Carbon Credit Allocation and Storage

In this episode, Ólafur Teitur Guðnason of Icelandic company Carbfix discusses his company’s approach to carbon sequestration by essentially making fizzy water and burying it deep underground.

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David Roberts

The idea behind the Icelandic company Carbfix is simple: pack water full of carbon dioxide (literally carbonate it, like a SodaStream) and inject it deep underground into Iceland’s porous basaltic rock. Minerals in the rock dissolve in the water, where they react with the CO2 to become calcium carbonates.

The carbon effectively becomes rock, which it will remain, for all intents and purposes, permanently. Or at least thousands and thousands of years. It is as long-term as carbon sequestration gets.

The idea dates back to 2006, but pilot injections didn’t begin until 2013 and it wasn’t until 2016 that a study published in Science confirmed that 95 percent of the CO2 in the water was mineralizing within two years — far faster than most had assumed possible.

Since it started, Carbfix has sequestered almost 100,000 metric tons of CO2 at its original site, but that is just a drop in the bucket compared to what it believes is possible. It has plans to make Iceland a major international carbon-burial hub and to replicate its technology in other geographies, maybe even in the shallow ocean.

When I visited the Carbfix operation in October and saw it in action, I was extremely intrigued and had a million more questions, so last week I got in touch with Ólafur Teitur Guðnason, Carbfix’s head of communications, to talk about where the company gets the CO2 it buries, where it plans to get it in the future, whether burial can work in other kinds of rocks and geographies, and exactly how much carbon Iceland can store.

All right, then, with no further ado, Ólafur Teitur Guðnason of Carbfix. Welcome to Volts. Thank you so much for coming.

Ólafur Teitur Guðnason

Thank you so much for having me.

David Roberts

So, Ólafur, I visited you guys when I was out in Iceland a few weeks ago and was very taken with this idea. And I don't know how I have been covering this stuff for so long without ever hearing about it, but it sounds like you guys are sort of on the verge of expanding. So I think probably a lot more people are going to be hearing about you soon. So to begin with, for listeners who are not familiar with your company, I'm going to run through the process and tell me if I get anything wrong. So you get a source of water, and we can discuss the source of water more later.

But you get water, you carbonate it more or less like a SodaStream carbonates water. You pump carbon dioxide into the water, and then you pump the water deep underground. And this carbonated water is heavier than normal water, so it tends to sink down to the bottom of the water table. And as it is sinking, the carbon dioxide in the water reacts with minerals in the rock to form calcium carbonates. Basically, the carbon dioxide in the water gets transformed into a form of rock, where it will then stay underground as rock for thousands of years. So you've permanently sequestered the carbon.

Is that more or less an accurate description?

Ólafur Teitur Guðnason

It's more than more or less accurate, I think. I'll give you a ten out of ten.

David Roberts

Excellent. Good. Well, I have so many questions about this, but the one thing I wanted to start with is the carbonation process of the water. Is that your intellectual property here? Is that your sort of main thing that you've pioneered here as a different way of carbonating water, or is there something special about the way you carbonate water?

Ólafur Teitur Guðnason

Yeah, that's one part of it. There are several elements to what we feel is proprietary or what we have solved — technology that we have developed. One thing is the capture of the CO2 emissions from the geothermal power plant, where we were kind of born as a research project within the company that runs the geothermal power plant, as well as universities both in Iceland and the US and France. So that is one element, yes. The dissolving of the CO2 with the water is another element, and the third element would be the way to inject it. So, yeah, there are different elements to this and at different stages of patenting.

David Roberts

Oh, I didn't realize that you were involved in the capture part of this. I knew that part of the CO2 that you're burying is coming from the geothermal plant, but I had kind of thought that was separate. Is this something that you're going to export if you try to export this model to other places or other countries? Is capture part of what you're promising, or are you mostly, do you think, going to be working with CO2 that someone else captured?

Ólafur Teitur Guðnason

Yes, mostly. Capturing is not our core field. It just comes from the fact that we were born out of this proximity to the geothermal power plant, so we needed a source of CO2, and we may, and have and are collaborating with other companies that run geothermal power plants, so our know-how is of use in that situation. But we are definitely not primarily a capturing company. There are other companies that focus on the capture part, and that has different technologies for different streams of CO2. So we're not too involved in that. We are mainly and primarily focused on getting it into the ground and mineralizing it and storing it.

David Roberts

So then when you carbonate the water, the physics of it, is it basically the same thing that's going on in a soda stream? Is there anything fancy going on, or is this just the carbonization that we're all familiar with?

Ólafur Teitur Guðnason

It's not too different, in essence. We have a stream of CO2, and then we shower it with water and pressurize so that it is completely dissolved. The difference is that we don't have the bubbles that you have in the soda stream or the soda drinks, mineral water that you drink, because these bubbles, they mean that the gas is escaping the fluid, so we don't want it to escape. So we are putting more of it into the water and making sure it's completely dissolved so that it doesn't rise back to the surface. And pressure takes care of that as well, as it continues to ensure this trapping mechanism underground as well when the solution gets into the ground.

