Oil majors Chevron and Occidental Petroleum are taking a minority stake in a Canadian start-up that has developed technologies to suck carbon dioxide directly from the atmosphere and use it to make synthetic fuel.
The deal marks the first significant investment by energy groups into the technology, known as direct air capture, which pulls carbon dioxide from the atmosphere by using chemicals and fans.
Carbon Engineering, a Bill Gates-backed start-up based in Squamish, British Columbia, said the new investment was part of a $60m fundraising round that would help it design and build commercial-scale plants. The company has not disclosed its valuation.
The investment comes at a time when the oil and gas industry is racing to find ways to reduce carbon emissions while also maintaining its core business model, producing and selling fuel. Part of the answer could be “negative emissions”, which refers to a range of technologies that reduce the level of carbon dioxide in the air.
“Negative emissions are increasingly essential in the various scenarios for how we address climate change,” said Steve Oldham, chief executive of Carbon Engineering. “It’s infeasible that we all stop using fossil fuels overnight.”
Unlike more traditional methods of carbon capture, which rely on pulling carbon dioxide out of a smokestack or from close to the source of emissions in an industrial process, direct air capture sucks carbon dioxide from the air.
The process has long been thought to be too expensive to be deployed on a large scale, but a paper published last year in scientific journal Joule using data from Carbon Engineering’s pilot plant suggested it could cost as little as $100 a tonne of carbon dioxide extracted.
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Carbon Engineering also uses carbon dioxide to produce synthetic fuels that can substitute for gasoline, jet fuel or marine fuel and be used in the same engines without modification, according to the company.
Even though these fuels produce carbon dioxide when burnt, they are considered low-carbon fuels because they are made using carbon dioxide that came from the atmosphere in the first place.
The investment in Carbon Engineering is only the second public deal made by Chevron’s Future Energy Fund, following its investment last year in ChargePoint, an electric vehicle charging company.
“We are interested in looking at innovations around carbon capture,” said Barbara Burger, head of Chevron Technology Ventures. The fact that Carbon Engineering uses carbon dioxide to make synthetic fuels is an area of particular importance, she added, pointing to Chevron’s significant downstream business.
Occidental said it was particularly interested in exploring atmospheric carbon extraction to complement its enhanced oil recovery operations, which inject carbon dioxide into old wells to maximise their production.
