Not all oil is bad for the planet.
Two dozen companies announced plans Thursday to buy $53 million worth of carbon-removal credits from Charm Industrial, which converts corn stalks, leaves, and other waste leftover from agricultural harvests into bio-oil. Charm then pumps that carbon-rich oil underground to be permanently stored.
It prevents organic material from degrading and warming up the atmosphere. The company says the oil hardens within days and it estimates the carbon dioxide is locked away for 1 million years.
The agreement, one of the largest to date involving the carbon-removal industry, would prevent 112,000 tons of carbon dioxide from entering the atmosphere between 2024 and 2030. That’s far more than the 6,055 tons that Charm Industrial has removed to date under pilot programs.
“This is a great purchase for raising money and expanding the capacity of our company,” Peter Reinhardt said to Insider. “It’s hard to build capacity for something that doesn’t have demand, so a signed contract is really impactful.”
The deal was facilitated by Frontier, which was launched last year by Stripe, Alphabet, Shopify, Meta, and McKinsey Sustainability aimed at jump-starting the carbon-removal market with a $1 billion commitment. Frontier had spent only $5. 6 million on carbon removal before Thursday’s deal with Charm Industrial.
Climate scientists say that carbon removal is essential to stave off catastrophe. Even if countries reduce greenhouse-gas emissions, it likely won’t be fast enough to keep global temperatures from rising above 1. 5 degrees Celsius compared with preindustrial levels. Meeting that global climate goal will likely require billions of metric tons of carbon dioxide to be removed from the atmosphere by 2050.
There is a variety of carbon-removal technology. Startups like Climeworks are using fans to suck carbon dioxide out of the sky, while others are using enhanced weathering that speeds up the natural ability of minerals to store carbon dioxide.
For its part, Charm Industrial buys agricultural waste from farmers and heats it to high temperatures in a contraption called a pyrolyzer. The process creates both bio-oil and biochar. The biooil is then pumped into wells and sal caverns which store industrial waste, or that were left by oil and natural gas companies.
“This is an opportunity to clean up these end-of-life oil and gas assets,” Reinhardt said. “We can take these abandoned assets that may be leaking oil or methane, refill the empty formation and then plug it or properly seal it off.”
Farmers can add the biochar to their fields, which can improve soil health and sequester more carbon. Charm Industrial does not include this in the measurement it uses to determine how much CO2 is being removed by its company. The life-cycle analysis includes the total carbon stored, minus emissions from transportation, pyrolysis, and the injection underground.
Today, Charm Industrial charges $600 per ton of carbon removed, but Reinhardt said that could drop to less than $100 by 2040 as the company scales.
As the company grows, it will need to access more agricultural waste (also known as biomass). The biomass is also used to make renewable aviation fuels and diesel.
Yet Reinhardt doesn’t worry about a shortage of biomass.
“This is something we hear in academia, but it is far removed from the reality of a biomass shortage. “Maybe at a really massive scale there starts to be some questions about how we are going to compete for biomass. Right now, we have biomass coming out of our ears.”
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