WEBVTT - Carbon Capture: Innovation Rises as Investment Stalls 0:00:00.400 --> 0:00:03.240 This is Dana Perkins and you're listening to Switched on 0:00:03.520 --> 0:00:06.680 the podcast where we discuss the energy transition with BENUF 0:00:06.680 --> 0:00:10.639 analysts and highlight findings from their most recent research. And 0:00:10.760 --> 0:00:13.399 today we're going to take a step away from carbon 0:00:13.480 --> 0:00:17.759 reduction and explore the world of carbon removal technologies. Many 0:00:17.760 --> 0:00:20.239 have had success over the past couple of years as 0:00:20.280 --> 0:00:23.840 recipients of growing investments and a number of projects have 0:00:23.960 --> 0:00:28.600 crossed the critical financial investment decision milestone or FID for short. 0:00:28.760 --> 0:00:31.640 But of course the picture isn't rosy across the board, 0:00:31.760 --> 0:00:33.960 and we will get into that on the show today. 0:00:34.159 --> 0:00:37.120 We talk about the most established technology at the beginning, 0:00:37.240 --> 0:00:41.400 which is carbon capture, Utilization and Storage or CCUS. We 0:00:41.479 --> 0:00:44.160 also talk about some of the newer technologies like direct 0:00:44.159 --> 0:00:47.320 air capture or DACK for short, and we save time 0:00:47.400 --> 0:00:49.920 to get into the world of the newest sources of 0:00:49.960 --> 0:00:53.479 innovation by delving in on direct ocean removal. To give 0:00:53.560 --> 0:00:56.280 us all the updates, I speak with Brenna Casey, who 0:00:56.320 --> 0:00:59.360 is an analyst from b and EF's Sustainable Materials team, 0:00:59.520 --> 0:01:03.440 and she highlights findings from the recent research. Note CCUS 0:01:03.480 --> 0:01:07.679 Market Outlook one h twenty twenty trough of disillusionment. She 0:01:07.720 --> 0:01:11.320 also draws from another research note titled Direct Air Captures 0:01:11.360 --> 0:01:14.800 Technology Battle to Heat Up in twenty thirties. BENYF clients 0:01:14.840 --> 0:01:17.399 will be able to find the full research at BNF 0:01:17.440 --> 0:01:20.119 go on the Bloomberg terminal or at BNF dot com. 0:01:20.200 --> 0:01:22.720 If you like the show, subscribe on whatever you're listening 0:01:22.720 --> 0:01:24.640 to us on now and you'll get an update when 0:01:24.680 --> 0:01:26.520 we publish a new show, and if you give us 0:01:26.560 --> 0:01:28.600 a review, other people will be able to find us 0:01:28.600 --> 0:01:30.800 more easily. But right now, let's talk to Brenna and 0:01:30.800 --> 0:01:43.600 get an update on carbon removal technology. Brenna, thank you 0:01:43.720 --> 0:01:45.319 very much for joining the show today. 0:01:45.760 --> 0:01:46.959 Yeah, thanks for having me, Dana. 0:01:47.160 --> 0:01:50.360 We're here to talk about carbon removal technologies, and there 0:01:50.400 --> 0:01:52.680 are a couple of different avenues we can go down. 0:01:52.680 --> 0:01:54.920 We'll come to direct air capture and actually some really 0:01:54.960 --> 0:01:58.280 interesting things happening in our oceans. But let's start with 0:01:58.920 --> 0:02:02.240 the big one, which is carbon capture, Utilization and storage, 0:02:02.360 --> 0:02:05.520 referred to as CCUS by most people. And one of 0:02:05.560 --> 0:02:08.280 the things about carbon capture technology is that when we 0:02:08.320 --> 0:02:11.919 look at a net zero future, so when we think 0:02:11.960 --> 0:02:15.080 about there being you know this, well, this net number 0:02:15.120 --> 0:02:19.280 where we are emitting and then absorbing this even amount 0:02:19.280 --> 0:02:21.800 of carbon on an annual basis. There are parts of 0:02:21.840 --> 0:02:26.440 the economy where CCUS is really the only existing solution 0:02:26.639 --> 0:02:30.280 right now and plays a very important role in a 0:02:30.280 --> 0:02:34.079 net zero future, at least with today's existing technology as 0:02:34.120 --> 0:02:36.480 we think about this forward. This is something that featured 0:02:36.520 --> 0:02:39.240 in our New Energy Outlook and definitely something that is 0:02:39.360 --> 0:02:43.080 causing us to think really seriously about this technology and 0:02:43.080 --> 0:02:44.720 the role it could play in the future. So the 0:02:44.760 --> 0:02:46.840 whole show today is going to be about where this 0:02:46.960 --> 0:02:50.320 investment is and where capacity editions are. So we'll just 0:02:50.360 --> 0:02:53.920 start with a very simple question, is is there an 0:02:54.000 --> 0:02:57.800 upward trend in investment into CCUS technology at the moment? 