Net-zero goals cannot be met by rising renewable energy usage and wider adoption of electrification in transport alone. The world will need to reduce the emissions from existing energy systems and from heavy industries such as cement, steel, or chemicals production if it hopes to meet the ambitious climate goals and stick to the target in the Paris Agreement to limit global temperature rise well below 2 degrees Celsius. The decarbonization of the energy infrastructure, the reduction of greenhouse gas (GHG) emissions in heavy industries, and the production of low-carbon hydrogen will be virtually impossible without carbon capture, utilization, and storage (CCUS), the International Energy Agency (IEA) said in a new report.
Strengthened climate goals and increased government support have created in recent years a new momentum for CCUS to become a large-scale, cost-effective solution to reduce emissions in many carbon-intensive industries.
Big Oil has also recognized the need for CCUS to cut emissions. All major oil companies are working on CCUS solutions and are investing in various projects, regardless of whether they have pledged to become net-zero energy companies within 30 years like most European majors or haven’t committed to net-zero goals such as the U.S. supermajors ExxonMobil and Chevron.
Government support will be critical to reduce costs and increase the pace of scalability of CCUS projects, in order to take the market from pilot projects and early-stage development to a commercially viable solution and cutting emissions in industries where such projects could be the only way to decarbonization.
‘Reaching net zero will be virtually impossible without CCUS’
CCUS “is the only group of technologies that contributes both to reducing emissions in key sectors directly and to removing CO2 to balance emissions that are challenging to avoid – a critical part of “net” zero goals,” the IEA said in its ‘CCUS in Clean Energy Transitions’ report.
“Reaching net zero will be virtually impossible without CCUS,” the agency said, outlining four key ways in which carbon capture could contribute to the clean energy transition.
The first and easiest way is reducing emissions from existing energy infrastructure, as CCUS can be retrofitted to existing power and industrial plants. Next, CCUS could be the solution to the emissions that are most challenging to cut—those from heavy industries, which account for nearly 20 percent of global carbon dioxide (CO2) emissions at present.
“CCUS is virtually the only technology solution for deep emissions reductions from cement production. It is also the most cost-effective approach in many regions to curb emissions in iron and steel and chemicals manufacturing,” the IEA said.
CCUS is also a cost-effective pathway for low-carbon hydrogen production. Finally, carbon capture and storage could be an approach to remove CO2 from the atmosphere for emissions that are too difficult or expensive to address directly, according to the international agency.
Post-Crisis Green Recovery Policies Could Boost CCUS Investment
Carbon capture and storage projects have gained momentum in recent years with increased investment, including from the world’s largest oil and gas companies.
Since 2017, more than 30?commercial facilities have been announced, and projects now nearing a final investment decision represent an estimated potential investment of around US$27?billion – more than double the investment planned in 2017, according to the IEA.
So far, in 2020 alone, governments and industry have committed nearly US$4 billion in CCUS projects. Still, the economic downturn could undermine future investment plans. Therefore, support for CCUS in recovery plans would ensure that recent progress is not derailed, the IEA said.
“No sector will be unaffected by clean energy transitions – and for some, including heavy industry, the value of CCUS is inescapable,” said IEA’s Executive Director Fatih Birol.
Related: Could ESG Investing Disrupt The LNG Boom? “CCUS will be necessary on a global scale if we are to meet the Paris Agreement. And we must start now,” said Prime Minister Erna Solberg of Norway, which has just launched the ‘Longship’ project.
Big Oil Invests in Carbon Capture and Storage
‘Longship’ includes funding for the ‘Northern Lights’ joint project of supermajors Equinor, Shell, and Total to capture CO2 from industrial sources in the Oslo fjord region (cement and waste-to-energy) and shipping of liquid CO2 from these industrial capture sites to an onshore terminal on the Norwegian west coast.
“Northern Lights is the first CCS project that focuses on shipping and that’s critical. If we can develop a viable solution to ship CO2, we can transport it from pretty much anywhere to carbon sinks in the North Sea, providing Europe with an additional way to decarbonise,” says Syrie Crouch, Shell’s vice president for carbon capture and storage.
CCUS is one of the ways Shell plans to address emissions as it aims to become a net-zero emissions energy business by 2050 or sooner, chief executive Ben van Beurden said this week.
Total’s new strategy and outlook published this week also recognizes the fact that carbon sinks will be required to achieve net-zero goals, with the French company investing nearly 10 percent of its research and development (R&D) budget in CCUS technologies.
Related: Iraq Ships More Crude Oil Despite OPEC Output Cut Pledge
Shell, Total, Equinor, BP, and ENI are also working on the Net Zero Teesside project in northeast England. BP leads this project, which aims to decarbonize a cluster of carbon-intensive businesses by 2030 and deliver the UK’s first zero-carbon industrial cluster, plans to capture up to 10 million tons of CO2 emissions - the equivalent to the annual energy use of over 3 million UK homes.
In the U.S., scientists from ExxonMobil, University of California, Berkeley, and Lawrence Berkeley National Laboratory said this year that they had discovered a new material that could capture more than 90 percent of CO2 emitted from industrial sources, such as natural gas-fired power plants. Chevron, for its part, has invested around US$1.1 billion in CCUS projects, the supermajor says.
The U.S. Department of Energy is also supporting the development of carbon capture technologies with federal funding.
Government support and industry involvement will be critical to advancing the development of CCUS, without which net-zero goals could be impossible to achieve.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Oil Bulls Return As OPEC+ Reassures Markets
- Biden Fracking Ban Could Cripple New Mexico’s Oil Industry
- The World's Most Expensive Crudes Get Expensive Again