Meet the Startup Producing Oil to Fight Climate Change

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May 25, 2021

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by Emily Pontecorvo (Grist) How Charm Industrial became a go-to in Big Tech’s mission to offset its carbon footprint. — … The friends, all engineers by training, had designed a machine that could turn agricultural waste, like almond shells, into renewable hydrogen fuel. They’d even found a partner, the owner of a fueling station for hydrogen-powered cars, who wanted them to build a pilot plant at his facility. But the process of leaving the lab and entering the real world suddenly lifted the veil on all the economic, regulatory, and logistical challenges the startup had yet to solve.

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About six months later, Charm landed its first major deal. They had figured it out — but what they figured out had nothing to do with hydrogen.

Meehan and his friends were pitching a new idea. Charm would use the same technology, but instead of turning plants into a useful energy product, it would offer a service. The company would take those almond shells and other types of biomass, convert them into a carbon-rich oil, and inject the oil deep underground.

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Today, Charm’s solution is expensive — about as expensive as capturing CO2 from ambient air.

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Meehan said Charm’s ultimate goal is to get its price down from $600 to $50 per metric ton of CO2 removed. The company’s grand scheme for getting there is primarily to scale up — as demand grows and Charm produces more bio-oil, it can bring down the cost of manufacturing the equipment and the overall cost of operations. The company is also looking to operate in states like Kansas and Oklahoma where the geology is suitable for injection wells, and where farm waste is abundant. By producing the oil closer to disposal wells, it can save money on transportation. Charm is also working to turn some of the bio-oil into a mixture of hydrogen and other gases called syngas that can be used to make green steel.

Government programs could also help Charm bring its costs down. A federal tax credit known as 45Q will eventually pay companies up to $50 per ton of carbon dioxide equivalent sequestered underground. Right now it only applies to CO2 gas, but Charm hopes to lobby to get the definition expanded to include bio-oil. Similarly, the company would like to become eligible to generate credits under California’s low carbon fuel standard, a status that direct air capture facilities recently gained.

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