Explainer: What is the circular carbon economy?

In 2019, when the G20 endorsed a circular carbon economy, it gave the concept a bit of “oomph”, according to Saudi Arabia’s Minister of Energy, HRH Prince Abdulaziz Bin Salman Bin Abdulaziz Al Saud.

He was speaking in April at the World Economic Forum’s Special Meeting on Global Collaboration, Growth and Energy for Development.

In a session on Advancing Carbon Capture and Utilization Innovations through Global Partnerships, he explained what the circular carbon economy is:

"It's a nuance to the old concept known to everybody: the circular economy. The addition of carbon emphasizes that it's much more focused on energy and how you can run an energy system that can monetize everything in an economical way… [while] being graceful enough to the environment and… [mindful] of climate change."

Saudi Arabia initiated its Circular Carbon Economy National Program in 2019 and will use this approach to achieve its net-zero emissions target by 2060, which it announced just before COP26 in 2021.

To accelerate net-zero efforts globally, the Forum’s UpLink platform and Saudi Arabia announced the Circular Carbon Economy Partnership at the Special Meeting – a collaboration to help early-stage start-ups develop cutting-edge solutions to reduce, recycle and remove carbon from the atmosphere.

Here’s what you need to know about the circular carbon economy (CCE).

As the Minister of Energy explained, the CCE applies the basic principles of the circular economy to carbon management and adds an extra R for ‘remove’.

1. Reduce: This step aims to minimize the amount of carbon entering the atmosphere in the first place through energy efficiency measures, fuel switching and the adoption of non-carbon-emitting renewable energy sources.

2. Reuse: This involves capturing carbon dioxide (CO2) emissions and using them directly without chemically altering the carbon molecules. Examples include enhanced oil recovery (EOR), where CO2 is injected into oil reservoirs to increase production, and using CO2 for industrial processes like the carbonation of drinks.

3. Recycle: This is when captured CO2 is converted into value-added products or alternative energy sources through chemical processes. This includes the production of synthetic fuels, chemicals and building materials from CO2. For instance, CO2 can be combined with hydrogen to create synthetic hydrocarbons for use in transportation or as feedstock for the chemical industry.

4. Remove: This means removing and storing CO2 from the air by natural methods – such as increasing carbon sinks like mangrove forests or through carbon capture, utilization and storage (CCUS) technologies, or direct air capture with carbon storage (DACCS) methods. The captured CO2 can be sequestered in geological formations, such as depleted oil and gas reservoirs or deep saline aquifers, or utilized in processes like bioenergy with carbon capture and storage (BECCS) to achieve negative emissions.

Over the next five years, at least one of those years will likely beat 2023 to become the hottest year on record, the World Meteorological Organization (WMO) said in June. It also found an 80% likelihood of at least one year temporarily exceeding 1.5°C between 2024 and 2028.

“Behind these statistics lies the bleak reality that we are way off track to meet the goals set in the Paris Agreement,” said WMO Deputy Secretary-General Ko Barrett. “We must urgently do more to cut greenhouse gas emissions, or we will pay an increasingly heavy price.”

While reducing carbon entering the atmosphere – decarbonizing the global economy through the energy transition – is the most pressing challenge, speeding up the rate at which we remove carbon is equally important.

“Even if every country and every company achieves net zero by 2050, it won’t be enough,” said Nasim Pour, Lead of Carbon Removals and Market Innovation in the Forum’s Carbon Dioxide Removal: Best-Practice Guidelines white paper.

“We will need to keep removing CO2 for decades afterwards – to reverse the accumulation of historic emissions, to balance out the hardest-to-abate emissions and to safeguard us against Earth’s own feedback loops from a warmer world.”

Natural carbon solutions, including afforestation, remove around 2 billion tonnes of CO2 a year – by 2050, we need to remove around 10 billion tonnes a year, and up to 687 billion tonnes by the end of the century, says Pour.

‘Engineered’ carbon dioxide removal (CDR) technologies, including BECCS, DACCS and enhanced rock weathering (ERW) need to be scaled quickly to make an impact, but this requires investment.

Members of the Forum’s First Movers Coalition – a buyers club to accelerate the decarbonization of hard-to-abate sectors – have committed to contracting for 50,000 tonnes or $25 million worth of durable and scalable carbon removal by 2030.

The Forum's Carbon Dioxide Removal whitepaper calls on companies to drive the development and deployment of engineered CDR solutions. It provides guidelines on securing budgets, choosing market access models, and communicating CDR performance.

By engaging in the circular carbon economy and investing in CCUS and CDR solutions, companies can not only contribute to climate change mitigation efforts but also position themselves as leaders in the transition towards a sustainable and low-carbon future.