Report extract

CCUS in the transition to net-zero emissions

Highlights
  • In the IEA Sustainable Development Scenario, in which global CO2 emissions from the energy sector fall to zero on a net basis by 2070, CCUS accounts for nearly 15% of the cumulative reduction in emissions compared with the Stated Policies Scenario. The contribution of CCUS grows over time as the technology improves, costs fall and cheaper abatement options in some sectors are exhausted. In 2070, 10.4 Gt of CO2 is captured from across the energy sector.
  • The initial focus of CCUS is on retrofitting existing fossil fuel-based power and industrial plants as well as lower-cost CO2 capture opportunities such as hydrogen production. Over time, the focus shifts to bioenergy with CCS (BECCS) and direct air capture (DAC) for carbon removal and as a source of climate-neutral CO2 for use in various applications, particularly synthetic fuels.
  • By 2070, the power sector accounts for around 40% of the captured CO2, almost half of it linked to bioenergy. Around one-quarter of the CO2 captured in 2070 is in heavy industry, where emissions are hard or – in the case of process emissions in cement – currently impossible to abate in other ways. Another 30% is in the production of hydrogen, ammonia and biofuels. A further 7% comes from DAC.
  • Global hydrogen use increases seven-fold to 520 Mt by 2070 and contributes to the decarbonisation of transport, industry, buildings and power. Around 6% of the cumulative emissions reductions in the Sustainable Development Scenario are from low-carbon hydrogen, with 40% of hydrogen demand met by fossil-based production equipped with CCUS in 2070.
  • Carbon removal is required to balance emissions across the energy system that are technically difficult or prohibitively expensive to abate. It can also help offset emissions from outside the energy sector, should progress there be lacking. DAC technologies can play an important role alongside BECCS: the challenge will be to lower the cost of DAC, which today is very high due mainly to the large amounts of energy needed.  
CCUS in the Sustainable Development Scenario

CCUS is an important technological option for reducing CO2 emissions in the energy sector and will be essential to achieving the goal of net-zero emissions. As discussed in Chapter 1, CCUS can play four critical roles in the transition to net zero: tackling emissions from existing energy assets; as a solution for sectors where emissions are hard to abate; as a platform for clean hydrogen production; and removing carbon from the atmosphere to balance emissions that cannot be directly abated or avoided. These roles are evident in the IEA Sustainable Development Scenario, in which global CO2 emissions from the energy sector fall to zero on a net basis by 2070 worldwide compared with the Stated Policies Scenario, which takes into account current national energy- and climate-related policy commitments. The contribution of CCUS to emissions reductions grows over time as the technology progresses, costs fall and other cheaper abatement options are exhausted.

CO2 emissions reductions in the energy sector in the Sustainable Development Scenario relative to the Stated Policies Scenario

The analysis in this report is underpinned by global projections of clean energy technologies from the IEA Energy Technology Perspectives (ETP) Model – a largescale energy systems model that comprises optimisation or simulation models covering energy supply and energy use in the buildings, industry and transport sectors, representing current and future technology options across all sectors. The ETP Model has been developed over many years, using the latest data for energy demand and supply, costs, and prices.1 It incorporates more than 800 technologies that are modelled individually, 230 of which are today not yet commercially deployed. The projections currently cover the period to 2070.

In line with other ETP publications, this report adopts a scenario approach to exploring the outlook for CCUS technologies and its role in the energy transition that would be required to achieve climate and broader energy sustainability goals. Projections for two main scenarios, which are also employed in the IEA flagship publication, the World Energy Outlook, are presented here, differentiated primarily by the assumptions they make about government policies:

  • Sustainable Development Scenario: This scenario, which lies at the heart of ETP 2020 and this Special Report, is used to illustrate the technology needs for reaching net-zero emissions from the energy sector. It describes the broad evolution of the energy sector that would be required to reach the United Nations Sustainable Development Goals (SDGs) most closely related to energy: achieving universal access to energy (SDG 7), reducing the impacts of air pollution (SDG 3.9) and tackling climate change (SDG 13). It is designed to assess what is needed to meet these goals, including the Paris Agreement, in a realistic and cost-effective way. The trajectory for energy- and industry-related CO2 emissions is consistent with reaching global net-zero CO2 emissions from the energy sector in 2070.
  • Stated Policies Scenario: This scenario, which serves as a benchmark for the projections of the Sustainable Development Scenario, takes into account government policies and commitments that have already been adopted or announced with respect to energy and the environment, including commitments made in the nationally determined contributions under the Paris Agreement.

The projections for both scenarios build on those of the World Energy Outlook 2019 (IEA, 2019a), which run to 2040. They have, however, been updated with new GDP and energy price assumptions to take into account the macroeconomic impacts of the Covid-19 pandemic.

Neither scenario should be considered a prediction or forecast, but rather an assessment of the impact of different policy approaches and technology choices on energy and emissions trends. They provide a quantitative framework to support decision and policy making in the energy sector, and to improve understanding of the need for technological innovation in energy supply and use. Any projection of energy supply or use 50 years ahead is bound to be speculative to some degree as it is impossible to know with certainty how technology will evolve. The further into the future one looks, the greater the uncertainty about how technology will change, the types of new technology that will emerge and how quickly they will be deployed.


Around 60% of the CO2 captured in the period to 2070 in the Sustainable Development Scenario is from fossil fuel use; the rest is from industrial processes, bioenergy and DAC. This reflects difficulties in eliminating CO2 emissions in certain industry sectors (and hence the need for carbon removal options), the high share of process emissions in some industries (in particular cement), the scope for capturing CO2 in the production of biofuels for transport; and the increasing role for DAC in providing CO2 as feedstock for producing synthetic aviation fuels as well as for removing CO2 from the atmosphere. Fossil fuels are still the source of about half of CO2 captured in 2070, with around one-third of this from low-carbon hydrogen production from natural gas.

When net-zero emissions are reached in 2070 in the Sustainable Development Scenario, 9.5 Gt CO2 is captured and stored and another 0.9 Gt is captured and used. The power sector accounts for around 40% of the captured CO2 in 2070, with almost half of it linked to bioenergy. Around one quarter of the CO2 captured is in heavy industries, where emissions are hard to abate in other ways. Almost 30% is in the fuel transformation sector to produce hydrogen and ammonia from fossil fuels as well as CO2 captured from biofuel plants, which is used to make synthetic fuels or stored for carbon removal. A further 7% comes from DAC, again, as a carbon-neutral source of CO2 for fuel and feedstock production or to create negative emissions (DAC with CO2 storage, or DACS). While only around 8% of total captured CO2 is used or “recycled”, it plays an important role in supporting the decarbonisation of the transport and industry sectors through the production of transport fuels and as a feedstock for the chemical industry.2

Key global CCUS indicators in the Sustainable Development Scenario

 

2030

2050

2070

Cumulative

Total CO₂ capture (Mt)

 840

5 635

10 409

240 255

of which from coal

 320

1 709

2 145

64 399

of which from oil

 21

 141

 230

5 301

of which from natural gas

 96

1 733

3 209

72 948

of which from biomass

 81

 955

3 010

52 257

of which from industrial processes

 312

 979

1 073

36 562

of which direct air capture

 11

 117

 741

8 788

of which stored

 650

5 266

9 533

220 845

of which used

 189

 369

 877

19 409

CO₂ capture by sector (Mt)

 

 

 

 

Industry

 453

2 038

2 724

77 092

Iron & Steel

 16

 394

 723

15 772

Chemicals

 178

 461

 571

18 363

Cement

 258

1 174

1 411

42 614

Pulp & Paper

 0

 8

 18

 343

Power generation

 223

1 877

4 050

87 529

from coal

 201

 895

1 031

34 378

from natural gas

 21

 605

1 175

26 942

from biomass

 0

 377

1 844

26 209

Other fuel transformation

 153

1 603

2 895

66 846

CO₂ removal (Mt)

 76

 821

2 920

47 739

Bioenergy with CO₂ capture and storage (BECCS)

 75

 802

2 649

45 000

Direct air capture with CO₂ storage (DACS)

 1

 19

 271

2 739

CCUS contribution to sector CO₂ emissions reductions

 

 

 

 

Iron & Steel

4%

25%

31%

25%

Cement

47%

63%

61%

61%

Chemicals

10%

31%

33%

28%

Fuel transformation

86%

86%

92%

90%

Power generation

3%

13%

25%

15%

Notes: Mt = million tonnes; CCUS = carbon capture, utilisation and storage; SDS = Sustainable Development Scenario; STEPS = Stated Policies Scenario. The sum of CO2 capture by sector does not equal total CO2 capture because it omits DAC; CO2 removal includes only those emissions that are captured from biomass and DAC and that are permanently stored. Industry refers to industrial production of materials while other fuel transformation covers sectors such as refining, biofuels, and merchant hydrogen and ammonia production; Biomass includes waste used for energy, which makes up a minor share of the total. Capture includes internal use of CO2 captured in the chemicals sector.

Emissions Capture And Removal In The Sustainable Development Scenario

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CO2 Emissions Capture And Removal In The Sustainable Development Scenario
Emissions Capture And Removal In The Sustainable Development Scenario
CO2 Emissions Capture And Removal In The Sustainable Development Scenario

IEA 2020. All rights reserved.