So solubility trapping, as it's called, is kind of the first stage of trapping and isolating the CO2 from the surroundings or from the atmosphere. It's a pretty secure way of trapping CO2. But then, fairly soon, mineralization comes into play, as well as the second stage, and even more secure.

David Roberts

You know, when people think about what is basically a geological process of a gas being transformed into a stable mineral. I think of geological time frames. But your mineralization process, by which the CO2 is pulled out of the water and becomes rock, happens in two years, you say. Two years of the water being underground, all of the CO2 will be pulled out of it and mineralized. So how is that happening so fast?

Ólafur Teitur Guðnason

Well, you need favorable conditions. You need favorable rock formations that are highly porous and reactive. It was quite a surprise when the scientific studies showed the extent and speed of the mineralization. So that was indeed surprising to the scientists at the time. A lot of it actually happens even sooner. So the process starts very soon, within a few weeks. And when we're talking about within two years, that is when almost all of it has mineralized. But it doesn't wait for two years, and then suddenly everything mineralizes, it starts sooner. So it's a very rapid process. Yeah, and that was a surprising finding, and that got a lot of attention back in 2016 when the results were published internationally.

David Roberts

Yeah, right. We should mention that this is not a new thing. You guys have been doing this for ten years now, have you been — ?

Ólafur Teitur Guðnason

Yeah, eleven years. Celebrated ten years of continuous mineralization last year and counting.

David Roberts

So there's been plenty of testing and monitoring?

Ólafur Teitur Guðnason

Absolutely. The idea was born in 2007, and this research collaboration started designing the way to capture, to dissolve the CO2 in the water to get it into the ground, drill testing holes, make mistakes, and so on and so forth. But the first successful pilot injections took place in 2012, so that was only five years after the project really started as an idea on paper. So a fairly quick progress there. And since then, we have continuously applied this method to sequester emissions from the geothermal power plant. Now we have also added a second source of CO2, which is captured from the atmosphere by our partners at Swiss company Climeworks.

David Roberts

When you say the rock needs to be reactive, what does that mean exactly? It just needs to contain the minerals with which the CO2 is going to react?

Ólafur Teitur Guðnason

Yeah, it has to be rich in those minerals or metals, iron, magnesium, calcium, that tend to come out of the rock, if we can say — I'm looking for the right word in English — they get dissolved, they get into the water, and then react with the CO2 to form these new minerals. So we are really dependent on those types of sometimes called mafic or ultramafic rocks. We are working primarily with basalts in Iceland. So it's a young volcanic rock that contains high levels of these metals, about a quarter of the weight. So they have the ingredients needed to form the minerals.

By the way, important to mention that this happens in nature over geologic timescales. It's one of the reasons why over 99% of all the carbon on the planet is already underground in rocks. So even though we have a crisis on our hands, it's less than 1% of the planet or Earth's carbon that is in the atmosphere and oceans and biomaterials. So, yeah, we can say it's nature's way, that we have found a way to accelerate.

David Roberts

And so when this mineralization happens, it becomes rock that is, for all intents and purposes, permanent. There's nothing that could reverse that process.

Ólafur Teitur Guðnason

Right. There is a debate on what counts as permanent in the climate debate. Is it 100 years? Is it 1,000 years? Is it 10,000 years? But we are definitely above all of those and into the tens of thousands of years. So even millions of years.

David Roberts

Interesting. Okay, so it says on your website that you have to date buried 97,000 metric tons of CO2. So I want to ask a few questions about the capacity of the land to absorb this. So you have said, I remember you said it was very striking, and I remembered it afterwards, when I came to visit that the amount of porous reactive rock in the Iceland sort of bedrock in and of itself could store all the CO2 that humans emit. Is that accurate?

Ólafur Teitur Guðnason

Yeah, it's even when we expand on that thought and say all of the CO2 that would result from burning all remaining fossil fuels on the planet.

David Roberts

No kidding.

Ólafur Teitur Guðnason

And that's Iceland alone. But that is a theoretical figure, not something that anyone is contemplating.

David Roberts

So theoretically, there's almost no upper limit to the amount of CO2 you could store in here, but I presume there are practical limits? So, like, say, in a particular injection well, you're pumping water down and the CO2 is reacting and becoming a rock and filling in those holes. The rock is porous, it's full of holes. The rock is filling in those holes bit by bit. So I wonder, in a particular injection well, do you reach saturation in a particular area? Like, is that a limit on your pace here?

Ólafur Teitur Guðnason

Well, in the end, we assume we will. But for the decade that we have been operating the same well, we are not even close to it. One of the signs would be that the well would become less receptive to the water flowing in. But that is not happening. So we don't really know exactly how long one well can last. But we do know that for the ten years that we have been operating, admittedly on a fairly small scale, but nevertheless, for a decade and close to 100,000 tons, we estimated that we have used less than 0.01% of the capacity of this area where we are operating.

David Roberts

This particular well, so there's tons more headroom even in this individual well?

