CO2-based materials: When emissions become profitable

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  Quantumrun Foresight
• November 4, 2022

Insight summary

Carbon-to-value startups are leading the way in recycling carbon emissions into something valuable. Fuels and construction materials notably demonstrate the greatest potential for carbon dioxide (CO2) reduction and market viability. As a result, an array of products are made using CO2, from high-end alcohol and jewelry to more practical items like concrete and food.

CO2-based materials context

The carbon tech industry is a rapidly developing market that has been gaining attention from investors. A report by PitchBook revealed that climate-tech startups specializing in carbon and emissions reduction technologies raised USD $7.6 billion in venture capital (VC) funding in the third quarter of 2023, surpassing the previous record set in 2021 by USD $1.8 billion. In addition, Canary Media noted that in the first half of 2023, 633 climatetech startups raised money, an increase from 586 in the same period last year.

Based on an analysis conducted in 2021 by the University of Michigan’s Global CO2 Initiative, this sector has the potential to reduce global CO2 emissions by 10 percent. This number means that carbon utilization is an inevitable requirement that should be factored into the suite of technologies required to meet the net zero targets set by governments and businesses. 

In particular, fuels and building materials, such as concrete and aggregates, have the highest CO2 reduction levels and market potential. For example, cement, a key component of concrete, is responsible for 7 percent of global CO2 emissions. Engineers are striving to revolutionize concrete technology by making CO2-infused concrete that not only captures greenhouse gases but also has greater strength and flexibility than its traditional counterparts. 

Disruptive impact

Various startups are releasing interesting products made of CO2. Canada-based CarbonCure, established in 2012, is one of the first organizations to incorporate carbon in building materials. The technology works by injecting CO2 into concrete during the mixing process. The injected CO2 reacts with the wet concrete and quickly becomes stored as a mineral. CarbonCure’s business strategy is to sell its technology to building material producers. The firm retrofits these manufacturers’ systems, turning them into carbon tech businesses.

Air Company, a New York-based startup from 2017, sells CO2-based items like vodka and perfume. The firm even produced hand sanitizer during the COVID-19 pandemic. Its technology utilizes carbon, water, and renewable energy and mixes them in a reactor to create alcohols like ethanol.

Meanwhile, startup Twelve developed a metal box electrolyzer that only uses water and renewable energy. The box converts CO2 into synthesis gas (syngas), a combination of carbon monoxide and hydrogen. The only by-product is oxygen. In 2021, syngas was used in the world’s first carbon-neutral, fossil-free jet fuel. 

And finally, the first yarn and fabric produced from captured carbon emissions were created in 2021 by biotechnology firm LanzaTech in partnership with high-end athletic apparel brand lululemon. To produce ethanol from waste carbon sources, LanzaTech uses natural solutions. The firm collaborated with India Glycols Limited (IGL) and Taiwan textile producer Far Eastern New Century (FENC) to make polyester out of its ethanol. 

Implications of CO2-based materials

Wider implications of CO2-based materials may include: 

• Governments incentivizing the carbon capture and carbon-to-value industries to fulfill their carbon net zero pledges.
• Increasing investments in research on how carbon tech can be applied in other industries, such as healthcare and space exploration.
• More carbon tech startups partnering with companies and brands to create niche carbon-based products. 
• Brands transitioning to carbon-based materials and processes to improve their environmental, social, and governance (ESG) ratings.
• Ethical consumers switching to recycled carbon products, shifting market share to sustainable businesses.
• Enhanced corporate interest in carbon tech leading to the formation of specialized departments focused on integrating these technologies into existing production lines.
• Rising demand for carbon tech professionals prompting universities to develop dedicated curricula and training programs.
• International collaborations between governments to standardize regulations for carbon tech, streamlining global trade and application.

Questions to consider

• How can governments incentivize businesses to transition to carbon-to-value processes?
• What are the other potential benefits of recycling carbon emissions?