CCUS in Clean Energy Transitions

Part of Energy Technology Perspectives
ETP

Regional opportunities

Highlights
  • The contribution of CCUS to the energy transition will vary considerably across countries and regions. In the Sustainable Development Scenario, China sees the largest deployment of CCUS, accounting for around one-quarter of all the CO2 captured cumulatively to 2070. Europe and North America –two other key regions for CCUS activity – also see a big increase in capture capacity. From 2030, CCUS is deployed on a significant scale in other parts of Asia, notably India, and the Middle East.
  • The United States is the global leader in CCUS, accounting for more than 60% of global CO2 capture capacity and half of all planned capacity, underpinned by new policy incentives and a supportive investment environment. The majority of stationary emission sources in the United States are located close to potential geological storage sites: 85% of emissions come from plants located within 100 km of a site and 80% within 50 km. Total potential storage is estimated at 800 Gt, or 160 years of current US energy sector emissions.
  • The North Sea is at the centre of CCUS deployment in Europe. Two facilities there already store 1.7 MtCO2/year and at least 11 other projects with a combined capacity of almost 30 Mt/year are in development in Europe. Almost 70% of emissions from power generation and industry are located within 100 km of a potential storage site and 50% within 50 km, though most of these sites are onshore where public opposition may hinder their development. Total storage capacity could be as much as 300 Gt, or almost 80 years of current emissions.
  • China is home to the largest and some of the youngest assets for coal-fired power plants as well as cement, iron and steel, and chemical plants. CCUS retrofits will be important to prevent emissions from these plants being locked in for decades. There is vast potential for CO2 storage in the western and northern provinces, as well as offshore. Some 45% of the CO2 emissions from power and energy-intensive industries is within 50 km of potential CO2 storage, and 65% of emissions within 100 km. Potential storage could total 425 Gt, or 40 years of current emissions. 
Overview

The contribution of CCUS to clean energy transitions will undoubtedly vary considerably across countries and regions. When, how and where CCUS is applied will depend on a number of considerations, including the size and age of existing power and industrial plants, domestic energy resources (both fossil and renewable), the cost and availability of alternative low-carbon technologies, the availability and proximity of CO2 storage resources to emissions sources, and public acceptance of CCUS. The level of climate ambition and the strength of associated policy measures will also be critical factors in determining the role CCUS plays in each country.

National and regional factors favourable to CCUS deployment

Factor

Potential role for CCUS where:

Existing energy assets

  • Large fleet and low average age of fossil-based power stations and industrial plants
  • High economic and/or social cost of retiring assets early

Current and future energy needs

  • Heavy reliance on fossil fuels in current power generation and industrial energy mix
  • Strong projected growth in electricity demand, industrial output and aviation
  • Limited availability of alternative (non‑fossil) energy sources
  • Large planned role for low-carbon hydrogen in energy system

Domestic energy resources

  • Abundant low-cost coal and gas resources
  • Abundant and low-cost renewable energy (for BECCS and DAC)

Industrial profile

  • Large cement, steel or chemicals industry, where availability of alternative decarbonisation options is currently limited
  • Good potential availability of low-cost CO2 to produce low-carbon materials

Climate policies

  • Ambitious climate targets, including for net-zero emissions, that require deep emissions cuts across all sectors and/or carbon removal technologies
  • Comprehensive climate plan and supportive measures for low-carbon technologies

CCUS readiness 

  • Availability of CO2 storage resources within reasonable proximity to emissions sources
  • Easy access to CO2 transport infrastructure and/or the possibility to repurpose existing assets
  • Legal and regulatory frameworks that enable and encourage CCUS deployment
  • Public acceptance of CCUS as an emissions abatement option

CCUS contributes to emissions reductions in all regions in the Sustainable Development Scenario. In absolute terms, its contribution is largest in China, accounting for around one-quarter of all the CO2 captured cumulatively to 2070 worldwide. In the period to 2030, China makes up around half of the increase in CO2 capture worldwide, primarily through retrofits to recently built coal-fired power plants and industrial plants. Europe and North America also see a significant increase in deployment of CCUS, accounting for 11% of the increase to 2030 and 21% to 2070.

Captured CO2 emissions by country/region in the Sustainable Development Scenario, 2019-2070

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Other regions account for a growing share of CO2 capture over the projection period in the Sustainable Development Scenario. In the Middle East, demand for CO2 for EOR is a key driver in the near term, alongside measures to decarbonise the refining and petrochemical sectors. Increased electricity demand also stimulates uptake of natural gas with CCUS in the power sector in some Middle Eastern countries. There are currently two large-scale CCUS facilities operating in the Middle East (in Saudi Arabia and the United Arab Emirates), linked to natural gas processing and steel production, with the CO2 used for EOR. The Abu Dhabi National Oil Company (ADNOC) has also announced a target of capturing 5 MtCO2/year from its natural gas processing plants by 2030 (ADNOC, 2020).

