A few years ago, as CEO of the tech company Segment, Peter Reinhardt started researching how the company could offset its emissions. He didn’t like the options. Nature-based solutions like reforestation are difficult to measure accurately, and they risk disappearing if, say, a forest burns. He started working with friends to look for new approaches.
In the past, some startups have tried to produce bio oil that could be used as a fuel. But the oil is far less energy dense than crude, and the technology didn’t work. As a “negative emissions” solution, though, the composition of the oil doesn’t matter. The process can separately be used to produce green hydrogen or synthetic gas for industries like steel production, and Charm Industrial plans to work in both markets. But it’s launching first in the world of offsets, targeting companies that are looking for ways to permanently sequester emissions.
[Photo: Charm Industrial]The process is less expensive than direct air capture, another process than can be used to permanently capture emissions. (So far, Charm says it has already sequestered more CO2 than the entire direct air capture industry, though larger direct air capture plants are opening now.) It’s still very expensive, at $600 per ton of sequestered carbon; some forest offsets cost $50 per ton or even less. But Reinhardt argues that the real cost of traditional offsets is higher. Research from Oxford; the University of California, Berkeley; and CarbonPlan found that 85% of offsets sold now aren’t providing additional benefit, and 82% of the rest cause leakage, meaning that emissions might drop in one place but then just shift to another.
“If you multiply that through, what sells today as a $10 or $20 offset is actually like a $400 to $800 offset,” Reinhardt explains. “Now, there are some other co-benefits, and those are important, but on a strict per-ton-of-CO2 basis, it’s actually not that different once you account for all the leakage and additionality issues,” he says.
To avoid the worst impacts from climate change, carbon removal is critical—as the world shifts to renewable energy, electric cars, and other solutions to shrink CO2 emissions, technologies like Charm’s can help offset emissions that are harder to eliminate quickly. Scenarios from the Intergovernmental Panel on Climate Change suggest that we’ll need between 5 and 20 gigatons of carbon removal a year in the coming decades. That would involve a huge number of machines from a company like Charm.
“I think we can do it, but it’s going to take an enormous amount of effort and an enormous amount of political willpower to get it done,” Reinhardt says. If the carbon removal industry can grow even faster, it could help reduce the concentration of CO2 in the atmosphere, not just balance out new emissions.