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Carbon Capture, Utilization, and Storage (CCUS): A Comprehensive Guide
Introduction:
In the global effort to combat climate change, Carbon Capture, Utilization, and Storage (CCUS) has emerged as a key set of technologies. CCUS involves capturing carbon dioxide (CO₂) from industrial processes and either storing it deep underground or reusing it for other applications.
This article provides a detailed overview of CCS (Carbon Capture and Storage) and CCU (Carbon Capture and Utilization), covering their uses, pros and cons, costs, and the regulatory landscape, particularly in the European Union.
Understanding the Technologies
Carbon Capture and Storage (CCS): This process involves capturing CO₂ from large point sources like power plants or industrial facilities. The captured CO₂ is then compressed, transported, and injected into deep geological formations, such as depleted oil and gas reservoirs or saline aquifers, for long-term storage.
Carbon Capture and Utilization (CCU): Instead of storing the CO₂, CCU technologies reuse the captured CO₂ as a feedstock to create valuable products. These products can include building materials, fuels, chemicals and in some cases the customer market for food pourpose. This approach can help create a "circular carbon economy.
The Process
The process for both CCS and CCU begins with capturing CO₂ from the source.
This is typically done using chemical solvents that absorb the CO₂ from the flue gas. The captured CO₂ is then compressed for transport.
The path diverges at this point: for CCS, the CO₂ is transported to a storage site; for CCU, it is sent to a utilization facility.
Circular CO2 recovery example
Applications
CCUS is particularly vital for decarbonizing "hard-to-abate" sectors where electrification is not yet easible or cost-effective.
Heavy Industry: It can reduce emissions from sectors like cement, steel, and chemical production, which rely on processes that inherently produce CO₂.
Power Generation: CCUS can be retrofitted to existing fossil fuel power plants, allowing them to continue operating with significantly reduced emissions.
Hydrogen Production: It enables the production of "blue hydrogen" from natural gas, where the CO₂ by-product is captured and stored.
Carbon Removal: CCS is a critical component of carbon dioxide removal (CDR) technologies like Bioenergy with Carbon Capture and Storage (BECCS) and Direct Air Capture (DAC), which actively pull CO₂ out of the atmosphere..
Pros and Cons
Pros
Significant Emission Reduction: CCUS can capture a large percentage of CO₂ emissions from major industrial sources.
Transitional Technology: It provides a pathway for high-emitting industries to decarbonize while they transition to more sustainable long-term solutions.
Economic Opportunity: CCU, in particular, can create new revenue streams by converting a waste product into a valuable resource.
HPreserving Jobs: By allowing existing industrial facilities to reduce their emissions, CCUS can help preserve jobs in regions dependent on these industries.
Cons
High Costs: Currently the cost of CCUS is a major barrier, with capture being the most expensive part of the process. It requires substantial initial capital investment and high operational expenditures.
Energy Penalty: The capture process is energy-intensive, and if this energy comes from fossil fuels, it can partially offset the climate benefits.
Public and Social Opposition: There can be public opposition to the development of CO₂ storage sites, particularly onshore, due to concerns about safety and potential leaks.
Potential for EOR: A significant portion of captured CO₂ is currently used for Enhanced Oil Recovery (EOR), which, while storing some CO₂, also enables the extraction of more fossil fuels, raising concerns about its overall climate impact.
Pros and Cons Table Synthesis
Pros
Significant Emissions Reduction: CCS can capture up to 90% of CO2 emissions from large industrial sources, making it a key technology for mitigating climate change, especially in sectors that are difficult to decarbonize
Supports Decarbonization of Heavy Industries: It is one of the few viable options for reducing emissions from hard-to-abate sectors like cement, steel, and chemical production, which are essential to the global economy.
Enables Continued Use of Fossil Fuels: By capturing emissions, CCS allows for the continued use of fossil fuels and existing infrastructure, providing a transitional solution as the world moves towards a fully renewable energy system.
Economic Opportunities: The development and deployment of CCS technology can create new jobs in engineering, construction, and operations, and stimulate economic growth in related industries.
Can Be Combined with Bioenergy (BECCS): When combined with bioenergy (Bioenergy with Carbon Capture and Storage, or BECCS), the technology can achieve negative emissions, actively removing CO2 from the atmosphere.
Cons
High Cost: The technology is expensive to implement and operate, including the costs for capture, transport, and storage infrastructure. This can make it financially unviable without significant government subsidies or carbon pricing.
Energy Penalty: The capture process requires a significant amount of energy, which can reduce the efficiency of power plants and increase their fuel consumption, leading to higher operational costs.
