capturing new jobs · 2. methodology to estimate dac employment opportunities 3. job opportunity...
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Capturing New JobsThe employment opportunities associated with scale-up of Direct Air Capture (DAC) technology in the US
PREPARED FOR THE LINDEN TRUST FOR CONSERVATION | JUNE 23, 2020
John [email protected]
Whitney HerndonSenior [email protected]
Galen HiltbrandResearch [email protected]
About this analysisThe Linden Trust for Conservation commissioned Rhodium Group to assess and quantify the employment opportunities associated with the scale-up of Direct Air Capture technology in the US. The research was performed independently. The results presented inthis report reflect the views of the authors, unswayed by those of the Linden Trust.
About Rhodium GroupRhodium Group is an independent research provider combining economic data and policy insight to analyze global trends.Rhodium’s Energy & Climate team analyzes the market impact of energy and climate policy and the economic risks of global climatechange. This interdisciplinary group of policy experts, economic analysts, energy modelers, data engineers, and climate scientistssupports decision-makers in the public, financial services, corporate, philanthropic and non-profit sectors. More information isavailable at www.rhg.com.
John Larsen is a Director at Rhodium Group and leads the firm’s US power sector and energy systems research. John specializes inanalysis of national and state clean energy policy and market trends. Previously, John worked for the US Department of Energy’sOffice of Energy Policy and Systems Analysis where he served as an electric power policy advisor.
Whitney Herndon is a Senior Analyst at Rhodium Group focusing on US energy markets and policy. She employs a range of energy andeconomic models to analyze the impact of policy proposals on the US electricity sector, energy market, and macroeconomy.
Galen Hiltbrand is a Research Analyst at Rhodium Group focusing on US energy policy and carbon management. She usesquantitative tools to assess the role that carbon capture and carbon removal technologies can play in decarbonizing the US energysystem.
Goal: Quantify the employment opportunities of materials and services associated with the scale-up of Direct Air Capture deployment in the US.
Contents:
1. An introduction to Direct Air Capture technology
2. Methodology to estimate DAC employment opportunities
3. Job opportunity estimates Comparison of current employment numbers in relevant sectors to projected number of jobs supported by Direct Air
Capture scale-up by midcentury Jobs associated with DAC plant investment
• Equipment• Construction• Engineering• Steel• Cement
Jobs associated with DAC plant operations• Operations & Maintenance• Electricity • Fuel• Chemicals
Goal and components of this analysis
An Introduction to Direct Air CaptureSECTION 1
RHODIUM GROUP 5
Direct Air Capture (DAC) technology
Source: Rhodium Group adapted from World Resources Institute
DAC uses electricity and heat to filter carbon dioxide (CO2) from the ambient air for utilization or for permanent storage deep underground. DAC and storage (DACS) results in the net removal of CO2 from the atmosphere.
RHODIUM GROUP 6
Previous Rhodium research found that DACS is an essential part of any US approach to reaching net-zero greenhouse gas (GHG)emissions by mid-century, which requires a 6 billion metric ton reduction compared to current levels. Decarbonization efforts includingelectrification, energy efficiency, synthetic fuels, and other types of carbon removal are all required. Even with rapid scale-up of eachstrategy, 563 million tons of CO2 will need to be removed from the atmosphere using DACS (low DAC scenario) to meet a net-zero target. Ifother decarbonization options are slower to deploy, up to 1,847 million tons CO2 removal using DACS will be needed (high DAC scenario).US greenhouse gas emissions, current and 2050
DAC is key to meeting climate targets
Source: Rhodium Group and Evolved Energy Research analysis. Note: See Capturing Leadership for more information. 2050 results shown represent achieving net-zero GHG emissions by 2045 and negative emissions in 2050. DACS removal values are smaller than capacity values reported later in this presentation due to lower than 100% utilization.
Million metric tons CO2e
5,188
978 483
1,323
1,032 947
-717 -381 -613
-1,847-563
-111
-584
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Current (2016) HighDAC
LowDAC
Bioenergy with CCS
Direct Air Capture withSequestration
Natural Sequestration
All other GHGs
Energy CO2
NET ZERO MID-CENTURY
RHODIUM GROUP 7
DAC is a proven technology
Source: Climeworks, Carbon Engineering
DAC has attracted hundreds of millions of dollars in private and public investment. There are three commercial companies with 11pilot projects deployed across the world. One company, Carbon Engineering, plans to break ground on a megaton scale facility soon.Rhodium estimates that the first megaton scale DAC plant will have a levelized cost of $124-$325/metric ton of captured carbon withthe range reflecting technology diversity and energy cost uncertainty. Costs are estimated to decline substantially with deployment.