CCUS also emerges as an important emissions abatement option across other parts of Asia, including India and Southeast Asia, after 2030. Emerging economies in Asia have relatively new coal-fired power stations and factories, which are unlikely to be retired early in view of economic and social development priorities. India, where there are no large-scale CCUS projects at present, sees deployment of CCUS in power and industry in the long term on the assumption that sufficient storage capacity or CO2 use opportunities can be developed.

The projected deployment of bioenergy and DAC (for both CO2 use and dedicated storage) is driven in large part by the availability of bioenergy and land resources for the former, and cheap low-carbon electricity or heat for the latter. In the short term, they are deployed primarily in China, North America and the Middle East, with those regions together accounting for almost 70% of total capture worldwide in 2030. China sees the fastest growth in deployment in the longer term, capturing over 600 MtCO2 from biomass in 2070 – one-fifth of the 3 Gt captured globally. The Middle East sees the biggest increase in DAC capacity, reaching over 60 Mt in 2050 and around 275 Mt in 2070 – about a quarter of the global total.

Expected impacts of Covid-19 on clean energy innovation from corporate experts in May 2020

  Power (coal) Power (gas) Industry (cement, steel and chemicals) Low-carbon hydrogen production Other fuel transformation Carbon removal (BECCS and DAC)
China
Europe
India
Middle East
North America
Rest of the World
Legend Large: Moderate: Limited:

The rest of this chapter focuses on opportunities for deploying CCUS in the United States – the leading country for CCUS today – Europe and China. These regions together account for around two-thirds of CCUS in operation today (by CO2 capture capacity) and almost 90% of capacity under construction or planned. The analysis examines the potential for CCUS to tackle emissions from existing emissions-intensive plants as well as opportunities to promote the development of industrial CCUS hubs. Geographic information system (GIS) mapping – a framework for gathering, managing and analysing spatial location data – is used to identify the proximity of existing power and industrial facilities to potential geological storage sites, based on transport distances of 50 km and 100 km.1

United States

CCUS today and in the Sustainable Development Scenario

The United States is the global leader in CCUS development and deployment, with ten commercial CCUS facilities, some dating back to the 1970s and 1980s. These facilities have a total CO2 capture capacity of around 25 Mt/year – close to two-thirds of global capacity. Another facility in construction has a capture capacity of 1.5 Mt/year of CO2, and there are at least another 18-20 planned projects that would add around 46 Mt/year were they all to come to fruition. Most existing CCUS projects in the United States are associated with low-cost capture opportunities, including natural gas processing (where capture is required to meet gas quality specifications) and the production of synthetic natural gas, fertiliser, hydrogen and bioethanol. One project – Petra Nova – captures CO2 from a retrofitted coal-fired power plant for use in EOR though operations were suspended recently due to low oil prices. All but one of the ten existing projects earn revenues from the sale of the captured CO2 for EOR operations. There are also numerous pilot- and demonstration-scale projects in operation as well as significant CCUS R&D activity, including through the Department of Energy’s National Laboratories.

CCUS deployment in the United States accelerates over the projection horizon in the Sustainable Development Scenario. Capture reaches around 1 200 MtCO2 by 2070 in that scenario, of which more than 95% is permanently stored. Most capture facilities are in fuel transformation and the power sector, including gas-fired power generation. The share of CCUS in the technologies and measures that contribute to reducing CO2 emissions relative to the Stated Policies Scenario increases over the period to 2070, as lower-cost mitigation options are exhausted and as DACS and BECCS are needed to produce negative emissions to compensate for residual emissions in hard-to-abate sectors.

CO2 capture in the United States in the Sustainable Development Scenario, 2030-2070

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Tackling emissions from existing plants

Industry and fuel transformation together with power and heat plants in the United States emitted around 2.6 GtCO2 in 2019 – more than half of the country’s total energy sector CO2 emissions of 5 Gt and over 7% of global emissions. Over a third of US emissions come from power generation, two-thirds of which are from coal-fired power plants and the remainder largely from gas-fired plants. CO2 emissions from the chemicals (180 Mt), cement (60 Mt), and iron and steel (75 Mt) sectors are responsible for around 55% of overall US industry emissions. Emissions come from some 2 150 plants of various sizes, but just 200 of them accounted for more than half of total power and industrial emissions. Power stations and industrial sites are widely distributed, but are clustered in Appalachia, the Gulf Coast, parts of California and along the East Coast.

Stationary sources of energy sector CO2 emissions in the United States, 2019

Sources

CO2 emissions (Mt/yr)

Number of plants

Power and heat generation

1 800

1 350

Chemicals

180

380

Iron and steel

75

120

Cement

60

100

Fuel refining

230

200

Total

2 345

2 150

Notes: The numbers of plants are based on estimations. The number of chemical plants in the table is a subset of the total fleet of chemical plants in the United States. It includes naphtha crackers and plants manufacturing HVCs.