The contribution of CCUS to reducing global energy sector CO2 emissions in the Sustainable Development Scenario evolves over the projection period, with three distinct periods. In the first phase to around 2030, the focus is on capturing emissions from existing power plants and factories. In the power and industry sectors, over 85% of all CO2 emissions captured in this decade are from plants retrofitted with CO2 capture equipment: coal-fired power units (and, to a lesser extent, gas-fired power units); chemical plants (mainly fertilisers), cement factories, and iron- and steelworks. Some low-cost CO2 capture opportunities in hydrogen and bioethanol production are also developed, building on the current portfolio of projects. Total capture reaches 840 Mt in 2030. Cumulatively to 2030, CCUS contributes around 4% of the overall emissions reductions in the Sustainable Development Scenario relative to the Stated Policies Scenario.

Growth in world CO2 capture by source and period in the Sustainable Development Scenario, 2020-2070

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During the second phase, from 2030 to 2050, the contribution of CCUS to cumulative emissions reductions grows to 12% relative to the Stated Policies Scenario. CCUS deployment expands most rapidly in the cement, steel and chemicals sectors, which together account for around one third of the total growth in global CO2 capture during that period. In power generation, the focus shifts to natural gas-fired stations, which help to integrate variable renewable energy sources (mainly solar and wind) in some regions by providing short-term flexibility and to balance seasonal variations in electricity demand or renewable generation, for which batteries are less well suited. Hydrogen production from fossil fuels (primarily natural gas) is responsible for a fifth of the overall growth in CO2 capture in the 2030-50 time frame, driven by increasing hydrogen demand in long-distance transport modes (such as trucks and shipping). BECCS also expands significantly, accounting for around 15% of the growth in CO2 capture over that period. By 2050, around half of BECCS capacity is in the power sector and the remainder primarily in producing alternative low-carbon fuels, in particular biofuels. BECCS benefits from economies of scale and cost reductions through technological advances and learning-by-doing, which are generally highest at the early stages of the adoption of a technology.


The power sector is the largest emitter of CO2 today, at around 40% of global energy-related CO2 emissions. Electricity demand almost triples over the period to 2070 in the Sustainable Development Scenario (equivalent to adding the Chinese grid every eight years), driven by economic growth, electrification of end uses and increased access to electricity in developing economies. The power sector is nonetheless among the fastest to decarbonise in the Sustainable Development Scenario, reaching net-zero emissions during the 2050s and removing emissions from the atmosphere on a net basis thereafter. Although there are a wide range of low-carbon alternatives available for power generation, CCUS is projected to play an important role for three key reasons:

  • CCUS can help to avoid the “lock-in” of emissions from the vast fleet of existing fossil-fuelled power plants through retrofits.
  • CCUS enables the sector to become net-negative though biomass-fuelled power plants with CCS (BECCS).
  • CCUS can help to meet the growing need for system flexibility as the share of variable renewable energy technologies in generation and the need for “dispatchable” capacity increases (IEA, 2020b).

Flexibility to deal with short-term and seasonal variability of electricity demand and supply is critical to ensure the stable and reliable operation of power systems. Coal and gas-fired power plants, which can adjust their power output on demand, have traditionally been the main sources of flexibility. Demand response (whereby consumers are encouraged to shift their consumption in response to price signals or other incentives), enhanced grid interconnections with neighbouring power systems, and energy storage are expected to play an increasingly important role in providing flexibility. Technological innovations in batteries and other forms of energy storage, some of them already commercially used today, may ultimately be able to meet the need for short-term flexibility without the need for fossil-fuel based generating plants (IEA, 2018). However, batteries may not be able to sufficiently replace dispatchable forms of generation in meeting seasonal variations in demand and output from variable renewables, which can be very pronounced in many regions. Alternatives to manage these seasonal variations, such as large-scale storage of hydrogen or ammonia, are at least today more expensive.

Coal- and gas-fired power plants with CCUS could provide system balancing services and flexibility over different time-scales, from ultra-short notice to seasonal variations. Retrofitting existing coal- and gas-fired power plants with carbon capture appears to have a small to negligible impact on their operational flexibility. In fact, it could increase short-term flexibility where the capture system and power block are able to operate independently, allowing the plant to boost power output by switching off the capture system to reduce the energy required to run it, although this would increase the CO2 emissions of the plant during those periods.

In the Sustainable Development Scenario, CCUS contributes some 15% of the cumulative emissions reduction of the power sector globally over the period to 2070. The amount of CO2 captured from fossil fuel power plants worldwide increases continuously over the projection horizon, reaching 220 Mt in 2030 and 4.0 Gt in 2070. Coal plants dominate in the period to 2040, mainly due to retrofits. After 2040, plants fuelled by gas and biomass play an increasing role. By 2070, a total of 1 100 GW of generating capacity is equipped with CCUS, producing around 6 000 TWh of electricity (or 8% of global power generation). At that time, all remaining coal- and gas-fired electricity generation and half of biomass-fired generation (all of which are dedicated BECCS plants) is associated with CCUS.

Share of CCUS in electricity generation by fuel in the Sustainable Development Scenario, 2070

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World electricity generation from plants equipped with carbon capture by fuel in the Sustainable Development Scenario, 2019-2070

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In the last phase from 2050 to 2070, the amount of CO2 captured jumps by 85%, as carbon removal and the use of CO2 accelerate. Around 45% of the growth during this period comes from BECCS and 15% from DAC, while capture from natural gas dominates the increase in CO2 capture from fossil fuels, driven by the production of hydrogen and electricity in regions with low-cost gas resources. In 2070, about 35% of all CO2 emissions captured are from bioenergy or DAC, most of which are stored, generating negative emissions to balance all remaining emissions from transport, industry and buildings so as to achieve a net-zero emissions energy system. Around one fifth of all the CO2 captured from bioenergy or directly from the air is used in combination with clean hydrogen to produce synthetic hydrocarbon fuels, notably for use in aviation, where synthetic fuels meet 40% of aviation fuel demand. The scale-up of carbon removal in the Sustainable Development Scenario implies an average of around 50 BECCS and 5 DACS plants of 1 Mt/year being added each year from 2020 to 2070. By 2070, 800 Mtoe (33 EJ), or more than a quarter of global primary bioenergy use, is linked to BECCS, with almost half of the bioenergy in the power and fuel transformation sectors being used in plants equipped with capture facilities. The deployment of these carbon removal technologies is constrained by their cost-competitiveness with other mitigation measures and (potentially) access to suitable storage, with BECCS also constrained by the availability of sustainable bioenergy and DAC by the availability of low-cost electricity and heat (see the section on carbon removal below).

World CO2 emissions and capture across the energy system in the Sustainable Development Scenario, 2019-2070

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The Sustainable Development Scenario reaches net-zero emissions from the energy sector within five decades on the back of ambitious technological change and optimised innovation systems comparable to the fastest and most successful clean energy technology innovation success stories in history. The Faster Innovation Case explores the opportunity to accelerate this transition to bring the global energy system to net-zero emissions 20 years earlier, by 2050. This variant of the Sustainable Development Scenario considers a more rapid deployment of new technologies, and innovative techniques to enable additional carbon removal, for example by expanding sustainable biomass supply.


Attaining global climate goals critically depends on the time at which net-zero emissions are achieved: the sooner net-zero emissions are achieved the higher are the chances to meet the most ambitious climate goals. The Faster Innovation Case, a special case of the Sustainable Development Scenario, is designed to explore how much additional clean energy technology innovation would be needed over the level of the Sustainable Development Scenario to bring forward the time at which net-zero emissions are reached to 2050.3

In the Faster Innovation Case, significantly shorter periods to market introduction and higher adoption rates enable nearly 10 GtCO2 of additional net emissions savings compared to the Sustainable Development Scenario in 2050. CCUS contributes around one quarter of the additional emissions reductions in the Faster Innovation Case. The overall level of captured CO2 emissions is almost 50% higher in the Faster Innovation Case in 2050 at over 8 GtCO2 per year, with the amount of CO2 stored almost 200 times greater than today.

World CO2 capture in the Sustainble Development Scenario and Faster Innovation Case, 2050

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Negative emissions technologies, namely DACS and BECCS, account for the bulk of increased capture volume and are critical in offsetting residual emissions from long-distance transport and heavy industry. Emissions captured from bioenergy and the air in 2050 would triple relative to the Sustainable Development Scenario. Around 7 DACS facilities of 1 Mt capture capacity would need to be commissioned every year on average from today to 2050 in the Faster Innovation Case, compared with around 3 such facilities every two years in the Sustainable Development Scenario over the same period. The largest DAC plant currently being designed is of 1 Mt capture capacity; only pilot-scale units of 0.4% that size have been operated so far. For BECCS, around 90 plants of 1 Mt capture capacity would be needed each year, over three times as much as the capacity projected in the Sustainable Development Scenario from today to 2050.


