The world’s biggest direct carbon capture plant

This is an audio transcript of the FT News Briefing podcast episode: The world’s biggest direct carbon capture plant

Marc Filippino
Good morning from the Financial Times. Today is Thursday, September 9th, and this is your FT News Briefing.

[MUSIC PLAYING]

Marc Filippino
Janet Yellen warned that the US Treasury could run out of cash next month. And PayPal is building up its buy now, pay later business. Defence lawyers for Theranos founder Elizabeth Holmes said failing to build up a business isn’t a crime. Plus, yesterday was the opening day for the world’s largest facility built to suck carbon dioxide right out of the air. Ever wonder what that looks like?

Leslie Hook
What you would see is kind of like a wall of dozens of fans spinning, and that’s it. It just looks like this magic black box.

Marc Filippino
I’m Marc Filippino. And here’s the news you need to start your day.

[MUSIC PLAYING] 

Marc Filippino
Yesterday was the opening salvo in a closely watched Silicon Valley trial involving failed blood testing start-up Theranos, a company once valued at nine billion dollars. Its founder, Elizabeth Holmes, is facing charges of wire fraud and conspiracy to commit wire fraud. Her lawyers told a federal judge that Holmes’s failure to build her start-up into a viable business was not a crime. Prosecutors allege that Holmes and a former Theranos president falsely promoted the company’s finances and its technology despite knowing it had issues with reliability. A lot of people will be watching this trial, which is expected to scrutinise Silicon Valley’s promotional culture and Holmes’s mental state.

[MUSIC PLAYING] 

Marc Filippino
The online payments giant PayPal is spending 2.7 billion dollars to buy a Japanese group called Paidy. It specialises in the growing field of buy now, pay later technology. You may have noticed this option when you’re checking out online. The buy now, pay later choice is focusing on younger consumers and people who have bad credit. The FT’s Dave Lee unpacks this a little more.

Dave Lee
Well, it’s the latest in a long line now of very interesting moves in the buy now, pay later space. This idea that, you know, rather than paying the full cost of an item online up front, you can spread it usually into only three or four payments over the next few weeks. PayPal has offered its own version of buy now, pay later in the US. What it’s gonna do with Paidy is get the Japanese market. It’s gonna get a little of the Asia-Pacific market. And so it just gives them more presence in what is a a quite intriguing, growing part of how business is done online. So this is, you know, it’s an emerging way to get people to spend money. It’s an emerging way that you can spend more money as well.

Marc Filippino
So, Dave, who are the other big players trying to get ahead in this buy now, pay later market?

Dave Lee
Well, it’s becoming pretty congested. So we saw a big, big deal last month where Square said it was going to acquire an Australian buy now, pay later firm called Afterpay. And then, you know, there was another deal with a firm which is a San Francisco-based provider. One of their big clients is is Peloton, who, you know, that you can pay that in instalments for a firm, but also a firm have now signed a deal with Amazon says that if you have a product or a basket that’s more than 50 dollars, you can pay that in instalments with a firm. And so, you know, what we’re seeing is this rush now to make sure that these major companies are positioned and ultimately what PayPal is trying to do is create what they call a super app that does all sorts of different functions, whether it’s cryptocurrency, investing, saving and so forth. And this is all part of that mix. It’s just seen as one part now of the banking mix that modern consumers want.

Marc Filippino
That’s the FT’s Dave Lee.

[MUSIC PLAYING] 

Marc Filippino
US Treasury secretary Janet Yellen is urging Congress to raise the government’s borrowing limit. In a letter to leading lawmakers yesterday, Yellen said the Treasury’s coffers could be out of cash in October. The Biden administration is worried about a possible debt default. Now it used to be routine for Congress to increase the borrowing limit so the Treasury could pay for the things Congress had already approved. But in past years, Republicans resisted and it pushed the US close to default. In her letter, Yellen warned lawmakers of the harm of waiting until the last minute.

