Circular Economy for Carbon

Bring CO2 back from atmosphere and store it or use it

Rajan Mehta, ALI Fellow - 2022

Introduction

I believe the debate about the reality of climate change is settled, at least amongst rational minds. Science
has proven and nature has rung its alarm bells several times. Climate models are predicting and our daily
lives are experiencing the impact of increased CO2 stocking up in the atmosphere. Heat reflected by earth
rather than escaping into stratosphere is getting trapped in the atmosphere and that in turn is warming-
up the land and ocean, causing ice to melt, sea levels to rise and catalyzing extreme weather events. The
result of all this would be forced migrations, loss of life and property, disease, food shortages and
suffering. Therefore, while we do everything in our means to mitigate further emission of CO2 and make
arrangements for adaptation, we must realize that CO2 is stocking up in the meantime and this
atmospheric stock is going to continue to trap heat and keep warming the planet for a long time even if
we reduce our current CO2 emissions to net zero. We therefore need to think about removing some of
this CO2 stock from the atmosphere, if we are serious about climate change.

Fortunately, there are ways and means to suck out the existing stock of CO2 from the atmosphere either
through natural systems or through technology. Our planet is bestowed with a rich biosphere and
hydrosphere, which can be nurtured to absorb and store carbon for long periods of time.

Then there is technology which has been developed to suck out CO2 from the atmosphere and even from
the exhaust of the fumes coming out of various industries and power plants. The CO2 thus sucked from
the air can be sequestered and stored in safe places underground or it can be used as a feedstock for
manufacturing products in many industries and even be used to synthesize clean high efficiency fuel for
aviation, shipping etc.

In addition to sucking CO2 from the atmosphere there are other ways to keep CO2 away from the
atmosphere but in the economy through biofuels / bioenergy produced from bio-waste or bio-stock. They
help to create a circular economy for carbon by absorbing CO2 from the atmosphere through
photosynthesis during the bio material’s growth phase, which is then converted into biofuel / bioenergy
and put back into the atmosphere when combusted, this cycle can keep repeating. CO2 is thus being
recycled or recirculated from and to the atmosphere rather than just being pulled out and added to the
atmosphere. There are other ways and processes through which carbon / CO2 can be recirculated without
letting it escape into the atmosphere.

This is what constitutes a circular economy for carbon wherein instead of letting CO2 keep stocking up in
the atmosphere, we bring it back and lock it into products or store it in natural formations over long
periods of time until it finds its way back into atmosphere and then we bring it and lock it up again.

Sure, work still needs to be done to make these systems, technologies and processes more robust and
economical but we seem to be slowly getting there.

Rajan Mehta, Advanced Leadership Initiative – 2022, Harvard University 1

Rationale for a Circular Economy for Carbon

As per data available, we are adding 51 GTs ( Giga Tonnes ) of CO2 equivalents of Green House Gases
(GHGs) very year into the atmosphere and as of 2022 we have already crossed a concentration of 420
ppm ( parts per million ) of CO2 in the atmosphere. As per science historians, this level was last seen
approximately 3.1 million years back when the earth’s temperature was 2.5 degrees higher than the pre-
industrial levels and the sea level around 6 – 8 meters higher than todays. Looking at it another way a
total stock of around 2495 GTs has been added to the atmosphere since 1850. Since there is a time lag
between CO2 concentration rise and earth’s temperature rise, our scientists through their climate models
have calculated a carbon budget which co-relates the total potential CO2 that we can still add to the
atmospheric CO2 stock for different levels of predicted temperature rise above the pre-industrial levels
with different probabilities. As per some of these models and more specifically those adopted by the
IPCC, in order for a 50% probability to keep the average earth’s temperature below 1.5 degree centigrade
above the pre-industrial levels, the total stock of CO2 in the atmosphere that we can afford to add should
not exceed 380 GTs. For a 50 % probability to keep the earth’s temperature below 1.7 degree centrigrade,
the total CO2 that we can afford to add to the atmosphere is 730 GTs and for a 2.0 degrees rise above the
pre-industrial levels with a 50% probability, total we can afford to add is 1230 GTs of CO2. Considering
that we are adding approximately 50Gts of CO2 per annum it leaves us only 8 years to cross 1.5 degree
centigrade rise, 15 years for 1.7 degrees and 25 years for a 2.0 degrees rise with the assumption that the
emissions remain stagnant at the current levels.

