The Case for Both CO2 Utilization and Underground Sequestration

We see it all the time. One technological option is pitted against the other in an “all or none” argument. People take sides on what’s right and wrong, bets are made, money is spent, and battles begin. This should not be the case for dealing with the problem of too much CO2. Both underground sequestration pathways and utilization pathways should be developed and should co-exist because time is of the essence, and both make sense. We need to do as much as we can as quickly as possible. In addition, there are very likely to be crossover benefits between both CO2 pathways.  All stakeholders can serve the same end goal which is to rebalance the Earth’s overabundance of CO2 in the atmosphere and find ways to more sustainably produce the basic products the world needs and uses every day.

So, How Big is the CO2 Problem?

Today, CO2e[1] levels in the atmosphere are higher than at any point in at least the past 800,000 years. Measured in parts per million (ppm), CO2e has steadily risen from under 200 ppm to 412.5 ppm as of 2020[2]. The U.S. Energy Information Administration estimated that in 2019, the United States emitted 5,130 million metric tons of CO2e, while the rest of the world emitted 33,621.5 million metric tons[3]. The annual emissions of CO2e is growing by around 1.5% annually, so without aggressive intervention, atmospheric concentration of CO2e will likely exceed 650 ppm by 2050.

Reducing CO2

There are really only two practical ways of reducing CO2 emissions. The first is geologic carbon sequestration, which is the process of capturing and storing carbon dioxide (CO2) in deep underground geologic formations. This model of dealing with CO2 waste is akin to landfilling solid waste where a landfill site is identified, the landfill is built, and garbage is transported to the landfill for permanent storage. With this approach there are significant costs to develop, permit and build the landfill and tipping fees for waste disposal. In the long run, landfills fill up because most of the waste is not recycled. Landfills are covered so that emissions from the deteriorating waste aren’t vented directly into the atmosphere and so that a portion of the gases can be used as renewable energy.

With underground CO2 sequestration, the CO2 is usually pressurized until it becomes a supercritical fluid, and then it is injected deep underground into porous rock formations in geologic basins. This method of carbon storage was developed for enhanced oil recovery (EOR) to get more crude production from older producing wells. In EOR, the supercritical CO2 is injected into the oil-bearing formation in order to drive the oil towards the production wells, in most cases also reducing the viscosity of the oil and allowing it to flow more easily to the surface.

In general, underground sequestration (1) focuses on industrial, point sources that would otherwise be emitting CO2 into the atmosphere, (2) captures the CO2, (3) concentrates it, (3) pressurizes it and then (4) deposits it underground. Industrial emitters can do this one by one or they can team up to achieve economies of scale.

Thanks to the oil industry, underground CO2 sequestration is a well-developed technology with fairly low technological risk. However, it is extremely capital intensive. Suitable injection wells are expensive to find, permit, develop, build and operate. Moreover, multiple industrial emitters usually need to come together and make commitments in order to achieve economies of scale and to support the huge capital investment. Industrial companies that choose this pathway must commit to pay significant dollars each year for as many as 10 to 20 years in order to dispose of their CO2. Large underground sequestration projects can run into the billions of dollars and take 5 or more years to develop, permit and build. Government subsidies often play a key role in the overall economics of these projects. It is unclear how underground sequestration projects are sustainable in the long term without a combination of government subsidies and tipping fees.

An example of this kind of project is ExxonMobil’s CCS Innovation Zone, a $100+ Billion project being evaluated in Texas.  ExxonMobil is developing the project along the Houston Ship Channel and surrounding industrial areas with the objective of capturing all the CO2 emissions from the petrochemical, manufacturing and power generation facilities located there. The CO2 would be compressed and piped into natural geologic formations thousands of feet under the sea floor.

Utilizing CO2 as a Feedstock

A second, and arguably a more sustainable, pathway for dealing with CO2 emissions is to look at CO2 as a primary feedstock instead of a waste byproduct. HYCO1’s technology very efficiently converts or “reforms” CO2 alongside CH4 into building block chemical gases of carbon monoxide (CO) and hydrogen (H2).  People often think, “Oh, carbon monoxide is bad stuff”, but in the world of making high value carbon-based products, CO and H2 are considered to be valuable chemical gases because they are the core building block molecules used in dozens of varying combinations to synthesize hundreds of downstream chemicals and products. People also tend to look at methane as a bad thing simply because it’s a fossil fuel. However, when the carbon in both the CO2 and the CH4 molecules can be simultaneously converted into high value products at low cost, well then you have something that can change the world. Instead of two bad greenhouse gases, you really have two very potent and valuable feedstocks that can be used to sequester carbon. H2 and CO as chemical gases are essential for the production of an enormous number of high value products, steel and plastics for starters.

