Q&A

Why this UK carbon capture co. expanded to Houston, IRA's impact, and more

Aniruddha Sharma of Carbon Clean weighs in on his North American expansion, the impact of the Inflation Reduction Act, and more. Photo via carbonclean.com

Earlier this year, a growing carbon capture company announced its new North American headquarters in Houston. Now, the company is focused on doubling it's headcount before the end of 2023 to meet demand.

Carbon Clean, which has a technology that has captured nearly two million tons of carbon dioxide at almost 50 sites around the world, opened its new office in the Ion earlier this year. The company is now building out its local supply chain with plans to rapidly expand.

In an interview with EnergyCapital, Co-Founder, Chair, and CEO Aniruddha Sharma weighs in on the new office, how pivotal the Inflation Reduction Act has been for his company's growth, and the future of Carbon Clean.

EnergyCapital: Looking back on the past year since the Inflation Reduction Act was enacted, what has the impact been on Carbon Clean?

AniruddhaSharma: The IRA did much to jolt industry, incentivizing investment in carbon capture, while also telegraphing that the US government is getting serious about bringing emissions down. Overnight, the US became Carbon Clean's biggest growth opportunity: inquiries from industrial emitters leapt a staggering 64 percent.

The impact of the IRA cannot be overstated for our industry, especially for point source carbon capture technology companies like Carbon Clean. The momentum created by the law's passage, along with our existing activity in North America, led to the opening of our US headquarters in Houston in March this year. We will double our US headcount to meet demand for CycloneCC, our breakthrough, fully modular carbon capture technology.

EC: What does the sector still need to see — in terms of support from the government — to continue to move the needle on the energy transition?

AS: There's much to admire in the way that the IRA incentivizes business. While it involves billions of dollars of public investment, it is set up in such a way that companies must make substantial investments first. IRA funding doesn't arrive on day one — it comes over several years and to get to the first dollar of funding, a company must secure considerable private investment first. In other words, every single dollar of the IRA funding is unlocking additional private investment, creating high-paying jobs, and bringing manufacturing back home.

Of course, a lot of additional investment still needs to happen, and for some harder-to-abate sectors additional policy measures may be required to enable deployment at scale. The IRA is just a first step, but what a giant step it promises to be.

EC: You recently opened Carbon Clean's HQ in Houston. What's next for your company in terms of growth — especially here in Houston?

AS: We're experiencing phenomenal growth globally, but we expect our expansion in North America to outpace all other regions. In line with this, we've seen a surge in interest from industrials across the US and our newly-opened Houston office will help us to meet this demand.

We are establishing a very significant base in the US — doubling our headcount this year — and we are developing a local supply chain to support the commercialization of our breakthrough modular technology, CycloneCC.

The potential for CycloneCC in the US and Houston area is huge. It is optimised for low to medium scale industrial emitters and recent Rice University research on the US Gulf Coast, for example, found that it is well suited to 73% of Gulf Coast emitters.

We're currently working with Chevron on a carbon capture pilot for our CycloneCC technology on a gas turbine in San Joaquin Valley, California. We expect to be announcing additional carbon capture projects in the US in the coming months.

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This conversation has been edited for brevity and clarity.

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A View From HETI

Here's 1PoinFive's newest customer on its Texas CCUS project. Photo via 1pointfive.com

Occidental Petroleum’s Houston-based carbon capture, utilization and, sequestration (CCUS) subsidiary, 1PointFive, has inked a six-year deal to sell 500,000 metric tons of carbon dioxide removal credits to software giant Microsoft.

In a news release, 1Point5 says this agreement represents the largest-ever single purchase of carbon credits enabled by direct air capture (DAC). DAC technology pulls CO2 from the air at any location, not just where carbon dioxide is emitted.

Under the agreement, the carbon dioxide that underlies the credits will be stored in a below-the-surface saline aquifer and won’t be used to produce oil or gas.

“A commitment of this magnitude further demonstrates how one of the world’s largest corporations is integrating scalable [DAC] into its net-zero strategy,” says Michael Avery, president and general manager of 1PointFive. “Energy demand across the technology industry is increasing, and we believe [DAC] is uniquely suited to remove residual emissions and further climate goals.”

Brian Marrs, senior director for carbon removal and energy at Microsoft, says DAC plays a key role in Microsoft’s effort to become carbon-negative by 2030.

The carbon dioxide will be stored at 1PointFive’s first industrial-scale DAC plant, being built near Odessa. The $1.3 billion Stratos project, which 1Point5 is developing through a joint venture with investment manager BlackRock, is designed to capture up to 500,000 metric tons of CO2 per year.

The facility is scheduled to open in mid-2025.

Aside from Microsoft, organizations that have agreed to buy carbon removal credits from 1Point5 include Amazon, Airbus, All Nippon Airways, the Houston Astros, the Houston Texans, and TD Bank.

Occidental says 1PointFive plans to set up more than 100 DAC facilities worldwide by 2035.

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