Captured CO2 can be either permanently stored deep underground in geological formations or used in a variety of ways, including for EOR or as a raw material in the production of fuels, chemicals or building materials.4 More than 90% of all the CO2 captured over 2020-70 in the Sustainable Development Scenario is stored, with 80% of the stored CO2 coming from fossil sources and industrial processes and 20% from bioenergy and DAC. Of the CO2 that is used, around 95% is used as feedstock for synthetic fuel production, while the remainder is used in the chemicals sector.5 This represents a major change in how CO2 is used. Today, the majority of CO2 captured and used is for EOR – where nearly all of the CO2 is permanently stored – or in the chemicals sector where the CO2 is captured and used within the same process to produce fertiliser and ultimately released into the atmosphere.6 In the period to 2030, CO2 use for synthetic fuel production is scaled up, building on projects already underway such as the planned Norsk-e Fuel project in Norway (see the section Long-distance transport below). This shift increases CO₂ use by around three-quarters relative to today, albeit from a small base, and paves the way for greater deployment of synthetic fuels in aviation in the longer term.

The contribution of CO2 use to reaching net-zero emissions depends in large part on the source of the CO2. By 2070, all synthetic fuel production uses CO2 sourced from bioenergy or DAC so that burning these fuels is carbon-neutral (using CO2 captured from fossil fuel sources would still result in emissions). In the preceding period, some of the CO2 used come from fossil fuels or from industrial plants, which contributes to CO2 reductions by reducing reliance on the direct use of fossil fuels in the transport and industry sectors (see Chapter 3 for a discussion of the climate benefits of CO2 use). 

World cumulative captured CO2 by sector in the Sustainable Development Scenario, 2020-2070

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World cumulative captured CO2 by application in the Sustainable Development Scenario, 2020-2070

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World cumulative captured CO2 by source in the Sustainable Development Scenario, 2020-2070

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Tackling emissions from existing assets

One of the defining challenges for global energy transitions is how to reduce CO2 emissions from the existing stock of energy-consuming assets – vehicles, factories, public and residential buildings, and infrastructure. Some of these assets, notably power stations and industrial plants, are built to last for decades, effectively locking in their emissions unless they are modified in some way to emit less or are retired early. Retrofitting CO2 capture facilities to existing plants and storing the CO2 underground is one way of addressing this challenge.

Existing industrial and power plants, if they continue to operate as they do now through to the end of their normal operating lifetimes, would generate over 600 Gt of CO2 emissions worldwide between now and 2070 – around 17 years’ worth of current global emissions. Continued operation of the existing transport fleet and building stock would increase cumulative locked-in emissions by a further 150 Gt. Emissions of that magnitude would exhaust the majority of the remaining CO2 budget in the Sustainable Development Scenario through to 2070. In other words, it would permit hardly any new energy-consuming assets of any description to be brought into use ever again.

Cumulative world CO2 emissions from existing fossil fuelled power and industrial plants compared to the Sustainable Development Scenario, 2019-2070

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World CO2 emissions from existing fossil fuelled power and industrial plants compared to the Sustainable Development Scenario, 2019-2070

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The power sector is the main source of emissions from existing assets, accounting for 410 Gt worldwide to 2070 – 80% of which is from coal plants. China alone contributes almost half of global cumulative emissions from existing power plants, and other emerging economies most of the rest, mainly due to their younger fleets. Most of the investment in those assets occurred over the past two decades, when their economies were growing most rapidly. The average age of coal plants is less than 20 years in most Asian countries and just 13 years in China; in Europe, it is 35 years and in the United States around 40 years. Of the 2 100 GW of coal-fired capacity in operation worldwide today and 167 GW under construction, around 1 440 GW could still be operating in 2050 – 900 GW of it in China alone.

Age structure of existing gas power capacity by region

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Age structure of existing coal power capacity by region

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Gas-fired power plants are generally younger, averaging less than 20 years in all major countries with the exception of Japan, the Russian Federation (hereafter “Russia”) and the United States, since gas was introduced as a fuel for power generation in many countries only after the 1990s. Because of their shorter technical lifetime, 350 GW of the around 1 800 GW of gas power plants in operation today and 110 GW under construction could still be operational in 2050.

Industry, particularly heavy industry sectors, is the other major contributor to emissions from existing assets. Of the nearly 200 Gt of cumulative CO2 emissions from existing industrial assets, the steel and cement sectors each account for around 30% and the chemicals sector for around 15%. As with the power sector, China is the main contributor, due to its dominance as an industrial producer and the relatively young age of its industrial plants. The country accounts for nearly 60% of the capacity used to make iron from iron ore, the most energy-intensive step of primary steel production, for just over half of the world’s kiln capacity for making cement, and for around 30% of total production capacity for ammonia, methanol and high-value chemicals (HVCs) combined.

The majority of China‘s industrial capacity is at the lower end of the age range for each type of assets, averaging between 10 and 15 years, compared with a typical lifetime of 30 years for chemical plants and 40 years for steel and cement plants. The phenomenal growth over the last two decades in China’s output of steel – more than sevenfold – and cement – nearly fourfold – bears testimony to the relatively short time frame over which most of the country’s steel works and cement plants were added. In contrast, the chemical sector is characterised by a more even distribution of capacity both regionally and across different age ranges.

There are three options for cutting locked-in emissions in the power generation and industrial sectors:

  • Investing in modifications to existing industrial and power equipment to either use less carbon-intensive fuels or improve energy efficiency
  • Retiring plants before the end of their normal operating lifetimes, or making less use of them (e.g. by repurposing fossil fuel power plants to operate at peak-load rather than base-load)
  • Retrofitting CO2 capture facilities and storing or using the CO2.

For the world to reach net-zero emissions by 2070 or earlier, a combination of the three will be required. Their relative contribution will vary by country depending on their economic viability, social acceptability and implications for energy security. At the level of an individual plant, the least-cost option, in terms of the cost per tonne of CO2 emissions avoided, depends on the age and technological characteristics of the assets as well as on the market conditions and regulatory framework. In practice, plant modifications and repurposing may be limited by the specific plant characteristics and, in the case of industry, by non-combustion processes. For example, CCUS is effectively the only option for achieving significant reductions in emissions from cement production short of closing the plant, due to the large amount of process emissions and the need for high-temperature heat, which cannot be provided easily and cheaply by non‑fossil energy.

In many cases, early retirement of assets before full repayment of capital costs is an expensive option for plant owners and governments, particularly in emerging economies with younger assets. Retrofitting these assets with CCUS to allow continued operation can provide plant owners with an asset protection strategy and may prove cheaper than early retirement, depending on the size of any carbon penalty and other policy incentives.

From a broader economic perspective, retrofitting CCUS generally makes most sense for power plants and industrial facilities that are young, efficient and located near places with opportunities to use or store CO2, including for EOR, and where alternative generation or technological options are limited. Other technical features that have to be considered when assessing whether a retrofit is likely to make commercial or economic sense are capacity, availability of on-site space for carbon capture equipment, load factor, plant type, proximity to CO2 transport infrastructure and confidence in the long-term availability of CO2 storage capacity. In advanced economies, where industrial capacity is generally older, there is greater potential for early retirement, as the economic losses involved are typically lower. In emerging economies with younger assets, the emphasis is likely to be more on retrofitting plants with more energy-efficient and CCUS technologies.

Retrofitting with CCUS plays a major role in reducing emissions from coal and gas-fired power assets in the Sustainable Development Scenario. Around 190 GW of coal-fired capacity, mainly in China, and 160 GW of gas-fired capacity is retrofitted with CCUS. Globally, retrofits on existing plants account for around a third of all the CO2 captured from power plants over the period 2020-70, and account for 16% of emissions reductions from existing plants relative to the Stated Policies Scenario. Some existing coal power plants are also repurposed to provide reserve capacity to the power system, thus generating smaller amounts of electricity and CO2 emissions, and some plants co-fire coal with biomass, also reducing CO2 emissions. Despite these measures, early retirements of some power plants are unavoidable: around 600 GW of the existing global coal capacity of 2 100 GW today are retired globally earlier than in the Stated Policies Scenario.

World CO2 emission reductions from CCUS retrofits in the power generation and heavy industry in the Sustainable Development Scenario, 2019-2070

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CCUS retrofits also play an important role in addressing emissions from existing assets in heavy industry. They account for nearly 90% of CO2 captured in heavy industry sectors by 2030 and 55% of the cumulative capture volume to 2070 in the Sustainable Development Scenario. Post‑combustion capture technologies are generally more suited to retrofitting than oxy-fuelling and pre-combustion technologies as there is less need for fundamental overhauls in combustion equipment. As with power stations, the regional deployment of retrofits in heavy industry is primarily determined by the age of existing assets, as well as future growth in production: if existing capacity levels are largely sufficient to meet local demand, such as in Europe and North America, retrofits may be an attractive option. Conversely, in countries such as India where production capacities are set to grow strongly, the share of retrofits is lower, given the relatively high investment in new assets. Worldwide, CO2 capture from retrofits in heavy industry declines rapidly after 2060 in the Sustainable Development Scenario, as the bulk of existing capacity today will have come to the end of its lifetime.

A solution for hard-to-abate emissions

No part of the energy system can avoid the need to reduce emissions, including those sectors where it is particularly difficult or expensive, if the world is to reach net-zero emissions. The main sectors in which emissions are hard to abate are heavy industry, notably iron and steel, cement and chemicals, and the three modes of long-distance transport – trucking, shipping and aviation.