Ólafur Teitur Guðnason

Yes, absolutely. The empty space in the rock has such a huge volume and we are depending on the empty space. In the first instance, we are depending on it for the permeability of the rock, for the water to be able to flow through, and then for a part of this empty space, a small part of it to hold the newly formed mineral that consists of the former CO2. As a rule of thumb, if your listeners are interested, a cubic meter of basaltic rock could hold approximately 100 kg. I'm using the metric system, excuse me. So 100 kg in a cubic meter as a rule of thumb.

And it is hard to wrap your head around how many cubic meters of rock there are underground. When you go deep, when you have a sizable area, these very quickly amount to huge amounts.

David Roberts

Right. So space for the carbon is not a limiting factor?

Ólafur Teitur Guðnason

No.

David Roberts

I'm wondering, as you scale up, if more and more CO2 is coming to you. I'm trying to figure out what the practical limiting features are here. Is there at a certain point you max out your flow, like at a certain point you're going to max out the amount you can carbonate at a time. Right. There's presumably limits on the flow of water that you can pump.

Ólafur Teitur Guðnason

It depends on the number of wells you have. If you need more flow, you can add wells. You just need to have a reasonable space between them because each well is only using so much underground area. So you can have another one 300ft away or 500ft away or something like that. So scaling up means really adding more wells, provided you have the appropriate conditions there as well. I would say a major limiting factor is the access to CO2 that has been captured.

David Roberts

Right.

Ólafur Teitur Guðnason

So the problem is not really storing it, the problem is getting it in the first place and getting it not only capturing it from emitters, but then also transporting it to a suitable storage site.

David Roberts

Your only limiting factor is how much CO2 you can get your hands on. Practically speaking, there's no limit to the speed and quantity that you could handle if you can solve the problem of getting it to you, basically.

Ólafur Teitur Guðnason

Yeah. And I would also mention that, of course, we need water for this process, so there has to be access to water as well.

David Roberts

Yes, I want to ask about that later too, but I want to start with energy though, because a bunch of people, I was talking about this on Twitter, this is the first question people have, which is sort of how much energy are we using to do this? And presumably, the energy you use to do it needs to be zero carbon, or else you're just sort of like in a loop of creating carbon to bury carbon. So this is all premised on zero carbon energy, right?

Ólafur Teitur Guðnason

Yes, preferably. Or at least you need to be — well, in Iceland, we don't really have that challenge. All of the energy is either geothermal or hydropower. So it is green energy, definitely. But still there is the question of displacing green energy for the purpose of carbon capture. And it's a whole debate on that, or at least some points to be made. But yeah, I mean, how net positive do you need to be to be justified? That's an open question. But in our case, the energy is completely sustainable and it is a very low energy process.

David Roberts

Can you put numbers on that? Like, what do we mean by low energy?

Ólafur Teitur Guðnason

It is negligible. I mean, it is running of pumps. Pumping water doesn't require a lot of energy. So it is really almost invisible in the big picture.

David Roberts

Theoretically, then even if you are using whatever natural gas generated electricity to do this, do you think you still might come out positive just because you're —

Ólafur Teitur Guðnason

Oh, definitely.

David Roberts

just because you're not using much energy.

Ólafur Teitur Guðnason

Yeah, it's so low compared to the amounts of CO2 that we are getting rid of, irrespective of the fuel or power source. It would be vastly net positive. But that's not the full value chain of course. You need the capturing, you may need the transport.

David Roberts

Yes. Right.

Ólafur Teitur Guðnason

And we will maybe come back to that. So we think for our biggest project that we are preparing — next big project in Iceland as well — transport will be most likely the major source of emissions to be then, of course, fully accounted for and deducted from the benefits that we are claiming to make.

David Roberts

Right. And so right now, you're getting your CO2 that you're burying from two sources. One is the geothermal power plant, which I think people think of geothermal as zero carbon. But it's not really zero carbon, there are —

David Roberts

No, it's not zero. I think it's 1% of a coal fired plant, approximately, but still —

David Roberts

Enough to capture it. And the other source of CO2, which Volts listeners will be familiar with, is from Climeworks, this direct air capture facility just down the road from you. With the big fans that are pulling air over this absorbent that's pulling the CO2 out. Presumably they are compressing the CO2 and putting it in a pipeline that comes to you. Is that how it gets to you?

Ólafur Teitur Guðnason

Yeah, they currently get it to us in liquefied form, so compressed and liquefied. So they break it away from their filters — I'm not the best one to explain their technology — but basically it's filters that they then collect it from the filters and compress it and send it to us.

David Roberts

And how pure of a CO2 stream do you need for your process to work? Does it need to be super purified, or — is that a limit?

Ólafur Teitur Guðnason

Not necessarily from the mineralization perspective, but from other environmental considerations.

David Roberts

Right.

Ólafur Teitur Guðnason

I mean, the European Directive on Geological Storage of CO2 stipulates that you shouldn't dump other things in there along with the process. So you should have a pure stream of CO2. So I think that's mainly an environmental consideration that makes sense generally. But that wouldn't necessarily hurt our mineralization process too much.

David Roberts

Are there other emitted gases that we don't like that we could capture and bury and mineralize in this same way, or is this like a carbon only kind of thing?