• Slide taken from a presentation deck of The Carbon Project

Approach

As I mentioned, creating a circular economy for carbon will require multiple experiments, approaches,
methods and projects. Some of these experiments and projects are already commercial, although at small
scale while others are at various stages across the spectrum - right from still being in the labs to small
scale demonstration projects. There are smart people involved and committed to developing these

Rajan Mehta, Advanced Leadership Initiative – 2022, Harvard University 2

technologies, methods and projects and sometime they need a little bit of help in terms of finance,
guidance, mentoring, support on the policy front or a combination of these to get off the ground.

My idea is to create a Venture Builder or a Project Development Company which identifies technologies,
projects and products which are addressing the climate issues by creating a circular economy for CO2 but
have not yet found their way into India / Asia. The idea is to extend these initiatives and their climate
benefits into the Indian / Asian region by setting up demonstration projects, developing markets for these
products and solutions and setting up back offices. This will serve a dual purpose of helping climate change
as well as helping the economy.

Climate Venture Creator

A Venture Builder is a platform that helps create companies / projects, nurtures them for a while and then
hives them off, so that entrepreneurs can then operate and scale these companies independently.
Sometimes you can also refer to a Venture Builder as a Project Development Company as well.

A typical Venture Builder generally does the initial research for a product or service idea, determines its
business potential, does any policy ground work if required, gathers the founding team, provides the initial
funding, physical office infrastructure and guidance to the founding team to launch the venture. Once
the venture is off ground, it helps the team raise further capital and slowly withdraws its involvement
from the venture, leaving the team to its own independence.

A Venture Builder takes on multiple ventures simultaneously and builds its longterm portfolio accordingly.

Our model of a Venture Builder would be slightly different wherein we would look at existing companies
/ technologies / solutions promoting circular carbon economy in the US / Europe that can be brought to
India. We want to use this model of a Venture Builder to create high impact companies that focus on
recirculating carbon, which can then be scaled up to make substantial contribution in climate mitigation
while at the same time helping grow the Indian economy.

We call this Venture Builder, Climate Venture Creator (CVC)

Climate Venture Creator

Idea
Creation Innovation, Technology Tie-up

Company
Creation
Team, Funding, Infrastructure

Business
Creation
Business Development

Co. Co Co.
A B C Independent Entrepreneur run Companies

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The idea for Climate Venture Creator (CVC) is to establish a platform in India to encourage entrepreneurial
initiatives and projects to address the climate issues.

• CVC would put together an initial funding to incubate and hive off a maximum of 4-5
companies over the next 5 years.
• Identify and study companies in the West who have had success in making an impact on
climate through a circular carbon economy approach and see if those models can be
replicated in India.
• Set up relationships with Universities, Research Institutes, Government and Corporates to
create an enabling environment and seek advice when necessary
• Set up initial infrastructure, demonstration projects, concessions, trials etc.
• Recruit a team of Entrepreneurs-in-Residence (EIRs) and handhold them during initial phase
• Help organize funding and then hive them off as independent companies

CVC would look for companies in the West with a business / technology focused on addressing climate
change and those who are interested in either of the below:

- Extending the market for their products / solutions to India or Asia

- Setting up a facility such as for CO2 sequestration etc in India / Asia
- Set up their back-end facilities for engineering, monitoring and reporting in India because of the
cost arbitrage and availability of talent, etc.

The interested companies can partake in the venture under different arrangements:

- Provide initial seed capital

- Get into a joint venture with CVC
- Enter into a technology transfer / market development and distribution agreement with CVC for
the India region
- Other commercial arrangements

CVC would handle the initial growth stage for each of these initiatives and then hive them off as
independent initiatives.

