Questions Entrepreneurs Should Ask If They Want to Cut Industrial Emissions
By Cody Finke, Ph.D., CEO, Brimstone Energy
Industrial processes—that is to say, the steps that go into making stuff—account for around 32 percent of global greenhouse gas emissions. That’s more than 5X the emissions from cars! We think quite a bit about industrial process emissions at my company, Brimstone Energy, as we work on eliminating greenhouse gas emissions from the production of one of the world’s most carbon-intensive products: cement. And we focused eliminating process emissions from hydrogen production in an academic journal article we recently published.
If you’re a science entrepreneur looking to decarbonize any heavy industry, you need to consider the infrastructural and economic hurdles you will face in turning an idea for a cleaner industrial process into reality. Because no matter how focused you are on shrinking the greenhouse gas that a product or process emits, you won’t get the traction you need to scale unless the solution checks several boxes.
For industry, cost is king, so creating a new approach to making an industrial product that cuts greenhouse gas as emissions isn’t enough. You need to consider the questions below and find a scenario with the lowest capital expenditure (CapEx), and the lowest and cleanest energy costs.
(It’s also helpful to know the different types of industrial process emissions and the products that generate most industrial emissions.)
Steel plant. Photo: Ben Cooper
Fossil heat can be hard to beat
Conventional production processes are primarily powered by heat, often generated on-site by burning fuel. Heat can, and often is, electrified at near 100% efficiency.
The good news here is that clean electricity, when generated at the industrial plant, can cost as little as $25/MWh, while on-site generation of fossil electricity would be $40/MWh.
However, there is more bad news than good news... Your on-site renewable energy is not likely available 24 hours a day, and that intermittency means you’ll have to weigh the price benefit of using on-site clean electricity against the cost of buying energy storage systems or adding additional manufacturing capacity to offset intermittency-driven downtime. And while on-site clean electricity is cheaper than electricity made on-site from fossil energy, it’s still likely going to be 4-6 times pricier than just using heat from burning coal, which costs as little as $7/MWh. So in summation: clean electricity is cheaper than dirty electricity but intermittent and more expensive than dirty heat.
So, ask yourself:
If I am using a process that uses electricity to make a material that is conventionally made using heat, how am I going to make the electricity cheap enough to compete with heat? Typically it does not.
Instead of inventing a new process to make an existing product clean, is it not cheaper to just use most of the conventional CapEx and electrify heat for an existing process? If so, what will make the use of clean electricity cheaper than dirty electricity or dirty heat, given realistic CapEx?
Industrial CapEx is high, which devalues intermittent energy
As shown above, intermittent renewable electricity is often the cheapest form of electricity (although still more expensive than heat which is the primary energy source for industry). However, because in industry you can make more product—and therefore more revenue—by operating your production equipment all the time, intermittent energy is especially challenging.
Solar energy, for example, is only available around 20 percent of the year compared to coal energy (the cheapest form of heat) which is always available. Therefore, in order to make a given amount of product in a given amount of time, a solar-only process would either need 5X the production capacity compared to on-demand powered-processes, a massive energy storage installation, or a combination of storage and long-distance energy transmission to connect disparate renewable sources.
So, ask yourself:
Given the CapEx of my process, is intermittent or 24-hour energy the least-cost operation scenario? If 24-hr electricity is cheaper than intermittent, is 24-hour electricity cleaner than the energy required to power the conventional (typically heat-driven) process? Typically it is not.
If my process is only cheaper if either renewable electricity or my processes’ CapEx falls to a specific price, is the least-cost operation scenario if these things do not happen? Electrifying the process using 24-hour electricity from the grid might not be cleaner if the conventional means of production is currently powered by heat because 24-hr electricity is usually dirtier than 24-hr heat.
It can be difficult to replace industrial materials with novel “clean” materials.
There are many regulations and an enormous amount of know-how and deployed capital around existing materials. Therefore, replacing a conventional material can be very difficult from a systems perspective. For example, cement and rebar (steel) are co-regulated because cement’s extreme alkalinity protects the rebar while the rebar provides cement with strength and flexibility. Additionally, both cement and rebar have the same coefficient of thermal expansion which prevents cracking on sunny days when the materials expand. New materials may not be compatible with other materials for an application and are perceived as risky to use.
So, ask yourself:
If I am making a new material, can it be swapped in for the material it replaces while meeting the same regulatory and functional specifications?
Suppose my new process for creating a material relies on carbon capture to be cleaner than conventional production. What is the financial incentive to capture carbon, and is my process still cleaner if the carbon is not captured? Why not just capture carbon on the original process rather than introduce a new process?
Here is an example from our recent research paper on hydrogen production that illustrates the type of analysis required for determining the viability of a new industrial process.
Given the current cost and capacity factor of unsubsidized solar energy (~$0.04/kWh and 15% - 35% respectively) and the current cost of installed CapEx (~$900/kW) it is cheaper to operate water electrolysis for hydrogen production on industrial grid electricity (~$0.06/kWh) or on-site at the plant fossil electricity (~$0.04/kWh) than it is to run it only using solar energy.
Solar-only costs are $9/kg of hydrogen while grid costs are $4/kg of hydrogen. Importantly, using fossil energy to split water is more carbon intensive than steam methane reforming by a factor of 3-4X. Therefore you have to decide what you believe to be true in the future to ensure that solar-only water electrolysis will be cheaper than conventional water electrolysis.
Industry currently uses cogeneration of hydrogen and other salable byproducts to make cheap, clean hydrogen (e.g., steam cracking propane to make propylene and hydrogen or the chlor-alkali process to make chlorine, caustic soda, and hydrogen). We found that various logical cogeneration schemes could meet the world’s hydrogen demand and be cleaner than conventional production even when powered by fossil energy. Among the most promising is the co-production of hydrogen and sulfur compounds like making hydrogen and sulfur from hydrogen sulfide for use in refineries or making hydrogen and sulfuric acid from sulfur, both for use in the production of fertilizer.
Cutting industrial emissions presents interesting challenges: the economics of replacing incumbent systems, such as low-cost heat, with cleaner alternatives; the prospect of disrupting a plant’s 24-hour production cycle; the struggle to eliminate or reduce the many types of process emissions; and the difficulty of adopting novel materials, to name just a few. These are vexing problems, all of which we are working on at Brimstone Energy, but because they represent more than a third of global greenhouse gas emissions, cutting industrial process emissions is also a huge opportunity to create a livable planet while still producing the stuff society wants.
Four categories of industrial process emissions
The remaining 7% of industrial emissions (which account for 2% of global emissions) are from forestry and land-use change.
The Big Four
Four industrial products represent half of all industrial emissions and the biggest sources of industrial process emissions.
Cody Finke earned his Ph.D. in environmental science and engineering under Prof. Michael Hoffmann at Caltech. During Finke’s Ph.D. he specialized in electrochemistry and techno-economic modeling where he attempted to find economically efficient ways to reduce carbon dioxide process emissions. Finke also helped develop and bring to market an electrochemical wastewater treatment technology for applications in low-income countries.
Finke earned a B.A. in chemistry with distinction at Carleton College, where he received numerous awards including the Barry M. Goldwater Scholarship. Finke founded Brimstone Energy to find economically advantageous methods of eliminating chemical process emissions.