Ólafur Teitur Guðnason

Hydrogen sulfite is emitted by geothermal power plants, comes from the ground, just as the CO2 does. And in fact, Carbfix was born as a twin project of Carbfix and Sulfix to take care of hydrogen sulfide, which is, you could accurately say that that is an even bigger threat to the local environment. It's dangerous in high concentrations and really a harmful gas. So that was among the key considerations, was to get rid of that as well. And as it happens, the same process applies.

David Roberts

It works same way.

Ólafur Teitur Guðnason

Yeah. So we get rid of the hydrogen sulfide as well, literally improving the air quality of the vicinity of the geothermal power plant and co-inject it with the CO2, and the same mineralization process happens, producing another type of mineral. But —

David Roberts

Oh, interesting.

Ólafur Teitur Guðnason

this is specific to geothermal power plants. So we are very much focusing on CO2.

David Roberts

Let's talk about then getting CO2, because if you're going to scale this process up to meaningful, sort of globally meaningful levels, the big limiter is your access to variable CO2. So it's easy enough to envision how this works in Iceland, where you have lots of geothermal power plants creating gases that at this point you're quite familiar with. You know the process. There's suitable rock nearby. Talk a little bit about the Coda terminal, because you guys have very big plans to import CO2 from other places and bury it. So how is that going to work and how is that going to pencil out in emissions terms?

Because obviously shipping uses energy and produces emissions, compressing the CO2, et cetera, et cetera. There's energy all along the chain there. So talk a little bit about how you're thinking about how you're going to set up a system to import.

Ólafur Teitur Guðnason

The big question was where should Carbfix scale up to the megaton scale, get to a million tons or more, which is, that's the big milestone that's ahead. Because I should add maybe for context, just to back up a little bit for half a minute. It's true that our focus needs to be on eliminating the use of fossil fuels. So the criticism is often, "well, you're distracting us from that mission." And it's true, it's a moral hazard to use carbon capture storage as an excuse to continue with business as usual. But the fact of the matter is, and the IPCC said that very clearly in their report last year, we will not reach the climate goals.

Even if we manage to do really well with the energy transition to green and renewable power, we will need to capture other emissions that will remain, that we know will remain. There are industries that have emissions that have nothing to do with energy. It's the part of the process of producing cement, steel, aluminium and so on and so forth, where even if they're powered by green energy, they still have the emissions, because the emissions are process emissions. So how do we take care of those as well?

David Roberts

You could also say that even if we could cut off all emissions to zero tomorrow, you could argue that there's too much CO2 in the atmosphere already to be safe. So you need to draw some of that down, even if you're not emitting anything.

Ólafur Teitur Guðnason

Right. So you need carbon capture, both from these hard to abate industries, which is the reduction of the remaining hard to abate emissions, and then drawing out of the atmosphere what we know as carbon removal. So the IPCC says in its report — anyone can look it up — even in their scenario, they have several pathways of how we could reach the climate targets. They have a pathway that is highly dependent on big successes in renewable energy. So it's called the high renewable pathway. Even under that assumption, they have calculated that by 2050, the annual amount of carbon capture storage will have to be 3 billion tons.

David Roberts

So, that even makes looking like the million-ton milestone look pretty small.

Ólafur Teitur Guðnason

The global total today is about 40 million per year. So we need to go from 40 to 3 billion until 2050. So that's why we can feel, we can very confidently say we are a necessary complementary action in addition to other efforts.

David Roberts

So, then it becomes the question of —

Ólafur Teitur Guðnason

Where do we scale up, how to move it around? And we decided that for scaling up and proving that we can do this on a megaton scale, it would be most feasible to do that in Iceland, where we are based, where we know the geology, where we know the legislative framework and so on and so forth.

David Roberts

It does seem like ideal conditions for what you want to do.

Ólafur Teitur Guðnason

Yes, it's ideal, both from a geological perspective, resource perspective, and makes sense, because this is where we are and where we know best. But then the challenge is, well, we don't have millions of tons of CO2 in Iceland to inject into the ground. The total emissions of Iceland, excluding land use, is about 5.5 million, approximately. That's from cars and planes and ships and so on. You won't be able to catch that. Industries in Iceland are emitting a little bit over 2 million tons, I guess. So even if we could capture all of that, which is not feasible in the near future, we would not be really utilizing the potential that we have.

So the idea with this project called Coda terminal is to be a transport and mineralization hub for mineralization of CO2. And this concept of a hub is really what is happening now, it seems, around the world, when it comes to geological storage, at least you have pockets or individual areas where you can geologically store CO2, but you need to have a network to get it there.

David Roberts

Right. The big question here is how often do you want to build the infrastructure to bury carbon, versus building the infrastructure to carry carbon to the places where that infrastructure already exists. Which of those is better, carbon-wise?

Ólafur Teitur Guðnason

Yeah, we won't be able to build a mineralization facility next to every factory or emitter, next to every cement plant, every steel plant. So that's just not feasible. The conditions are not there. So in any case, even though transporting to Iceland from Europe seems excessive, there will always need to be transport for whatever distances other big projects are looking at storing beneath the ocean floor in the North Sea that will have to be transported somehow — ships, pipelines, whatever. So I think there is a lot more focus on this now. How do we make sure that we have the infrastructure in terms of the Coda terminal there will be shipping from Europe.