0:02:58.520 --> 0:03:03.600 So short answer one hundred percent yes. Long answer, I 0:03:03.600 --> 0:03:09.120 think it's pretty nuanced, depending on obviously region and then sector. 0:03:09.240 --> 0:03:11.720 So over the last year we've seen a dramatic uptick, 0:03:11.960 --> 0:03:15.720 particularly in EMEA the Middle East, a lot of investment 0:03:15.919 --> 0:03:18.680 leading up to COP twenty eight, and then we've also 0:03:18.760 --> 0:03:22.760 seen a lot of investment into particularly the heavy industry 0:03:22.960 --> 0:03:27.280 sectors so cement, chemicals, steel, hydrogen in Europe, and that's 0:03:27.320 --> 0:03:31.720 really as developers corporates those sorts of kind of stakeholders 0:03:32.320 --> 0:03:34.840 brace and fear of the carbon price as well as 0:03:34.880 --> 0:03:37.520 you know other sorts of like like cban, like border 0:03:37.640 --> 0:03:40.920 adjustment mechanisms as well. So definitely an upwards trend in 0:03:40.960 --> 0:03:43.640 those areas. In the US, well, the US leads and 0:03:43.680 --> 0:03:47.600 investments in total, but that's really just bolstered by DOE funding. 0:03:47.840 --> 0:03:51.840 So we're seeing lots of investment or subsidies from them 0:03:51.880 --> 0:03:54.440 to kind of pick start a lot of our heavy industries. 0:03:54.600 --> 0:03:57.600 And that's separate from forty five Q. But apart from 0:03:57.640 --> 0:04:00.480 a lot of these subsidies, private investment is actually gone 0:04:00.480 --> 0:04:02.080 down in the US so quickly. 0:04:02.120 --> 0:04:03.920 So we're talking about the US. What is forty five Q. 0:04:04.120 --> 0:04:07.880 Forty five Q. Yeah, So twenty twenty two, the government 0:04:07.960 --> 0:04:11.200 signed into law the Inflation Reduction Act and baked into 0:04:11.240 --> 0:04:13.960 that is forty five Q, which gives it's an investment 0:04:13.960 --> 0:04:16.760 tax credit, So it's eighty five dollars per ton awarded 0:04:17.000 --> 0:04:20.120 if you are storing the CO two kind of sequestered 0:04:20.160 --> 0:04:24.200 from a point source plant, so a cement plant, petrichemical steel, 0:04:24.440 --> 0:04:26.560 and then you're going to get sixty dollars per ton 0:04:26.600 --> 0:04:29.040 if you're taking that CO two that you've captured and 0:04:29.240 --> 0:04:30.960 utilizing it as a feedstock. 0:04:31.360 --> 0:04:33.000 So it makes sense that we start kind of on 0:04:33.040 --> 0:04:35.680 the around the world tour of what's actually happening in 0:04:35.680 --> 0:04:39.279 investment for CCUS with the US which is the leader 0:04:39.560 --> 0:04:41.679 at the moment. So if we're looking at just twenty 0:04:41.720 --> 0:04:44.000 twenty three, kind of what was the level of investment. 0:04:44.279 --> 0:04:46.920 Yeah, so twenty twenty three was around two point eight 0:04:47.000 --> 0:04:50.200 billion dollars and that's primarily due to subsidies from the 0:04:50.279 --> 0:04:53.000 US Department of Energy or the DOE. And we've also 0:04:53.000 --> 0:04:57.720 seen a couple of projects reaching FID in twenty twenty three. However, 0:04:58.440 --> 0:05:03.799 we've actually, I've seen momentum in the US drop off 0:05:04.000 --> 0:05:07.080 pretty substantially, and that's due to a multitude of factors, 0:05:07.360 --> 0:05:11.880 one primarily being the IRS has yet to kind of. 0:05:12.080 --> 0:05:14.640 The IRS, the Internal Revenue Service, the same people that 0:05:14.680 --> 0:05:15.400 are collecting my. 0:05:15.360 --> 0:05:19.000 Taxes exactly exactly. They've yet to kind of set these 0:05:19.000 --> 0:05:22.960 regulations or clarifications as to what qualifies as a project 0:05:23.200 --> 0:05:26.560 that can receive a forty five Q subsidy. So investors 0:05:26.560 --> 0:05:29.599 are a little bit wary, and therefore