CCUS – alongside electrification, bioenergy and hydrogen – is a major component of the portfolio of technology options to deliver deep emissions reductions in the hard-to-abate sectors in the Sustainable Development Scenario. Improvements in the performance of existing technologies, material efficiency in heavy industry and measures to conserve energy in transport, by avoiding journeys and shifting between modes, can deliver substantial emissions reductions in the near‑term. But for the energy sector as a whole to reach net-zero emissions in the longer‑term, technologies that significantly reduce the emissions intensity of producing a tonne of material or of moving passengers and freight around the world are required.

Principal CCUS and alternative technologies to reduce CO2 emissions in selected sectors

Sector

Barriers

Technology options (year available in the SDS [TRL])

Cement

  • High reliance on coal for high temperature heat
  • Large share and quantity of process emissions
  • Low-margins
  • The need to locate capacity relatively near to the point of use

CCUS

  • Chemical absorption with full capture rates (available from 2024 [TRL 7-11])
  • Calcium looping (2025 [TRL 7])
  • Direct separation (2030 [TRL 6])
  • Oxy-fuel (2030 [TRL 6])
  • Novel physical adsorption (using silica or organic-based adsorption) (2035 [TRL 6])

 Alternatives

  • Raw material substitution: calcined clay to reduce emissions associated with clinker production (today [TRL 9])
  • Alternative binding agents that avoid substantial shares of process emissions (some available today [TRL 3-9])

Steel

  • High reliance on coal for high temperature heat and iron reduction
  • Limits to the availability of scrap for steel recycling
  • Globally traded commodity with relatively low margins

CCUS

  • DRI: natural gas-based with CO2 capture (today [TRL 9])
  • Smelting reduction with CCUS (2028 [TRL 7])
  • Blast furnace: process gas hydrogen enrichment and/or CO2 removal for use or storage (2030 [TRL 5])

Alternatives

  • Blast furnace: electrolytic hydrogen (H2) blending (2025 [TRL 7])
  • Ancillary processes: H2 for high temperature heat (2025 [TRL 5])
  • DRI: Natural gas-based with high levels of electrolytic H2 blending, or solely based on electrolytic H2 (2030 [TRL 5])

Chemicals

  • Large share of process emissions
  • Fossil fuels used as feedstock that are difficult to fully substitute with bioenergy or electrolytic hydrogen
  • Globally traded commodities with highly complex supply-chains

CCUS

  • Chemical absorption (available today for ammonia [TRL 11] and methanol [TRL 9]; in 2025 for HVCs [TRL7])
  • Physical absorption (today for ammonia [TRL 9]; 2023 for methanol [TRL 7]; 2025 for HVCs [TRL 7)
  • Physical adsorption (today for HVCs [TRL 7])

Alternatives

  • Hydrogen: Electrolytic H2 supplied by variable renewables (2025 for ammonia [TRL 8] and methanol [TRL 7])
  • Direct electrification: methanol production from methane pyrolysis (2025 [TRL 6])
  • Bioenergy:
    • Bioethanol dehydration for ethylene (today [TRL 5-9])
    • Lignin-based benzene/toluene/mixed xylenes production (2030 [TRL 6])

Long-distance transport

  • Dense energy carriers are required
  • Direct electrification is difficult, particularly for aviation and shipping
  • Biofuels are limited by sustainability constraints

CCUS

  • Synthetic hydrocarbon fuels (2025 [TRL 5-7])

Alternatives

  • Biofuels in shipping, aviation and trucks (some today [TRL 3-10])
  • Electrification of trucks (today [TRL 8-9])
  • Ammonia in shipping (2024 [TRL 4-5])
  • Hydrogen in shipping and trucks (2021 [TRL 4-8])

Notes: TRL = technology readiness level; DRI = direct reduced iron; H2 = hydrogen; HVC = high-value chemicals. Year available corresponds to market introduction – although the time period to materiality (1% market share) varies in global deployment projections in the Sustainable Development Scenario. A number of other technologies, including energy and material efficiency, play important roles in decarbonising these sectors in the Sustainable Development Scenario. See IEA, 2020a for additional details and Chapter 3 of this report for further details on the technology readiness of different CCUS options for heavy industry.

Heavy industry and long-distance transport together emit around 10 Gt of CO2 today, or around 30% of total emissions from the energy system, including industrial process emissions. In the Sustainable Development Scenario, emissions from these sectors decline by almost 90% to around 1.5 Gt in 2070. Achieving these reductions requires widespread adoption of near-zero emissions production routes in heavy industry and the substantial replacement of fossil fuels with low‑carbon alternatives in long-distance transport. CCUS plays a critical role in both sectors. By 2070, around 2.7 GtCO2 is captured in the steel, cement and chemicals sectors, and around 5 mb/d of synthetic fuels are consumed in the aviation sector using around 0.8 Gt of captured CO2.

Technology options and costs

In heavy industry, CCUS can be applied directly to production facilities to manage industrial process and energy-related CO2 emissions, through both retrofits as well as the construction of new plants with integrated CO2 capture facilities. Industry produces large quantities of bulk materials for sale in highly competitive global market places; margins tend to be slim and energy costs account for a large share of overall production costs. In this context, technology costs, along with local regulatory contexts and infrastructure constraints, will be critical in determining the eventual deployment of CCUS alongside other emissions abatement options.

It is generally difficult to reduce industrial process emissions, which are inherent to the chemical reactions involved in producing certain bulk materials, without CO2 capture. The production of clinker – the key active ingredient in Portland cement – is the prime example here. Process emissions account for around two-thirds of the emissions in a cement kiln. Even if the kiln in which it is produced were to be electrified or fuelled with bioenergy, these emissions would persist. Industrial process emissions amounted to 2.5 GtCO2 in 2019, of which the cement sector accounted for 63% (the chemicals and steel sectors account for more than half of the rest). There are no alternatives to CCUS at comparable levels of technology maturity that can support deep emissions cuts in this sector. Alternative binding agents could one day constitute an alternative to the use of Portland cement, which produces around 520 kgCO2 of process emissions per tonne of clinker. Alternative binding materials that could lead to substantial reductions in process emissions (e.g. magnesium oxide derived from magnesium silicates) are still in the research and development (R&D) phase today.

There are also limited alternatives to CCUS for now for reducing emissions in steel and chemicals production. CCUS concepts in the steel and chemicals sectors also tend to be at higher levels of technology maturity than their hydrogen-based alternatives. The hydrogen-based direct reduced iron (DRI) route for making steel, which reduces emissions substantially, could emerge as an economically viable alternative to CCUS-equipped facilities, but probably only in regions with access to very low-cost renewable electricity for hydrogen production via water electrolysis. Based on current estimates of the levelised costs of production for commercial-scale plants, producing one tonne of steel via CCUS-equipped DRI and innovative smelting reduction processes is typically 8-9% more expensive than today’s main commercial production routes, but the hydrogen-based DRI route typically raises costs by around 35-70%. The story is similar in the chemicals sector. Electrolytic hydrogen as a feedstock for ammonia and methanol production could become an important alternative to CCUS, but in most regions today, it is more expensive than applying CCUS to existing or new plants. The cost of CCUS-equipped ammonia and methanol production is typically around 20-40% higher than is that of their unabated counterparts, while the cost of electrolytic hydrogen routes is 50-115% higher.

Simplified levelised cost of competing low-carbon technologies in cement production

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Simplified levelised cost of competing low-carbon technologies in chemicals production

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Simplified levelised cost of competing low-carbon technologies in steel production

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CCUS accounts for nearly 40% of the total cumulative reduction in global CO2 emissions in the steel, cement and chemicals sectors combined in the Sustainable Development Scenario relative to the Stated Policies Scenario. CO₂ emissions captured in industry – including those utilised in the commercial production of urea – increase by a factor of four in the period to 2030 (to 0.5 Gt) and by almost a factor of 25 to 2070 (to 2.7 Gt) in the Sustainable Development Scenario. Industrial CCUS applications account for around 54% of total CO2 capture in the energy system by 2030 and 26% by 2070. The amount of CO2 captured cumulatively is largest in the cement industry (43 Gt), followed by the chemicals (18 Gt) and steel industries (16 Gt). By 2070, almost 90% of the CO2 generated in cement production is captured, about 75% in the steel sector and just under 80% in the chemicals sector. 

Share of sub-sector emissions generated by industry sectors in the Sustainable Development Scenario, 2019

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Heavy industry process emissions by sector in the Sustainable Development Scenario, 2019-2070

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The role of CCUS in reducing emissions in each sub-sector grows rapidly over time to 2050, after which its contribution begins to plateau. By 2070, CCUS accounts for 61% of annual emissions reductions in the cement sector, 31% in the steel sector and 33% in the chemicals sector. Cement production accounts for the largest share of the process CO2 emissions captured. CCUS is also deployed in the pulp and paper sector, but on a much smaller scale. Around 18 Mt is captured annually in this sector by 2070 in the Sustainable Development Scenario, or 1% of all the CO2 captured in industry. CCUS in that sector is mainly applied to steam boilers, some of which are fed by biomass (e.g. bark and other pulp and papermaking residues), resulting in some CO₂ removal (-3.5 Mt in 2070).

