Three Ways Modularity Can Help Scale Up Carbon Removal
How applying this powerful concept can help us rise to the massive climate challenge in front of us.
Despite growing recognition that removing carbon dioxide from the atmosphere is necessary to meet global climate goals, one of the major criticisms leveled at engineered carbon removal solutions is its high cost. Today, carbon removal via direct air capture (DAC) costs well over $500/ton of CO2 removed - a cost barrier that needs to be overcome in order for it to have a climate-relevant impact in the years ahead.
The pathway to bringing down the cost and scaling up engineered carbon removal solutions like DAC is both daunting and unclear. Recently, however, a new paper was published that offered a fresh take on the scale of investment needed to bring down the cost of DAC to $100/ton (which is considered the threshold for economically viable CO2 removal). The study, by Klaus Lackner and Habib Azarabadi, was unique in that it based its analysis on small deployments of modular DAC units, as opposed to large industrial-scale plants which have been the basis for most analyses to date. The paper determined that in most of their simulated cases using modular DAC deployments, capturing between 1.5 and 3 million tons of CO2 could bring down the cost of DAC to below $100/ton - a small amount relative to the current global consumption of CO2.
I have been fascinated by the concept of modularity for a long time and believe it holds the key to unlocking much of carbon removal’s potential for scale. But what is modularity? Based on my understanding, there are three ways to think about modularity, each of which could play a unique role in transforming (and growing) the carbon removal landscape.
Modular can mean small and self-contained.
This is the definition of modular used in the Lackner and Azarabadi paper. They defined modular to mean that all the necessary components for carbon capture were contained within autonomous DAC units. While larger DAC plants may enjoy economies of unit scale, Lackner and Azarabadi point out that small, modular deployments allow for learning curve cost reductions at a lower level of total production output. Small, modular technologies require shorter investment timeframes, lower investment risk, faster construction times, and fewer deployment uncertainties than custom-made, large, individual plants. These factors could improve the predictability of costs, streamline deployment, and improve decision-making flexibility. Additionally, smaller, modular units may have shorter useful lives than industrial plants, which means they are replaced more frequently by units with more up-to-date technologies. Finally, smaller-scale versions of DAC can be deployed in more places that can put CO2 to use - like concrete plants and vertical farms. Lackner and Azarabadi suggest that small, self-contained DAC units could benefit from a similar cost trajectory as other mass produced technologies like solar PV. While DAC faces very different constraints relative to solar PV including high energy requirements, their analysis demonstrates that taking a modular approach enables DAC to meet the critical $100/ton threshold well within current global demand for CO2. In other words, it may be faster to bring down the cost of a carbon removal solution by replicating a large number of smaller projects than by deploying fewer large projects.
Steep reductions in the cost of solar PV over the last 10 years have been partly attributed to the technology’s modular form. Photo by Kelly Lacy from Pexels. Modularity can refer to how components work together within a product.
Another way to think about modularity is within a product’s architecture - how the components and subsystems interact and work together. Modularity Theory was featured in business professor Clay Christensen’s book “The Innovator’s Solution”. Christensen described two states of a product’s architecture - interdependence and modularity. An architecture is interdependent if the way one component is designed depends on the way another component is designed, essentially requiring one organization to develop all of the critical components of a product. A modular interface, on the other hand, is one where there are no unpredictable interdependencies between components. Modular components fit and work together in well-understood and highly defined ways, meaning that modular components can be developed by different companies, allowing for specialized component production that can be outsourced, expanding the number of companies involved in production. It also optimizes for advances in specific components. To continue the DAC example, technological improvements in sorbent materials that improve CO2 capture can be easily swapped into a DAC unit with a more modular design. According to Modularity Theory, interdependent architectures optimize for design freedom and performance, modularity optimizes for flexibility, price, speed, and rapid adoption. The question is, which carbon removal technologies perform well enough in their current interdependent form to transition to a modular architecture in order to achieve the rapid adoption we need?
Finally, modularity can be expanded to include the entire value chain.
The scope of modularity can be expanded to include the degree of integration and interoperability across the value chain. Zooming out from a product to the industry as a whole, a modular approach would enable a variety of organizations to participate in carbon removal at different stages of the value chain. Airminers’ Tito Jankowski’s recent note “Your carbon removal startup doesn’t need to do everything” made me realize how carbon removal start-ups may be trying to take on too much. Imagine innovating, designing, and manufacturing a carbon capture solution, navigating regulatory uncertainties in an effort to deploy the solution and sequester the captured carbon, selling the sequestered carbon in an opaque carbon offset marketplace (or identifying and developing new markets for potential carbon use cases) and conducting ongoing monitoring and verification. This degree of vertical integration is a lot for any one company to take on effectively, and may ultimately lead to slower deployment of carbon removal solutions. It also excludes innovators, companies, and other stakeholders with unique competencies at different stages of the value chain. Instead, carbon removal companies should establish standards (e.g. safety standards, carbon accounting standards) and open up the value chain to more companies, achieving specialized production efficiencies while expanding the diversity of stakeholders who want to see carbon removal succeed.
The benefits of modularity in the context of carbon removal are obviously untested and theoretical. Lackner and Azarabadi’s model is sensitive to unknown real world factors like what the actual technology learning cost reductions from deploying DAC at scale will be. Carbon removal technologies may not perform well enough for a transition away from interdependent to modular architectures. A high degree of vertical integration across the industry may be unavoidable given how nascent the carbon removal field currently is. Nonetheless, modularity offers a new pathway for scaling up carbon removal that should be piloted and evaluated in order to accelerate adoption of this critical climate solution. Modularity leaves behind a “winner-take-all” mentality that simply can’t match the scale of the problem in front of us. It benefits from technology learning cost reductions through faster, cheaper, and more predictable deployments; leverages the specialized competencies of companies across the value chain; and distributes participation in this exciting field across more organizations and stakeholders. Taken together, it results in a more resilient carbon removal industry that’s more likely to succeed in helping the world get to net zero.
Modularity leaves behind a “winner-take-all” mentality that simply can’t match the scale of the problem in front of us.
What do you think? Where is there untapped potential for greater modularity in the carbon removal space? Is it too premature to be thinking about this transition? Send me a note or post a comment if you’d like to discuss what modular deployments of different carbon removal solutions could look like.
The views expressed in this post are mine alone and no compensation was received for publishing it. To receive regular ideas and analyses on carbon removal and the new carbon economy, please subscribe below. If you enjoyed this post, please share it with friends. And if you’d like to get in touch, you can find me on LinkedIn and Twitter.