Types of Projects / Companies

CVC would undertake projects that follow any of the following broad approaches to helping climate
change:

1. Removal of carbon from air and then sequestering it or using it as a feedstock for products or
processes

2. Keep carbon recirculating in the economy and prevent it from escaping into air

3. Avoid usage of carbon as a fuel

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Removal of carbon from air (1)

There are two approaches we are looking at for removal of carbon dioxide from the air.

A. Nature based solutions

B. Technology based solutions

Nature Based

Nature based solutions involve the biosphere or ocean to suck out CO2 from the atmosphere and store it
within its seams. As part of the nature-based solutions, we are looking at the following kind of projects:

- Trees Investment Management Organization

- Energy from Bio Materials – Ethanol, Biofuels

Trees Investment Management Organizations

These are companies which undertake afforestation projects on private or public lands under a suitable
land sale or lease arrangement. The planted trees absorb CO2 from the atmosphere through
photosynthesis thus reducing the stock of CO2 present in the atmosphere and creating negative
emissions. This carbon is then locked up in the trunks of the trees as wood which can later be used for
construction, furniture, pulp etc and hence kept away from escaping into the atmosphere for a
considerable amount of time. Meanwhile, new trees can be replanted after the old ones have been cut,
thus absorbing CO2 again and creating a circular economy for carbon.

TIMOs while helping lock up carbon also help create economic value for investors in three ways:

- Revenue through sale of timber

- Value through appreciation of land
- Revenue through transfer of carbon credits

The price of timber varies based on the real estate industry but TIMOs generally attract patient capital
and hence have the advantage to time the sale of timber to an upswing in the real estate industry.

There generally is an appreciation in the value of the underlying land over time thus providing value to
the business / investors.

The CO2 absorbed and stored by the trees can be offset by sale of carbon credits to industries which are
hard to decarbonize such as aviation, shipping etc., thus strengthening the business model for the TIMOs.

A key factor for the success of TIMOs would be the measurement of CO2 absorbed by the trees or negative
emissions achieved, their authentic reporting in a proper format and then verification of the same by an
independent third party so that investors and those who buy the carbon credits are sure that the climate
benefits are being achieved. This process is often referred to as the MRV process and CVC is already
working on relationships to ensure that all portfolio companies have access to a robust MRV system.

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Energy from Bio Materials

The basic premise is that bio-materials that absorb CO2 through photosynthesis or waste bio-materials
will be used as a feedstock for biofuels with a caveat that a comprehensive study is done that these do
not lead to land use changes and other detrimental effects on the environment and are net carbon
negative. Within that caveat, a circular economy for carbon can be created by absorbing CO2 from the air,
processing it into fuels which are used in difficult to decarbonize industries. The CO2 thus released by
burning of these biofuels is again absorbed back by bio materials somewhere through photosynthesis.
The same cycle keeps repeating thus ensuring that there is no net CO2 added in the atmospheric stock by
these Biofuels.

In case of ethanol produced by dry milling of corn or anerobic treatment of molasses, the CO2 released
can be captured and used in industries like carbonated water, dry ice etc.

Technology based Solutions

Technology based solutions for sucking CO2 from the air can again be broadly classified into types:

1. Direct Air Capture

2. Carbon Capture from flue gases

Carbon Capture from Flue Gases

Direct Air Capture

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Direct Air Capture (DAC)

Technology has made it possible to suck out CO2 from the air, concentrate it into a liquid form and then
sequester it underground or use it as a feedstock in products or processes.

This is made possible through either:

- An Absorption based chemical process

- An Adsorption based electrochemical process

Absorption based Chemical process for Direct Air Capture

This involves sucking of air through large industrial fans and then exposing this air to chemicals such as
KOH which absorb the CO2. The carbonate thus formed is put through a series of chemical and thermal
processes to release CO2 again in a concentrated form which is further compressed and converted into a
liquid form before being sequestered underground or converted into a useful form for industrial use.
There have been successful experiments to manufacture fuels from this CO2 to be used for aviation etc.
but they are still at laboratory scale.