World CO2 emissions reductions by abatement measure in the cement sector in the Sustainable Development Scenario relative to the Stated Policies Scenario, 2019-2070

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World CO2 emissions reductions by abatement measure in the steel sector in the Sustainable Development Scenario relative to the Stated Policies Scenario, 2019-2070

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World CO2 emissions reductions by abatement measure in the chemicals sector in the Sustainable Development Scenario relative to the Stated Policies Scenario, 2019-2070

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The pace of CCUS deployment in industry is daunting, emphasising the need to get the ball rolling as quickly as possible. By 2030, around 450 MtCO2 is captured per year in industry worldwide, mainly in the cement sector, in the Sustainable Development Scenario. Assuming an average capture rate of 0.5 MtCO2 per year for each facility, this implies a need for close to one CCUS-equipped cement facility coming online per week between now and then. The rate accelerates to almost 6 per month on average in the period 2030‑70. Much of this capacity is retrofitted to existing plants or those currently under construction. This deployment hinges on a matching expansion of CO2 transport and storage infrastructure. 

Technology options

CCUS is an option for effecting deep emissions reductions in long-distance transport, including heavy-duty trucking, shipping and aviation. Together, these three sub‑sectors make up nearly half of global annual energy use (1 192 Mtoe) for transport and related CO2 emissions (3.6 Gt). They are among the most difficult to decarbonise. Electrification of trucks and the direct use of hydrogen and ammonia in ships are among the main alternatives to the use of biofuels (the supply of which is constrained by the availability of land to grow crops for energy purposes) and synthetic fuels. By contrast, electrification of long-distance air travel is a nascent technology, constrained by limits on the gravimetric energy density of batteries. An all-electric passenger commercial aircraft capable of operating over ranges of 750‑1 100 kilometres, for instance, would require battery cells with densities of 800 Wh/kg – more than three-times the current performance of lithium-ion (Li-ion) batteries (Schäfer et al., 2019).

CCUS can contribute to the decarbonisation potential of long-distance transport as a source of CO2 for synthetic hydrocarbon fuels. Captured CO2 can be used to convert low-carbon hydrogen into synthetic hydrocarbon fuels (diesel, gasoline and kerosene) that are easier to store, transport and use, but with potentially lower lifecycle CO2 emissions than conventional fossil fuels (see Chapter 3). However, the production of synthetic hydrocarbons is energy-intensive and requires large amounts of hydrogen, making them relatively expensive. As CO2 emissions constraints increase over time, the feedstock CO2 must increasingly be sourced from biomass or the air (DAC).

Simplified levelised cost of competing low-carbon technologies in long distance transport

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Given the high cost of producing synthetic fuels, their long-term use at scale is likely to be mostly limited to long-distance aviation, where practically no other alternatives to conventional oil-based fuels and biofuels exist, and where the higher cost are likely to be more easily absorbed. The estimated levelised cost of synthetic fuels is around two to seven times that of kerosene produced from crude oil (at a price of USD 50/bbl) and bio kerosene is around 1.5-4 times that of kerosene produced from crude oil (at a price of USD 50/bbl). The cost of capturing the CO2 needed to make synthetic fuels is a major component of the total cost of making those fuels. CO2, generated in the production of bioethanol is expected to be the cheapest source of biogenic CO2, at around 15-30/tCO2. CO2 captured from the atmosphere in a DAC facility is projected to cost in the region of USD 135-345/t, though future costs are highly uncertain since this family of technologies is at a comparatively early stage of development. Electricity accounts for around 30-80% of the cost of synthetic fuel production, based on a future renewable energy electricity price of USD 20-60/MWh. 


Liquid fuels derived from crude oil have a high gravimetric energy density. This explains their widespread use in the transportation sector, which accounts for around 60% of global oil demand today. A litre of gasoline weighing around 0.75 kg contains around 35 MJ of energy. A Li-ion battery today can store the same quantity of energy when fully charged, but would weigh about 50 kg, and the battery does not get lighter as it discharges. This weight constraint can be offset to a large degree by the increased efficiency of electric motors (2.5-5 times more efficient than internal combustion engines), meaning the effective battery weight requirements of electric vehicles can be reduced accordingly for a given driving range. Nevertheless, the disparity in weight helps to explain the difficulty of directly electrifying long-distance transport modes, where the weight of the fuel is a critical parameter. This is particularly the case in aviation, where the gap between the efficiency of electric motors and jet turbines is smaller, and where regenerative breaking cannot compensate for the added weight of batteries. Synthetic fuels offer an indirect pathway from low-carbon electricity to energy-dense fuel applications.

Synthetic fuels are produced by converting hydrogen and a source of carbon into long-chain hydrocarbons, which are then upgraded to usable fuels. The Fischer-Tropsch process, which uses carbon monoxide (CO) as the carbon source, is a key component of most pathways to produce synthetic fuels that are direct substitutes for the fossil fuels used in long-distance transport modes (kerosene, diesel and heavy fuel oil). To be carbon‑neutral, this CO2 has to be generated from biogenic CO2 (captured from a biofuel production or biomass-fired power plant) or atmospheric CO2 (captured using DAC).The production of these fuels also requires significant amounts of electricity. Overall, the production of one litre of synthetic kerosene from electrolytic hydrogen together with CO2 captured through DAC requires around 25 kWh of energy. Over 80% of this is electricity used to produce hydrogen and around 15% is heat and electricity for capturing CO2 through DAC. The remainder is used in the Fischer-Tropsch synthesis step. With current technology, only around 40% of the energy input ends up in the final liquid product, although process optimisation could potentially increase the overall conversion efficiency beyond 45%. Some projects aiming to produce synthetic hydrocarbons have been announced recently. For example, the Norsk e‑Fuel project is planning the first commercial plant in Europe using this technology. It is expected to come on line in 2023 with a production capacity of 10 million litres/year (Norsk‑e Fuel, 2020). 


CO2 for synthetic fuels in the Sustainable Development Scenario

CCUS contributes indirectly to emissions reductions in all three long-distance transport sub-sectors in the Sustainable Development Scenario. While conventional biofuels expand most rapidly in the near term, synthetic hydrocarbon fuels and BTL with CCUS start to make inroads in the late 2020s. By 2070, biofuels make up 17% (418 Mtoe) of the total fuel mix and synthetic hydrocarbon fuels make up 10% (254 Mtoe).

Synthetic hydrocarbon fuels make the largest contribution in aviation, accounting for almost all synthetic fuel use and 40% of the total demand for kerosene in 2070 (biofuels account for 35%). In the Sustainable Development Scenario, synthetic hydrocarbon fuels play a modest role in the trucking sector over the period 2030 to 2060, with the sector transitioning to other low-carbon fuels thereafter. By 2070, the production of synthetic hydrocarbon fuels across all sub sectors requires around 120 Mt (350 Mtoe) of electrolytic hydrogen, 830 Mt of CO2, and 5 500 TWh of electricity – around 8% of all the electricity produced worldwide in 2070. As the CO2 is sourced from the atmosphere (55% of all CO2 used in 2070) or captured at biomass power or biofuel production plants (45%), the aviation fuel produced is carbon-neutral.

CO2 use as feedstock for synthetic kerosene in the Sustainable Development Scenario, 2019-2070

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World energy demand in aviation in the Sustainable Development Scenario, 2019-2070

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CCUS in low-carbon hydrogen production

CCUS can play an important role in facilitating the production of low-carbon hydrogen for use across the energy system. Hydrogen is a low-carbon fuel or feedstock that can be used without direct emissions of air pollutants or GHGs. It offers a way to decarbonise a range of energy sectors, in particular where direct electrification is difficult, including long-haul transport, chemicals, iron and steel production, and power and heat generation (see the previous section). CCUS can help decarbonise hydrogen production in two key ways:

  • By reducing emissions from existing hydrogen plants: Around 75 Mt H2 of hydrogen is currently produced each year for industrial use,7 almost entirely from natural gas (76%) and coal (23%), with the remainder from oil and electricity. This is associated with more than 800 MtCO2, corresponding to the combined total energy sector CO2 emissions of Indonesia and the United Kingdom (IEA, 2019b). Unabated production of hydrogen from fossil fuels results in emissions of 9 tCO2/t H2 in the case of natural gas and 20 tCO2/t H2 in the case of coal. Seven projects based on the generation of hydrogen from fossil fuels with CCUS are in operation today8 with a combined annual production just over 0.4 MtH2, capturing close to 6 MtCO2. Of the seven projects, four are at oil refineries and three at fertiliser plants. There is significant potential to expand CCUS retrofitting to reduce emissions from existing facilities and enable these facilities to continue operations sustainably. Capturing CO2 from hydrogen production is a relatively low-cost CCUS application, and existing facilities are often concentrated in coastal industrial zones, with potential to share CO2 transport and storage infrastructure with other industrial facilities.
  • By providing a least-cost pathway to scale up new hydrogen production: Gas- and coal-based hydrogen production with CCUS is currently less expensive than using renewable energy for water electrolysis in most regions and will remain so where both CO2 storage and low-cost fossil fuels are available.