DAC companies with commercial technology
RHODIUM GROUP 8
DAC costs exceed current revenue opportunities
Federal action is needed for DAC scale-up
Source: Rhodium Group analysis. Note: all values reflect median DAC costs. See Capturing Leadership for more information.
$14
$86 $35
$242 $242
$0
$50
$100
$150
$200
$250
$300
Enhanced Oil Recovery Carbon Removal
Product Revenue
Current Policy Support
Median Break Even Cost
30-year levelized USD (2018 dollars) per metric ton CO2
DAC has existing policy support from California’s Low Carbon Fuel Standard (LCFS) and the federal 45Q tax credit. However, toovercome the current median costs of $242/ton, more federal policy support is needed for widespread DAC deployment. SeeRhodium’s Capturing Leadership for more on policy options for large-scale DAC deployment.
RHODIUM GROUP 9
There are two main processes for commercial DAC technology. One uses a chemical solid sorbent to capture CO2 and the otheruses a liquid solvent. Each approach has different construction requirements and different costs and performance profiles. Thereis no clear front-runner technology. This analysis considers both approaches.
Two main approaches to DAC
System Step 1 Step 2 Step 3
Solid Sorbent
Liquid Solvent
Ambient air enters air contactor and CO2 is adsorbed onto a solid adsorbent
Ambient air enters air contactor and CO2reacts with capture solution to produce carbonate
Temperature/Vacuum Adsorption
Heat exposure (with possible vacuum pressure) releases CO2 from adsorbent and a concentrated stream of CO2 is produced
Pellet Reactor
Carbonate reacts with hydroxide to form small pellets
Calciner
Pellets are heated to produce lime and a concentrated stream of CO2
Air Contactor Regeneration ofSorbent or Solvent
Sorbent is cooled to reactivate it for reuse in the air contactor
Lime from the calciner reactivates capture solution for reuse in the air contactor
Source: Energy Futures Initiative. Process simplified.
RHODIUM GROUP 10
Construction/Capital Equipment
Cement
Steel
Construction
Engineering
Energy Requirements
Electricity
Heat Natural Gas Electric Heat
Operations
Chemicals
Operations & Maintenance
In this analysis, we focus on the largest employment opportunities directly associated with DAC scale-up in three categories: Construction/Capital, Energy Requirements and Operations. For example, we estimate the jobs created in the cement industry associated with cement required for DAC plant construction. Due to a range of uncertainties, we do not estimate the indirect or induced jobs associated with DAC scale-up even though it is likely that such opportunities will be substantial. We rely on a range of data sources and previous Rhodium research to estimate the size of these direct employment opportunities.
DAC plant direct employment opportunities
Methodology to Estimate DAC Employment Opportunities
SECTION 2
RHODIUM GROUP 12
Focus sectors Equipment Construction Engineering Steel Cement
Electricity Natural Gas Operations &
Maintenance Chemicals
DAC scaleA range of DAC deployment is quantified through 2050, associated with meeting a midcentury net-zero, economy-wide emissions target for the US.*
Technology Both solid sorbent and liquid solvent
technologies Projections assume the market is
supplied by 50% solid sorbent and 50% liquid solvent
Today’s technology and cost are used
In this analysis, we focus on the employment opportunities associated with DAC scale-up. We rely on a range of data sources and previous Rhodium research to estimate the value of these opportunities.
Methodology and assumptions
Construction and inputs Each plant is assumed to have the
capacity of 1MMt/year Median operating and cost parameters Heat and electric requirements are
assumed to be supplied by 100% electricity in Solid Sorbent plants and 100% natural gas in Liquid Solvent plants
Plant construction assumed to be completed within one year
Data sources
Energy Information Administration National Academy of Sciences Keith et al. 2018 American Institute of Steel
Construction U.S. Bureau of Labor Statistics IMPLAN Group Bureau of Economic Analysis
*See Capturing Leadership for more information.
Employment analysis Economic model IMPLAN used to input
changes in expenditures in the focus sectors due to DAC scale-up
We follow BLS and BEA’s jobs definition: employment estimates represent annualized job numbers and include full-time, part-time, and seasonal jobs
Employment per industry output assumed to stay constant over time
Results include only direct jobs associated with DAC plants.
