Using CO2 as a feedstock almost never makes economic sense: it costs a lot of energy to break those carbon-oxygen bonds, and your potential products are all low-value C1 molecules (carbon monoxide, formic acid, methanol, or methane). The story changes in the few cases where CO2 is integrated into a larger chemical process (e.g. in the production of urea or polycarbonate polyols), but those niche cases don’t scale to a broader climate solution—the CO2 sources are rarely co-located with the right large plants, and the mass balance between emissions and chemical demand just doesn’t line up.

But if you were able to reduce that CO2 to a C1 molecule, such as formic acid, in an extremely efficient manner, then maybe you could break even at competitive market prices (roughly $0.20-$0.50/lb). It’s just hard to sell low-value chemicals like this because when prices are this low, the cost to transport the product (let’s call it $0.05-$0.10/lb) ends up being a large fraction of the delivered price, so you need to be close to your customer.

In principle I like electrolysis as a means of reducing CO2 because it has the lowest theoretical energy cost (thermochemical processes aren’t particularly efficient, they just scale well on the CapEx side), and when your feedstock is free, almost all of your OpEx is energy, so it’s the only lever we really have to reduce production costs. After that it really just comes down to getting creative with your product.

Anyways, all of that is just a prelude to this news: OCOChem, a Washington-based startup using CO2 and water to produce formic acid via electrolysis, just signed a deal with ADM to set up their first demonstration-scale plant at ADM’s ethanol plant in Decatur, Illinois. This is a big deal in the world of chemicals! And while the market for formic acid isn’t particularly enticing, if the technology works well at ethanol-plant-scale I have faith in ADM and OCOChem’s joint ability to develop a market for formic acid or some derivative of it. [LINK]