While the technology is well established, the challenge is to reduce the cost per tonne of captured CO2
which is still very high and stands at around $500 per tonne. It needs to be brought down to under $100.

The way to achieve this is by improving the process technology and reducing the energy consumed in the
process as well as the cost of energy. Also it needs to be ensured that we use renewable energy only in
the Direct Air Capture plants.

Industries which are hard to decarbonize would need to offset their emissions by purchasing negative CO2
emission credits achieved by the DAC’s. There is a voluntary market already developing for the same with
companies like Microsoft, Stripe, Google, Facebook already buying carbon offsets from some of the DACs.
In addition, there would be a market at least for a part of the CO2 captured by DACs to be used as a
feedstock for certain products eg carbonated drinks, carbon black, dry ice etc. and processes g curing of
concrete etc, thus making DACs viable over time.

However, it is essential to have a price for carbon or a mandated reduction in CO2 emissions for the DACs
to thrive in the future. This is where Government Policy has to play a role.

CVC is figuring out CO2 sequestration possibilities in India in its basalt rock belts, saline aquifers and coal
seams and exploring options to tie-up with a DAC technology provider to set up a Demonstration project.

Adsorption based Electrochemical process for Direct Air Capture

This is similar to the chemical process except that instead of using an absorbent to bind the CO2, it uses
adsorption as a process wherein the CO2 binds to the surface of thin sheets of a suitable filter material in
a collector chamber. Once the collector is full with CO2, it is removed and heated in order to release the
CO2. The CO2 thus collected is compressed into liquid form and then sequestered or used as a feedstock
in various products and processes.

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Carbon Capture from Flue Gases

Industry today is responsible for contributing approximately 25% of the total CO2 in the atmosphere and
majority of it is contributed by a few sectors like Cement, Steel, Fertilizers, Glass and Aluminum. There are
other smaller segments as well such as production of ethanol which gives out CO2, landfills that give out
methane, fermentation-based industries that produce CO2. Based on the above we can have two
approaches to capturing CO2 and Methane:

- Large CCUS ( Carbon Capture, Utilization and Sequestration ) plants which are complex and
where CO2 needs to be separated from other gases and particles. These are generally used
for large industries such a power production, cement, steel and others

- Small CCUS which are used for collecting Methane from Landfills or CO2 from ethanol
production.

Large CCUS

In this process the flue gases or exhaust coming out is intercepted and put through a similar process as in
the case of Direct Air Capture ( with some nuances ). CO2 is thus separated, concentrated through a
chemical or electrochemical process, liquified for transportation and either stored or used as a byproduct
in certain processes or products.

CCUS is already being used in some industries and places - more particularly in coal and gas-based power
plants in Europe and North America.

The challenge with both DAC and CCUS is that there is no incentive for anyone to install these as there is
no price for carbon ( except in Europe where there is a Cap and Trade system in place and also California
) or a mandate directed by the Governments to reduce such carbon emissions. Hence there is no
motivation for people to invest in these projects. Governments would have to either price carbon or
mandate compulsory reduction of carbon in order for these projects to flourish.

Small CCUS

There are certain small industries where a process results in release of pure CO2 such as the production
of ethanol, fermentation-oriented processes, landfills which generate methane etc. Currently in many
developing countries this CO2 / methane is released into the atmosphere thereby exasperating the
climate further. This CO2 can be simply collected, concentrated and transported for use in industries like
carbonated drinks, dry ice or used for curing of concrete.

CVC is exploring such initiatives.

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Keep embedded Carbon recirculating in the economy (2)

Under this category, we look at solutions which help keep the carbon recirculating in the economy and
thus avoid or reduce the amount of carbon embedded in existing products from escaping into the
atmosphere. This could be achieved in three ways:

- Circular Economy based approaches

- Nature based enzymes that reduce the production of Carbon
- Urban mining

Circular Economy based approaches

There are ways to keep carbon embedded in products from escaping into the atmosphere by re-
circulating, re-cycling, re-using or re-purposing. This is relevant for carbon intensive products derived from
fossil fuels.