RHODIUM GROUP 13
Million metric tons/year capture capacity Range of DAC deployment in the US
Pathways to net-zero emissions by mid-century
Source: Rhodium Group analysis. Note: See Capturing Leadership for more information. Note: Capacity values shown here are larger than the carbon removal values shown earlier in the presentation due to less than 100% utilization. The emissions associated with materials used to construct DAC capacity are not considered in this analysis but will need to be addressed if the US Is to achieve net-zero emissions by mid-century.
6 21 67214
689
9 34136
554
2,260
0
500
1,000
1,500
2,000
2,500
2030 2035 2040 2045 2050
Our previous research found that 689 to 2,260 million tons of capture capacity is necessary to achieve net-zero emissions by mid-century. We use this range for the level of DAC scale-up in this analysis. We assume a 50/50 split between liquid solvent and solidsorbent technologies. This rapid scale-up will only occur with ambitious federal policy action both in the near and long-term.Employment opportunities may be larger, and more near-term if policy action is quicker and more robust than this analysis assumes.
Overview of DAC Employment OpportunitiesSECTION 3
RHODIUM GROUP 15
The figures show the average jobs associated with building and operating a single one million ton capture capacity DAC plant. The majority of jobs are associated with design, engineering and construction of the plant as well as the manufacturing of plant equipment. A typical DAC plant requires 278 workers to maintain and operate the facility once it’s constructed.
Total Jobs
Average jobs created per one megaton DAC plant
Source: IMPLAN Group, Keith et al. 2018. NAS, AISC, Rhodium Group analysis. Note: All values reflect DAC plant median cost and performance estimates. Values will vary depending on technology type and configuration.
Jobs from Plant Operations
8
25
48
278
0 200 400 600 800 1,000 1,200 1,400 1,600
Chemical manufacturing
Natural gas
Electricity generation
Operations & Maintenance
Jobs from Plant Investment
10
139
657
721
1,543
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
Cement manufacturing
Steel manufacturing
Engineering
Construction
Equipment manufacturing
3,428
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jobs Associated with DAC Plant ConstructionSECTION 4
RHODIUM GROUP 17
Industrial equipment manufacturing jobs
Source: IMPLAN Group, Keith et al. 2018, NAS, Rhodium Group analysis.
16,003
50,296
164,604
1,543 6,171
21,600
67,885
222,170
139,378
0
50,000
100,000
150,000
200,000
250,000
Current 2030 2035 2040 2045 2050
Total 2018 Industrial Equipment Manufacturing Employment
DAC Jobs
DAC can increase industrial equipment manufacturing jobs beyond their current levels. Industrial equipment manufacturingemployment includes air purification and ventilation equipment manufacturing, turbine manufacturing, power boiler and heatexchanger manufacturing, and other commercial service industry machinery manufacturing. Additional indirect employmentopportunities may materialize in industries that supply equipment manufacturers such as steel. Estimates of these additionalopportunities are outside of the scope of this analysis but may be substantial.
RHODIUM GROUP 18
By 2050, DAC can support up to one-third of current relevant construction jobs. Construction jobs include employment from power,communication line, and related structures construction.
Construction jobs
Source: IMPLAN Group, Keith et al. 2018. NAS, Rhodium Group analysis
31,712
103,786
1,441 5,766 23,784
97,300
248,927
726,251
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Current 2030 2035 2040 2045 2050
Total 2018 Construction Employment
DAC Jobs
RHODIUM GROUP 19
Engineering jobs associated with DAC plant construction could add an additional 13% to current engineering employment levels.
Engineering jobs
Source: IMPLAN Group, Keith et al. 2018. NAS, Rhodium Group analysis.
94,640 1,314 5,258 21,688 88,725
224,502
1,779,336
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
Current 2030 2035 2040 2045 2050
Total 2018 Architectural, Engineering, and Related Services Employment
DAC Jobs
RHODIUM GROUP 20
The construction of DAC plants can support over a doubling of steel manufacturing jobs. The estimates reflect jobs in manufacturing steel products and do not include indirect jobs at iron and steel productions mills that supply product manufacturers. Steel is also an important input in renewable energy construction, pipelines and natural gas production; activities that will scale in association with DAC. Indirect steel employment associated with all of these opportunities could be substantial, roughly the same order of magnitude as direct jobs associated with DAC shown here.
Steel manufacturing jobs
Source: IMPLAN Group, Keith et al. 2018. NAS, AISC, Rhodium Group analysis
6,121
20,033
278 1,113 4,591
18,781
50,633
27,680
0
10,000
20,000
30,000
40,000
50,000
60,000
Current 2030 2035 2040 2045 2050
Total 2018 Steel Manufacturing Employment DAC Jobs
RHODIUM GROUP 21
DAC plant construction could support up to one-third of current cement manufacturing jobs. Additional indirect cement job opportunities may arise in association with natural gas and electricity production needed to supply DAC plants.