Consider the following list of products – all made with or using CO and H2 – which represent hundreds of billions of dollars in total annual product value:

Waxes Isocyanates
Sustainable Aviation Fuel (SAF) Formaldehyde
Base Oils (Group IV+) Dimethyl Ether
Methanol Lubricants
Solvents Acetic Acid
Steel Vinyl Acetate Monomer (VAM)
Ammonia Oxo-alcohols
Dimethyl Carbonate (DMC) Ethyl-Methyl Carbonate (EMC)


In each of the above products, CO2 and CH4 can be effectively reformed and used to sequester carbon. In most of the above products, the carbon from both the CO2 and CH4 gets locked into or permanently sequestered in the end product for decades, if not centuries.  In other cases such as SAF, the desired product is an essential transportation fuel that is designed to be burned so the carbon is expected to be re-released into the atmosphere. But, making aviation fuel from recovered CO2 is vastly more sustainable than making it from crude oil. The former is a circular use of CO2 as a primary feedstock whereas the latter is a linear use of CO2. Circular not linear is the most sustainable way forward for Planet Earth.

The Future of Carbon is Not Linear

During the past century, the world got really good at extracting coal, crude oil, and natural gas out of the ground and combusting it as fuel or converting it into other downstream products. The world economy was based on a simple formula: produce and emit through a linear, “consume and dispose” economy. That was the old way of doing things.

Today, we find ourselves scrambling to reverse decades-old industrial processes that have become overdependent on emitting CO2 into the atmosphere.

HYCO1 believes that the path forward is not an “Either/Or” proposition, but rather a “BOTH” proposition, especially in the short and medium term.

CO2 conversion / utilization projects built alongside large point-source CO2 emitters or direct air capture (DAC) plants can take their CO2 “over the fence” as primary feedstock to make products that displace crude oil-based products. With HYCO1, the world’s carbon economy can become circular. The number of potential CO2 utilization projects is not measured in the hundreds but in the thousands. HYCO1 believes that CO2 utilization projects can and should be built all around the world – wherever there is a significant CO2 point source emitter.

Pipelines that connect industrial point-source CO2 emitters across vast distances and inject CO2 into select underground disposal wells can be an effective and safe way to decarbonize. Building over-the-fence utilization projects at industrial sites where underground sequestration is either not possible or not economic or may take too long is also a viable path for decarbonization. The reality is that both CO2 utilization pathways working alongside each other in a circular CO2 ecosystem can become symbiotic and sustainable. Both pathways can work in harmony to decarbonize more and do it faster than by trying to do it all one way.  

The future that HYCO1 envisions is a future where CO2 gathering systems and pipelines get built and get interconnected with CO2 utilization projects all throughout the country, where these CO2 aggregation systems serve to provide backup supply of CO2 used as feedstock which can help facilitate and secure ESG project financing (because of more reliable CO2 supply) and optimize the uptime of CO2 utilization projects (i.e., so that utilization projects can run even when the CO2 host is down for whatever reason). It is a future where utilization projects can be built in places where underground sequestration projects are not possible and vice versa. It is a future where both sides, in fact everyone all around the world, can work together to achieve a better outcome for all. The future of carbon is not linear, it is circular; it is also not competitive, but collaborative

How Energy-Intensive Industries Can Increase Sustainability Without Increasing Costs

While there are many hurdles for any industry reaching net zero emissions by 2050, as put forth by the Paris Climate Agreement, energy-intensive industries (EII’s) have the ultimate uphill battle.

EII’s are often producers of basic materials such as steel, petrochemicals, aluminum, cement, and fertilizers. Collectively, these heavy industry emitters currently make up around 22% of global emissions. Along with the transportation sector, these industries are referred to as “harder-to-abate”.