Existing power and industrial plants in the United States would emit more than 40 GtCO2 between now and 2070 if operated under normal conditions – unless they are retrofitted with CCUS or are retired early (see Chapter 2 for a discussion of existing infrastructure). Despite the advanced age of the fleet of coal-fired power plants, which averages around 40 years, their cumulative emissions would still be around 16 Gt if they ran to the end of their technical lives. Gas-fired power plants average 22 years in age and would emit 12 Gt. Cumulative locked-in emissions from existing industrial facilities amount to 14 Gt, of which nearly 4 Gt is in the chemicals sector with a young fleet of plants averaging only about 10 years (methanol plants have an average of just 5 years). While CCUS retrofits may be an attractive low-cost solution for some of the younger assets in the United States, they may not be for some older plants.

Potential CO2 storage capacity in the United States is estimated at around 800 Gt – equal to around 160 years of domestic emissions from all sources (see Chapter 3). The availability and likely cost of developing storage sites vary considerably across the country.2 Around two-thirds of this capacity (550 Gt) is onshore, mostly in saline formations. The Gulf Coast region, home to many large sources of emissions, has the most capacity, followed by Wyoming, Colorado and Montana.

The majority of CO2 sources in the United States are located close to potential CO2 storage sites. Around 80% of industrial facilities and power plants, accounting for 85% of emissions, are located within 100 km of a potential storage site and 75% of plants (80% of emissions) within 50 km (Figure 4.4). To put these distances into context, the average distance over which CO2 is currently transported by pipeline between existing CCUS facilities is around 180 km and the maximum around 375 km (from the Lost Cabin Gas Plant). The United States has the world’s largest CO2 pipeline network (8 000 km), which can provide a basis for developing new capacity to link emissions point sources to dedicated CO2 storage and EOR sites in the future.3

Source: CO2 storage based on DOE/NETL (2015), NATCARB/ATLAS.

Near-term opportunities for CCUS

Near-term opportunities for new CCUS facilities in the United States are mainly located in highly industrialised areas where emissions sources are concentrated, CO2 storage is available and CO2 is needed for EOR. The 45Q tax credit and California LCFS have improved the investment environment and have already spurred a number of project announcements.


In the United States, a tax credit known as Section 45Q, named after the relevant section of the US tax code, was expanded in 2018, providing a significant boost to CCUS investment plans. It now provides a credit of up to USD 50/tCO2 for permanent geological storage, or up to USD 35/t for EOR or other beneficial uses of CO2. The credits are slated to last for 12 years for projects started within a specified period; to be eligible for the credit, a construction on a new project would need to begin by 1 January 2024. The value of these credits is adjusted over time to take account of inflation. The conditions for projects to qualify for the credit was changed to allow for smaller sources of CO2 and a cap on the total credit available was removed.

In January 2019, a CCUS protocol was agreed under the Californian LCFS, which allows transport fuels whose life-cycle emissions have been reduced through CCUS to become eligible for additional tax credits. Facilities anywhere in the world capturing CO2 through DAC for permanent geological storage and projects that produce ethanol for sale in California and store the CO2 (including through EOR) are also eligible for credits, but must satisfy the requirements of the LCFS CCUS protocol (which includes monitoring for 100 years). The value of these credits, which are tradeable, has risen to more than USD 190/tCO2 in Q3 2020. 


The Gulf Coast and Texas offer opportunities for near-term CCUS deployment: the Denver City hub cluster in Texas has the largest CO2 pipeline infrastructure in the world and connects CO2 sources to EOR sites. The Gulf Coast hub emits around 200 MtCO2 per year, of which around 35 Mt is from highly concentred streams (OGCI, 2019). Another major emission hub is the Rocky Mountain cluster (IEAGHG, 2015). The US Department of Energy has supported a number of front-end engineering design studies for carbon capture.4 The CarbonSAFE Initiative focuses on the development of geologic storage sites for the storage of more than 50 Mt from industrial sources. These projects could represent potential anchor projects for regional hubs.

Selection of potential CCUS hubs in the United States

Hub

State

CO2 sources

Approximate CO2

emissions (Mt/yr)

Wabash CarbonSAFE

Illinois

Power, refining, (petro)chemicals, fertiliser, hydrogen

2.0

Integrated Midcontinent Stacked Carbon Storage Hub

Nebraska, Kansas

Power, refining, (petro)chemicals, cement, mining, hydrogen

 

1.9

CarbonSAFE Illinois Macon County

Illinois

Power, refining, (petro)chemicals, cement, iron and steel

 

2.0-5.0

Project ECO2S: Early CO2 storage complex in Kemper County

Mississippi

(Petro)chemicals, iron and steel, hydrogen

 

3.0

Wyoming CarbonSAFE hub

Wyoming

Power

3.0+

Source: Based on DOE/NETL (2020), CarbonSAFE.