Cement manufacturing jobs
Source: IMPLAN Group, Keith et al. 2018. NAS, AISC, BEA, Rhodium Group analysis
428 1,401
19 78 321 1,314
5,391
14,318
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Current 2030 2035 2040 2045 2050
Total 2018 Cement Manufacturing Employment
DAC Jobs
Jobs Associated with DAC Plant OperationsSECTION 5
RHODIUM GROUP 23
Operations & Maintenance jobs
Source: IMPLAN Group, Keith et al. 2018. NAS, Rhodium Group analysis
14,760 47,342
151,773
1,949 7,241 28,684
116,684
475,092
400,679
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Current 2030 2035 2040 2045 2050
Total 2018 Industrial Repair & Maintenance Employment
DAC Jobs
Jobs associated with operating and maintaining DAC plants could double current industrial repair and maintenance jobs. CurrentIndustrial Repair & Maintenance jobs include employment from commercial and industrial machinery and equipment repair andmaintenance.
RHODIUM GROUP 24
Electricity generation and distribution jobs
Source: IMPLAN Group, EIA, Keith et al. 2018. NAS, Rhodium Group analysis
33,521 375 1,474 7,196 29,492
117,247
453,222
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Current 2030 2035 2040 2045 2050
Total 2018 Electric Power Jobs
DAC Jobs
The electricity consumption of solid sorbent DAC plants can support up to one-fourth of current electric power jobs. Employmentshown here includes electric power generation from solar, wind, fossil fuel with CCS, hydroelectric, and nuclear sectors, as well aselectric power transmission and distribution. This analysis assumes solid sorbent plants are powered entirely by electricity and liquidsolvent plants are powered entirely by natural gas.
RHODIUM GROUP 25
Natural gas industry jobs
Source: IMPLAN Group, EIA, Keith et al. 2018. NAS, Rhodium Group analysis
The jobs supported by liquid solvent DAC plants powered by natural gas could increase current oil and gas employment by 7%. Thisanalysis assumes solid sorbent plants are powered entirely by electricity and liquid solvent plants are powered entirely by natural gas.
13,467 173 642 2,545 10,353 42,154
636,449
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Current 2030 2035 2040 2045 2050
Total 2018 Oil & Gas Employment
DAC Jobs
RHODIUM GROUP 26
Chemical manufacturing jobs
Source: IMPLAN Group, Keith et al. 2018. NAS, Rhodium Group analysis
Chemical manufacturing to operate DAC plants could support up to one-third of current basic inorganic chemical manufacturing jobs.
1,340 4,295
55 205 812
3,302
13,443
39,957
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Current 2030 2035 2040 2045 2050
Total 2018 Basic Inorganic Chemical Manufacturing Employment
DAC Jobs
RHODIUM GROUP 27
DAC is essential to address climate change and needs federal policy support DAC technology is commercially ready with hundreds of millions in investor backing and large-scale projects in the pipeline. New federal policy is required to drive initial deployment of DAC because early-stage costs are higher than existing revenue
opportunities.* Long-term federal policy frameworks are needed for DAC to scale by mid-century. More policy action sooner can accelerate employment
opportunities.
Significant employment opportunities associated with DAC are there forthe taking. We find that:
When DAC reaches full scale, workers in key trades will see a surge in demand Construction, engineering, and equipment manufacturing sectors combined could see at least 300,000 new jobs with DAC at full scale. Steel employment could increase by at least 50% relative to current levels. Additional indirect employment opportunities for the sector
could materialize through renewable energy and natural gas production supporting DAC plants and could be roughly the same order ofmagnitude.
Operation and maintenance jobs at DAC plants could be a major source of jobs for the communities that host them. DAC represents a major new job growth opportunity for cement, electricity, chemicals and natural gas workers. Most employment opportunities associated with DAC are high wage jobs. While these opportunities are substantial, they will not materialize for 2-3 decades and are dependent on policy action.
*See Capturing Leadership for more information.
Employment opportunities will accelerate with supportive DAC policies and established early supply chains More ambitious policy action in the near-term can accelerate job creation associated with DAC. Manufacturers that supply the first wave of DAC projects stand to lead in a major new growth market opportunity.
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The employment opportunities associated with scale-up of Direct Air Capture (DAC) technology in the US
PREPARED FOR THE LINDEN TRUST FOR CONSERVATION | JUNE 23, 2020
Capturing New Jobs