we haven't seen 0:05:30.240 --> 0:05:33.000 continuous investment in twenty twenty four so far. 0:05:33.400 --> 0:05:36.159 But presumably this seems like a barrier that once we 0:05:36.240 --> 0:05:39.840 get through the mechanics of the way that government works, 0:05:40.120 --> 0:05:42.680 that there could be you know, some pent up demand 0:05:42.880 --> 0:05:45.400 and there could be more investment and more projects on 0:05:45.400 --> 0:05:47.160 the way. Or is that just wishful thinking for me 0:05:47.480 --> 0:05:50.560 working my way backwards. Since we started the conversation talking 0:05:50.560 --> 0:05:52.560 about net zero goals. 0:05:52.520 --> 0:05:54.919 When we look at the capacity that we have so 0:05:55.360 --> 0:05:58.120 out until twenty thirty, it's around four hundred and twenty 0:05:58.160 --> 0:06:02.000 four million metric tons of ccus opacity due to come online. 0:06:02.360 --> 0:06:07.320 In reality, conservatively, I guess optimistically instead around thirty percent 0:06:07.360 --> 0:06:09.320 of those projects are set to be canceled. When we 0:06:09.400 --> 0:06:11.719 talk to a lot of developers in the industry, some 0:06:11.800 --> 0:06:14.359 people like to say, maybe, hey, seventy percent of these 0:06:14.400 --> 0:06:16.960 projects are going to get canceled. Over the last or 0:06:17.000 --> 0:06:20.240 since forty five Q was ratified in twenty twenty two, 0:06:20.320 --> 0:06:24.000 we've seen two consecutive years of double digit growth. When 0:06:24.000 --> 0:06:27.000 we're looking at millions of tons of capacity announced to 0:06:27.000 --> 0:06:29.920 come online, but four hundred and twenty four million metric 0:06:29.960 --> 0:06:33.559 tons by twenty thirty, that number has remained unchanged since 0:06:33.680 --> 0:06:36.120 I think last year in October when we released our 0:06:36.160 --> 0:06:39.160 previous market outlook, and so I think really right now, 0:06:39.200 --> 0:06:42.919 what we're seeing is a lack of additions and maybe 0:06:42.920 --> 0:06:45.240 potential cancelations. Over the last couple of years, we've seen 0:06:45.360 --> 0:06:49.160 lots of those, especially in Canada. It's mostly these power projects, 0:06:49.240 --> 0:06:53.160 coal power projects, where the economics aren't extremely favorable and 0:06:53.279 --> 0:06:55.640 so tying it back to forty five Q. Even with 0:06:55.680 --> 0:06:58.520 forty five Q this is it's still prohibitively expensive. Forty 0:06:58.520 --> 0:07:00.800 five Q alone is not enough to make the business 0:07:00.839 --> 0:07:04.440 case for ccs, and these credits also only last twelve years, 0:07:04.520 --> 0:07:07.240 so when you're thinking about building a new project with 0:07:07.480 --> 0:07:10.480 a lifetime of thirty years, you kind of have to 0:07:10.520 --> 0:07:12.200 see where you're going to make your money back on 0:07:12.240 --> 0:07:13.720 that in forty five Q in a lot of cases 0:07:13.800 --> 0:07:17.000 isn't enough for a lot of these developers to continue 0:07:17.000 --> 0:07:22.280 to announce projects. However, once the IRS has figured out, okay, 0:07:22.360 --> 0:07:24.680 what actually does qualify for a project, we're likely to 0:07:24.680 --> 0:07:29.200 see industries like iron steel, blue hydrogen cement, We're likely 0:07:29.240 --> 0:07:32.360 to see those first movers kind of potentially continue to 0:07:32.360 --> 0:07:35.720 add in capacity. If you're looking at cement or coal 0:07:35.800 --> 0:07:38.760 power where there's lots of impurities in the gas, you 0:07:38.840 --> 0:07:41.880 have to scrub the gas, have a sorbin or a 0:07:41.880 --> 0:07:45.240 solvent that isn't volatile, doesn't degrade in the presence of 0:07:45.280 --> 0:07:48.400 those impurities. And due to the low concentration of CO 0:07:48.600 --> 0:07:51.600 two in those flue gases, you also need high amounts 0:07:51.600 --> 0:07:54.480 of energy to kind of sequester or strip that CO 0:07:54.760 --> 0:07:57.080 two from the gas, and so it gets more and 0:07:57.120 --> 0:08:01.120 more expensive the lower CO two concentration is in that gas. 0:08:01.320 --> 0:08:04.520 There really isn't any alternative. That's the problem with CCS 0:08:04.600 --> 0:08:08.000 is that CO two is effectively a waste product. It's 0:08:08.160 --> 0:08:10.400 not a commodity. We're trying to make it a commodity. 