Europe

CCUS today and in the Sustainable Development Scenario

There are two large-scale CCUS projects operating in Europe at present – Sleipner and Snøhvit, both located in Norway and both capturing CO2 from natural gas processing and reinjecting it into dedicated storage sites. Their combined capacity is 1.7 Mt/year. A number of small pilot and demonstration projects are operating elsewhere in Europe. These include the CarbFix project in Iceland (capturing CO2 from geothermal fluid and air and storing it in basalts formations), the Drax CCS pilot project in the United Kingdom (currently pilot-testing capture from biomass-based power generation), the STEPWISE Project in Sweden (testing sorption-enhanced water gas shift separation in the iron and steel sector), the CIUDEN project in Spain (focusing mainly on storage technologies) and a geothermal plant with CCS in Croatia (generating electricity from geothermal hot brine).

CO2 capture is projected to rise to around 35 Mt in 2030, 350 Mt in 2050 and more than 700 Mt in 2070 in Europe in the Sustainable Development Scenario. Cumulatively in the time horizon 2019‑70, power generation is the main contributor (42%), followed by industry (31%) and fuel refining (26%). Up to 2050, most of the CO2 captured is associated with the use of fossil fuels. After 2050 BECCS and DAC play a more prominent role, together accounting for almost 330 MtCO2 captured in 2070, compared with almost 380 Mt from fossil fuels. Two-thirds of CO2 captured from power generation in 2070 is associated with BECCS. 

CCUS in Europe in the Sustainable Development Scenario, 2030-2070

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Tackling emissions from existing plants

Energy sector CO2 emissions totalled 3.9 Gt in Europe in 2019. The power sector was the main source (32%), followed by the transport sector (25%), manufacturing industries (20%), and buildings and agriculture (18%). Industry emissions of around 800 MtCO2 came largely from energy-intensive industries, including iron and steel (26%), cement (19%) and chemicals (18%). Around 32% of the emissions from these three sectors were from industrial processes rather than fuel combustion.

Stationary sources of energy sector CO2 emissions in Europe, 2019


Sources

CO2 emissions (Mt/yr)

Number of units

Power and heat generation

1 242

3 550

Chemicals

141

6 200

Iron and steel

204

40

Cement

154

250

Fuel refining

166

600

Total

1 907

10 640

Notes: The number of units is based on estimations. The number of units for chemicals, which excludes Turkey, is a subset of the total fleet of chemical plants in Europe. It includes naphtha crackers and plants manufacturing HVCs.

Many of the plants responsible for CO2 emissions could be operating for decades to come. For instance, the average age of a European fossil-based power plant is 28 years (33 for coal-fired plants and 17 for natural gas plants) against an average technical lifetime of around 50 years. Those plants and others under construction or planned could emit cumulatively more than 25 Gt between 2019 and 2070 unless they are retrofitted with CCUS or retired early. For industrial plants, the average lifetime is around 25 years, while the average age in Europe depends on the subsector: 15 years for chemical and cement plants, around 12 for blast furnaces, and 17 for DRI production. The cumulative emissions from these plants could amount to 10 Gt over the next 30 years or so.

The bulk of Europe’s energy sector emissions are from sources located in relatively close proximity to potential storage sites. This report calculates that around 68% of all the emissions from power plants and factories in Europe are located within 100 km of potential storage.5 This includes 54% of emissions from iron and steel plants, 56% of emissions from refineries, 52% from cement, 72% from power, and 79% from chemical plants. However, much of the European storage capacity – around 160 Gt – is onshore, where storage projects are likely to face public opposition; offshore storage – roughly 140 Gt – is expected to be more feasible, particularly in the near term. An estimated 19% of industrial plants in Europe are located within 100 km of a suitable offshore storage site, with oil refineries accounting for 25% of these emissions, followed by chemical plants (20%), power plants (19%), iron and steel plants (17%) and cement plants (10%).

Source: CO2 storage data based on CO2StoP (2020), European CO2 storage database, CO2 Storage Potential in Europe (CO2StoP).

Many of these plants are found in industrial hubs, notably in Germany, France, Belgium, the Netherlands and the United Kingdom.

In Germany, North Rhine-Westphalia produces around a quarter of Germany’s electricity (WIRTSCHAFT.NRW, 2020), hosting as well a large number of manufacturing industries, while the Ruhr region, a very large industrial cluster, includes Europe’s largest steel production complex alongside cement industries, refineries and several waste-to-energy facilities (Bellona, 2016).

The two main industrial hubs in France are located in close proximity of the coasts. They are in the south at Fos-Berre/Marseille, with a number of emissions-intensive areas between 2.5 Mt and 17.7 MtCO2/year (IEAGHG, 2015), and in the west at Le Havre, where assessments have been made on the feasibility of a shared transport and storage system, with captured CO2 coming from around 13 facilities (Decarre, 2012).

In Belgium, geological storage options are limited, therefore transportation links to nearby collection hubs are required to ensure the deep decarbonisation of the Antwerp region (Bellona, 2016).

In Scandinavia, the Skagerrak/Kattegat region, which lies between southern Norway, Sweden and northern Denmark, includes several industrial and energy-related smaller clusters (IEAGHG, 2015), with potential capture estimated to be equivalent to 14 MtCO2 per year (Tel-tek, 2012).

