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(Asia Chang, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Bart Kolodziejczyk, Research Fellow, Monash University & Tyra Horngren, PhD candidate, University of Melbourne

In August last year, the Trump administration proposed the weakening of vehicle emission regulations, causing concern for climate advocates. This follows its decision to withdraw from the Paris agreement, signed in 2015, which sets specific goals to combat climate change and lower carbon emissions globally. The central aim of this agreement is to restrict global temperature increases to below 2 degrees Celsius, through nationally determined contributions from each of the 127 signatory countries. The proposal to weaken the emission regulations of vehicles is likely to be a significant setback to global efforts to lower carbon and greenhouse gas concentration, particularly because transportation accounts for 28% of emissions within the US. The lack of political acceptability of climate change policies, however, is not simply limited to the Trump administration agenda, but stems from the high cost of lowering carbon emissions, the unpopularity of a carbon tax, and lingering scepticism about climate change.

One of the tools implemented by the Paris agreement as an enabler to meet carbon emission goals is carbon pricing, which taxes companies based on their emissions. The World Bank’s report on carbon pricing for 2018 puts the total value of emission trading systems and carbon taxes at $82 billion – up from $52 billion in 2017. The public’s perception of these schemes is varied, with debate over their effect on GDP, especially in developing countries.

In addition to taxes, the cost of lowering carbon emissions is also high. Some sectors that emit substantial quantities of CO2 – such as cement and transportation – are not easily able to use sustainable alternatives. The process of carbon capture, utilisation and storage (CCUS) provides an appealing method to lower emissions from these sources by capturing the CO2 emitted before it enters the atmosphere.


A variety of technologies have arisen that aim to capture carbon emissions, many implemented at power station exhausts. This technology could also be applied to capturing vehicle and aircraft emissions (however, this is more challenging and has remained under-explored).

Following its capture, the carbon is often stored underground, but new tactics aim to use it to produce a variety of products such as fertilizer, plastics and, recently, ‘clean’ fuel. This can be seen as a circular carbon economy, where currently taxed carbon emissions can instead be captured and turned into valuable commodities.

Ethanol, for instance, which can be used as an alternative to fuels produced by the petrochemical industry, is currently produced through the fermentation of bio-feedstocks such as maize or food waste. Producing ethanol from carbon dioxide captured from vehicle or power plant exhausts holds the potential for a carbon-negative process that effectively converts carbon emissions into a valuable commodity: fuel.

Something new under the sun

This efficient conversion of carbon dioxide to ethanol is no trivial matter and the idea is being developed by numerous research groups. The high stability of carbon dioxide renders the molecule chemically inert, and it requires a significant amount of energy to enable its conversion. In order to meet these energy demands, research groups have begun looking at utilising sunlight as a source of energy to drive this conversion, maintaining the process as carbon negative.

One method is the use of solar photovoltaics in solar-to-fuel systems being developed at the Lawrence Berkeley National Laboratory (Berkeley Lab), in California. This method combines photovoltaic and electrochemical systems to allow the reduction of carbon dioxide to fuels such as ethanol, propanol and hydrogen. Previous methods utilising this technique suffered from low efficiency due to the large over-potentials required to enable the reduction of carbon dioxide. Researchers at Berkeley Lab, however, have overcome this by optimizing each component of the system and utilizing newly designed materials to minimize voltage loss. The selective production of a single reduction product, however, remains a challenge. This study appears promising and will hopefully result in continued efforts to further develop solar-to-fuel systems capable of efficiently converting carbon dioxide to ethanol selectively.

Figure: simple contour map showing commodity price of ethanol and methane based on price of solar energy and conversion efficiency of the process. Isolines and listed values correspond to solar energy price in USD kWh-1. Dotted lines show the current ethanol and methanol stock exchange price as of 18/05/2019. The solar generation cost of the commodity excludes capital expenditure for carbon dioxide capture and conversion. Capital expenditure for solar installation is included in the cost.

Commodity price of ethanol and methane based on price of solar energy and conversion efficiency of the process.

In March 2017, Bloomberg New Energy Finance estimated the price of solar energy to be about 0.07 USD/kWh, based on the above graph. At this price, competing with traditional ethanol and methane prices is not feasible, even at a 100% conversion rate. However, as the price of solar drops further, the technology will become economically feasible. Based on the above graph, at 0.03 USD/kWh of solar energy, the conversion efficiency to generate ethanol would have to be only 60% to be competitive with current market price. A further drop in the solar energy price to 0.01 USD/kWh would require the conversion process to be only 20% efficient to compete with traditional ethanol production. (The feasibility of solar methane generation is further away).

Although this technology is in its infancy, great strides have been made to lower the cost and increase the efficiency of carbon capture and utilisation. This fact may increase the political and public acceptability of carbon emission policies, due to the economic incentives associated with the production of fuel and other commodities from CCUS. As a result, the establishment of a circular carbon economy may allow the goals set by the Paris agreement to be met while facilitating global economic growth. Additionally, the establishment of climate policies offering incentives to promote the continued research and development of carbon capture and utilisation methods may fast-track the achievement of sustainability goals compared with current policies based on penalties and taxation, which may inherently be limiting R&D efforts by reducing available funding.