Hydrogen production from natural gas using reforming processes and from coal using gasification are well-established technologies. In the case of natural gas, steam methane reforming (SMR) is the leading production route today, with part of the natural gas (30-40%) used as fuel to produce steam, giving rise to a “diluted” CO2 stream, while the rest of it is split with the help of the steam into hydrogen and more concentrated “process” CO2. The concentration of the CO2 in the output streams affects capture costs. Capturing CO2 from the concentrated “process” stream costs around USD 50/t, leading to overall emission reductions of 60%. CO2 can also be captured from the more diluted gas stream. This can boost the level of overall emissions reduction to 90% or more, but it also increases costs to around USD 80/tCO2 in merchant hydrogen plants. Several SMR CCUS projects are currently at the feasibility study stage with ambitions to be operational by 2030, in particular in densely industrialised zones. These include the H-Vision project, which aims to retrofit CO2 capture to up to 0.6 MtH2/yr for industrial use in Rotterdam, the Netherlands (PoR, 2019), and the Magnum Project in the Netherlands, which could create demand for 0.2 MtH2/yr for each of the three gas power plant units converted to hydrogen (NIB, 2018).

Auto‑thermal reforming (ATR) is an alternative technology in which the required heat is produced in the process itself. This means that all the CO2 is produced inside the reactor, which allows for higher CO2 recovery rates than can be achieved with SMR. ATR can also be cheaper than SMR because the emissions are more concentrated. A large share of global ammonia and methanol production already uses ATR technology, and two new projects in the United Kingdom – HyNet and H21 – plan to use that technology, too (Northern Gas Networks, 2018; HyNet, 2020).

Other options for using natural gas to produce hydrogen exist, but are still at a laboratory or demonstration stage. In an alternative SMR design, natural gas would still be required as feedstock, but the necessary steam could be produced by alternative sources, such as electricity or concentrated solar energy, thus eliminating the diluted CO2 stream from heat generation in conventional SMR designs. Methane pyrolysis (or splitting) is another emerging technology. It involves splitting methane at high temperatures, for example in a plasma generated by electricity, to produce hydrogen and solid carbon, but no CO2. The resulting carbon can be potentially used as feedstock in the chemical, steel or aluminium industry, providing another revenue stream besides the hydrogen (Daloz et al., 2019). In the United States, Monolith Materials operates a pilot methane pyrolysis plant in California and a commercial demonstration plant in Nebraska. In Australia, the 100 t H2/yr Hazer Commercial Demonstration Plant, which will use biogas to produce hydrogen and graphite, is under construction (FuelCellsWorks, 2020).

Coal gasification is a mature technology used today mainly in the chemical industry for the production of ammonia, in particular in China. Coal gasification can be combined with CCUS, though there are technical challenges. In particular, few technologies exist that produce both high-purity hydrogen and CO2 that is pure enough for other uses or storage, since gas separation technologies focus on either hydrogen removal or CO2 removal. The choice and design of the capture technology therefore depends on what the hydrogen is going to be used for, as well as on production costs. In Australia, the planned Hydrogen Energy Supply Chain Latrobe Valley project is seeking to produce hydrogen from lignite using gasification, with the CO2 being transported and stored via the CarbonNet project.

Producing hydrogen from fossil fuels with CCUS will likely remain the cheapest low-carbon route in regions with low-cost domestic coal and natural gas and available CO2 storage, such as the Middle East, North Africa, Russia and the United States. The cost of producing hydrogen that way is currently in the range of USD 1.2/kg H2 to USD 2.6/kg H2, depending on local gas and coal prices. This cost is not projected to change significantly in the coming decades. The future economics of the technology and competing options depend on factors that will continue to vary regionally, including prices for fossil fuels, electricity and carbon. The cost of electrolytic hydrogen is expected to come down substantially in the long term, driven by cost reductions from scaling up the deployment of electrolysers and their manufacturing capacities as well as due to declining costs for electricity from renewables. Water electrolysis could become a competitive option for low-carbon hydrogen production in regions with abundant renewable energy resources, including Northern Africa and most of Australia, with costs projected to range from USD 1.3/kg to USD 3.3/kg of hydrogen by mid‑century.

Global average levelised cost of hydrogen production by energy source and technology, 2019 and 2050

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Low-carbon hydrogen plays a key role in decarbonising transport, industry, buildings and power generation in the Sustainable Development Scenario, with global hydrogen demand increasing seven-fold to 520 Mt by 2070. Hydrogen is used in a wide range of new applications as an alternative to current fuels and raw materials, including as a transport fuel for cars, trucks and ships, as an input for chemicals and steel making, to produce heat in buildings and industry, and for energy storage to balance the variability of renewables in the power sector. The direct use of hydrogen in transport, buildings, industry, and power generation accounts for two-thirds of hydrogen demand in 2070, while nearly a quarter is used to produce synthetic hydrocarbon fuels and 10% is converted into ammonia as a fuel for the shipping sector. Ammonia produced from natural gas with CCS covers more than a third of fuel needs in the shipping sector in 2070.

CCUS in hydrogen and synthetic fuel production for energy purposes in the Sustainable Development Scenario, 2070

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CCUS In Hydrogen And Synthetic Fuel Production For Energy Purposes In The Sustainable Development Scenario 2070
CCUS in hydrogen and synthetic fuel production for energy purposes in the Sustainable Development Scenario, 2070
CCUS In Hydrogen And Synthetic Fuel Production For Energy Purposes In The Sustainable Development Scenario 2070

IEA 2020. All rights reserved.

Overall, the production of hydrogen with CCUS and its use leads to cumulative CO2 reductions of around Gt by 2070, or 3.5% of the cumulative emissions reductions in the Sustainable Development Scenario relative to the Stated Policies Scenario. Production reaches 18 Mt (52 Mtoe) worldwide in 2030 in the Sustainable Development Scenario, meeting 20% of global hydrogen needs, compared with 7.8 Mt9 (22 Mtoe) in 2020. Both existing and new hydrogen plants are equipped with CO2 capture, including in some of the main industrial clusters in ports of the North Sea, the US Gulf Coast and southeast China.

The shares of water electrolysis and fossil fuels with CCS in total low-carbon hydrogen supply is roughly equal up to 2030, but moves slightly in favour of water electrolysis over time, reflecting expected cost reductions for electrolysers and renewable energy generation. By 2070, low-carbon hydrogen production from fossil fuels with CCUS accounts for 40% of global hydrogen production or around 210 Mt (600 Mtoe) – nearly 500 times more than the total hydrogen capacity with CCUS in operation today. Around 1.9 GtCO2 is captured and stored from hydrogen production in that year, representing around 18% of all CO2 being captured globally in 2070.

CO2 captured at hydrogen production by region in the Sustainable Development Scenario, 2019-2070

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Global hydrogen production in the Sustainable Development Scenario, 2019-2070

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Removing carbon from the atmosphere

Carbon removal technologies involve extracting CO2 from the atmosphere, directly or indirectly (via the absorption of CO2 in biomass), and permanently storing it. The main attraction of carbon removal technologies is their potential to offset residual emissions from sectors where emissions are hard to abate, to achieve net-zero emissions across the energy sector. While some CO2 could be stored in products (e.g. concrete), geological storage will undoubtedly be needed to achieve large-scale carbon removal with these technologies.

Carbon removal is also often seen as a way of producing net-negative emissions in the second half of the century to counterbalance excessive emissions earlier on. This feature of many climate scenarios however should not be interpreted as an alternative to cutting emissions today or a reason to delay action. In the Sustainable Development Scenario, carbon removal technologies are part of the portfolio of technologies and approaches to cut emissions in the near term and in the future, helping a faster transition to net-zero emissions. From a policy perspective, support for carbon removal technologies can additionally serve as a means to hedge against the risk of delay or even failure in the development and deployment of other CO2 abatement technologies across the energy sector: technology development and deployment tends to be a non-linear process in which delays can occur for many different reasons (IEA, 2020c). 


Both the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (IPCC, 2014) and more recently the IPCC Special Report on Global Warming of 1.5°C, or SR1.5 (IPCC, 2018) highlight the central role that carbon removal technologies will need to play in meeting ambitious climate targets. Most scenarios referenced in SR1.5 rely on carbon removal technologies to meet climate targets, in particular BECCS.10 Scenarios in which carbon removal technologies do not contribute to emissions reductions involve energy demand falling at a rate that the IPCC describes as unprecedented.

In the SR1.5 scenarios that are comparable to the Sustainable Development Scenario in having a 66% probability of limiting the global mean temperature increase by 2100 to 1.7-1.8°C, the highest levels of carbon removal projected are almost 6 Gt of CO2 in 2050 and 13 Gt in 2070. This is well above that in the Sustainable Development Scenario, in which BECCS and DACS combined remove almost 3 Gt from the atmosphere in 2070. The median value of the contribution of carbon removal in these SR1.5 scenarios by 2070 is more than twice as high as that projected in the Sustainable Development Scenario. While BECCS is the main contributor to carbon removal in the Sustainable Development Scenario, as in these SR1.5 scenarios, DACS plays a much larger role, reaching around 270 Mt in 2070. Only one comparable SR1.5 scenario deploys DAC, at a level around 9 Mt (after 2060).