0:08:10.520 --> 0:08:12.200 I mean, we're already at the end of the line here, 0:08:12.320 --> 0:08:15.560 we're looking at CCUS because there hasn't been a readily available, 0:08:15.560 --> 0:08:20.360 economically viable alternative. It's jumped in. Is that a right 0:08:20.440 --> 0:08:24.000 typification of how one should view the application of this technology. 0:08:24.120 --> 0:08:26.640 Not in all cases, but let's say, you know, in 0:08:26.680 --> 0:08:27.400 the majority of. 0:08:27.360 --> 0:08:30.960 Cases, Yeah, definitely. I mean there is the argument of 0:08:31.240 --> 0:08:34.839 electrify everything that we've heard, right, and so that has 0:08:34.880 --> 0:08:38.040 a play and the power sector for example, but obviously 0:08:38.040 --> 0:08:41.440 we need peaking power, which really can only be done 0:08:41.480 --> 0:08:45.440 with you know, say nuclear hydrogen or natural gas with 0:08:45.520 --> 0:08:47.920 ccs if we're looking at a net zero world, if 0:08:47.960 --> 0:08:50.679 we're thinking about I think the best two examples are 0:08:50.880 --> 0:08:55.160 for cement and petric chemicals. So you can sure electrify 0:08:55.160 --> 0:08:58.320 half of these processes, but cement, for example, is well, 0:08:58.360 --> 0:09:00.679 I guess both c and petric chemicals they a significant 0:09:00.679 --> 0:09:04.760 amount of process emissions, meaning that electrifying only abates like 0:09:04.960 --> 0:09:08.600 ah or yeah maybe yeah, forty percent of total industrial emissions. 0:09:08.640 --> 0:09:11.840 And so you actually need ccs to to carbonize these 0:09:11.840 --> 0:09:14.760 heavy industries. And so you can kind of use ccs 0:09:14.800 --> 0:09:18.760 in these higher concentration sources, so natural gas, processing, ammonia, 0:09:18.760 --> 0:09:21.160 ethanol where it's cheaper and you can kind of build 0:09:21.160 --> 0:09:24.800 the supply chains, build the confidence in the technology, scale 0:09:24.840 --> 0:09:27.880 it that way, and then where it's more expensive and 0:09:27.920 --> 0:09:30.120 a larger barrier to entry for you know, cement and 0:09:30.120 --> 0:09:32.719 petrochemicals later on down the line, that can then kind 0:09:32.720 --> 0:09:35.880 of use that technology to help abate those emissions. 0:09:36.280 --> 0:09:38.679 So you've established that some projects, what did you say, 0:09:38.720 --> 0:09:41.200 close to a third of projects might end up not 0:09:41.360 --> 0:09:45.680 moving forward. And then additionally, the current investment is slowing down, 0:09:45.800 --> 0:09:47.680 and there may be reasons to believe that in the 0:09:47.720 --> 0:09:50.240 future this could speedback up again, but for the time being, 0:09:50.480 --> 0:09:52.160 this is the state of play, and I want to 0:09:52.240 --> 0:09:54.560 understand kind of whose money is at stake. So is 0:09:54.559 --> 0:09:56.960 it large corporates, is it oil and gas firms, is 0:09:57.000 --> 0:10:00.640 it venture capital or is it private equity fund you know, 0:10:00.880 --> 0:10:04.120 whose money is essentially tied up in the projects that 0:10:04.200 --> 0:10:07.720 might be canceled and the investment strategy for the future. 0:10:07.960 --> 0:10:10.520 Yeah, I think it's a mix of kind of all 0:10:10.559 --> 0:10:12.679 of it, and also depends on the application. If we're 0:10:12.679 --> 0:10:15.880 looking specifically at the US right now, it's the tax payers, 0:10:16.120 --> 0:10:19.680 I guess you could say so. Last year again, primarily 0:10:19.720 --> 0:10:21.679 it was a lot of DOE funding, which has kind 0:10:21.720 --> 0:10:24.280 of helped kickstarting the industry, which makes sense again because 0:10:24.360 --> 0:10:28.520 CO two is this waste product and funding for CCUS 0:10:28.640 --> 0:10:31.000 or direct air capture can be viewed as it's a 0:10:31.000 --> 0:10:33.480 public good right to remove the COO two from the 0:10:33.480 --> 0:10:36.440 atmosphere or to abate it from going into the atmosphere. 