In the United Kingdom, there are a number of industrial clusters with the Humber region the most carbon-intensive (12.4 MtCO2 emitted per year), including more than 100 chemical and refining plants and a number of manufacturing facilities and power stations (Zero Carbon Humber, 2019).

Selection of potential CCUS hubs in Europe

Hub

Country

CO2 sources

Approximate CO2

emissions (Mt/yr)

North Rhine-Westphalia/Ruhr

Germany

Refining, (petro)chemicals, cement, iron and steel, waste incineration

35

Fos-Berre/Marseille

France

Refining, (petro)chemicals, cement, iron and steel

31

Rotterdam

Netherlands

Refining, (petro)chemicals, cement, iron and steel, waste incineration, bio‑based industries

28

Antwerp

Belgium

Refinery, (petro)chemicals, iron and steel, waste incineration

20

Le Havre

France

Power, refining, (petro)chemicals, cement, iron and steel

14

Skagerrak/Kattegat

Scandinavia

(Petro)chemicals, fertilisers, refinery, cement, pulp and paper

14

Humberside

United Kingdom

Refinery, (petro)chemicals, cement, iron and steel

12.4

South Wales

United Kingdom

Refining, (petro)chemicals, cement, iron and steel, waste incineration, bio‑based industries

8.2

Grangemouth/Fifth of Forth

United Kingdom

Power, refining, (petro)chemicals

4.3

Teesside

United Kingdom

Refining, (petro)chemicals

3.1

Merseyside

United Kingdom

Refining, (petro)chemicals, pulp and paper, glass

2.6

Southampton

United Kingdom

Refining, (petro)chemicals, cement

2.6

Sources: Bellona (2016); Decarre (2012); GCCSI (2019); IEAGHG (2015); OGCI (2019); Tel-tek (2012).

Most of Europe’s potential offshore CO2 storage capacity is located in the North Sea, where there are a number of depleted oil and gas fields and saline aquifers that could provide suitable storage. These sites are in close proximity to a number of industrial clusters in Belgium, Denmark, Netherlands, Norway, United Kingdom and Sweden. The Utsira formation (an offshore saline formation) in Norway is considered the largest potential sink for CO2 in Europe, with a storage capacity up to 16 GtCO2 (The Norwegian Petroleum Directorate, 2020a, 2020b). Other Norwegian offshore saline aquifers and depleted oil and gas fields might be able store as much as 40 Gt. As in Norway, CO2 storage capacity in the United Kingdom (around 78 Gt) is mostly located offshore, including in deep saline formations and depleted oil and gas fields (The ETI, 2016). Germany has an estimated storage capacity of around 20 Gt, mainly offshore in the North Sea. Onshore CO2 storage in Germany, which is currently prohibited, has faced considerable public opposition in the past. Storage capacity in the Netherlands is estimated at between 2.7 Gt and 3.2 Gt (mostly onshore, with only 1.2 Gt offshore), most of it in depleted gas fields (Noordzeeloket UK, 2020). 

Near-term opportunities for CCUS

The investment environment for CCUS in Europe has been improving, in particular due to the adoption of more ambitious climate goals and increased policy support for clean energy technologies. The European Commission has set a net-zero emissions target within its 2050 long-term climate strategy, which is part of the recently announced European Green Deal – a set of policy initiatives drawn by the Commission to achieve that target. The United Kingdom has also adopted a goal of net-zero emissions by 2050, following the advice of the Committee on Climate Change. The committee suggested a number of decarbonisation options, including resource and energy efficiency, extensive electrification, development of a hydrogen economy, and CCUS (Committee on Climate Change, 2019). The European Commission and also a number of European countries (including Austria, Belgium, France, Germany, Italy and the Netherlands) have included hydrogen in their long-term decarbonisation strategies and roadmaps (IEA, 2019).

Recent policy measures include the EU Innovation Fund, which makes available up to EUR 10 billion (USD 11.9 billion) to support the demonstration of low-carbon innovative technologies, and the EU Horizon 2020 (EUR 70.2 billion/ USD 83 billion) dedicated to research and innovation covering a number of topics including energy system decarbonisation. National policies include the Dutch SDE++ programme – an operating grant intended to support the deployment of sustainable energy and CO2 reducing technologies and practices – and CCUS funding in the United Kingdom. The UK government announced the establishment of a CCS Infrastructure Fund of at least GBP 800 million (USD 1 billion) to support CCUS in at least two sites, one by 2025 and one by 2030 (UK Government, 2020).

This improved investment environment has contributed to a growing number of CCUS projects under development in Europe, including several targeting industrial hubs:

Porthos, the Netherlands: The Port of Rotterdam currently emits around 28 MtCO2 per year (OGCI, 2019). Within the Porthos Project, the Port of Rotterdam Authority and two state-owned energy companies, Gasunie and EBN, have joined forces to develop CO2 storage of 2 Mt to 5 Mt per year below the North Sea. The storage capacity could be increased to up to 10 Mt/year or more, enabling the site to store CO2 coming from other European countries (OGCI, 2019; Rotterdam CCUS, 2020).

