16 December 2021 Investors Club Insight Session on Energy in Transition CO2 Value Europe – CCU Developments in Europe Carbon Capture and Utilisation (CCU) means capturing CO2 from industrial emissions or directly from the air and transforming it into marketable products like fuels, chemicals, construction materials, with the use of renewable electricity. CCU can lead to net emission reductions and even negative emissions for certain pathways. It provides an alternative carbon feedstock for the chemical industry, thereby leading to de-fossilised production systems. CCU makes industries more circular and resilient to fluctuations in fossil resources and fosters the transition to more renewable energy systems. CO2 Value Europe is an association representing the European CCU community and is active in the entire chain of CO2 – from upstream CO2 producers to downstream convertors of CO2, as well as users of the final products. Its goal is to foster the development of a CCU industry and highlight the role of CCU as an integral part of the transition to a sustainable economy. CCU is happening now, and it needs the proper regulatory framework to deploy at a large scale within this decade. Such a supportive policy framework, including market-pull mechanisms, provides investors with the correct signal that a market for CCU products will be created and sustained, that the products will be taken-up, therefore investments on scaling-up at industrial levels can take place. Product will be taken up and investments and scaling can continue. An ecosystem of funding actors, combining private, public funders, and industrial investors, is essential to see an accelerated deployment of CCU technologies. - Anastasios Perimenis, Secretary General Lux Research – Following the Innovative Journey of CO2 Utilisation “What can we utilise CO2 for, and where is it going?“ Currently, we utilise CO2 capturing in big markets like concrete and fuels. Smaller markets provide opportunities to have high-value products or indispensable products like medication and produce chemicals out of CO2. Carbon utilisation is still an early-stage technology area. In 2000, R&D started in the following industries: building materials and polymers. In 2010, it spread to chemicals, fuels, and carbon, and in 2015 – to proteins. Until now, we’ve faced problems with implementing CCU solutions in the commercial landscape since only the building materials and polymer markets knew commercial companies. Right now, investors should be paying close attention to university research and early start-ups. It’s important to note that in the last 5 years, only 47% of the companies are still active in the field and only 4% got acquired. One of the most important factors is access to cheap renewable energy (€0,01/kWh). This is because many of the markets lack oxygen atoms, which increases the energy usage for the implementation of CCU. Recycling is cheaper and easier than reducing oxides. Like steel and glass, the carbon industry needs to put recycling first and fresh carbon second. Investing in CCU technologies is still an early-stage investment. The market is expected to grow to $550 billion in 2040, with the biggest market share for building materials, followed by polymers and fuels. Commercialisation of CCU will probably be filled with spin-offs from universities and research institutes. It's expected that more universities will pick up this topic because it's still in an early phase. The ones worth paying attention are the global CO2 initiative from the University of Michigan, IFDEN, Frauenhofer, and the 3-trillion infrastructure deal from the US. - Arij van Berkel – Lux Research University of Twente – Negative Emission Technologies Bob is a Negative Emissions Program Manager at the University of Twente in the Netherlands Center for Energy Innovation. The Center for Energy Innovation has 4 mission-driven pillars: Negative Emissions Technology Advanced Battery Technology Low Energy Data Centres Digitalization of the Energy System At the core of the Negative Emissions Technology programme stands Direct Air Capture (DAC). Three routes are being investigated for technological developments around DAC: towards carbonates, towards carbon, and towards chemicals/polymers. Challenge number 1 for DAC is that the volumes of air needed to capture 1 kg of CO2 are too large. Therefore, there’s a need for processes that have a low-pressure drop so that as little energy as possible is needed to process the large volumes of air. Opportunities consist of natural resources such as wind and natural convection, as well as artificial resources like wind turbines. The second challenge is the energy used for the desorption of CO2. Once CO2 is in the system, it needs to get out. Normally, this involves a step in either pressure or temperature, which both come with high energy consumption. Currently, research is done on other release mechanisms like electrical, magnetic, and sound-induced CO2 releasement. The third challenge is getting rid of the water. By capturing CO2 from the air, they also capture another by-product – water. The captured water can be used either for dry agricultural areas or as a source of clean drinking water. - Bob Hoomans – University of Twente Engie Solution Architect – How can a CCU project be profitable in 2025 If big-scale projects on CCU are set up now, they can become profitable in 2025. The main