Some of the unique challenges they face include the following:

  • Having long-lived capital assets, meaning switching to any new alternative technology can require massive upfront capital costs. 
  • With high-temperature heat requirements in their processes, these companies need huge amounts of fuel. 
  • Process emissions are hard or impossible to avoid in many cases. For example, look at cement factories. CO2 is a byproduct made not from fossil fuel consumption but from the creation of the active ingredient in cement. 
  • Materials produced by heavy industries are globally traded and in high demand. This sets up trade considerations that, in most cases today, make the status quo more affordable than sustainable alternatives. 

So, if you are in a harder-to-abate industry, how can you increase sustainability in the face of these challenges? 

All while staying profitable?  

Well, there are two main areas to focus on. You must increase energy efficiency and adopt the 4 tenants of a circular carbon economy: Reduce, reuse, recycle, and remove. 

Research points to the following to achieve just that.

Get an accurate benchmark on your energy efficiency through an energy audit

If it can’t be measured, it can’t be improved. Simple as that. 

Creating a sustainability plan comes with a hefty list of jobs to be done while considering your business’ unique variables and factors. You need to identify industry drivers of sustainability, find the right technologies to aid your sustainability efforts; plan, establish and enforce policies business-wide, etc… 

But an important piece for any business is auditing and benchmarking your energy usage across your company both internally — between departments, for example — and externally. 

From there, you can set the appropriate objectives, goals, and KPI’s. See Green Business Bureau’s 10 part action guide for executives on creating a successful sustainability plan:

Accuracy is important in any audit. 

With harder-to-abate industry companies, there is typically a large amount of equipment to track, sophisticated technology in use, and an increasing demand for mobile devices – all of which can cause a complex reporting equation. So, visibility of all device and equipment usage is necessary. 

This kind of visibility can often be found through your company’s utility bills. And some complex invoice management companies and softwares can ensure that full level of visibility, such as with Cannon Group’s Utility Bill Management and ESG Reporting capabilities (ESG being Environmental, Social and Governance). 

With intelligent invoice management such as that, energy usage can be reported directly along with a utility or device bill. Many companies even go one step further and automate the ESG reporting process.

Which brings us to the next area to focus on: Automation.

Automation (Smart Manufacturing) Lowers Costs and Increases Energy Efficiency

The U.S. Department of Energy’s Smart Manufacturing Institute concluded that automation, unsurprisingly, reduces energy consumption. Some of the key verticals studied included paper, iron & steel, and petroleum refining. 

The two major pieces in this automation equation are Robotic Process Automation (RPA) and Internet of Things technology (IoT).

RPA blurs the lines between digital and physical more than ever before. 

Driving industry 4.0, RPA helps machines, people, CRMs, software, and more communicate with one another by automating the storage and processing of data. While RPA has traditionally been associated with increasing financial savings through efficiency, more and more, clean energy executives are looking to it specifically for its sustainability benefits (UI Path). 

Take Anheuser-Busch InBev (AB InBev) for example. They have recently launched many RPA initiatives with sustainability being their main priority

Where RPA helps automate the handling of data, IoT heightens the ability for devices and machines to communicate that data. When mixed together, the possibilities are powerful. 

For manufacturers, it means applying things such as sensing technology, better control functionality, predictive modeling, automated diagnostics, heightened monitoring systems, and much more to a given facility or network of devices. Doing so cuts down on overproduction, waste, human touchpoints, energy consumption, etc… all of which greatly increases efficiency and sustainability while producing budget savings in organizations. 

To give you a sense of what other industry sustainability programs are investing in for their facilities, here is a graph from Automation World’s survey of heavy industry companies.

Types of automations manufacturers are purchasing
Image from Automation World

Breakthrough Carbontech Turns Emissions into Valuable Products

And according to Forbes, The New York Times, GreenBiz, and many others, there is a carbontech revolution on the rise. 

To truly understand this revolution, it’s helpful to level set and understand the three core areas of focus when dealing with carbon emissions: Carbon capture, carbon sequestration, and carbontech. Carbon capture grabs greenhouse gasses from either the air (direct-air capture) or from the source of emissions (point-source capture). Point-source capture being the most relevant for energy-intensive industries. From there, carbon is sequestered and stored in various ways (Clean Energy Ventures). 

Carbontech is any technology that utilizes captured CO2 in a productive way. I.e. sequestering it into something usable. 

The problem with many carbontech companies is that (up until recent breakthroughs) it’s been expensive and inflexible on the output produced. 