I will share only a few examples here but suffice it to say that the same concept and principles can be
applied across various products, industries and sectors.

Vehicular Tyres

Old vehicle tyres can now be recycled to make carbon-black which is used as an ingredient in many
industries. There are a few companies doing this globally and it is our endeavor to seed a company in India
/ Asia to do the same, so that tyres rather than being incinerated or dumped in landfills ( as is the practice
today) and adding CO2 and other Greenhouse gases to the atmosphere, are put to good use and the
captured carbon kept away from escaping into the atmosphere.

Reusable Plastic Packaging

Plastics are generally made from fossil fuels and they release a significant amount of CO2 during their
manufacture. In addition, plastic packaging is generally single use and is usually put in landfills or
incinerated where it again leads to further release of CO2 into the atmosphere. This can however be
avoided by creating reusable packaging which can be recirculated and reused multiple time. Think re-
usable take-away coffee cups or common reusable jars for various groceries at retail outlets, which can
be collected back from customers and reused by the manufacturers multiple times.

The eco-system would be based on getting the industry to agree on a common design standard for a group
of similar packaging products and then create the infrastructure and eco-system to collect back the
packaging, clean it and circulate it back to the manufacturers or service providers.

This will not only help save plastic pollution, but reduce the amount of CO2 as well, besides saving on
costs.

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 Ecosystem for Reusable Packaging as a Service

Nature based solutions that reduce the production of Carbon

Bio Materials as Methane reducing Agents

Bio materials like Kelp that grow in the ocean and absorb CO2 through photosynthesis are currently said
to absorb around 200 million tonnes of CO2 per annum. However, it is said that the ocean has a potential
to grow as much kelp that can absorb upto 1.0 – 2.0 Billion tonnes of CO2 per annum.

What is more important is the fact that kelp has pro-biotic properties and if fed to the cattle as an additive
in their food can help reduce their methane emissions through belching and farting. There is therefore a
dual impact first by absorbing CO2 and then by reducing methane emissions. Methane as we know is
about 80 times more potent than CO2 as a greenhouse gas.

Urban Mining

Rare Earth Metals from coal-ash

India is the second largest producer and user of coal in the world and produces around 112 million tons
of coal-ash also called fly-ash every year. There is now a process to mine Rare Earth metals out of coal ash
and the estimates are that for every 5000 tons of fly-ash, we can get one tonne of Rare Earth metals.
Therefore 112 million tons of fly-ash can lead to approximately 22,400 tons of Rare Earth metals evry year
thus helping avoid as much of mining for Rare Earth metals which we know is very energy intensive and
corrosive for the environment. This can thus indirectly avoid a lot of CO2 from getting added to the
atmosphere by avoiding the whole mining process. In addition, it also secures the supply of rare earth
metals which we know are scarce and geo-politically sensitive.

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Avoid Usage of Carbon as a fuel (3)

This can be done by avoidance of fossil fuels and focusing instead on renewal energy. We are not
focusing consciously on solar / wind etc as they are already getting adequate attention. We will
instead focus on Hydrogen and more specifically Turquoise / Green Hydrogen.

Turquoise Hydrogen

Hydrogen has been popularly acknowledged as the fuel of the future especially for hard to abate sectors
such as long distance travel, air travel, ocean freight, industries like cement, steel, glass whose processes
require heat energy etc. Within the Hydrogen family Turquoise Hydrogen creates a circular economy for
carbon. It is produced when a hydrocarbon fuel is thermally cracked into hydrogen and carbon. For
example, when methane is heated to the required temperature, it discomposes in the following manner:
CH4 = C + 2H2. The difference is that Turquoise Hydrogen produces Carbon instead of Carbon Dioxide.
This carbon or Carbon Black can we used as a feedstock for Tyres or in various other rubber, plastic, ink,
color and coating applications.

• Some of the data, figures and diagrams used in this paper have been taken from the internet

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