with that calculus on many, many levels. It is certainly the case that we can get below $100 a ton, we can probably get below $60 a ton. That's conventional engineering, conventional systems. This is exactly the argument that I have over and over again, with Vaclav Smil. I think it's reasonable to be skeptical about this.


ML I’ve got to be honest, I'm a Smilite on direct air capture, because I look at it, and I say $100 a ton, times two gigatons, is $200 billion a year, and you've said it produces no benefit other than the service of not messing up the planet. Who is going to spend that?


JF You don't get a benefit directly to the economy for keeping a stable climate. But the ecosystem services are well worth that money. That's where Stern started the Stern Report. He said the cost of fixing the climate is maybe 5% of GDP. But the cost of not fixing the climate is maybe 20% of GDP.


ML I agree, but the problem is in the real world, I just can't see the spending of that amount. I can see spending on renewable energy, on energy efficiency, on lots of things around mitigation and adaptation. But I'm not seeing a couple of $100 billion a year spent on direct air capture.


JF At the heart of it, it's a narrative story. It's a challenge of telling stories and getting people to buy in. I want to put a point on this in a numeric way. If you were to do carbon capture on a cement plant, it would double the cost of cement. That would only increase the price of a bridge made entirely out of concrete by 1%. You double the cost of the primary material, but the end product cost goes up a tiny, tiny amount. The same thing happens if you did direct air capture to offset all of the costs for steel production. The cost of a car with that steel production would go up 4%, at $500 a ton. It's an infinitesimal cost on the cost of a car.


ML As long as it is people saying “if we don't pay this, then this bad thing will happen at some point…” I'm thinking that politics is very heavily stacked against that scale.


JF At the heart, climate change solutions face this difficulty, because most of the emissions are invisible to most people. Most people don't go to the store to buy 10,000 tons of steel, but we have to decarbonize steel. And it is a system which is built around a traded commodity that is globally traded with very tiny margins. So very small changes in the price of steel are very hard for the market to absorb. But we still have to do it. So, I look at direct air capture and say that that it is the 12th of 12 miracles. We have to do 11 other miracles to get to the point where we also do the direct air capture.