Of course, it has to get to the ship as well before that. There are discussions of pipelines. Can you use existing infrastructure to some extent? Possibly, probably. But you also need some new ones.

David Roberts

I think they're a little farther along in Europe in terms of CO2 pipelines, than in the US, is my understanding. Like there's an actual plan there.

Ólafur Teitur Guðnason

They are starting to at least look very seriously into it, and adopting new legislation to make sure that we have the framework about financing, access and so on and so forth. There is actually considerable existing infrastructure in the US connected to the oil industry that is piping CO2 over some distances as well. So it is a known concept. It's not inventing anything new, really, but on a larger scale. So the plan for the Coda terminal, is to be able to receive and mineralize 3 million tons every year as of 2031, when we plan to have reached full capacity.

And some of that will come from Iceland, no doubt. We are working, collaborating. The Icelandic government and heavy industries in Iceland are collaborating with us to find ways to capture and store the emissions. We have several aluminium plants in Iceland using the green energy that we have a ferrosilicon plant as well.

David Roberts

In Iceland, you can build one of these next to every factory.

Ólafur Teitur Guðnason

Conceivably. Well, one of the plants is in east of Iceland, where there are actually the least amount of basalts, but at least for several of them, it is very feasible. And, in fact, the Coda terminal will be built next to one of these plants. So it will be fairly straightforward, once the technology is there, to capture their emissions, to get it to us, because we will be located right next door, and also there is a harbor there for receiving ships from elsewhere. But this is definitely needed. The ships. If we assume that the ships would run on traditional fuels, we estimate that the emissions of shipping would be maybe approximately 7% of the CO2 that's being transported for storage.

David Roberts

So significant, but not enough to wipe out the value, right?

Ólafur Teitur Guðnason

Definitely not. But then, of course, as soon as greener fuels become available for the shipping, those will be employed immediately as they become available.

David Roberts

So ideally, these would be zero carbon ships carrying this stuff from Europe to you.

Ólafur Teitur Guðnason

Yeah. Or at least much lower than traditional fuels.

David Roberts

Right. Right. And this Coda terminal, is this a gleam in your eye? Are there plans, is there money set aside?How real is this plan for this big terminal?

Ólafur Teitur Guðnason

It's very real. It last year got funding from the European Innovation Fund for €115 million, give or take a third of the total cost. So it was deemed by the European Innovation Fund to be realistic, and the technological readiness level, as they say, is very high. As we have been operating this technology already, we're not inventing new things, we're scaling up what we already know. So the plans are in full motion to secure environmental impact assessments, permits, land and so forth and all moving along quite nicely.

David Roberts

Is the idea that Carbfix would sort of have direct contracts with big emitters in Europe, sort of direct contracts to off-take their CO2?

Ólafur Teitur Guðnason

Yes. The business case is, in part, and we could say probably the biggest part of the business case is the fact that Europe has a cap on emissions from industries. So the European trading, emission trading system, ETS, is the driver for companies to take care of their emissions. So those who know how the system works will know that you get a certain amount of free allowances, and it's a total cap on the continent. The free allowances are reduced gradually, year on year, creating a kind of pressure on industries to improve. And since the emission allowances are quite expensive, there is a significant incentive to take care of it, otherwise capture it and store it.

And the regulatory framework says, if you capture it and store it in a regulated geological storage site that has the appropriate permits, then you don't need to purchase the emission allowances. So this is what creates the business case. And the flip side of that is the economy of our method, which is a very economical method indeed.

David Roberts

Yeah. Is this, as far as, you know, the cheapest form of permanent storage?

Ólafur Teitur Guðnason

I'm not sure I can say that with 100% certainty. But judging from the look on people's faces when we discuss the costs, I'm thinking that they must be. The mineralization cost itself is very low, less than $20 per ton or something.

David Roberts

I want to talk about water, but first, actually, I got a bunch of questions about land use. But I think we should just say that the land use needs of this are really quite small. I saw one of your little domes that you build to house the pumps, and it's just like a little yurt. Like it's relatively tiny. I guess you have to count the pipelines in some respect. But in terms of land use, that doesn't seem like a kind of limiting factor. You're not taking up a lot of space.

Ólafur Teitur Guðnason

Definitely not for a single well. And even with the Coda of terminal, where we will need many more wells, of course, spreading out over a significant area, the actual footprint of the actual infrastructure is quite small and can quite easily coexist with other industries, facilities. It's not a delicate operation. It doesn't emit noise, vibration, emissions. So I think I would happily live next door to one of these injection wells.

David Roberts

Yeah, like I could tuck one of those in my backyard. They're even kind of cute.

Ólafur Teitur Guðnason

It can easily cohabit with other industries, no question.

