The concept of CO2 utilization goes something like this: instead of releasing CO2 into the atmosphere through industrial processes, we could instead capture CO2 from smokestacks (and/or the ambient atmosphere) and use this CO2 to manufacture carbon-based products -- such as fuels, food, and construction materials. So what role might CO2 utilization play in fighting climate change? The outlook seems mixed, as explained below.
Cost-effective CO2 utilization has a number of interesting implications. First, if CO2 capture costs could come down significantly, existing markets for carbon-based products could drive reductions in carbon emission without the need for pesky-to-implement large-scale GHG regulations. Even with today's CO2 capture and utilization technology, a number of companies are successfully turning would-be CO2 emissions into valuable end products.
The main problem with CO2 utilization today is economics. For one, CO2 from naturally occurring underground reservoirs costs about $10-$20/t, where as capturing would-be CO2 emissions from power plants costs 5x-10x that amount. Capturing CO2 from industrial facilities that produce goods like ethanol or ammonia is more cost competitive, but such industrial facilities can only supply a limited amount of CO2 compared to the 10B+t/year of CO2 that the power sector produces. Companies like Inventys are making great innovations to drive down these costs of capture, but technology still has a fairly long way to develop before it is competitive with naturally occurring CO2.
Another factor holding CO2 utilization back is that, even if CO2 was incredibly inexpensive to capture, it still might not be cost-effective to build products out of CO2. For example, right now, fuels remain considerably less expensive to extract from the ground than to synthesize from CO2. As a result, we will have to drive down not only the cost of CO2 capture (and transport), but also that of manufacturing processes that utilize CO2 in order to make CO2 utilization cost effective.
Without cost reductions in CO2 capture technologies, CO2 utilization is only likely to make a small dent in annually GHG emissions. But while these economic challenges are significant, large-scale R&D programs for innovative CO2 capture technologies could change these economic fundamentals in a major way. The field of CO2 utilization seems similar in many way to the field of solar energy back in the 80s: in the 80s, we had solar technologies that worked, but they made poor businesses in most cases. 30 years of aggressive R&D later, solar is now challenging fossil fuels on an unsubsidized basis in many regions -- CCS could follow a similar trajectory with the right investments in R&D and regulatory support.
Where it just doesn't seem like the numbers will ever truly be in the favor of CO2 utilization is when it comes to carbon dioxide removal (CDR). With CDR growing increasingly necessary, it would be great if CO2 utilization in carbon-sequestering end products (e.g. products that we make with CO2 and then don't turn immediately back into CO2 emissions) could provide significant negative emissions potential.
The potential for CDR from such carbon-sequestering end products, however, looks fairly limited today. The markets for three of the major carbon-based products -- cement, plastics, and timber (when sustainably harvested and used for other purposed besides energy production) -- are fairly modest in overall size in comparison to the prodigious ~35B tonnes of CO2 we emit into the atmosphere annually as "waste."
The above graphic show how much CO2-equivalent is consumed each year with these various end products. The graphic below translates this into the potential for these as a CO2 sink today and in 2100 (assuming 2% annual growth):
The bottom line is that by the end of the century, we will need a lot more than just carbon-sequestering end products to prevent climate change -- we'll also need large scale decarbonization of the economy. Such decarbonization might rely on CO2 utilization for fuel synthesis, but it also means that we will need to pursue other ways to sequester CO2 emissions, such as by storing carbon in soils through farming techniques or fertilizers, or injecting it underground to monetize potential carbon programs.
So while it looks like CO2 utilization will make incremental gains in the fight against climate change, it doesn't look like we will be able to innovate our way entirely out of our GHG emissions problem, and that some form of regulation will likely be needed to contain global warming.