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A record 71 new carbon capture and storage (CCS) facilities have
been announced this year as the total pipeline of facilities
reached 135, with 27 operational so far, according to a study by the Global CCS
Institute, an Australia-headquartered think tank.
The CO2 capture capacity of all the CCS facilities under
development has risen to 111 million metric tons per annum from 73
million mt/year, an increase of 48% compared with a year
earlier.
This is in part because national and corporate net-zero targets
have spurred commercial CCS facility announcements since the think tank's annual report last
year. But states and investors must pick up the pace of funding
to reach net-zero goals, the Global CCS Institute pointed out.
"Net-zero commitments made by more than 100 countries and by
thousands of companies have driven home the necessity of CCS, and
this has kick-started a virtuous cycle whereby governments around
the world are strengthening policy support for CCS," General
Manager of Advocacy and Communications in the UK Guloren Turan said
at the report launch.
"We expect to see a rising number of facilities all around the
world in the next few years in response to strengthening climate
policy, and other business drivers," she added.
Of the 135 facilities found, most (78) are in North America as
well as in Europe (38). The countries that had the most CCS
projects were the US, the Netherlands, Belgium, and the UK.
There are four CCS facilities operational or under development
in the Middle Eastern states of the Gulf Cooperation Council that
includes the UAE, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait.
There were nine CCS facilities in the rest of the world, including
Asia.
Several countries started development of commercial CCS
facilities over the past year, including Belgium, Denmark, Hungary,
Indonesia, Italy, Malaysia, and Sweden.
North America is at the forefront of the charge, with over 40
new CCS projects announced in 2021. The report credited this to US
policies, such as a clearer definition of CCS tax credits under
revised rules, and the recommitment to carbon reduction under the
Paris Agreement by US President Joe Biden.
Diversifying sector
While many CCS projects are experimental, the technology is not
wholly new. Many large oil and natural gas producers have used it
for three decades as part of a process referred to as enhanced oil
recovery (EOR), according to law firm Latham
& Watkins.
Nowadays, CCS facilities are serving a broad range of new
sectors that are starting to decarbonize such as power generation,
LNG production, hydrogen production, cement, steel,
waste-to-energy, and Direct Air Capture and Storage (DACS).
For example, the recently approved Norcem Brevik project, part
of the Longship (Langskip) network in Norway, is integrating CCS
with cement manufacturing.
Planned or operational CCS facilities are capturing emissions in
other new sectors, for example coal-fired power plants or ethanol
plants, while smaller facilities capture carbon at natural
gas-fired power plants, processing facilities, and for the
production of hydrogen from natural gas, the report found.
CO2 networks a growing trend
The report observed a new trend of projects sharing CO2
"networks," specifically transportation and storage pipelines,
shipping, port facilities, and storage wells that link several CCS
end-users to the same capture facility to lower investment
costs.
Such CCS networks were called "the dominant operating model" by
the report.
One example of this is the Porthos project in Rotterdam, the
Netherlands, where a shared pipeline will transport liquid CO2 from
four new blue, or natural-gas derived, hydrogen projects. The
project is being developed by Shell, ExxonMobil, and two industrial
gas producers, Air Liquide and Air Products.
Another project in Rotterdam, TotalEnergies and Shell's Aramis
CCS network, will use a system of pipelines as well as seagoing
barges to transport CO2 for different companies in the waste to
energy, steel, chemicals, oil refining, and cement sectors.
Net-zero goals to require $1.2 trillion
investment
In most of IHS Markit's outlooks showing the paths for the world
to reach net-zero, CCS is required to capture energy-sector-related
CO2 emissions starting in the 2030s.
Only about 36.6 million mt/year of capture capacity is
operational worldwide today, far below the 5.6 gigatons the
International Energy Agency estimates is required to
decarbonize industry and reach net zero by 2050 in line with Paris
Agreement goals.
In the UK alone, the government's ambition is to reach 10
million mt/year by 2030, which represents about a third of all
existing CCS capacity.
So far, 24 governments have mentioned CCS in the national carbon
reduction strategies submitted in accord with the Paris Agreement,
the report said.
The institute argued the private sector will need to invest as
much as $1.28 trillion in new CCS capacity over the coming 30
years. In 2018, the entire energy sector's capital spending totaled
$1.85 trillion.
As a result, governments should help to finance and provide
policies that support the creation of CO2 pipeline and storage
networks at industrial hubs, it said.
The state assistance is needed because there is little time left
to increase the rates of CCS facility development to levels
required by 2030 and get them operating by 2050. Large CCS
facilities or pipeline networks can take seven to 10 years to enter
service.
The report's authors warned that considerable investment would
be needed soon. "There is no time to waste. Creating an enabling
environment for investment in CCS facilities and other net-zero
aligned assets—particularly in supporting
infrastructure—through both policy and funding, should be a
high priority for governments between now and 2030," they said.
When it comes to the billions required, several barriers have
historically prevented investors from plowing the required funding
into CCS, including low carbon prices and a lack of demand.
What's more, the potential cost of managing risks at CO2 storage
facilities—such as well blowouts or potential leaks of CO2 in
the natural geology—pose a financial risk that Swiss Re has proposed addressing with
insurance.