The world’s reliance on carbon — from electricity and heat to transportation and plastics — presents the evolving challenge of managing carbon efficiently while also enabling a future economy that serves as a tool to manage carbon circularly. To achieve this balance, companies are finding opportunities to develop innovative strategies and chart a course toward a circular carbon economy — a framework where carbon mitigation options work together to provide a systems approach to emissions reduction. This is particularly important to address as the global population is expected to increase by 2 billion people within the next 30 years, according to the United Nations.
The journey to creating a circular carbon economy is complex and variable, influenced by industry sectors. While the process goes back to the basics of reduce, reuse and recycle, it requires unparalleled innovation and the consideration of the entire life cycle of all products.
Here are some key aspects of a circular carbon economy at work:
- Integrating wind, solar or hydro power generation reduces the amount of carbon emissions produced. These technologies feed directly into energy generation, which powers the transportation, residential and industrial sectors. Renewable energy integration also minimizes dependence on fossil hydrocarbons.
- The agricultural industry also plays a role in a circular carbon economy. When carbon is emitted through agricultural waste, it can be reused in the renewable fuels and chemical production and power generation industries. Biomass — renewable organic material that comes from plants and animals — can be burned directly for heat or converted to renewable liquid and gaseous fuels. Livestock waste, crops, wastewater and food waste can be converted to biogas and used for heat and electricity, as well as biomethane for gas grid and fuel.
- When powered by fossil fuels, the transportation, residential and industrial sectors produce greenhouse gas emissions. Managing these emissions is an opportunity to contribute to a circular carbon economy. Through gasification and pyrolysis, plastics can be broken down into their basic chemicals, which are then used to make new materials. This plastics recycling can minimize the natural gas consumption and reduce greenhouse gas emissions.
- Carbon capture technologies are also making it possible to remove carbon dioxide from plant emissions. When installing carbon capture systems, companies should consider how they will dispose of and benefit from the large amounts of captured carbon dioxide. Carbon sequestration is an artificial process that removes carbon dioxide from the atmosphere by injecting carbon dioxide into very large underground geological formations for storage, essentially disposing of carbon dioxide as a waste product. Another one of the largest industrial uses of carbon dioxide is enhanced oil recovery, whereby pressurized carbon dioxide is injected into existing oil and gas reservoirs to produce more hydrocarbons.
To encourage change and alleviate financial burdens, federal and state agencies have passed incentives and tax credits to help fund initiatives that contribute to a circular carbon economy. Section 45Q of the U.S. tax code makes the implementation of carbon sequestration technology a more economically attractive proposition for utilities, while not limiting the industry with a tax credit cap. The renewable fuel standard program is a national policy that requires a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based fuel. Low-carbon fuel standards are designed to decrease the carbon intensity of a transportation fuel pool and provide an increasing range of low-carbon and renewable alternatives. The U.S. federal biodiesel tax credit provides qualified taxpayers with a tax credit when the required amount of biodiesel or renewable diesel is blended with petroleum diesel.
While renewable technologies reduce greenhouse gas emissions, holistic systems can help balance the growing population’s continued reliance on fossil fuels. With a circular carbon economy, carbon can be reduced, reused, recycled and removed to prevent emissions from entering the atmosphere while turning it into valuable products.
Carbon capture offers an economically viable way to balance aggressive environmental mandates with reliable power generation.