0:10:36.520 --> 0:10:40.320 What we're seeing right now, the biggest announcement to stay on, 0:10:40.400 --> 0:10:44.080 you know, recent recent trends, so the industrial demonstrations projects 0:10:44.120 --> 0:10:47.520 or the IDP that's been made available to lots of 0:10:47.559 --> 0:10:50.920 heavy industry, so cement, iron and steel, Patrick chemicals, and 0:10:50.920 --> 0:10:53.520 blue hydrogen the key industries that are taking home a 0:10:53.520 --> 0:10:56.720 lot of money for CCUS, though that funding hasn't been 0:10:56.880 --> 0:11:00.960 awarded to individual projects yet. There's still no negotiations. Things 0:11:00.960 --> 0:11:03.800 have to be signed, so the funding is at risk 0:11:03.840 --> 0:11:07.160 of I guess revocation until those agreements are signed. And 0:11:07.320 --> 0:11:11.079 that's obviously contingent one on the new party in November, 0:11:11.120 --> 0:11:13.200 whoever gets selected. That that might be an issue for 0:11:13.200 --> 0:11:16.319 a lot of this funding. But again it really is taxpayer. 0:11:16.400 --> 0:11:18.880 It's a lot of governments in the US right now 0:11:18.920 --> 0:11:22.280 because private investors or even corporates are standing back and 0:11:22.440 --> 0:11:25.120 are a little bit wary until these forty five Q 0:11:25.200 --> 0:11:27.120 guidelines are set in stone. 0:11:27.440 --> 0:11:29.440 So we've established that things have cooled a bit in 0:11:29.480 --> 0:11:32.120 the US. But let's continue around the world and just 0:11:32.160 --> 0:11:34.720 do a quick state of play on various other parts. 0:11:34.800 --> 0:11:36.760 So do you want to go with the rotation of 0:11:36.800 --> 0:11:39.319 the earth or against the rotation of the earth. Oh, 0:11:39.360 --> 0:11:42.040 let's go with We'll go with. Okay, moving then next 0:11:42.080 --> 0:11:44.720 to where I am, So where in Europe? 0:11:44.760 --> 0:11:44.960 Now? 0:11:45.360 --> 0:11:48.080 What is happening in Europe when it comes to CCUS, 0:11:48.120 --> 0:11:50.800 Because before there was the Inflation Reduction Act. The European 0:11:50.920 --> 0:11:54.360 Union certainly had ambitious net zero targets. So where are 0:11:54.440 --> 0:11:57.960 we seeing projects here and is the investment dampening also 0:11:58.240 --> 0:11:59.400 on this side of the pond? 0:11:59.600 --> 0:12:01.800 Yeah, yeah, euro is a little bit of a different 0:12:01.880 --> 0:12:06.400 story right now. We're kind of seeing Europe, particularly Germany, 0:12:06.480 --> 0:12:10.840 as the test bed for industrial decarbonization. So many of 0:12:10.880 --> 0:12:14.840 the projects we're seeing for I guess cement, chemicals, hydrogen 0:12:15.040 --> 0:12:17.480 are all taking place in that area, which makes sense 0:12:17.559 --> 0:12:20.960 because of the EUETS. So as that carbon price starts 0:12:20.960 --> 0:12:23.680 to loom over the heads of a lot of these players, 0:12:23.720 --> 0:12:28.920 they are taking initiative to start developing their decarbonization strategies 0:12:28.960 --> 0:12:30.840 and so a lot of the money we're seeing there 0:12:30.960 --> 0:12:35.040 is going towards those projects. Twenty twenty three in Europe 0:12:35.120 --> 0:12:36.920 right now, we're really seeing a lot of projects just 0:12:37.000 --> 0:12:40.040 move towards FID and so that was the Porthos project, 0:12:40.120 --> 0:12:43.559 which was one of the biggest projects take FID last year, 0:12:43.800 --> 0:12:46.160 and that's part of a hub. So the EU business 0:12:46.200 --> 0:12:48.640 model is and we are seeing like sprinkles of this 0:12:48.679 --> 0:12:51.040 in the US as well, but the EU centric business 0:12:51.080 --> 0:12:55.240 model really is CCUS hub formation and that's just it's 0:12:55.320 --> 0:12:57.680 kind of a natural business model because lots of industry 0:12:57.760 --> 0:13:02.079 has just naturally conglomerated around port cities in the EU, 0:13:02.280 --> 0:13:04.680 and so it makes sense to just create this co 0:13:04.840 --> 0:13:09.600 located area to capture transport and store CEO two. And 0:13:09.640 --> 0:13:12.760 so we're seeing lots of investment into those sorts of hubs, 0:13:12.800 --> 