UK-backed report identifies ‘viable business models’ for carbon capture technology

Promoters of CCS argue the technology will be crucial to decarbonise heavy industries such as cement, chemicals, oil refining and steel, which are harder to electrify and decarbonise. [johndal / Flickr]

Carbon capture utilisation and storage (CCUS) offers “one of the greatest industrial opportunities” for Britain as the world pivots to a low-carbon economy, said Claire Perry, the UK’s Energy and Clean Growth Minister.

“There is international recognition that we need CCUS to meet the global climate ambitions agreed through the Paris Agreement in 2015,” Perry wrote in a foreword to the report by the CCUS Cost Challenge Taskforce, that will be submitted to the UK government on Thursday (19 July).

“Whilst we have made great strides in decarbonising our power sector, we know that the UK still needs gas,” Perry said, adding the technology “may have a role to play” in this regard by cutting the carbon impact of gas while “extending the life of our existing plant”.

“We want to have the option to deploy CCUS at scale during the 2030s, subject to costs coming down sufficiently,” Perry said, adding she believes “the opportunities from CCUS are real”.

CCUS is the latest offshoot of carbon capture and storage (CCS), a technology that involves burying emissions from fossil fuels in underground rock formations, usually depleted oil and gas fields. CCS was initially promoted at the beginning of the century as a way to decarbonise the power sector but it was undermined by the rise of cheap renewable energies – mainly wind and solar – which don’t emit CO2 in the first place.

‘Game over’ for CCS, driven out by cheap renewables

“The game is over” for carbon capture and storage, priced out of the low-carbon energy mix by the rise of cheap renewables, industry experts say. Even the use of CCS to decarbonise heavy industries like steelmaking now looks less attractive.

Still, promoters of CCS argue the technology will be crucial for heavy industries such as cement, chemicals, oil refining and steel, which are harder to electrify and decarbonise.

And scientists have recently given the technology a shot in the arm, warning that further delays in developing CCS risked removing “a major mitigation tool” in the fight against global warming.

Scientists inject new sense of urgency into CCS

Europe – and the warming planet – has lost precious time in developing carbon capture and storage (CCS), a fledgling technology seen as crucial to decarbonise heavy industry, warned scientists in a new report presented in Brussels last week.

Sandbag, a not-for-profit climate change policy think tank, sat on the UK taskforce. In a statement, it said the report “recognises the urgency of acting now to deliver CCUS at scale and at lowest cost. We fully support this, and believe the Government should start the process to select CCUS clusters next year.”

“With the UK and EU government’s now considering a date to reach Net Zero emissions, in line with the Paris Agreement, negative emissions have become even more important for tackling climate change,” said Sandbag, adding: “We look forward to the publication of the UK Government’s deployment pathways in just a few months”.

Carbon capture and utilisation (CCUS)

The taskforce report presented to the UK government today makes the case for carbon capture utilisation and storage (CCUS) to be deployed in industrial “clusters” where the CO2 transport pipelines can be shared across a range of industrial facilities.

“Separating the business model for CO2 transport and storage (‘T&S’) infrastructure from the business models for CO2 capture projects can reduce overall commercial risks and costs, by reaching cost-effective public-private risk sharing arrangements,” the report states in its recommendations.

One such project involves the construction of a new hydrogen pipeline between the Greater Manchester region and Liverpool that promoters say could usher in a new era of hydrogen-fuelled vehicles while significantly decarbonising the region’s energy.

Meet Europe’s two ‘most exciting’ CO2 capture and storage projects

A plan to pipe CO2 emissions from industries around the Port of Rotterdam and a hydrogen transport hub in the north of England have been branded as “the most exciting in Europe”, although promoters admit both will need substantial government backing to materialise.

“The role that CCUS can play in reducing emissions cuts across many sectors, not just electricity but also heating, industry and transport,” said Charlotte Morgan, the chair of the taskforce, and a partner at the Linklaters law firm.

“We have identified viable business models, funding mechanisms, and an innovation pathway, as well as suggesting options to support the lowest cost delivery of a potentially transformative technology,” the report states.

The taskforce delivered four key messages to the UK government, including detailed recommendations in each area:

  • Time is limited to deliver CCUS at scale by 2050. “We need to recognise the CCUS opportunity and the urgency of acting now in order to deliver CCUS at scale, at lowest cost,” the report says.
  • “CCUS can unlock value across the economy to enable low carbon industrial products, decarbonised electricity and gas, a hydrogen economy, greenhouse gas removal, and new industries based around utilising CO2”.
  • “Viable business models” are needed to deploy CCUS on a commercial scale, one of which is the sharing of transport and storage (T&S) infrastructure.
  • CCUS “can already be deployed at a competitive cost” in industrial clusters where the technology can benefit local economies.

>> Read the full report below:

CCUS Cost Challenge Taskforce Report_July 2018_screen version

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