Longship CCS project, Norway: This project consists of two CO2 capture facilities and a CO2 transport and storage hub. Fortum Oslo Varme (waste-to-energy) and Norcem (cement production) are planning to build CO2 capture facilities at their plants, delivering the gas to the Northern Lights consortium (Equinor, Shell and Total), which will handle the transport and permanent storage of the CO2 in the North Sea. Although this project does not focus on an existing industrial hub (it is currently planning to capture 0.8 Mt per year), it has the potential to increase the transport and storage capacity up to 5 Mt/year (total storage capacity around 100 Mt) and provide a storage solution for industrial facilities around Europe6 (Northern Lights, 2019). 

Zero Carbon Humber, United Kingdom: This project is currently aiming to convert the gas grid in the Humber region to hydrogen, while capturing CO2 from the hydrogen facility and also from a number of emissions sources (including a proposed BECCS project from Drax) and storing it offshore in the North Sea (initial capture capacity equivalent to 10 MtCO2/year).

Net Zero Teesside, United Kingdom: This project is an integrated CCUS project aiming to store up to 6 Mt/year of CO2 from a number of energy-intensive industries located in Teesside. The region is home to five of the United Kingdom’s top 25 CO2 emitters and accounts for 5.6% of total UK industrial emissions. The storage site, with capacity of at least 1 Gt, would be located offshore in the North Sea (Net Zero Teesside, 2019).

Ervia Cork, Ireland: The aim of this project is to reduce CO2 emissions from the electricity, heating, industry, agriculture and transport sectors in Ireland (Ervia, 2020). It will initially capture 2.5 MtCO2 from two combined-cycle gas turbine power plants (440 MW each) and one oil refinery (with a capacity of 75 000 bbl per day).

In addition to the above, a number of projects in the United Kingdom are developing CCUS infrastructure for low-carbon hydrogen production. This includes H21 North of England, which aims to decarbonise homes and business (Northern Gas Networks, 2018), and HyNet, an integrated low-carbon hydrogen production, distribution and CCUS project (HyNet, 2020).

Several of the proposed offshore CO2 storage projects in Europe are planning to use shipping rather than pipelines as the primary form of transport. This could provide valuable flexibility in linking storage to sources of CO2 and reduce initial integration risks. A major legal barrier to the development of CCUS hubs in Europe and elsewhere was resolved in 2019, with Norway and the Netherlands securing Provisional Application of the CCS export amendment to the London Protocol.


A major hurdle to the development of regional CO2 transport infrastructure was removed in 2019, when the Parties to the London Protocol – an international agreement on preventing marine pollution – approved a resolution to allow countries who have ratified a 2009 amendment to export and receive CO2 for offshore geological storage. The London Protocol effectively prohibits the transport of CO₂ across national boundaries for the purposes of sub-seabed storage. The Protocol was amended in 2009 to remove this barrier, but for the amendment to come into force, it must be ratified by two-thirds of the Parties. There has been little progress in reaching this share.

In October 2019, Norway and the Netherlands, with the endorsement of the United Kingdom, agreed on an interim solution in the form of a Resolution for Provisional Application of the 2009 CCS Export Amendment. The resolution highlights the role of CCUS technology as a means to reduce levels of atmospheric concentrations of CO₂ and provides for the provisional adoption of the 2009 amendment in the absence of full ratification. With the support of several countries, the proposal was accepted (IMO, 2019).

China

CCUS today and in the Sustainable Development Scenario

There is one large-scale CCUS project currently operating in China – the China National Petroleum Corporation (CNPC) Jilin project, which captures some 600 ktCO2 per year from a natural gas processing plant for transportation via a 50 km pipeline to an oil reservoir for EOR (GCCSI, 2020). Two other large-scale projects are under construction, both of which involve capturing around 400 kt/year of CO2 from chemicals production facilities and transporting it over 75-150 km for use in EOR. Several smaller capture and storage demonstration projects, mainly related to coal-fired power plants and chemical facilities, have operated successfully over the last decade. China’s interest in CCUS is reflected in government documents highlighting the importance of the technology for the country’s decarbonisation strategy.


Since the 12th Five-Year Plan (2011‑15), China has included CCUS in its national carbon mitigation strategies. The National Climate Change Plan for 2014‑20 defines CCUS as a key breakthrough technology. Since the plan came into effect, the government has issued guidance documents, such as the Notice on Promoting Demonstration of Carbon Capture, Utilisation and Storage, Industrial Green Development Plan (2016-2020) and 13th Five-Year (2016-2020) Work Scheme on Greenhouse Gas Emissions Reduction, which aim to support and advance the development of CCUS technologies. CCUS was also included in China's catalogue of strategic emerging technologies and was a major focus of the national technological innovation project, Clean and Efficient Use of Coal (Wei et al., 2020).

In May 2019, the Ministry of Science and Technology, and the Administrative Centre for China’s Agenda 21 (ACCA21) jointly issued an updated version of the Roadmap for Development of CCUS Technology in China. The roadmap sets out an overall vision of the development of CCUS technology in China (ACCA21, 2019). It defines several phase goals in five-year increments to 2050. 