0:13:14.560 and these are the sorts of projects that are beginning 0:13:14.600 --> 0:13:18.840 to take FID. Granted, the Porthos projects, it took from 0:13:18.960 --> 0:13:23.720 announcement to FID around ten years, so there's a pretty 0:13:23.840 --> 0:13:27.520 large gestation period, you could say, but we are beginning 0:13:27.559 --> 0:13:29.599 to see a lot of these projects take off. For 0:13:29.640 --> 0:13:31.319 a few of these projects take off, but. 0:13:31.320 --> 0:13:34.720 The EUETS, so the European Union's emissions trading system is 0:13:34.840 --> 0:13:39.360 proving to be a important catalyst at least for CCUS 0:13:39.440 --> 0:13:43.760 adoption and certainly across Europe in keeping emissions to a 0:13:43.840 --> 0:13:45.920 level that that's actually been defined. And there are a 0:13:45.960 --> 0:13:47.679 number of different ways of doing this, and I think 0:13:47.720 --> 0:13:51.880 that's another podcast. But as we continue around the world, 0:13:51.920 --> 0:13:54.400 so you had mentioned in the run up to COP 0:13:54.440 --> 0:13:57.120 twenty eight, which took place in Dubai, there were also 0:13:57.240 --> 0:14:00.400 a number of installations that were getting underwe in the 0:14:00.440 --> 0:14:02.880 middle East, And you know, to some extent that doesn't 0:14:02.880 --> 0:14:06.920 surprise me given that at those discussions at the COP 0:14:07.000 --> 0:14:10.079 there was a discussion around the role that transition fuels 0:14:10.120 --> 0:14:13.760 will play in the energy transition of the future, and 0:14:14.280 --> 0:14:17.840 CCUS certainly helps facilitate some of these transition fuels, as 0:14:17.880 --> 0:14:20.320 you pointed out natural gas being one of them. Well, 0:14:20.320 --> 0:14:22.600 I guess my first question before we get into what's 0:14:22.640 --> 0:14:24.600 actually happening in the Middle East. Do you think that 0:14:24.680 --> 0:14:27.600 being a COP host country in the UAE, that that 0:14:28.040 --> 0:14:31.080 was a part of the reason why so many eyes 0:14:31.120 --> 0:14:34.400 were on CCUS as we headed into November last year. 0:14:34.760 --> 0:14:38.240 Yeah, so one hundred percent. It was actually kind of 0:14:38.240 --> 0:14:40.840 surprising to see the movement into the Middle East. I 0:14:40.840 --> 0:14:42.720 think it was around one point three billion dollars of 0:14:42.720 --> 0:14:45.960 investment in twenty twenty three that we saw in that region, 0:14:46.120 --> 0:14:50.680 particularly ADNOCK, so the Abu Dhabi National Oil Company was 0:14:51.120 --> 0:14:54.360 definitely a key catalyst and a lot of that funding. Obviously, 0:14:54.680 --> 0:14:58.360 like natural gas, oil is their core competency there. It's 0:14:58.360 --> 0:15:02.120 actually quite interesting a new trend we're starting to see 0:15:02.000 --> 0:15:05.240 is actually direct air capture in that region too. There's 0:15:05.280 --> 0:15:08.120 lots of pre existing oil and gas expertise obviously, lots 0:15:08.160 --> 0:15:11.240 of depleted oil wells, and so we've actually heard word 0:15:11.280 --> 0:15:14.920 of ADNOC partnering with Carbon Engineering to kind of start 0:15:14.960 --> 0:15:18.320 a couple new pilots over there for one storage, but 0:15:18.360 --> 0:15:22.040 also to cootwo utilization for fuels of some sort. But 0:15:22.520 --> 0:15:25.240 I think COPP was probably a key catalyst of that. 0:15:25.680 --> 0:15:28.440 Now, before we move on to Asia Pacific as a region, 0:15:28.560 --> 0:15:30.520 is there anything happening in Africa? 0:15:31.240 --> 0:15:35.640 Not really for ccs for dak though we are actually 0:15:35.640 --> 0:15:38.240 seeing not in terms really of investments yet, but we 0:15:38.280 --> 0:15:42.000 are seeing projects announced in Kenya in the Kenyan Rift 0:15:42.080 --> 0:15:45.440 Valley actually where you can take advantage of really great 0:15:45.480 --> 0:15:49.440 CO two storage geologic storage. You can mineralize the COO 0:15:49.440 --> 0:15:51.560 two because there's lots of basalt rocks in that area, 0:15:51.720 --> 0:15:55.400 and then there's great renewable energy, so lots of hydro 0:15:55.680 --> 0:15:58.560 So we're