David Roberts

So right now, because you are in this symbiotic relationship with the geothermal plant, insofar as you build next to geothermal plants, you don't really have to worry about water, because geothermal plants bring water up and then they pump water back down. So all you're doing is kind of inserting yourself and adding one additional step in that process. But the water loop is basically the same as for a normal geothermal plant. But I'm wondering, I have several questions about sort of the potential to do this in other places, in other contexts. If you didn't have a geothermal plant, how do you think about where to get water?

And do you view that as kind of a limiting factor on where you can go and where you can establish one of these?

Ólafur Teitur Guðnason

We do need water to be there, but there are many places where you have access to groundwater. In fact, I read a report on groundwater in the US that said that it is an underutilized resource because it's only about 30% of the fresh water that is used in the United States is groundwater. The rest is surface water. So I think not everybody realizes the extent of water that is stored in the ground and for one reason or another, hasn't been extracted. It's certainly a precious resource. And that's why it's important to note that we are not competing with domestic uses of potable water. Definitely not going anywhere near those kinds of reservoirs. We do return the water into the ground, not having contaminated it in any way, added CO2 to it.

David Roberts

What you do to the water, does that render the water dangerous in any way? Like, can it mess up groundwater or can it pollute anything, or is there any risk to this carbonated water?

Ólafur Teitur Guðnason

Well, it is mineralized water, mineral water. When you add carbon dioxide into water, it raises the acidity, so you don't want to mix it with the groundwater. And that's why we go much deeper with the injections, isolate the pipes from the surroundings and because, as you mentioned at the start of our talk, that once you have added the CO2 to the water, it's heavier than the water around it, it tends to sink and continue sinking.

David Roberts

So you inject it below the groundwater that people are drinking —

Ólafur Teitur Guðnason

Absolutely.

David Roberts

and it sinks.

Ólafur Teitur Guðnason

Yeah.

David Roberts

So theoretically, you could pump up the water yourself. I mean, presumably that would add a little bit of cost, but you could just pump up the water yourself out of the water table, carbonate it and pump it back down with no need for an external water source.

Ólafur Teitur Guðnason

Right. Well, if the water is there at the site, yes, we, of course, need relevant permits and everything like that. But yes, the water use, because we are talking about fairly big amounts, it adds up and it's easy to calculate big numbers. I was actually looking into this a few days ago. What's the water footprint of products? And I found a website from, I guess it's an NGO that's concerned with water and water preservation and so forth. And it takes about three tons of water to make a hamburger if you calculate the life cycle of it. So, for us to take care of one ton of CO2 requires about the same amount of water that it takes to make nine or ten hamburgers or two smartphones.

David Roberts

But you're not really using up the water, right. You bring it up and you put it back down.

Ólafur Teitur Guðnason

We bring it up, put it back down. We do add the CO2. The CO2 then gets released from the water again as it mineralizes. So then the water is free of the CO2 that we added to it and it goes on its way.

David Roberts

Yeah.

David Roberts

So it seems like in terms of large scale hydrological systems, you basically have very little effect. You're just kind of inserting yourself in the middle of a process that's already happening. But you're not net subtracting water.

Ólafur Teitur Guðnason

Well, it depends on where you take the water and where you put it. Do you return it to the same place as where you took it? So that will be different from site to site and will need to be assessed. I would not be comfortable saying, well, we don't have any effect at all. I think that wouldn't be fair. So it is something that needs to be looked at, investigated, analyzed properly, to make sure that we are not affecting. When you extract water from one place, you can affect the hydrology of surrounding area and so on and so forth.

But I would not say it's a zero concern, but I would definitely say that with the proper designs, we can make it entirely safe.

David Roberts

Well, one almost inexhaustible source of water is the ocean, which is sitting right next to you there in Iceland. So I wonder, what about the prospect of carbonating ocean water and injecting it underground? Because if you could do that, then you have all the water you could ever want in the world. Is this something you have been thinking about or trying to do?

Ólafur Teitur Guðnason

Most certainly. We, a few years ago, started to look into this very heavily. We have already demonstrated in controlled conditions in the laboratory of the University of Iceland that the physics work dissolving CO2 in seawater, exposing it to the appropriate rocks, produces this mineralization process in much the same way as using freshwater does.

David Roberts

Is there any reduction in performance or anything, or does it work just as well?

Ólafur Teitur Guðnason

It more or less works well, yes. I'm not sure exactly about the details of the differences, whether you can dissolve as much or more even, or what the effects are exactly. But what I do know is that once you leave the controlled conditions of the lab and go into the field, you tend to run into unexpected things. And that's precisely why we have actually started — just a few days ago, we finally injected the first CO2 that was dissolved in seawater below the ocean floor using seawater. So the installation is at the shore. It's not offshore; it's close to the shore.

So we are extracting seawater and then pumping it or injecting it under the seabed.

David Roberts

And this is like the shallow coastal seabed, right?

Ólafur Teitur Guðnason

Yes, but we always go a few hundred meters down into the ground and below it. So, yeah, that was a milestone for us that we have been celebrating for the last couple of days at the company, because it has such potential to be a game changer in terms of opening up new geographies, new areas where it might otherwise not be feasible.

David Roberts

Right. And definitely removes any worries about the availability of water.

Ólafur Teitur Guðnason

Yeah, absolutely.