Take biochar. 

Biochar is a charcoal-like material made from capturing emissions and sequestering them into biomass. It’s then burned for energy. Unfortunately, this is a process with a single output that’s probably reliant on an expensive distribution channel. This biochar startup, for example, currently has a carbon removal cost of $600 per CO2 ton. Next year the company hopes to get to $400 per ton and then to achieve $200 per ton by 2024. It is conceivable that they could eventually get to a cost below $100 per ton.

There are a wide range of carbontech solutions, but almost all of them can only go as low as around $100 per CO2 ton captured

In contrast, at HYCO1, we contract CO2 removal for $0 per ton


We capture greenhouse gas emissions straight from the point-source and, on our nickel, we convert the CO2 into green building block chemical gases such as ultra-pure streams of Hydrogen and Carbon Monoxide. We use these building block gases to make targeted high-value products that pay for the capital investment needed to take and convert CO2. And we do it at an industrial scale (100 TPD to 5,000 TPD). So, for energy-intensive industrial manufacturers, we can take your current environmental burden (CO2 emissions) and your potential future carbon tax liability and turn these into a win-win outcome.

Our proprietary, patent-pending process: 

  • Converts 100% of CO2 emissions into highly valuable products
  • Scales from 100 tons per day to 5,000 tons per day of CO2 emissions
  • Has no out-of-pocket expense for industrial manufacturers
  • Will be commercially ready by mid-2022

You can learn more about our process here.

HYCO1 Can Help Harder-to-Abate Industries Decarbonize! 

For us, it’s not good enough to be carbon neutral. We believe in helping companies reach carbon negative. Our leadership team at HYCO1 has the experience and track record to bring this vision to reality. And the first step is improving the sustainability in energy-intensive industrial manufacturers. 

If you’re a senior executive or if you’ve been tasked with clean energy initiatives at your company, please reach out either on our contact page or through LinkedIn to discuss how you can decarbonize your business with no out-of-pocket expenses. 

Additional Resources

  1. Mission possible report https://www.energy-transitions.org/publications/mission-possible/#download-form
  2. Post from strategic energy consulting: http://www.sustainabilityconsulting.com/blog/2021/6/1/getting-to-net-zero-for-hard-to-abate-sectors
  3. Climate action article on harder to abate industries: https://www.climateaction.org/news/efforts-in-making-hard-to-abate-a-thing-of-the-past
  4. https://www.wri.org/climate/expert-perspective/unlocking-hard-abate-sectors
  5. https://eadcorporate.com/implementing-industrial-automation-in-2021/
  6. https://www.sia-partners.com/en/news-and-publications/from-our-experts/iot-and-rpa-connecting-physical-world-digital-world
  7. https://www.greenbiz.com/article/how-smart-manufacturing-can-embrace-sustainability-and-become-future-ready
  8. https://netzeroclimate.org/sectors/heavy_industry/
  9. https://www.iea.org/articles/the-challenge-of-reaching-zero-emissions-in-heavy-industry
  10. https://cio.economictimes.indiatimes.com/news/next-gen-technologies/rpa-going-beyond-efficiency-to-impact-sustainability/75550725

What is the Current Status of Carbon Pricing Around the World?

According to The World Bank, 64 carbon pricing initiatives have been implemented in 45 countries around the world. Economists and policymakers don’t agree on one universal method to reduce carbon emissions, so every program consists of its own terms. A majority of the world’s developed economies have implemented federally mandated carbon pricing programs; the United States and Australia are the only countries who have not yet followed suit.

So how are major economies dealing with carbon reduction? 

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Image Source: World Bank


The nearly 6% increase in emissions reduction between 2020 and 2021 is largely due to Chinese efforts. Though China has put carbon-reducing instruments in place for almost a decade, 2021 marks the first year the world’s largest GHG emitter rolled out a national plan. 

After a gradual start with trading systems across 8 regions in 2011, China opened the largest carbon market in the world. The emissions-trading system (ETS) gives polluters a yearly limit on the amount of carbon they are permitted to emit. Companies can buy or sell their allowances. Pricing per allowance is expected to be under $8 per metric ton, which aligns with US pricing but is still much lower than UK and European standards. The initial rollout only targets the power sector, with plans to move into seven other industries in the coming years. With President Xi Jinping vowing to reach peak emissions by 2030 and carbon neutrality by 2060, China’s forward momentum is expected to have a huge impact.


