IEA (2019), "Tracking Industry", IEA, Paris https://www.iea.org/reports/tracking-industry
Despite recent project start-ups and a series of projects under development, CCUS in industry and fuel transformation is not on track to reach the Sustainable Development Scenario (SDS) level of 400 million tonnes per annum (Mtpa) in 2030 (300 Mtpa in industrial applications and 100 Mtpa in fuel transformation).
The number of large, operational CCUS projects in industry and fuel transformation rose to 17 in 2019 when the 4‑Mtpa Gorgon CO2 injection project launched operations in Australia, capturing CO2 from natural gas processing. The Gorgon CO2 Injection project is part of the wider Gorgon gas development project offshore Western Australia.
In 2018, the 0.6‑Mtpa CNPC Jilin Oil Field CO2 enhanced oil recovery (EOR) project started commercial operations in China. The CO2 for the EOR project is captured from a natural gas processing plant at a nearby gas field.
The world’s first large-scale iron and steel facility with CCUS began operating in 2016 in Abu Dhabi, capturing up to 0.8 Mtpa.
The Illinois Industrial CCS Project in the United States (1 Mtpa) has been operating since April 2017. The facility, which produces corn ethanol, is the world’s first large-scale CCUS project linked with bioenergy.
Making progress on bio-CCS applications is important for SDS alignment, as they can enable a net removal of CO2 from the atmosphere and hence offset emissions from other sources and sectors.
Source: Based on Global CCS Institute’s CO2RE database, accessed 22 May 2019. This map is without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
The 17 large industrial projects operating today have a potential annual capture capacity of 32 MtCO2.
Four large-scale industrial and fuel transformation CCUS projects are expected to come online in 2019‑20, to bring the total number of operating facilities to 21. Two of the four projects under construction are in China. The Sinopec Qilu Petrochemical project in China moved into the construction phase in 2018 and will capture 0.4 Mtpa from fertiliser production. The Yanchang integrated demonstration project, which currently captures 0.05 Mtpa from a coal-to-chemical plant, will add another 0.36 Mtpa from a larger CO2 source. The captured CO2 will be transported for EOR in the Ordos Basin in central China. The other two projects in progress are the two Alberta Carbon Trunk Line projects in Canada, set to capture CO2 from fertiliser production (0.5 Mtpa) and oil refining (1.3 Mtpa).
In Norway, feasibility studies are under way for CO2 capture from a cement facility and from a waste-to-energy recovery plant. An Equinor, Shell and Total partnership is developing offshore CO2 storage in the North Sea (the Northern Lights project) to support Norway’s plans for a fully integrated industrial project.
Industrial CCUS hubs are also being planned in Australia (CarbonNet; initial capture of 1-5 Mtpa), the Netherlands (Port of Rotterdam; 2‑Mtpa capture by 2020) and the United Kingdom (Teesside Collective; initial capture of 0.8 Mtpa).
Of the substantial policy progress made in 2018, the extension and expansion of the 45Q tax credits for CCUS in the United States is the most prominent. These tax credits could unlock many lower-cost industrial and fuel transformation CCUS opportunities, particularly in natural gas processing, refining and ammonia and bioethanol production.
The 45Q tax credits progressively reach USD 35 per tonne of CO2 (tCO2) used in EOR and USD 50 per tonne for CO2 storage. They now also apply to smaller industrial facilities that produce 100 000 tCO2 per year and use 25 000 tCO2 (excluding EOR). This could stimulate capital investments of USD 1 billion over the next six years.
Emissions from industry subsectors will need to be increasingly targeted if global climate goals are to be achieved. CCUS is one of the few technology options that can significantly reduce direct CO2 emissions (including process emissions) from the industry sector, which produces one-quarter of global CO2 emissions.
Using CCUS in industry and fuel transformation is one of the most cost-effective ways to reduce emissions, particularly from processes that produce concentrated CO2 streams. Targeted policies and incentives such as the 45Q could therefore unleash investments in these sectors.
Indeed, more than three-quarters of the CO2 capture capacity built in the past decade and operating today is in low-cost areas such as hydrogen production-related processes, gas processing and biomass fermentation for ethanol production.
At the other end of the spectrum, it is more challenging – both economically and technically – to capture CO2 from industries such as iron and steel and cement production.
To stimulate early investments in these subsectors, a range of targeted policy measures, such as regulatory levers, market-based frameworks, public procurement, low-carbon product incentives, tax credits and grant funding will be needed.
New business models and approaches to deployment can also help to facilitate a rapid scale-up of CCUS in industry.
This includes separating the components of the CCUS value chain and developing multi-user transport and storage networks that industrial facilities can access.
The economies of scale and improved allocation of commercial risks resulting from these approaches would reduce unit costs and save industrial facilities from engaging directly in activities outside their traditional expertise, such as CO2 storage development.
In certain industry subsectors, notably iron and steel, cement and chemicals, commercially available mitigation options that would enable deep decarbonisation, are limited. CCUS can play a key role to reduce emissions from these subsectors, with innovation needed in several areas, including improving post-combustion capture technologies, reducing the additional energy footprint of capture units, optimising use of captured CO2 for chemical, fuel and concrete aggregate production, and reducing the cost of CO2 transport and storage.
Integrating CCS into existing iron and steel technologies could considerably reduce the carbon footprint of steelmaking. Achievable emissions avoidance depends on the iron and steel processes used, the capture technology and the amount of CO2 captured.
CO2 capture could produce capture yields of up to 95%, and widespread application would reduce clinker production process emissions, for which reduction options are limited.
- A number of CCS technologies are available for application in the cement sector, with the two most advanced being chemcial absorption post-combustion and oxy-fuel capture.
- In chemical absorption post-combustion capture, CO2 is separated from the clinker kiln exhaust gases using a chemical sorbent at the end of the production process. Due to high sorbent costs, however, additional thermal energy is required to regenerate the saturated sorbent to make it reusable, and electricity is also needed to operate the capture unit.
- In oxy-fuel capture, oxygen is separated from air prior to combustion, so that flue-gases are composed of mainly CO2 and water, making capture easier.
Carbon capture is needed to enable chemical production methods that use CO2 as a feedstock. Combined with permanent storage, it could drastically reduce CO2 emissions and even create negative emissions if combined with biomass-based production methods.
Keith Burnard (IEAGHG), John Scowcroft (Global CCS Institute)