David Roberts

At that point, you've got all the world's oceans full of water. Right now. You are, as we've been sort of discussing, in what might as well have been cooked up in a laboratory to be the perfect circumstances for this. You've got the geothermal there, you've got cheap carbon free power to run it on. You've got the perfect porous, young basalt rock. Almost unlimited space down there to use, so this — Iceland is ideal for this. Have you tried to do this with other kinds of rock and other kinds of geology in other countries?

Ólafur Teitur Guðnason

We have done two small test projects abroad, so we have injected small amounts in Germany and in Turkey. Those were kind of research pilot projects, not really intended to become huge projects, more of a scientific exercise. We are looking into several locations abroad at various stages of discussion, possibly development. Basalt is actually quite common. It covers about 5% of the land mass.

David Roberts

Oh, really?

Ólafur Teitur Guðnason

Yeah. So it's not only in Iceland, but it tends to be young and favorable basalt in Iceland; also, the ocean floor, the majority is basalt. So that also is about what we're discussing earlier. So there are several locations, but I could mention also the US. We have been awarded three rather than four, I think it's three grants from the US Department of Energy to study the potential of our method in the US.

David Roberts

Interesting. Where would that be?

David Roberts

What kind of rock would that be?

Ólafur Teitur Guðnason

Well, it's basalt in the Pacific Northwest, so two projects there. And I should note that we are in collaboration with many other parties collaborating on these projects. So it's not just us, it's the Rocky Mountain Institute, the University of Wyoming and others, and others, Pacific Northwest National Labs and other partners that are collaborating on a couple of projects in the Pacific Northwest. And those have to do with basalt because there are huge basalt in that area. And then in Minnesota, we also have a feasibility study that we are going to do in collaboration with others as well, to check whether our method can be applied there in a slightly different form of rock formations.

David Roberts

Is there a general way to characterize what sort of geology you need? I mean, is it basalt specific, or is it just, you need porous rock, rock with a lot of these minerals in it? Are there other kinds of rock that have these features?

Ólafur Teitur Guðnason

Yeah, like I said, they are similar to basalt. These mafic and ultramafic rocks, which have the large amounts of the metals that we discussed, need to be there. The porosity can vary — for our approach it needs to be there to some extent.

David Roberts

Right.

Ólafur Teitur Guðnason

And we know that there are other companies looking into different types of rocks that are maybe less permeable but have also potential storage capacity. So those will bring different challenges, I guess, that we are not qualified to explain fully. But at least this natural tendency and capability of rocks to store CO2 is something that is catching a lot of attention. And to my knowledge, I think I can safely say that we are the only ones actually applying it today, at least on a commercial basis.

David Roberts

So it's still somewhat of an open book here. We still don't have a great idea of the full extent of types of rock that could be used here.

Ólafur Teitur Guðnason

Yeah, you're right. And I forgot to mention that we also got, in collaboration with scientists in Scotland, a public fund there, to also look into potentials there. I believe those are also slightly different rock types. So there is a lot of research going on and what we have to balance is to move our projects along that are based on what we know and at the same time to expand, improve and do research and development as we need to do to scale these things up. But we are quite satisfied with the project pipeline that we have already and the R&D pipeline.

So we are around 43 people today. We were 15 when I started 18 months ago. We are changing fast.

David Roberts

It's the right thing at the right time. Seems like there's no shortage of CO2 out there looking for places to be buried.

Ólafur Teitur Guðnason

Yeah, that's right.

David Roberts

In terms of sort of accounting, just to take your current setup. If Climeworks captures a ton of CO2, sends it to you and you bury it, who gets the carbon credit? Who gets to sell the carbon credit there? Who gets to sort of claim to be the entity that dealt with the carbon?

Ólafur Teitur Guðnason

Yeah, well, that's a matter of negotiation. Under the current setup, Climeworks sells the credits to customers such as Microsoft and others. So we are providing the storage as a service. Potentially we could have a different setup where we would split those credits somehow. We were not really there at the moment.

David Roberts

So that's not totally settled yet, how that's going to work?

Ólafur Teitur Guðnason

For the current setup it is definitely. But what may happen in the future potentially we also have collaborations with other direct air capture companies. So what the setup will be when those come online, we'll have to see. One fascinating question from my perspective is also the interplay of corporate accounting and national accounting.

David Roberts

Yes, we addressed that on an episode of this very pod a few weeks ago.

Ólafur Teitur Guðnason

I'll have to listen to that.

David Roberts

It's a puzzle.

Ólafur Teitur Guðnason

Yeah. Because there is some criticism that, for example, a particular project in Denmark, where Denmark is going to count the storage project against its national targets and the credits are also sold to a private company in another country.

David Roberts

I think it's Microsoft, actually. I think we discussed that very case.

Ólafur Teitur Guðnason

Yeah. So some people call that double claiming, double counting others, and I'm a bit fond of that argument, which is that this is co-claiming where you shouldn't confuse national accounts with corporate accounts. It's two entirely different systems. So you do have countries, for example, publishing figures on employment, and then you have companies publishing exactly the same figures and one is an aggregate of the other. So you're not double counting the jobs, you're just counting them in two different. You have them in the annual report of this company and then you have them in the national economic figures of the country.