By 2030, CCUS should be ready for industrial applications, and long-distance onshore pipelines with capacities of 2 MtCO2 should be available. It also aims to reduce the cost and energy consumption of CO2 capture by 10-15% in 2030 and 40-50% in 2040. By 2050, CCUS technology is to be deployed extensively, supported by multiple industrial CCUS hubs across the country. The roadmap earmarks several regions as suitable candidates for CCUS hubs.

Hurdles to faster CCUS deployment in China include the lack of a legal and policy framework, limited market stimulus and inadequate subsidies (Jiang et al., 2020). Public understanding and awareness of CCUS technologies is relatively low.

China is committed to achieving a peak in CO2 emissions by 2030 or before. In 2017, China implemented a national ETS to limit and reduce CO2 emissions in a cost-effective manner. The ETS, which is due to start operating in 2020, will strengthen commercial incentives to invest in CCUS and other low-carbon technologies. It will initially cover coal- and gas-fired power plants and will later be expanded to seven other sectors, including iron and steel, cement, and petrochemicals. The scheme will be the world’s largest to date, covering one-seventh of global CO2 emissions from fossil fuel combustion.


CCUS capacity is projected to grow rapidly in China, seeing the largest increase of any country or region through to 2070, in the Sustainable Development Scenario. By 2030, the amount of CO2 captured reaches 0.4 Gt, or around half of the global total, and more than 2 Gt in 2070. CO2 capture is applied mainly to coal-fired power plants, followed by chemicals, cement, and iron and steel production facilities. These sectors together make up the vast majority of the CO2 captured in both 2030 and 2050. The role of BECCS and DAC becomes more important over time, accounting for one-third of the CO2 captured in 2070.

CCUS in China in the Sustainable Development Scenario, 2030-2070

Openexpand

China’s energy sector CO2 emissions totalled 11.1 Gt in 2019 – close to one-third of the world total. Coal-fired power generation was responsible for 45% of Chinese emissions, followed by iron and steel (12%), cement (11%), chemicals (5%), and oil refineries (2%).

Stationary sources of energy sector CO2 emissions in China, 2019

Sources

CO2 emissions (Mt/yr)

Number of units

Power and heat generation

5 000

450

Chemicals

600

60

Iron and steel

1 390

650

Cement

1 210

800

Fuel refining

270

120

Total

8 470

2 080

 

Notes: The number of plants is based on estimations. The number of chemical plants in the table is a subset of the total fleet of chemical plants in China. It includes naphtha crackers and plants manufacturing HVCs.

The majority of CO2 sources are concentrated along the coast. In recent years, the government has started relocating some coal-fired power plants and energy-intensive industry (cement, iron and steel, and refineries) to neighbouring provinces to reduce air pollution in major population centres, such as the Beijing-Tianjin-Hebei Circle and Yangtze River Delta Region.

The young average age of the coal-fired power and industrial assets presents a risk of CO2 emissions being locked in for decades to come. Unlike in Europe and the United States, most of the investment in those assets occurred over the past two decades when China’s economy grew most rapidly. Nearly half of the global coal-fired power capacity of 2 100 GW in operation today is in China, where the average age of coal-fired power stations is less than 13 years. Of the currently installed capacity in China, around 900 GW could still be operating in 2050. The country also hosts close to 60% of global capacity to make primary steel, just over half the world’s kiln capacity in cement production and 30% of total production capacity for ammonia, methanol and high-value chemicals. The majority of this industrial capacity is at the younger end of the global age range in each asset class, averaging between 10 and 15 years. The potential cumulative emission lock-in to 2070 amounts to nearly 180 Gt for power stations and around 90 Gt for industry. CCUS can help avoid a large share of these emissions while minimising the cost of early retirement of power and industrial assets.

As in other countries, the competitiveness of CCUS in China as a mitigation option is specific to each sector and location. The economic viability of power and industrial plants with CCUS depends on several factors, including the plant’s age and layout, raw material and energy prices, proximity to CO2 storage resources or large-scale opportunities for making use of the CO2 (including EOR), and competing low-carbon technologies. In regions with favourable solar and wind resources, renewable electricity generation coupled with electrolytic hydrogen production may be cheaper than power plants retrofitted with CCUS. For example, compared with coal-fired power generation with CCUS, wind power currently has a cost advantage in 16 out of the country’s 23 provinces, while solar PV is cheaper in the central province Qinghai and the southern island Hainan (Fan et al., 2019). Planned high-voltage direct current (HVDC) transmission lines would enable huge amounts of renewables-based electricity to flow from resource-rich inland provinces to population centres near the coast.

