Tesla and SpaceX CEO Elon Musk has announced plans to donate $100 million toward a prize for the best carbon capture technology.
Musk, who overtook Jeff Bezos this month to become the world’s richest man, revealed the decision to his 42.7 million Twitter followers late Thursday night, promising more details in the week ahead.
“Am donating $100M towards a prize for best carbon capture technology”, the short Tweet read.
This latest philanthropic endeavour comes on the back of a record-breaking year for Tesla Inc., which became consistently profitable and saw the value of its stock rise by a remarkable 695%, propelling it into the S&P500 Index. Musk’s net worth has now climbed to $201.4 billion, according to Bloomberg.
But what exactly is carbon capture technology, and why is it needed?
Carbon capture technologies sequester the most common greenhouse gas –carbon dioxide or CO2 – from power plant and factory emissions to prevent it from being released into the earth’s atmosphere, or directly from the air to reduce its prevalence. After being ‘captured’, CO2 can be redirected for alternative uses or be stored deep underground where it will not contribute to global warming.
With global daily CO2 emissions reaching a weighty 100 million metric tonnes, and the atmosphere carrying 45% more CO2 than it did in the pre-industrial era, scientists believe these technologies offer our best chance of managing the current planet warming trajectory.
Existing technologies, however, remain far behind where they need to be to reach the lofty goal set in the Paris Agreement to limit global warming to no more than 2 degrees Celsius. According to the International Energy Agency, there are currently only about 20 large-scale carbon capture, usage and storage (CCUS) projects operating globally, procuring a total of 40 million tonnes of CO2 a year. To put this into context, we would need 10,000 large-scale CCS facilities by 2070 to meet the Paris Agreement target, according to a Royal Dutch Shell report.
Carbon capture technologies also face significant challenges in establishing their wide-scale commercial viability. As it stands, the costs associated with implementing and running CCT are prohibitive and the legal issues associated with storage are unattractive: companies face liability for potential leaks and significant jurisdictional hurdles when dealing with underground property use.
Current tax credits offered to companies using these technologies are also not yet attractive enough to encourage their mass deployment and usage. Businesses in the US garner just $35 per tonne for CO2 use and $50 per tonne for geological storage. For widescale implementation to be effective, costs associated with carbon capture will need to fall, and regulatory frameworks will need to introduce larger incentives to offset high CCUS costs.
Technology and innovation must also work to make CO2 a valuable good for both new and existing products, as one McKinsey report noted. At present, the main beneficiary of captured CO2 is unquestionably the oil industry, which employs 90% of all CO2 seized in its enhanced oil recovery procedures. Yet the compound has considerable potential to be used in manufacturing superlight carbon fibre, carbon enriched cement and carbon-neutral fuels (including synthetic gasoline, jet fuel and diesel).
Musk’s investment, therefore, comes at a crucial stage in the nascent technology’s development.