Feb 6, 2014

Key insights on energy issues and climate change

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4 min
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Jules Kortenhorst is the chief executive officer at the Rocky Mountain Institute and is a recognized leader on global energy issues and climate change. His background spans business, government, entrepreneurial, and nonprofit leadership. GLOBE spoke with Jules about his work at RMI and inline with his participation at the upcoming GLOBE 2014 Conference, taking place in Vancouver, Canada, from March 26-28. 

GLOBE: You have a long history with the energy industry, having worked for energy giant Royal Dutch Shell and as the CEO of a Netherlands-based bioenergy company (Topell Energy BV). How do you feel your previous work in the energy industry has prepared you for your current role as CEO of the Rocky Mountain Institute?

JK: There is no doubt that the energy industry has many unique aspects. Having worked in the industry before helps me understand the challenges as well as the opportunities that result from the energy revolution for which we now advocate. Large companies like Shell will find it hard to adjust, but if they do, they have a tremendous contribution to make into the future.

GLOBE: The energy sector worldwide is undergoing a profound transformation. New technologies have opened up vast reserves of untapped resources that, in turn, have upset long-established relationships in the energy marketplace. What advice do you have for policy makers and investors when it comes to making the right decisions given that there is so much uncertainty about the future global energy mix?

JK: There are a few interesting trends which both policy makers and investors should consider:

First, there is the cost trend line. On the one hand there is shale gas, currently very cheap in the U.S., but what is the medium term outlook for gas costs? Is the trend up or down? How come Shell has just concluded that it can not make money in this business in the U.S.? And at the same time, the cost of reducing energy demand (i.e. efficiency) or renewables (in particular solar and wind) is going down rapidly. Those learning curves will determine future returns.

Second there is the challenge of climate change. IPCC has told us we can only emit a further 560 Gt of CO2. What is the stranded asset risk associated with large fossil fuel companies beyond the immediate horizon?

Finally, there is the question of the consumer. An electric car, maybe even on a shared basis, is rapidly becoming cool and sexy. LED lamps are now in reach, and so much easier, with higher functionality. The Nest is now part of Google: I think the old energy sector will soon find itself in the same position as the mainframe companies in the late ’80s, early ’90s.

GLOBE: You are also the founding CEO of the European Climate Foundation (ECF), a major philanthropic initiative to promote climate and energy policies that greatly reduce Europe’s greenhouse gas (GHG) emissions and mitigate climate change. Do you think the business model for this initiative could be applied in other jurisdictions and/or on other continents with equal success?

JK: It has been. In fact, ECF was modeled on the Energy Foundation here in the U.S., and my dear friends at EF were instrumental in helping ECF’s success.

GLOBE: The Rocky Mountain Institute (RMI) is applying its “Reinventing Fire” initiative to focus on four core energy sectors – transportation, buildings, industry, and electricity – with the hopes of transforming global energy to become “cleaner” and more efficient. Which of RMI’s current initiatives do you feel have the greatest overall potential for reducing global GHG emissions?

JK: There are two parts to that answer. First, we have to look at the integrated picture and work on all the aspects of the energy portfolio at the same time. So, although in the short run maybe our electricity work abates most CO2, it can only be successful if we deliver more efficient buildings, if the electric car becomes integrated into the grid, etc.

But unrelated, we are doing the same work in China now. Reinventing Fire China, which we carry out together with the Lawrence Berkeley lab, the Energy Foundation China and ERI, the energy research institute of the planning commission of the Chinese government, will hopefully inform China’s next 5 Year Plan and thereby have a huge impact.

GLOBE: You will be joining other energy industry executives from around the world at GLOBE 2014 this March 26-28 in Vancouver, Canada, as a speaker in a session on The Global Energy Mix: Opportunities & RealitiesWhat message do you hope to bring to the international delegates and audience that will be attending GLOBE 2014?

JK: The changes in the global energy industry are now rapidly accelerating. A magnificent, but challenging opportunity, for creating wealth while addressing climate change and sustainability is emerging. These are exciting times.

Photo credit: Dan Breckwoldt / Shutterstock.com

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Jul 29, 2021

Carbon dioxide removal revenues worth £2bn a year by 2030

Energy
technology
CCUS
Netzero
Dominic Ellis
4 min
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades says the UK's National Infrastructure Commission

Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission

Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.

The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.

The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture. 

It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.  

The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020. 

Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.

The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.

While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.

Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.

Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse. 

"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.

“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.” 

The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets. 

Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.  

Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."

McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:

  • Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
  • Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
  • Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
  • Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
  • The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere

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