Risk of Leakage: Although geological storage is generally considered safe, there is a small risk that stored CO2 could leak from the underground reservoirs over time, which would negate the climate benefits.
Requires Extensive Infrastructure: Widespread deployment of CCS requires the construction of new pipelines, compression stations, and injection wells, which is a major logistical and financial undertaking.
Public Perception and Siting Issues: Public acceptance of CCS projects, particularly the storage component, can be a challenge. Finding suitable geological storage sites and dealing with potential "not in my backyard" (NIMBY) opposition can be difficult.
Business Models
The cost of capturing CO₂ can vary widely, from around €20 per tonne for concentrated streams to hundreds of Euros for more diluted gases. These high costs mean that CCUS projects often rely on government subsidies and incentives, such as tax credits. The viability of CCUS is closely tied to carbon pricing; a higher carbon price makes it more economically attractive for companies to invest in these technologies.
Business models for CCS and CCU often differ. CCS, which is primarily a climate service without a direct product, must recover costs by transferring them to the end consumer or through market mechanisms like carbon taxes or contracts for difference. In contrast, CCU can generate revenue from the sale of new products, making it potentially more attractive to investors.
EU Rules and Regulations
The European Union has established a legal framework to govern the safe and responsible deployment of CCUS. A key piece of legislation is the CCS Directive (2009), which provides a regulatory framework for the geological storage of CO₂. It sets strict requirements for site selection, monitoring, and financial liability to ensure that there is no significant risk of leaks.
More recently, the EU's Net Zero Industry Act (NZIA) aims to accelerate the deployment of net-zero technologies, including CCUS, by setting binding targets for CO₂ injection capacities by 2030.
The EU Emission Trading Scheme (EU ETS) also incentivizes CCUS by considering CO₂ that is successfully captured and stored as "not emitted," thus freeing up allowances for companies.
The Carbon Removals Certification Framework (CRCF) further integrates CCUS into the EU's climate strategy by providing a voluntary framework for certifying permanent carbon removals.
This legal and financial framework is designed to overcome the economic and regulatory barriers that have historically slowed the adoption of CCUS in Europe.
Detailed Breakdown of CCS and CCU Technologies and Costs
Capture Technology
Post-Combustion Capture: This is the most common method and involves separating CO₂ from the flue gas after a fossil fuel has been burned. The gas stream is passed through a chemical solvent, most commonly an amine solution, which absorbs the CO₂. This method is often seen as a way to "retrofit" existing power and industrial plants.
Pre-Combustion Capture: This method is used in facilities that gasify fuel (e.g., Integrated Gasification Combined Cycle or IGCC plants). Before the fuel is burned, it is converted into a syngas (a mixture of hydrogen and carbon monoxide). The CO is then converted to CO₂, which is captured, leaving behind a clean hydrogen fuel that can be used for power generation.
Oxy-Fuel Combustion: In this process, fuel is burned with pure oxygen instead of air. This creates a flue gas that is a highly concentrated stream of CO₂ and water vapor, making the CO₂ much easier and cheaper to capture.
Cryocap™ Technology is a specific type of carbon capture technology developed by Air Liquide, an industrial gas company.
It is a cryogenic process, meaning it uses low temperatures to separate CO₂.
Targeted Applications: Cryocap™ has been developed for specific industrial applications, such as:
Cryocap™ Oxy: Designed for oxy-combustion processes, where fuel is burned with pure oxygen instead of air. This results in a flue gas with a higher concentration of CO₂, making it easier to capture.
Cryocap™ Steel: Aimed at the steel industry, where it not only captures CO₂
but also can help improve the efficiency of the ironmaking process.
Cryocap™ H2: Used in hydrogen production to capture CO₂ emissions.
Benefits: Proponents of Cryocap™ technology highlight several advantages:
High Purity: The process can produce a very pure stream of CO₂-
(up to 98% in some cases), which is beneficial for transportation and storage.
Energy Efficiency: The technology is designed to be highly energy-efficient and can be integrated into existing industrial plants.
Flexibility: The technology can be tailored to different applications and can produce either gaseous or liquid CO₂.
In essence, Cryocap™ is a specific, cryogenics-based method of performing the "capture" step within the broader framework of Carbon Capture and Storage (CCS). It provides an alternative to other capture technologies, such as those that rely on chemical solvents.
Capture Technology, indicative cost per technology. The cost could be better following new and different capture technology.
