Sara Stefanini, a journalist at Carbon Pulse, sat down with Raphael Pfaeltzer, CEO of The Carbon Removers, to discuss the company’s current and upcoming projects and the future of the carbon removal industry in the UK and beyond. The full article is also available here.
The Carbon Removers, which specialises in capturing biogenic CO2 from alcohol distilleries and farms, expects to announce a number of deals with Danish biomethane sites in the next couple of months to catch and store their emissions under the North Sea, in the new
Greensand Future site, its CEO told Carbon Pulse.
This is part of the Scottish company’s plans to scale up its carbon removals to up to 1 million tonnes per year by 2030, from the low thousands today. The first step is to fill the 50,000 tonnes per year of capacity it has booked in Greensand’s depleted oilfield.
If we had been able to buy storage space in the UK, to be honest, we probably would never have expanded to Denmark, because we are a UK business. But it’s just impossible,” Raphael Pfaeltzer said in an interview.
Denmark, on the other hand, makes it possible for smaller, biogenic CO2-focused companies like The Carbon Removers to store emissions geologically. “So after we got the Danish storage space, the next logical move was to also find Danish CO2, and just replicate our entire UK business model.”
While Denmark has far fewer whisky distilleries than Scotland, it does have vast farming land, he added.
The Greensand Future storage facility, operated by oil and gas company Ineos, is set to become the EU’s first operational CO2 storage facility, with the developers aiming to begin operating storage in the Nini field, under the Danish North Sea, around July.
It’s expected to initially capture and store 400,000 tonnes of CO2 per year, and could reach as much as 8 million tonnes, according to the developers.
The Carbon Removers announced its “breakthrough deal” with the Greensand developers in Dec. 2024, to permanently store 50,000 tonnes per year. The company plans to ramp up in the second half of this year, and reach its full capacity, about 10 times more than current rates, in 2027, Pfaeltzer said.
Until now, The Carbon Removers has been storing its CO2 in carbonated building materials, as defined by the carbon removals registry Puro.earth. While the technology works, the CO2 makes up a small percentage of what goes into the building material – somewhere between 5-20%, Pfaeltzer said.
“So if you look at how much building material the building industry uses, you can store thousands of tonnes, maybe scale up to tens of thousands of tonnes,” he said.
“But there is no one in the entire carbonated building materials world who would be able to store 50,000 tonnes for us right now.”
No entry
Despite the UK government’s political push to kickstart a carbon capture, utilisation, and storage (CCUS) industry, the country’s regulatory structure has so far made it impossible for The Carbon Removers to secure geological storage capacity.
This is because the UK has classified carbon storage and transport networks as a regulated asset base, much like utilities, said Pfaeltzer.
The regulated asset base model is designed to attract private investors by providing economic licences that lead to stable, regulated returns, with fair access to the storage and transport infrastructure.
The problem for The Carbon Removers is that it significantly limits the types of companies that are even allowed to queue up to buy capacity, mostly reserved to large industrial emitters like cement, power generation, and energy-from-waste plants, Pfaeltzer said. Emitters also need to be near the country’s first CCUS clusters, in Teesside (northeast England), Humber (northern England), and Merseyside (northwest England).
“Practically, it means that if you’re a small business, you’re not even allowed to join the queue. And if your CO2 comes, not through a pipeline, but through a truck or ship or rail or barge, like ours does, you’re also not allowed to join the queue.”
Pfaeltzer worked for the Norwegian CO2 removals and storage company Storegga until Sep. 2023, when he joined The Carbon Removers first as chief operating officer.
At Storegga, he was involved in the Acorn CCS project in Scotland’s Aberdeenshire. Storegga then announced plans to sell its stake in Acorn in December, introducing fresh uncertainty around the project.
Packaged CO2
The Carbon Removers was founded by brothers Ed and Richard Nimmons in 2012, formerly as Carbon Capture Scotland, by buying biogenic CO2 from local whisky distilleries and biomethane sites and selling carbon removal credits.
The company’s Nimmons900 carbon removal module turns the CO2 into highly pure cryogenic, pressurised liquid, which The Carbon Removers then transports by truck to its partner OCO Technologies, which makes sustainable construction materials using the CO2.
The Nimmons900 is easy to install onsite, easy to scale, and easy to move, according to the company. The technology is certified by ISO, and carbon credits are registered with Puro.
“That’s where we learned this business of capturing CO2 from multiple sites, aggregating it, making sure it’s pure, reliable feedstock, and feeding it to storage,” said Pfaeltzer.
Before announcing its deal for storage capacity at Greensand Future, The Carbon Removers secured “vital” financial support through an agreement with London-based carbon asset manager Carbonaires and Swiss bank UBS in Nov. 2024.
In what The Carbon Removers called an innovative financing arrangement, the three organisations agreed to run a project capturing CO2 from the Scotch whisky supply chain, which they expected to generate 134,000 verified carbon credits over several years.
The CO2 would initially be stored in cement, until permanent storage, like oilfields, became available, the company said at the time.
More recently, The Carbon Removers also secured nearly £1 mln from the South of Scotland Enterprise, a development agency focused on southern Scotland, to help draw in wider investments and support the company’s growth across Europe and the UK.
The Carbon Removers, formerly known as Scottish CCS, hopes to push its removals up to 1mln tonnes of CO2 per year by 2030, and reach £1 billion of annual revenue by 2034-35, SOSE said in a statement in January.
Where next
While permanent CO2 storage isn’t an option in the UK yet, the market is expected to change in the coming years, Pfaeltzer said.
This is thanks to two key interlinked changes that the UK government is planning to make from 2029: introducing a bespoke contracts for difference (CfD) scheme for greenhouse gas removals (GGRs), and then introducing GGR credits into the UK Emissions Trading Scheme (ETS).
The government’s GGR Business Model, published last August, introduced a 15-year CfD designed to de-risk investment and unlock private finance in carbon removals. Like with CfDs for renewable energy projects, this would compensate developers with the difference between a set strike price and revenue generated through voluntary carbon market sales.
Read more: ANALYSIS: New UK carbon removals business model will make the market “bankable”, industry says
These changes should make it possible for a company like The Carbon Removers to secure physical storage space in the country in 2029, and to start booking it in 2027, Pfaeltzer said.
Crucially, the changes will also bring greater price clarity in a carbon removals market where prices are kept tightly under wraps, he added.
But while the company is keen to permanently store CO2 in its home country, it continues to look for opportunities in Denmark and elsewhere, he said.
“The best countries are those that have geological sequestration sites, but also have large agricultural industries and or alcohol industries. So Denmark is brilliant, because Denmark has a massive agricultural industry and has storage,” Pfaeltzer said.
“The next countries on the list in Europe are the Netherlands, which has an attractive, big agricultural industry and storage, and Italy, which is very close to developing its first storage site, and northern Italy has a really big agricultural industry.”
By Sara Stefanini – sara@carbon-pulse.com