seeing lots of companies kind of move into 0:15:58.560 --> 0:16:01.520 that space down there. But in terms of CCS, we 0:16:01.600 --> 0:16:03.880 haven't seen really any capacity editions now. 0:16:03.880 --> 0:16:06.320 So I'm not ready for direct air capture fully yet. 0:16:06.360 --> 0:16:09.480 We'll come back to that conversation, So hold that thought. Now, 0:16:09.560 --> 0:16:12.920 moving to APAC and you know on this show we 0:16:12.960 --> 0:16:16.880 do talk about adaption of technology in China a fair amount, 0:16:17.080 --> 0:16:19.760 but in variably there are other parts of the region 0:16:19.760 --> 0:16:23.160 that are also looking at this technology, and including Australia, 0:16:23.440 --> 0:16:29.120 where are we seeing CCUS taking off in that continent. 0:16:29.360 --> 0:16:31.680 Over the last couple of years. In Australia, we've actually 0:16:31.760 --> 0:16:37.160 seen CCS funding revoked just because of this soured public 0:16:37.240 --> 0:16:40.800 sentiment that a lot of Australians have towards CCS. There's 0:16:40.960 --> 0:16:44.280 one big project in Australia that hasn't met it's previously 0:16:44.760 --> 0:16:47.600 announced capacity targets, meaning that it's running at a lower 0:16:47.680 --> 0:16:51.560 utilization rate and therefore it's actually costing millions and millions 0:16:51.600 --> 0:16:54.640 of dollars more than initially expected. What we're seeing right 0:16:54.640 --> 0:16:56.600 now in Australia is that people a kind of moved 0:16:56.640 --> 0:17:01.320 away from CCS and are looking more towards as the 0:17:01.400 --> 0:17:04.600 key technology that will help them in the energy transition. 0:17:04.920 --> 0:17:07.520 China's a little bit of a different story what we're seeing. 0:17:07.520 --> 0:17:10.639 We've actually seen a couple of pipelines actually become operational. 0:17:10.720 --> 0:17:12.240 I think it was a one million ten per year 0:17:12.320 --> 0:17:16.399 pipeline in China. Again, there's not any incentives geared towards 0:17:16.440 --> 0:17:18.880 accelerating the industry like the US has with forty five 0:17:18.960 --> 0:17:21.159 Q and so it's really a lot of these companies 0:17:21.160 --> 0:17:23.680 over there have to rely on enhanced oil recovery to 0:17:23.720 --> 0:17:26.320 create this supplemental revenue stream to help get a lot 0:17:26.359 --> 0:17:28.240 of these projects over the line or make the business 0:17:28.240 --> 0:17:32.639 cases for these projects. China did implement a carbon price recently, 0:17:32.960 --> 0:17:35.600 not all industries are covered under that, and realistically it's 0:17:35.600 --> 0:17:38.760 going to take to twenty thirty twenty thirty five for 0:17:38.880 --> 0:17:44.760 that really to have any influence on CCUS editions, especially 0:17:44.800 --> 0:17:47.120 when we're talking about or if we think about free 0:17:47.160 --> 0:17:50.959 allocations and how many allowances a lot of industrials over 0:17:51.000 --> 0:17:53.960 there are going to be given. But yeah, it's things 0:17:54.000 --> 0:17:56.840 are moving slow in APAC, you could say. 0:17:56.960 --> 0:17:59.159 So really simply put in what I'm hearing from you 0:17:59.240 --> 0:18:02.639 is things are moving slow pretty much everywhere. And so 0:18:02.840 --> 0:18:06.119 there's this important part of reaching climate goals that is 0:18:06.440 --> 0:18:08.880 underfunded at the moment for a number of reasons, due 0:18:08.880 --> 0:18:12.440 to economics that were expected to be more competitive by 0:18:12.440 --> 0:18:15.880 this point, and by tax incentives and schemes that maybe 0:18:15.920 --> 0:18:19.560 aren't really following through on what they were initially designed 0:18:19.560 --> 0:18:21.960 to do. So there are some obstacles that need to 0:18:22.000 --> 0:18:26.520 be removed for traditional ccus. Is that fair to say, Yeah, 0:18:26.800 --> 0:18:29.679 we're going to pivot now to some of the technology 0:18:29.760 --> 0:18:32.200 end of things. So you had reference direct air capture, 0:18:32.440 --> 0:18:36.320 and that is where we are with machines sucking carbon 0:18:36.520 --> 0:18:39.440 out of the air. So one might call them mechanical trees, 0:18:39.440 --> 0:18:42.040 although I think that's a bit generous, but is definitely 0:18:42.040 --> 0:18:45.119 a place where we are seeing technology and innovation. So 0:18:45.480 --> 0:18:47.760 what's happening in that space? We have done a show 0:18:47.800 --> 0:18:50.320 on direct air capture in the past, but are things 0:18:50.560 --> 0:18:54.200 heating up with investment on those sorts of technologies and 0:18:54.240 --> 0:18:55.880 are there interesting things that are happening. 