Carbon removal through BECCS and DACS in the Sustainable Development Scenario and IPCC SR1.5 scenarios, 2030-2100

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Carbon removal approaches can include either nature-based solutions, enhanced natural processes, or technological solutions.11 Nature-based solutions include afforestation (the repurposing of land use by growing forests where there were none before) and reforestation (re-establishing a forest where there was one in the past)12. Enhanced natural processes include land management approaches that increase the carbon content in soil through modern farming methods (for instance, by adding biochar13 or fine mineral silicate rocks) and ocean fertilisation, in which nutrients are added to the ocean to increase its capacity to absorb CO2. BECCS and DACS are the main technological solutions available today – they are the primary route for the energy sector to contribute to carbon removal in the transition to net-zero emissions, and therefore the focus of this analysis.

While all these approaches can be complementary, technology solutions can offer advantages over nature-based solutions, including the verifiability and permanency of underground storage; the fact that they are not vulnerable to weather events; including fires that can release CO2 stored in biomass into the atmosphere; and their much lower land area requirements. BECCS and DACS are also at a more advanced stage of deployment than some carbon removal approaches. Land management approaches and afforestation/reforestation are at the early adoption stage and their potential is limited by land needs for growing food. Other non‑technological approaches – such as enhanced weathering, which involves the dissolution of natural or artificially created minerals to remove CO2 from the atmosphere, and ocean fertilisation/alkalinisation, which involves adding alkaline substances to seawater to enhance the ocean’s ability to absorb carbon – are only at the fundamental research stage. Thus, their carbon removal potentials, costs and environmental impact are extremely uncertain.

BECCS, DAC, land management approaches and ocean fertilisation/ alkalinisation have the highest cumulative potential; however, they all come with potential negative side effects such as land use changes, food security and biodiversity losses (BECCS, land management approaches), high CO2 capture costs (DAC), and ocean eutrophication (ocean fertilisation/alkalinisation). DAC has the smallest land footprint among the most mature carbon removal options, while BECCS and afforestation/reforestation have similar ranges for the land footprint, which depends mainly on the source of biomass.

Leading bioenergy with CCS/CCU projects currently operating worldwide

Approach

Approach type

Current maturity category

Carbon removal potential (cumul. to 2100, GtCO2)

CO2 capture cost (USD/tCO2)

Bioenergy with CCS

Technology

Demonstration

100-1170

15-85

Direct Air Capture and Storage

Technology

Demonstration

108-1000

135-345

Enhanced weathering of minerals

Enhanced natural processes

Fundamental research

100-367

50-200

Land management and biochar production

Enhanced natural processes

Early adoption

78-1468

30-120

Ocean fertilisation/alkalinisation

Enhanced natural processes

Fundamental research

55-1027

-

Afforestation/reforestation

Nature-based

Early adoption

80-260

5-50

Notes: Estimates for carbon removal potential are not additive, as CDR approaches partially compete for resources. While afforestation/reforestation is an established practice, it is at early adoption in the context of carbon removal. Sources: EASAC (2018), Fuss et al. (2018), Haszeldine et al. (2018), Keith et al. (2018), Minx et al. (2018), Nemet et al. (2018), Realmonte et al. (2019), Smith et al. (2015).

BECCS

BECCS involves the capture and permanent storage of CO2 from processes where biomass is converted to energy or used to produce materials. Examples include biomass-based power plants, pulp mills for paper production, kilns for cement production and plants producing biofuels. Waste-to-energy plants may also generate negative emissions when fed with biogenic fuel. In principle, if biomass is grown sustainably and then processed into a fuel that is then burned, the technology pathway can be considered carbon-neutral; if some or all of the CO2 released during combustion is captured and stored permanently, it is carbon negative, i.e. less CO2 is released into the atmosphere than is removed by the crops during their growth. In practice, a life cycle assessment is needed to identify whether a specific technology and application is genuinely producing negative emissions or not, depending on the sustainability of the biomass feedstock, the scope of the application, changes in land management and use, and the timing of emissions and removals (IEA Bioenergy, 2013).

BECCS is the most mature of all the carbon removal technologies, as both bioenergy production and CCS have been separately proven at commercial scale. BECCS is already operating in the fuel transformation and power generation sectors, with different levels of maturity depending on the specific application. The most advanced BECCS projects capture CO2 from ethanol production or biomass-based power generation, while industrial applications of BECCS are only at the prototype stage (IEA, 2020d). There are currently more than ten facilities capturing CO2 from bioenergy production around the world. The Illinois Industrial CCS Project, with a capture capacity of 1 MtCO2/yr, is the largest and the only project with dedicated CO2 storage, while other projects, most of which are pilots, use the captured CO2 for EOR or other uses. 

Leading bioenergy with CCS/CCU projects currently operating worldwide

Plant

Country

Sector

CO2 storage or use

Start-up year

CO2 capture capacity (kt/year)

Stockholm Exergi AB

Sweden

Combined heat and power

-

2019

Pilot

Arkalon CO2 Compression Facility

United States

Ethanol production

Storage (EOR)

2009

290

OCAP

Netherland

Ethanol production

Use

2011

<400*

Bonanza BioEnergy CCUS EOR

United States

Ethanol production

Storage (EOR)

2012

100

Husky Energy CO2 Injection

Canada

Ethanol production

Storage (EOR)

2012

90

Calgren Renewable Fuels CO2 recovery plant

United States

Ethanol production

Use

2015

150

Lantmännen Agroetanol

Sweden

Ethanol production

Use

2015

200

AlcoBioFuel bio-refinery CO2 recovery plant

Belgium

Ethanol production

Use

2016

100

Cargill wheat processing CO2 purification plant

United Kingdom

Ethanol production

Use

2016

100

Illinois Industrial Carbon Capture and Storage

United States

Ethanol production

Dedicated storage

2017

1000

Drax BECCS plant**

United Kingdom

Power generation

-

2019

Pilot

Mikawa post combustion capture plant

Japan

Power generation

-

2020

180

Saga City waste incineration plant

Japan

Waste-to-energy

Use

2016

3

* The OCAP plant receives its CO2 from a fuel refining facility (hydrogen production) and from an ethanol production plant. Therefore only part of the total CO2 (400 kt/year) qualifies as bioenergy with CCU. ** The project is currently releasing CO2 after its capture, but the long-term plan is to focus on offshore storage as part of the Zero Carbon Humber project.

DAC

DAC technologies extract CO2 directly from the atmosphere for permanent storage (carbon removal), or for use, for example, in food processing or to produce synthetic hydrocarbon fuels (where the CO2 is ultimately re-released). Currently, technologies to capture CO2 from the air rely either on liquid sorbents (liquid DAC [L-DAC]), using a hydroxide solution (Carbon Engineering, 2020)) or solid sorbents (solid DAC [S-DAC]), making use of a CO2 “filter” (Climeworks, 2020) or dry, amine-based chemical sorbents (Global Thermostat, 2020).

While existing DAC technologies rely on both fuel for heat and electricity to power rotating equipment for their operation, S-DAC could operate solely on electricity, which could come from renewable power sources. On the other hand, L-DAC will most likely always need a source of heat such as natural gas in order to achieve the high operating temperature needed in the calciner (around 900°C), unless a new way of providing a low-carbon source of heat (which does not currently exist [IEA, 2019a14] becomes commercially available. If gas were used to provide the heat (as it is the case nowadays), the associated CO2 emissions would also need to be captured and stored along with the CO2 captured directly from the air to maximise carbon removal.

An advantage of DAC is the potential for flexibility in siting. For example, a DAC plant could be located next to a plant that needs CO2 as a feedstock or on top of a geological storage site to reduce the need for CO2 transport. DAC facilities can also be co-located with other CO2 capture facilities, such as CCUS-equipped power or industrial plants, to facilitate access to existing CO2 transport infrastructure and enabling these facilities to reach net zero or even negative emissions.

The main drawback of DAC is the low CO2 concentration in ambient air compared with other sources of CO2, such as industrial or power plants, which makes this technology highly energy-intensive and expensive compared with other options for carbon removal. The amount of energy needed and the share between fuel and electricity differs depending on the type of technology and whether the CO2 needs to be compressed for transportation and storage. L-DAC for CO2 use applications requires relatively small amounts of electricity (less than 5% of total energy needs); S-DAC for storage typically requires more (23%). Natural gas – usually the cheaper source of energy for heat-raising – is mainly used to regenerate the solvent, either at around 100°C (S-DAC) or around 900°C (L-DAC).

Specific energy consumption for CO2 capture using current DAC technologies

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A total of 15 DAC plants are currently operating in Canada, Europe, and the United States. Most of them are small-scale pilot and demonstration plants, with the CO2 diverted to various uses, including for the production of chemicals and fuels, beverage carbonation and in greenhouses, rather than geologically stored. Two commercial plants are currently operating in Switzerland, selling CO2 to greenhouses and for beverage carbonation. There is only one pilot plant, in Iceland, currently storing the CO2: the plant captures CO2 from air and blends it with CO2 captured from geothermal fluid before injecting it into underground basalt formations, where it is mineralised, i.e. converted into a mineral (CarbFix, 2020). In North America, both Carbon Engineering and Global Thermostat have been operating a number of pilot plants, with Carbon Engineering (in collaboration with Occidental Petroleum) currently designing what would be the world’s largest DAC facility, with a capture capacity of 1 MtCO2 per year, for use in EOR (Carbon Engineering, 2019).