transitional elements for carbon neutrality in 2050 and decarbonisation are not only hydrogen and the e-molecule but also 1) a focus on energy efficiency, and, 2) electrifying operational processes as much as possible. E-fuels are one of the products that can be produced with CO2 as one of the main elements. E-methane is one of those e-fuels, which requires only water and CO2. E-methane is an example of an e-fuel that can be produced in areas where there is little water. That’s because, at the end of the production process, 50% of the water is recycled. Engie is working on the Columbus project, which is a concrete example of e-methane production. Besides the production of an e-fuel, oxygen and heat are also generated to support and be utilized in the close district heating network. CCU can be used better than simply placing CO2 underground. The implementation of CCU with the Columbus project is making it possible to increase savings of CO2 by a factor of two. The bottom line: NOT a lot of funding is needed and the technology is available. However, a lot of regulation is needed to make it possible. - Daniel Marenne - Engie Solution Architect Chrysalix Venture Capital – Electrochemical CCU Investment Insights Chrysalix is an industrial innovation fund in cleantech, industry 4.0, and decarbonisation. The fund shares the same forecast as Lux Research. Mr. Alfred Lam from Chrysalix is now focussing on electrochemical conversion of CO2 and the trend of electrification in the industry. CCU is still in an early stage and electrochemistry is very complicated because of the non-linear interrelated variables. The elements that play part in this are: Current Density Current Efficiency Voltage Losses Energy Requirement Material Durability & Compatibility - Alfred Lam - Chrysalix Venture Capital ICOS Capital – Accelerating Sustainability ICOS Capital was founded in 2005 and has been investing in sustainable propositions. The company focuses on three areas: Food sustainability Decarbonisation of the industry Digitisation of the industry One of their portfolio companies is Carbon Clean. Founded in 2009, they have raised $45m, captured more than 1m tons of CO2, own 55+ patents globally, and are now finalising their second-generation technology that is able to capture 1 ton of CO2 for the costs of $30 with 10x size reduction in equipment. The company has over 38 sites operating across the world and enables the capturing of over 1 billion tons of CO2. The investment opportunity lays within the growing carbon capture market (est. $1 trillion by 2030) and the competitive advantage in the pricing proposition, which is over $100 per ton of CO2 for the competition, compared to Carbon Clean’s $30 per ton. - Peter van Gelderen – ICOS Capital Saudi Aramco – Energy Ventures Saudi Aramco Energy Ventures is the strategic fund of Saudi Aramco. It is looking for technologies that have applications in Saudi Aramco or Saudi Arabia. One of the portfolio companies of Saudi Aramco is Daphne Technology. The company leverages innovative technology to remove toxic and GHG emissions from the combustion gas of any fuel type, both at sea and on land. It was founded in 2018, completed a 10m CHF round in October 2021, and is now raising a 5m CHF round to finance upcoming pilots, commercialisation, and scaling up in 2022. Daphne Technology has developed a solution that breaks down pollutants, converting them into non-hazardous by-products, which are either released into the environment or transformed into valuable products. The value proposition is the easy instalment of the product, usability for all fuel types, future-proof technology platform, and the recurring revenue business model with the cartridges and service on the product being recurring. The investment opportunities include patented technologies, large and growing market, business model opportunities, and a capable and experienced team - Ilya Bozhkov – SAUDI ARAMCO Energy Ventures SABIC Ventures B.V. SABIC is a global leader in chemicals. It has a business portfolio of 4 business focus industries: Petrochemicals Specialties, Agri-nutrients, Metals. SABIC Ventures is a corporate VC with a global investment focus using Typical VC instruments with minority stakes, board governance and often in combination with strategic collaboration such as joint technology/market development. The focus areas are the circular economy or anything that can close the material loop, digital technologies that improve the efficiency of SABIC’S processes and circular value chain, decarbonisation & electrification products and services that support SABIC’S carbon neutrality roadmap, differentiated materials and products, and Agri-nutrients innovations. SABIC is currently focusing on the following industries: Advanced chemical recycling and Enablers for better access to high quality feedstocks for mechanical recycling Digitalisation (New business model enablers, value chain traceability with the goal to generate the highest quality feedstocks possible) Decarbonization and Electrification of key assets (steam cracker, Highly disruptive green H2 or green ammonia, enablers minimizing water/energy use and material loss, process enabling low quality energy recovery and carbon sequestration) Materials supporting the energy transition (H2 storage and transport), and GHG reduction and monitoring (Carbon sequestration) - Michael Claes – SABIC Ventures B.V.