The exec selling climate tech to corporates

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Direct air capture is hot right now, and Carlos Härtel is one of those leading the push to capitalize on it.

Switzerland-based Climeworks in January became the first company to deliver actual emission reductions based on pulling carbon dioxide out of ambient air for a corporate customer. But the price is high — as much as $600 per ton — and capacity is low. Both the Biden administration and the private sector are pouring money in to help expand the nascent industry and combat climate change as fast as they can.

Härtel, Climeworks’ chief technology officer, talked with POLITICO about how carbon removal compares with carbon offsets, the Inflation Reduction Act and whether carbon removal should be mandated for certain industries.

This interview has been condensed and edited for clarity.

How do you legitimize the carbon removal market compared to the offset market? How do you avoid similar reputational issues?

Fundamentally it boils down to credibility. If I have a technical solution, and there is a CO2 stream coming from my capture plan that goes to the sequestration side, I can measure the amount of CO2 with high accuracy.

This is one of the big advantages of technical solutions, compared to other things, which are more based on obviously, natural phenomena like biomass growing, or rocks decaying due to weathering.

If I’m Microsoft, can I say I want to buy X many tons of carbon removal from Climeworks and Climeworks can deliver on that?

In principle, yes. But the capacity buildup takes time. What we do recognize today is that certainly everybody who can offer high-quality carbon removal is in a sense oversubscribed. If someone asks us for 20,000 tons next year, our answer would be ‘I’m sorry, I just don’t have the capacity.’ So you’re talking about deliveries of removals, further towards the end of the decade, 2028, 29, and, of course, 2030. And the requests we get are very sizable indeed.

We first need to put the plans in place and maybe develop [the] next generation of technology. And then the permits for operating and the energy supply. Industrial technologies become quite demanding. It’s not just scaling, like software, scaling up hardware becomes harder the bigger you become. So we have a clear roadmap: we want to be at about a million ton[s of] removal capacity by 2030. That’s a target, which is doable. It’s very ambitious. But I think it’s doable.

Does Climeworks stand to benefit from the Inflation Reduction Act?

I would say it depends a little bit right now on the call for the [funding opportunity announcement], this expression of interest for the DAC hub program. As of today, I can’t give you an answer whether we’re going to submit something specifically or not. Because this also is a conflict with or is in resource competition with a few other projects we’re trying to push at the same time, and resources are limited.

But I’m absolutely sure that in totality, that piece of legislation will make a huge difference. And I can only imagine Climeworks being in the U.S. as well, in a major way over the next few years, not the least because of that move that the government did.

Is carbon removal always going to be basically extra credit for corporations? Or do you see it as something that will be mandated for companies to do or invest in?

I think it’s going to be something that will be mandatory. At the end of the day, some sort of emissions regulation around CO2 is a necessity. I’m not a policymaker, so I don’t know how to do this best. The associations and academics and non-government organizations will all be involved in negotiating that. It will have to be industry-dependent… striking a balance between what we call unavoidable emissions and those [that] can well be avoided.

How do you deal with the concern that if companies know carbon removal is possible, they won’t be incentivized to actually curb their own emissions?

That’s a question that unsurprisingly comes up very often…the numbers are just glaringly clear. We say the total amount of CO2-equivalent emissions into the atmosphere every year is 50 billion [tons]. The total amount that the carbon removal industry with technical means can offer today is rather to the tune of a couple of thousand tons. So the difference between what the world emits, and what today and in the foreseeable future a carbon removal industry can compensate is daunting.

So unless we bring down this 33 [billion tons] In pure CO2 or 50 [billion tons] in equivalent very fast by other means, the carbon removal industry is not going to be able to make a difference ever. So if the carbon removal industry gets at some point in time, over the next 30 years to a capacity of five to 10 gigatons… I’d think it was a resounding success.

What we do with our clients is we both know that we have to set an example to the world before governments and society start embracing this as part of a long term solution, it needs to grow to a certain size. And that’s exactly what we are doing with all voluntary customers today. Microsoft’s ambition is not to solve their emissions problems by buying a couple of hundred tons or whatever [of] removals from us. This is part of a bigger strategy of we’re going to take care of our emissions as we move forward.

How do you think carbon removal or direct air capture should be treated policywise? Should it be mandated for any specific industries?

Fundamentally two ways. The first is that you have a regulation in place, the mandate in place, that CO2 emitted is being removed. How the regulation is being done will strongly affect whether very high quality permanent removal is requested or whether something more temporary is requested.

The other thing is governments can say there’s a lot of legacy emissions in the atmosphere. Since it’s not enough to just have everybody turn down the emissions and get totally emissions free, there is still a cleanup job to be done. For legacy emissions of their economies, governments will have to basically pick up the tab themselves at some point in time.

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