The European Union adopted the world’s first ETS in 2005. Their aggressive program covers almost half of the EU’s emissions, with plans to hit net neutrality by 2050. In 2018, the European Commission added an additional program, called the Effort Sharing Regulation, to place further restrictions on industries not included in the ETS. The Regulation targets sectors like agriculture, transportation, and construction; the industries under The Regulation make up almost 60% of Europe’s total emissions. 

Europe has also adopted the 2030 Climate Target Plan. The ambitious plan will restructure the current climate legislature and the Effort Sharing Regulation to reach pre-1990 carbon levels by 2030.


The Industrial Decarbonization Strategy, the UK’s opened its nationwide ETS this year with prices at £50 ($69.26), which was over £5 ($6.92) higher than the EU’s pricing at the time. 83 million permits will be up for auction this year, available to the same companies that were included in the EU’s ETS before Brexit. The UK’s strategy includes government funding for companies who struggle to find funding for green initiatives, and reforms aimed at reducing carbon leakage.

The UK expects to reduce emissions by two thirds by 2035, and hit net-zero by 2050.


Though Australia’s Clean Energy Future plan was successful at reducing emissions when it was introduced in 2011, it was met with such backlash that it was repealed just two years later. As it currently stands, carbon reduction is not legally required, and Australia has not committed to a net-zero deadline. However, Australia’s emitters are taking steps on their own to reach net-zero by 2050 by investing in greener technology. These companies are watching the rest of the world’s carbon markets, and making moves to get ahead of any federal program that may be enacted in the future. 


Canada first introduced their current carbon pricing strategy in 2016. Under the Pan-Canadian Framework on Clean Growth and Climate Change, the federal government gave each province three years to set their own carbon pricing program. All programs were required to meet federally mandated benchmarks, and the government provided the framework for pricing programs for provinces that did not develop their own initiatives. The provinces that opted into the federal program are still given the revenue to reinvest as they see fit. Canada has also implemented two additional programs to reduce carbon pollution at the local level. The Climate Action Incentive program awards additional tax returns to eligible families in certain provinces. The Climate Action Incentive Fund provides aid to small businesses, medical and educational institutions, and other federal programs.

Latin America

Though Latin America has been slow to respond to climate change, several countries have implemented programs to cut carbon emissions. Mexico, Colombia, Argentina and Chile have all initiated carbon taxes, though the prices are far below the recommendations of the Paris Agreement. Mexico is also testing its own ETS system, targeting its power and industry sectors. Chile’s Climate Change bill includes an aggressive cumulative emissions reduction target for 2030, and plans for a future cap-and-trade system. The bill is still being considered by the Chilean Congress.

United States

Despite no federally mandated carbon pricing system, there are still big efforts being made to reduce carbon emissions in the US. California initiated its California Climate Investments program in 2015. This cap-and-trade system has raised billions of dollars that have been reinvested back into green initiatives throughout the state. Eleven states in the Northeast have come together to create the Regional Greenhouse Gas Initiative, a mandatory cap-and-trade system across multiple sectors. RGGI prices are still incredibly low compared to European markets. Pennsylvania and Virginia are planning to join the initiative. Though already a member of RGGI, Massachusetts has a second program that further targets its power sector. Finally, in April 2021, Washington passed legislation on their own aggressive cap-and-trade program. Washington’s market will open January 1, 2023 and expects emissions to be 45% under 1990 levels by 2030, and net-zero emissions by 2050.

Though many US legislators acknowledge carbon pricing as an effective way to combat climate change, the jury is still out on whether a federally-mandated carbon tax will be enacted or some other form of market system is adopted. Regardless of what the government decides, more consumers are calling for carbon neutrality, and emitters are wisely taking steps to reduce carbon emissions to meet the demand and prepare for future legislation. Working with HYCO1 is an easy and affordable way for emitters to eliminate carbon emissions. Our breakthrough catalyst and conversion process turns costly CO2 emissions into high-value, low CI-score products. Even better, HYCO1 plant partners are able to significantly reduce their total cost of production while lowering the CI score of their own products. 

Contact a HYCO1 expert today to learn how you can achieve net-zero emissions at no cost to you.

HYCO1: Carbon Negative. Planet Positive.

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