China has large theoretical geological storage capacity in excess of 325 GtCO2 in onshore basins and 100 Gt in offshore basins (Kearns et al., 2017). Most of the onshore sedimentary formations are located in the northern, western and central-eastern parts of the country, while offshore basins are available along most of the coastal area. In its 2019 CCUS roadmap, the Chinese government expressed interest in exploiting early opportunities associated with CO2-EOR (ACCA21, 2019). Most of these opportunities are in the north-western (Xinjiang), central (Gansu, Ningxia, Shaanxi) and north-eastern areas (Heilongjiang, Jilin) (Wei et al., 2015).

A considerable share of the stationary sources of CO2 in China are in relatively close proximity to at least one geological CO2 storage reservoir. In China, 45% of existing power and industrial facilities (2.8 GtCO2) have at least one storage formation within 50 km, and 65% of the sources (4.1 GtCO2) are located within 100 km of a potential storage site. This means that all of the CO2 captured in the period to 2070 in the Sustainable Development Scenario could come from plants that are within 50 km of a storage site based on the current location of emissions sources. Further assessments would be required to determine the suitability of potential reservoirs, their exact technical capacity and their economic feasibility. The South Central and Eastern provinces, which have high CO2 emissions, are farthest from potential onshore CO2 storage reservoirs. In these areas, offshore storage may be cheaper than the development of long-distance CO2 pipeline infrastructure to inland onshore reservoirs. Offshore storage may also be the preferred option for populous areas along the coast where high land prices and public opposition could hamper the development of onshore storage resources. 

Source: CO2 storage based on data provided to IEA by Chinese Academy of Sciences.

Near-term opportunities for CCUS

Prime locations for early development of CCUS hubs are centred on areas with good CO2-EOR opportunities. The revenue stream from CO2-EOR can help support investment in CO2 capture facilities and be a bridge towards more widespread geological storage of CO2. CO2-EOR can contribute to emissions reductions (see Chapter 3). Locations for CCUS hubs include those where CO2-EOR is already in use today, in particular in the northern provinces (Xinjiang, Heilongjiang, Jilin and Shaanxi). While the CO2 emissions density in some of these provinces is lower than in the coastal areas, supply of CO2 is unlikely to be a constraint.

Regions with a high concentration of coal-based chemicals and hydrogen production facilities provide other near-term opportunities for CCUS. CHN Energy, China’s largest power company, is also the world's largest hydrogen production company. Its 80 coal gasifiers can produce around 8 Mt/year of hydrogen – equivalent to 12% of global dedicated hydrogen production today. Applying CCUS to this existing capacity could deliver CO2 emissions reductions of up to 145 Mt per year, while providing a major boost to the development of both CCUS and low-carbon hydrogen. The majority of the coal-based hydrogen production facilities are located in the northern provinces of Shanxi, Shaanxi and Inner Mongolia, all of which have CO2 storage resources in relative close proximity. In recent years, the Chinese government indicated that hydrogen energy is a vital element in China’s energy technology development strategy. Coal gasification with CCUS could be a springboard for hydrogen to fulfil its longer-term decarbonisation potential across the Chinese energy sector.

Other opportunities for CCUS hubs are in large industrial ports on the east coast. Of the ten largest ports in the world, seven are in China. The development of industrial CCUS hubs with associated infrastructure in these ports presents an attractive opportunity to reduce a significant amount of China’s CO2 emissions.

Selection of potential CCUS hubs in China

Hub

Province

CO2 sources

Approximate CO2

emissions (Mt/yr)

Junggar and Turpan-Hami basins

Xinjiang

(Northwest China)

Power, refining, chemicals, cement, iron and steel

65

Ordos basin

Shanxi, Shaanxi

(North China)

Power, refining, chemicals, cement, iron and steel

300

Songliao basin

Heilongjiang, Jilin

(Northeast China)

Power, refining, chemicals, cement, iron and steel

100

Sichuan basin

Sichuan

(Central China)

Power, refining, cement, iron and steel

200

 

Notes: The hubs include CO2 sources within a distance of 50 km from the basin(s). Sources: IEA analysis based on in-house data and ACCA21 (2019).

References
  1. These distances are relatively short compared with currently operating CCUS facilities, which have pipeline transport ranging from less than 2 km to as long as 450 km. In the United States, the average CO2 transport distance for existing CCUS facilities is around 180 km. The recently commissioned ACTL in Canada is 240 km long.

  2. Storage estimates for the United States differ among sources (see e.g. the US Department of Energy Carbon Storage Atlas, www.netl.doe.gov/coal/carbon-storage/strategic-program-support/natcarb-atlas). The estimated value given here is based on the approach described in the storage section of this chapter and is at the lower end of current storage estimates for the United States.

  3. The CO2 transported through this pipeline network is a mix of anthropogenic and natural CO2 used primarily for EOR.

  4. www.energy.gov/articles/us-department-energy-announces-110m-carbon-capture-utilization-and-storage.

  5. Given the wide range of plant sizes, not all plants will be suitable for CO2 capture.

  6. In September 2019, Equinor signed a memorandum of understanding with seven companies (Air Liquide, Arcelor Mittal, Ervia, Fortum Oyj, HeidelbergCement AG, Preem and Stockholm Exergi) interested in developing value chains in CCUS.