They’re acknowledging the huge potential of CCS in strengthening corporate sustainability efforts and decarbonising the global economy and we’re already seeing a steady rise of such projects worldwide.
Under the IEA’s Announced Pledges Scenario , where all governments’ climate commitments are set to be met in full and on time, carbon capture capacity will grow to 350 Mt CO2 per year by 2030.
Estimated CCS capacity will surge further under the Net Zero Emissions Scenario by 2050 Scenario to around 1.7 Gt CO2 per year in 2030—almost five times bigger than under the APS.
Admittedly, the biggest challenge to the scaling-up of CCS has been cost.
However, if industrial producers are looking to reduce their emissions, which they will increasingly be required to do as companies and governments work toward realising their net-zero targets, CCS is now one of the cheapest options.
And since fossil fuels will not be completely phased out by the middle of the century, even in the Net Zero Emissions Scenario, CCS will become a crucial way of reducing net emissions.
That said, despite its key position in reducing global emissions, CCS is still in a nascent stage of development and corporates will need to rely on government incentives to reduce cost and/or enhance revenue to deploy more, larger projects.
The US has been gaining stronger momentum in developing CCS: during the first nine months of 2021, 36 of the 71 newly added CCS projects worldwide were in the States.
On the state level, California’s Low Carbon Fuel Standard , which allows more low-carbon technologies to be eligible for carbon credits, offers additional incentives for the development of CCS.
Yet scaling up CCS needs not only revenue stream incentives but also fast advancing technologies to reduce cost and increase efficiency.
Currently, the largest CCS network in the US is ExxonMobil’s proposed Houston Ship Channel CCS Innovation Zone at the Gulf of Mexico, with an ambition to capture 100 Mtpa of CO2.
Indeed, Norway’s Sleipner facility was the world’s first commercial CO2 storage project, operational in 1996 and capable of capturing 1 Mtpa of CO2.
The Netherlands, with a target to halve emissions from 1990 levels by 2030, envisions CCS to contribute to 50% of the emissions reduction required in the industry sector.
The HyNet North West project backed by Eni and Progressive Energy hopes to produce low carbon hydrogen from capturing 10 Mtpa of CO2.
This requires CO2 infrastructure from industry clusters such as the Ruhr area to the northern part of Germany and/or connections to the future CO2 infrastructure in the Netherlands.
Among others, Norway greenlighted $1.2bn worth of funding to the Northern Lights CCS project that is led by Equinor, Shell, Total to capture 1.5 Mtpa of CO2 per year.
CCS will become attractive to investors if a project developer can demonstrate that the integration of CCS can bring their carbon intensity to below the taxonomy’s standard.
It adopted a national Technology Investment Roadmap in 2020, aiming to direct Australian investments in new and developing low emissions technologies in the short, medium, and long term.
LNG producer Santos’ Moomba project, which expects to capture 1.7 Mtpa of CO2 in north-eastern South Australia, expects to sell generated ACCUs either to the government or privately.
While the Gorgon facility did still inject 5Mt of CO2 as of July 2021 and various other CCS projects worldwide have shown success, the takeaway is that CCS developers need to conduct rigorous planning, testing, and management right at the start of a project to avoid overpromising.
As much of China still depends heavily on coal for heating and electricity generation, and as the country relies on the industrial sector for economic growth, it could benefit from implementing large-scale CCS projects and networks.
China’s CCS capacity is on the rise: last year, Guohua Jinjie coal power plant completed the instalment of a 150,000 tonne/year carbon capture facility – the largest to date – adding to the country’s six operating commercial facilities and 12 operational pilot and demonstration facilities.
China’s national emissions trading system , officially launched last year, will in the long term benefit the development of CCS as the technology can help bring down CO2 emissions and generate carbon trading credits, but in the short term, the impact would be limited.
The office of the Prime Minister released the Environment Innovation Strategy in 2020, highlighting the vision of developing low-cost CO2 capture technologies and applying CCS to producing blue hydrogen.
Japan also led the launch of the Asia CCUS Network, including Asia-Pacific governments and more than 100 companies and organisations to nurture a more promising CCS business and research environment in the region.
Despite these positive movements, government policies and initiatives so far aren’t enough to scale up CCS to a level needed to get the world to net-zero by 2050.
But more generous incentives, clearer implementation guidelines, and established enforcement mechanisms are all needed to boost investment in CCS to desired levels, at least from a climate perspective.
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