0:18:56.240 --> 0:18:58.800 Yeah, So I think DAK is the outlier here because 0:18:59.000 --> 0:19:03.280 while traditionals is tapering off, for interest in traditional ccs 0:19:03.359 --> 0:19:06.719 is tapering off seemingly right now, we have seen a 0:19:06.800 --> 0:19:11.000 continuous interest in direct air capture. Apart from DOE funding, 0:19:11.119 --> 0:19:14.119 there's been an uptick and VCPE funding as well. So 0:19:14.480 --> 0:19:17.600 I think it was two Q twenty twenty two was 0:19:17.720 --> 0:19:21.240 the last largest quarter for direct air capture and that 0:19:21.359 --> 0:19:24.119 was primarily this climb Works deal. I think they raised 0:19:24.119 --> 0:19:27.560 over six hundred million dollars in funding, and then twenty 0:19:27.600 --> 0:19:30.159 twenty three, we saw investment or interest taper off a 0:19:30.200 --> 0:19:33.680 little bit, but still remain relatively consistent, and then Q 0:19:33.760 --> 0:19:36.800 one of twenty twenty four was the largest quarter we've 0:19:36.840 --> 0:19:40.359 seen since that big climb Works investment, and that's primarily 0:19:40.400 --> 0:19:43.320 you know, carbon capture. I think they had a eighty 0:19:43.359 --> 0:19:45.880 million dollar deal in Series A, and then we've also 0:19:46.000 --> 0:19:49.080 seen avnos take home some money as well. So it's 0:19:49.160 --> 0:19:54.080 kind of this next generation of not technology particularly, but 0:19:54.200 --> 0:19:58.320 this next generation of startups that are seeing more movement 0:19:58.400 --> 0:19:59.240 into the market. 0:19:59.640 --> 0:20:01.720 So on the techie side of things, can you get 0:20:01.720 --> 0:20:05.200 me excited about direct air capture and what's actually happening there. 0:20:06.000 --> 0:20:08.080 Yeah, So you can kind of think of it as 0:20:08.160 --> 0:20:10.320 DAK one point zero, DAK two point zero, and then 0:20:10.520 --> 0:20:13.000 maybe DAK three point zero, So the traditional forms of 0:20:13.000 --> 0:20:15.360 direct air capture, and we can talk about companies here. 0:20:15.359 --> 0:20:20.080 It's climb Works Global Thermostat Carbon Engineering. They're using this 0:20:20.240 --> 0:20:23.960 thermal driver as a catch and release. You catch CO two. 0:20:24.200 --> 0:20:26.520 You kind of use this temperature swing to release the 0:20:26.560 --> 0:20:30.800 CO two from the capture medium. And unfortunately, due to 0:20:30.840 --> 0:20:33.359 the low concentration of CO two in the atmosphere, you 0:20:33.480 --> 0:20:36.399 need a very high thermal requirement to strip that CO 0:20:36.600 --> 0:20:38.920 two from the medium and capture the COO two as well. 0:20:39.000 --> 0:20:41.959 So these technologies right now are pretty expensive. And what 0:20:42.000 --> 0:20:45.320 we're seeing is a divergence away from the traditional thermal swing. 0:20:45.400 --> 0:20:49.800 So we're seeing vacuum swing, but more innovative, we're seeing 0:20:49.840 --> 0:20:53.560 this electrochemical swing. And so how can you either manipulate 0:20:53.600 --> 0:20:57.520 the pH or manipulate the voltage to catch and release 0:20:57.680 --> 0:21:02.879 COO two invite utilizing an avenue like electrochemical capture, you 0:21:02.920 --> 0:21:07.120 can see dramatic declines and energy requirements. And so we're 0:21:07.119 --> 0:21:09.520 seeing this DAK two point zero or DAK three point zero, 0:21:09.600 --> 0:21:14.600 the new innovations of startups and technologies utilizing that lever 0:21:15.080 --> 0:21:17.040 rather than temperature for example. 0:21:17.400 --> 0:21:21.199 So, keeping within theme of carbon removal technology in a 0:21:21.400 --> 0:21:24.199