DAC plants in operation worldwide, 2020

Company

Country

Sector

CO2 storage or use

Start-up year

CO2 capture capacity (tCO2/year)

Climeworks

Switzerland

Greenhouse fertilisation

Use

2017

900

Climeworks

Switzerland

Beverage carbonation

Use

2018

600

Climeworks

Germany

Power-to-X

Use

2019

3

Climeworks

Netherlands

Power-to-X

Use

2019

3

Climeworks

Germany

Power-to-X

Use

2019

3

Climeworks

Switzerland

Power-to-X

Use

2018

3

Climeworks

Germany

Customer R&D

Use

2015

1

Climeworks

Switzerland

Power-to-X

Use

2016

50

Climeworks

Italy

Power-to-X

Use

2018

150

Climeworks

Germany

Power-to-X

Use

2020

50

Climeworks

Iceland

Mineralisation of CO2

Storage

2017

50

Carbon Engineering

Canada

Power-to-X

-

2015

365 (max)

Global Thermostat

United States

-

-

2013

2500

Global Thermostat

United States

-

-

2010

500

Global Thermostat

United States

-

-

2019

4000

Power-to-X refers to a suite of technologies that convert electricity into other forms of energy such as ammonia or hydrogen.

Costs of BECCS and DAC

At present, BECCS is the cheaper of the technology-based approaches for carbon removal. Generally speaking, the higher the initial concentration of CO2 before capture, the lower the capture cost, which is why BECCS is cheaper than DAC. In the case of BECCS, capture from fuel transformation processes (such as bioethanol production from sugar or starch cane) or biomass gasification (where only pre-treatment and compression are needed to capture CO2) are the cheapest at present, with costs ranging from about USD 15/tCO2 to USD 30/tCO2. Capture in biomass based power generation costs around USD 60/tonne, while BECCS applied to industrial processes has a capture cost of around USD 80/t. 

Current cost of CO2 capture for carbon removal technologies by sector

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Capture costs for DAC are much higher than for BECCS capture – by a factor of between 2 and 25 – due mainly to the lower initial concentration of CO2 compared with industrial streams. DAC costs vary according to the type of technology (solid- or liquid- based technologies) and whether the captured CO2 needs to be compressed to high pressure for transport and storage rather than used immediately at low pressure. As the technology has yet to be demonstrated on a large scale, future costs are extremely uncertain. Cost estimates reported in the literature are wide, typically ranging from USD 100/tCO2 to 1 000/tCO2 (Realmonte et al., 2019). Carbon Engineering claimed that costs as low as USD 94/t to USD 232/t were achievable depending on financial assumptions, energy costs and the specific plant configuration (Keith et al., 2018).

The energy needs for a DAC plant will be a major factor in determining plant location and production costs. The choice of location needs to take into account the source of the energy needed to run the DAC plant, which will also determine if the system is carbon negative, as well as the cost of the energy. For instance, low-carbon energy sources such as solar thermal, photovoltaic (PV) and wind power generation could power DAC plants in isolated areas, though the utilisation rate of the plant (and, therefore, its economic viability) would vary according to the availability of sunshine and wind.15

Carbon removal accounts for a large and increasing share of the CO2 captured over the projection horizon in the Sustainable Development Scenario. Bioenergy with CCS/CCU and DAC together account for 25% of all the CO2 cumulatively captured to 2070. Of all the CO2 captured by the two technologies, around 48 Gt, or 78%, is stored permanently and so counts as carbon removal. Captured and stored volumes reach around 2.7 Gt for BECCS and almost 0.3 Gt for DACS in 2070. In both the Stated Policies and Sustainable Development Scenarios, the availability of sustainable biomass is assumed to be limited to around 3 000 Mtoe/year (125 EJ/year), which constrains the deployment of BECCS (see below). Stronger policy incentives, including higher carbon prices, are nonetheless assumed to drive much faster growth in BECCS in the Sustainable Development Scenario.

World CO2 capture from biomass and DAC for use or storage in the Sustainable Development Scenario

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BECCS starts to be deployed at scale from 2030, and by 2070, it has captured a cumulative total of around 45 GtCO2 in the Sustainable Development Scenario. It is mainly installed in power generation (55%) and fuel transformation (40%), with the remainder in the cement and pulp and paper industries. By 2070 half of biomass-fired generation is associated with CCUS. When BECCS is deployed in the fuel transformation sector (where CO2 capture is cheaper than in other sectors) around half of the carbon remains in the biofuel product, providing a carbon-neutral fuel for hard-to-abate transport modes. 

World CO2 capture from BECCS by sector and bioenergy primary demand in the Sustainable Development Scenario, 2019-2070

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BECCS and DACS can play a decisive role in getting the global energy system to net-zero emissions. However, there remains considerable uncertainty regarding the potential contribution of these technologies in practice, notably with respect to future costs and performance, how fast they can be commercialised, public understanding and acceptance, the limits to the availability of sustainable biomass, and how quicklCO2 transport and storage infrastructure can be developed. This underscores the need for intensive RD&D to ensure that these technologies are ready to be deployed on a large scale within the next decade given the lead times involved.

Particular concerns have been expressed regarding the land requirements associated with both BECCS and DACS. The land footprint for BECCS is estimated at between 1 000 and 17 000 km2 per Mt of CO2 removed, depending on a number of factors including location and the source for the biomass (e.g. forest and agricultural residues, and purpose-grown energy crops). The land needs for DAC are smaller, at a maximum of around 15 km2 per Mt of CO2 removed, including the space needed for solar PV panels if they are the sole source of the electricity used to run the plants.16 The 740 MtCO2  captured by DAC in 2070 in the Sustainable Development Scenario would require approximately 10 500 km2 of land if using solar PV – roughly one-third the size of Belgium. The same level of removal through afforestation would require between 0.5 and 11.5 million km2, the latter being a land area bigger than the United States. An emerging DAC technology, based on electro swing adsorption (ESA-DAC)17 has potential for a smaller land footprint (Voskian and Hatton, 2019).

Water requirements for DAC are highly dependent on the chosen technology. L-DAC requires significant amounts of water while, by contrast, some S-DAC options produce water, which could be beneficial within integrated systems with water demand such as hydrogen production (Breyer, et al., 2019).

References
  1. Full descriptions of the model and key assumptions can be found on line at: www.iea.org/reports/energy-technology-perspectives-2020/etp-model. Emerging near- and medium-term energy and emissions trends will be discussed in the forthcoming World Energy Outlook 2020.

  2. Full descriptions of the model and key assumptions can be found on line at: www.iea.org/reports/energy-technology-perspectives-2020/etp-model. Emerging near- and medium-term energy and emissions trends will be discussed in the forthcoming World Energy Outlook 2020.

  3. For details on the assumptions taken for the Faster Innovation Case see IEA (2020b).

  4. Building materials and CO2-EOR can also provide long-term storage of CO2 (see "CCUS technology innovation").

  5. Other CO2 use applications, such building materials, are beyond the scope of the ETP energy modelling framework. While some of these applications offer opportunities to achieve emission reductions, their contribution to the overall decarbonisation effort is expected to be relatively modest (see the section on CO2 utilisation and carbon recycling in "CCUS technology innovation".).

  6. Today, around 125 MtCO2 per year is captured from ammonia production for on-site use in the manufacture of urea, which is widely used in fertilisers. This so-called internally-sourced CO2 is accounted for in the ETP model. It declines in the Sustainable Development Scenario reflecting changes in fertiliser production ("CCUS technology innovation"). Internally sourced CO2 is not taken into account in discussions about CO2 capture from operational large-scale CCUS projects in this chapter.

  7. The leading uses of pure hydrogen today are in oil refining (33%) and for the production of ammonia (27%).

  8. These include facilities that produce pure hydrogen and capture CO2 for geological storage or sale. CO2 captured from ammonia plants for use in urea manufacturing is excluded.

  9. These include facilities producing pure hydrogen and capture CO2 for geological storage or use, either for urea production or other purposes.

  10. Only six integrated assessment models referenced in the IPCC report model the deployment of DAC: WITCH, TIAM-Grantham (Realmonte et al., 2019), C-ROADS-5.005, MERGE-ETL 6.0, MERGE-ETL 6.0, and REMIND 1.7 (Huppmann et al., 2018).

  11. Nature-based solutions and enhanced natural processes, which are not part of the energy system, are outside the scope of this analysis and have not been included in the IEA modelling framework.

  12. Afforestation/reforestation can also provide biomass for bioenergy.

  13. Charcoal used as a soil amendment for the purposes of both carbon sequestration and soil health.

  14. Estimates for carbon removal potential are not additive, as CDR approaches partially compete for resources.

  15. While afforestation/reforestation is an established practice, it is at early adoption in the context of carbon removal.

  16. While afforestation/reforestation is an established practice, it is at early adoption in the context of carbon removal.

  17. The potentially lower cost of the variable renewable energy would need to be weighed against the lower utilisation rate and, therefore, higher levelised capital cost of the plant per tonne of CO2 captured (Fasihi, Efimova and Breyer, 2019).