[MUSIC PLAYING] 

Marc Filippino
The world’s largest direct carbon capture plant has just opened for business. It’s in Iceland and it’s being operated by a Swiss engineering start-up called Climeworks. The plant is called Orca and it will collect about 4000 tonnes of carbon dioxide every year. To figure out how significant this is, I’m joined by our environment correspondent, Leslie Hook. Hi Leslie.

Leslie Hook
Hi, Marc.

Marc Filippino
So, Leslie, how important is this plant and the technology that it uses?

Leslie Hook
Well, the technology known as direct air capture has been the focus of a lot of energy, effort and money for the last couple of years. The idea is that if we could only pull enough carbon dioxide from the atmosphere, then that would really help solve the problem of global warming. So it’s a very appealing concept, but it’s never been executed at scale before. And this plant is about five times bigger than the next biggest plant that’s currently operating, even though it’s still a long ways from pulling the billions of tonnes per year that would be needed to really balance out emissions on the planet. The Orca plant will capture about 4,000 tonnes a year of carbon dioxide, which is less than like a small city in the US would emit. So it’s a, it’s a small step forward, but it’s a technology that its advocates hope will really bring about a big change in terms of balancing carbon dioxide in the atmosphere.

Marc Filippino
All right, walk me through it. How does this technology work? How do you capture carbon? And and you know, what when when you got it, what do you do with it?

Leslie Hook
Pulling carbon dioxide from the air is really hard because the atmosphere is only 0.04 per cent carbon dioxide. So you have to get a lot of air to pass over what is basically like a contact surface. You can imagine it like a sponge. Some people think of it more like glue. So you have big fans. They blow the air over this contact surface. The chemicals there bind with the CO2. And once they’ve collected enough of the CO2, then the collector device gets closed and heated. The heating process causes the CO2 molecules to be released and the CO2 gas is captured in a more pure form and it’s stored in a tank before being injected underground. Now, there’s a lot of things you can do with CO2. You can use it to make fizzy drinks. You can pump it into a greenhouse to help the plants grow better. This new plant in Iceland will be permanently storing the CO2 underground. So they’ll take that CO2, mix it with water and inject it deep underground where it will react with a rock formation underground that’s made of basalt. And over a two-year period, the CO2 will basically turn into rock.

Marc Filippino
Now, how fast can this technology actually grow and spread?

Leslie Hook
Well, I think the sector is kind of limited right now by how fast these machines can be built. What’s the manufacturing process? Climeworks says that they want to be extracting millions of tonnes of CO2 a year by 2027. It has potential to grow a lot, but right now the cost is is quite expensive. Climeworks charges 1,000 euros per tonne of CO2. So if you want to offset your personal emissions by making sure that they’re matched up by carbon dioxide removal in Iceland, then you will be paying a thousand euros per tonne of CO2. So that compares to, you know, as much as just five dollars or ten dollars for like a forest-type of offset. So I think the market will be limited by the extremely high price. It’s not economical at the moment, not economical yet at a really big scale.

Marc Filippino
You know, high prices aside, what do sceptics say about this technology?

Leslie Hook
I think the sceptics say that there’s a bit of a moral hazard in focusing too much on direct air capture, that the world needs to cut its emissions right now. And we can’t sit around and and hope that, you know, we’ll be rescued by this miracle technology. So I think that there are some sceptics and they point out that even if when we have direct air capture, the world will still need to cut its emissions and really cut its fossil fuel use in addition to having direct air capture. So this is not a get-out-of-jail-free card at all.

Marc Filippino
Leslie Hook is the FT’s environment and clean energy correspondent. Thanks, Leslie.

Leslie Hook
Thanks, Marc.

[MUSIC PLAYING] 

Marc Filippino
Before we go, more fallout from Wirecard and other financial scandals. The accounting firm EY, formerly known as Ernst & Young, said it would invest two and a half billion dollars over the next three years to improve the quality of its audits. EY had been auditing the defunct German financial firm Wirecard and missed the fraud that led to the company’s unravelling. It’s been reprimanded for its failings in other scandals, too. EY’s chief executives said the money would help improve the accounting firm’s ability to detect fraud and will be invested in new technologies like artificial intelligence.

[MUSIC PLAYING] 

Marc Filippino
You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.