CCUS in industry & transformation

Tracking Clean Energy Progress

🕐 Last updated Wednesday, 23 May 2018

Not on track

In 2017, one additional industrial project linked to bioenergy came into operation (in the U.S.), bringing the total number of global CCUS projects in industry and fuel transformation to 15. Only one large industrial CCUS project has received a final investment decision since 2014, an additional signal that industrial CCUS remains woefully off-track for the SDS target. CCUS is one of the few existing technology options that can significantly reduce more stubborn CO2 emissions from industry.


Large-scale CO2 capture projects in industry and transformation

Carbon capture, utilisation and storage remains woefully off track to achieve the 2030 target.

	SDS Target	Iron and steel	Chemicals	Biofuels	Refining	Natural gas processing
2000		0	0.7	0	3	9.15
2010		0	0.7	0	3	18.25
2015		0	1.7	0	5	20.2
2017		0.8	1.7	1	5	20.2
2025		0.8	3.05	1	6.3	25.15
2030	500					
2040	1600					
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Note: Capture volumes represent total CO2 captured from energy and process related emissions in industry and transformation.


The world’s first large scale iron and steel-related CCUS project began operating in 2016 in Abu Dhabi, capturing up to 0.8 million tonnes of CO2 per year (Mtpa).

The number of large operational CCUS projects in industry and fuel transformation rose to 15 the following year, when the Illinois Industrial CCUS Project in the United States (1 Mtpa) started in April 2017. The facility, which produces corn ethanol, is the world’s first large-scale CCUS project linked with bioenergy. CO2 is stored in a geological formation underneath the facility.

CCUS projects in industry

Several carbon capture projects for industry are under construction around the world, but progress must be accelerated to meet the SDS goals.

Based on Global CCS Institute project database, https://www.globalccsinstitute.com/projects/large-scale-ccs-projects, accessed 17 May 2018.

Making progress on bio-CCS applications is important to meet the SDS goals, as they can enable a net removal of CO2 from the atmosphere and thereby offset emissions from other sources and sectors.

Five large scale industrial and fuel transformation CCUS projects are expected to come on line in 2018 and 2019, which would bring the total number to 20.

In 2017, China began building its first large industrial CCUS development, the Yanchang integrated demonstration project. The project will add capture of 0.36 Mtpa from a large CO2 source to its current capture of 0.05 Mtpa from a smaller CO2 source, both in the coal-to-chemical industry. The captured CO2 is transported for use in enhanced oil recovery (EOR) in the Ordos Basin in central China.

The other four projects in progress are the 3.6 Mtpa Gorgon CO2 injection project in Australia, which will capture CO2 from natural gas processing; the two Alberta Carbon Trunk Line projects in Canada, which will capture CO2 from fertiliser production and oil refining (0.5 Mtpa and 1.3 Mtpa); and the Sinopec Qilu Petrochemical project in China, which will capture 0.4 Mtpa from fertiliser production.

In Norway, feasibility studies are under way for CO2 capture from two industrial facilities that produce cement and ammonia and from a waste-to-energy recovery plant. A partnership between Statoil, Shell and Total is developing offshore CO2 storage in the North Sea 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).

In the United States, the recently passed 2018 US Budget Bill and the extension and expansion of the “45Q” tax credits for CCUS could unlock many lower-cost industrial and fuel transformation CCUS opportunities, particularly in natural gas processing, refining, ammonia and bioethanol production.

The 45Q tax credits progressively reach USD 35 per tonne of CO2 used in EOR and USD 50 per tonne for CO2 storage. The 45Q tax credits now also apply to smaller industrial facilities producing 100 000 tonnes of CO2 a year and using 25 000 tCO2/year (excluding EOR). This could lead to capital investment of USD 1 billion over the next six years.


Tracking progress

CCUS in industry and fuel transformation is not on track to meet the SDS target of around 500 Mtpa in 2030, including 400 Mtpa in industrial applications and 100 Mtpa in fuel transformation.

The 15 large industrial projects operational today have a potential annual capture capacity of only around 28 MtCO2, and despite the recent surge in CCUS projects beginning operation, only ten projects are under development or in the early planning stages (seven in industrial processes and three in fuel transformation).

Expanding CCUS in industry is crucial to achieve ambitious climate targets since it is one of the few technology options that can significantly reduce direct CO2 emissions from the industrial sector (including process emissions), which make up around one-quarter of global CO2 emissions.

CCUS in industry and fuel transformation can also offer the least-cost ways of reducing emissions, particularly in processes that produce concentrated streams of CO2, such as ammonia or bioethanol production.

At the other end of the spectrum, it will be economically difficult to capture CO2 from some significant emissions sources in industry, such as iron and steel and cement production, without policy intervention and technological progress.

Three quarters of the CO2 capture capacity built in the last decade and operating today has been in hydrogen production-related processes, gas processing and biomass fermentation for ethanol production. This represents almost half of all investment in CCUS made in the last decade.

Of the 28 Mtpa captured today from large industrial sources, 87% is used for EOR, of which 74% is in the United States.


Innovation

Research into the utilisation of CO2 is gaining momentum and different pathways are being explored for their scalability and economic viability.

Several large pilot projects are testing from CO2, based methanol production including the Mitsui Chemicals project in Osaka, Japan, and the Carbon Recycling International project in Iceland. The public-private Carbon2Chem initiative in Germany aims to demonstrate commercial production of chemicals using gases arising from steel production, including CO2, CO and H2. The initiative uses a load-balancing approach, in which chemicals production would fluctuate to balance electricity grid loads.

Development is under way of processes that use CO2 in cement production. For instance, cements based on the carbonation of calcium silicates are cured with CO2 and can sequester CO2 at a higher rate. There are plans for a first demonstration project of oxy-fuel capture technologies in two cement plants in Europe but funding is uncertain so realisation is unlikely before 2020.

Further, several power-to-fuel pathways are being explored, such as producing synthetic diesel and kerosene via hydrogen-based syngas or the Fischer-Tropsch process, and producing methane from hydrogen and CO2. The Steelanol project aims to produce bioethanol for blending into gasoline from gases from blast furnaces for pig iron production with a commercial scale facility targeted to be in operation in Europe by 2019.

A large pilot plant has been built in the Netherlands at Tata Steel for a new smelting reduction technology for iron production (hot metal) and is being scaled up. The target is to reach commercial-scale demonstration including the integration of carbon capture by 2022. In Japan, the industry aims to reach commercial demonstration by 2030 of COURSE 50 (CO2 Ultimate Reduction in Steelmaking Process by Innovative Technology for Cool Earth 50), which uses coke oven gas reforming to produce enhanced reducing gas for the blast furnace coupled with CO2 capture.