So I don't think really there is necessarily a problem there as long as there are not two companies claiming the same results.

David Roberts

Right. Well, there's still puzzles though, because, say, in the private accounting scheme, whatever, Climeworks gets the credit and shares a little bit of it with you, that's the private thing. But for publicly, if emissions are captured in, I don't know, Germany liquefied, shipped to Iceland and buried in Iceland, is that a reduction in Germany's emissions? Does Iceland get to claim anything?

Ólafur Teitur Guðnason

Well, what is, and what should be? My understanding is that under the current rules, it would be an emission reduction in Germany. Because you count at the smokestack, so to say.

David Roberts

Right.

Ólafur Teitur Guðnason

And that's the same logic. The current climate accounting is you count the emissions where they happen.

David Roberts

Right.

Ólafur Teitur Guðnason

You could do it otherwise. You could, for example, have consumption based accounting where Iceland would have to — well, we import cars, we don't produce any cars.

David Roberts

Right.

Ólafur Teitur Guðnason

The case could be made that to be fair, we should be acknowledging the carbon footprint of those cars —

David Roberts

The embedded emissions I think they are called.

Ólafur Teitur Guðnason

Yes. And at the same time, we are having in Iceland to acknowledge or bear the burden, so to speak, of having three aluminium plants. We are producing aluminium for 3% of the world's production, many hundreds of times more than what we need. We could produce our own needs in like 10 seconds or something.

David Roberts

Yeah. Right.

Ólafur Teitur Guðnason

Because we're such a small nation of 360,000 people and you could say it's unfair that we have to account for this. And as a result of this, we have some of the highest emissions per capita in the world. But that's because we are the aluminium factory of the world. That's not really fair, you could argue. So you could argue for a consumption based, but I guess it's just not practical. So you just count at the stack in the geography where the stack is located.

David Roberts

I mean, if you did do a consumption based accounting, you could see Iceland being like negative emissions many, many times over. You know if they become a hub for bearing stuff.

Ólafur Teitur Guðnason

Yeah, if you would count all the bearing in Iceland, then you could. Yeah, but at the same time, we do consume products and they have to be shipped here and so on. But the point I'm making is maybe that there is no single best way. You have to choose an approach. And it may not be perfect, but it has to be practical. We have this principle of just counting the geography. And by that logic, I guess if emissions are reduced in a certain location, that location needs to be credited. And even though it seems a bit unfair that the country storing it doesn't get the credit, because if you couldn't store it, then what would you do with it?

Personally, I feel that it is worth discussing at least whether we need for this to be recognized somehow, the contribution of countries that are storing, providing storage. Or is it simply the financial benefit of selling that service? Or should it be reflected in the climate national accounts? I mean, I don't really have a very strong opinion on it, but it's worth thinking about. And it's an interesting thought exercise.

David Roberts

Yeah, it's quite a puzzle. You move one piece and a bunch of other pieces move.

Ólafur Teitur Guðnason

Yeah. I'm also sympathetic to the view that we mustn't get too caught up in bookkeeping. We need to get things done. So I don't want to give the impression that, well, Iceland will not store CO2 unless we get the credit. I mean, that's not really a very sensible position, even though you may have interesting arguments about it. The pressing issue is to get things done and not to get stuck in these details. With all due respect to proper accounting and everything, of course it has to be in place. But let's not get distracted from the task, which is to get some progress and scale up our efforts.

David Roberts

For sure. One of the things that really captured my attention and my imagination —

Ólafur Teitur Guðnason

No pun intended?

David Roberts

exactly! Captured, but did not bury my attention and imagination, here is just how simple this whole thing is. There's no piece of this that is particularly obscure or technical, more than an ordinary person could understand. So I wonder, are there places in this process where you can foresee substantial performance improvements or innovations? Like where could you improve the performance of this process? Or is it so simple that it just is what it is, and you might get some economies of scale, but the process itself just is what it is. Or is there room here to sort of improve the performance of this?

Ólafur Teitur Guðnason

Yeah, absolutely. We are continuously doing that. I'm not sure that there will be an order of magnitude improvements in efficiency, but we are definitely working to use our resources more efficiently, use less water, and increase the capture efficiency from geothermal power plants. That was a big breakthrough that we had. So we have designed new capturing equipment.

David Roberts

Oh, interesting.

Ólafur Teitur Guðnason

We've designed a mobile injection system that enables us to go into areas for test injections with much less effort than before. The seawater tests, of course, would be, if those are successful, a game changer. But you are right, I think it's more apart from the seawater, which is really a big shift, it's more honing and fine tuning, but definitely going after every bit of improvement that we can identify.

David Roberts

Awesome. Well, this is so fascinating, Ólafur, thank you so much for coming on and talking us through it.

Ólafur Teitur Guðnason

It's been a pleasure.

David Roberts

I hope to see you up here in the Pacific Northwest before too long.

Ólafur Teitur Guðnason

Absolutely. Thank you for having me. It was a real pleasure.

David Roberts

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