'Carbon-negative hydrogen' | This start-up has designed technology that combines H2 production with direct air capture
Parallel Carbon aims to launch kilowatt-scale demonstration project by 2025, with carbon credits already pre-sold
Direct air capture is one of the more controversial climate solutions proposed in recent years.
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While proponents warn that it will be necessary to mitigate emissions from hard-to-abate sectors in order to reach net zero by 2050, critics argue that it will be prohibitively expensive in the short term and allow industries to continue to pollute, with budgets better spent on other, more effective decarbonisation measures.
The company’s electrolyser splits a neutral-salt electrolyte into an acid at the anode and an alkali at the cathode during hydrogen production, which CEO and co-founder Ryan Anderson describes as “similar to the chlor-alkali process” but without generating chlorine gas.
This process also regenerates the electrolyte, although Anderson notes that the technology also flows “a fair amount more water than traditional electrolysers”.
Even though the electrolyser may operate intermittently, the acids and alkalis for recycling the mineral sorbent can be overproduced and stored to continue to run the direct air capture process even when renewable power is not available.
“For most direct air capture, operating with clean power is a necessity — I think that's very challenging for other direct air capture technologies,” he adds, noting that “over 90% of the energy for the process goes into the electrolyser”, which is designed to run on a wider operating range than alkaline equivalents while being roughly the same capital cost.
However, the technology does require more energy input than conventional electrolysers, since it is also running direct air capture, potentially making the process more reliant on low power prices.
“We’ve pre-sold our [carbon dioxide removal (CDR)] credits through the end of 2025 for operations that will begin in 2025. So we’ve sold our first year of operations to get us off the ground, to get our project built,” Anderson adds.
As 2030 interim climate targets loom for major corporations, many have turned to the voluntary carbon market, which trade credits based on carbon removals or environmental protection, such as via preventing deforestation.
“There’s a lot of ways this is going wrong, but there are very clear ways to make sure you’re doing it right,” says Anderson, who had previously worked as an analyst on carbon capture and storage (CCS) for research house BloombergNEF.
“You can ensure basically every step along the way that you are paying for high-quality climate action.
“I think the challenge for direct air capture in the voluntary carbon market world is pricing. No-one wants to pay thousands and thousands of dollars per tonne, even though some are willing to for smaller-scale projects to get them off the ground and see how the technology develops.”
But for hard-to-abate sectors such as steel, why invest billions of dollars toward switching their processes to run on hydrogen to mitigate carbon prices, when they could simply buy CDR credits and run business as usual?
“That's largely what we're trying to solve, right?” said Anderson. “We're trying to say, ‘let's make you carbon-negative hydrogen, that way you can decarbonise your steel and also if you have other supply chain or residual emissions, use the carbon removal credits towards those so you can hit net zero faster and more cost effectively’.”
However, he is sceptical that industries will opt for carbon removal over investing in other decarbonisation methods, in part because the actual quantity of high-quality credits on the market over the next 10 to 15 years will be relatively small.
Due to this limit on supply, as well as the understanding that carbon removal will be the last resort, Anderson points out that companies offering credits will have little reason to try and undercut other emissions reductions methods on price.
Beyond a growing carbon credit market, direct air capture also benefits from extremely lucrative subsidies in the US.
However, Anderson notes that this starts to get complicated if Parallel Carbon or producers using its technology wanted to also claim the 45V clean hydrogen production tax credit, which offers a top rate of $3/kg based on a strict limit of lifecycle greenhouse gas emissions.
When it comes to revenue, the Parallel Carbon CEO notes that “right now, today, we own the entire process”, from manufacturing and operating the electrolyser to the direct air capture equipment.
But while the start-up is looking to partner with larger electrolyser manufacturers on that side of the technology, “we intend to own and operate the direct air capture process”, Anderson adds, noting that there is “a lot of optionality in how these get deployed”.