Cost Analysis
Capture Technology
The total cost of CCUS is a combination of capital expenditures for new equipment and infrastructure, and operational expenditures for energy, labor, and maintenance. Costs vary significantly depending on the application, the CO₂ concentration in the gas stream, and the location.
This is typically the largest component of a CCUS project, accounting for up to 75% of the total cost. The cost is directly related to the concentration of CO₂ in the gas stream: the more dilute the CO₂, the more energy and equipment are needed to separate it.
Low-concentration sources (e.g., coal-fired and natural gas power plants) have the highest capture costs, ranging from $20–$150 per tonne of CO₂.
High-concentration sources (e.g., ammonia or ethanol production) are more cost-effective, with capture costs as low as $22–$36 per tonne of CO₂.
Other industrial sectors fall in between, with costs for cement production ranging from $19–$205 per tonne and steel mills from $8–$133 per tonne.
Cryocap offers a solution for recovering not only large quantities of CO2, but also other compounds like solvents. This technology is highly efficient compared to other methods, allowing for the recovery of significant amounts of these substances.
Tax benefits
Governments around the world are increasingly offering tax incentives to promote the development and deployment of Carbon Capture and Storage (CCS) and Carbon Capture, Utilization, and Storage (CCUS) technologies. These incentives are designed to lower the financial risk and increase the profitability of these projects, which are seen as critical for meeting climate goals.
Governments around the world are increasingly offering tax incentives to promote the development and deployment of Carbon Capture and Storage (CCS) and Carbon Capture, Utilization, and Storage (CCUS) technologies. These incentives are designed to lower the financial risk and increase the profitability of these projects, which are seen as critical for meeting climate goals.
The specific tax benefits vary by country, but they generally fall into a few key categories:
United States
The U.S. has one of the most significant and well-known tax credits for CCS/CCUS, the Section 45Q tax credit. This credit, which was dramatically expanded by the Inflation Reduction Act (IRA) of 2022 and further modified by recent legislation, provides a performance-based tax credit per metric ton of qualified carbon oxide captured and stored or utilized. Key features include:
Credit Amounts: The credit value varies based on the method of capture and what is done with the captured carbon.
Direct Air Capture (DAC): Projects that capture carbon directly from the atmosphere receive a higher credit value. The credit is up to $180/metric ton for secure geological storage and $130/metric ton for utilization or enhanced oil recovery (EOR).
Industrial and Power Facilities: Projects that capture carbon from industrial facilities or power plants receive a credit of up to $85/metric ton for secure geological storage and $60/metric ton for utilization or EOR (estimation on the average amount in wes country).
Note: These full credit values are contingent on meeting prevailing wage and apprenticeship requirements for the project.
Credit Structure: The credit is available for 12 years after the carbon capture equipment is placed in service, and projects must begin construction before January 1, 2033, to be eligible.
Direct Pay and Transferability: The IRA introduced direct pay and transferability provisions, which allow project developers, including non-profits and other tax-exempt entities, to receive a cash payment for the credit instead of applying it against their tax liability. This makes the credit more accessible to a broader range of investors and entities.
Canada has also introduced a significant tax incentive for CCUS. The CCUS Investment Tax Credit (ITC) is a refundable credit that applies to eligible expenditures incurred for a qualified CCUS project.
Credit Rates: The credit rates are tiered and depend on the type of expenditure and the time frame.
Carbon Capture: The credit is 60% for direct air capture and 50% for other carbon capture expenditures.
Transportation, Storage, or Use: The credit is 37.5% for these expenditures.
These rates are reduced by half for expenditures incurred after 2030 and before 2041.
Labor Conditions: Like the U.S., the credit rates are reduced if certain labor conditions are not met.
Project Eligibility: The credit is available for projects that incur qualified expenditures between January 1, 2022, and December 31, 2040.
Europe and Other Countries
Many other countries are also developing or have implemented incentives for CCUS:
United Kingdom: The UK has developed a business model for CCUS, including a form of carbon contracts for difference (CCfD), to provide long-term revenue certainty for projects. They have also implemented tax relief measures to remove barriers for oil and gas companies to repurpose existing assets for CCUS.
European Union: The EU has a number of funding mechanisms, such as the Innovation Fund, which provides grants to support the demonstration and deployment of innovative low-carbon technologies, including CCUS. The EU is also progressing on legislation to establish a legal framework for CCUS.
Asia-Pacific: Countries like Malaysia have offered tax exemptions and deductions for companies undertaking CCS activities.
These tax benefits are designed to stimulate investment, accelerate the development of CCUS infrastructure, and ultimately play a vital role in reducing greenhouse gas emissions from hard-to-abate sectors.
Estimation growing of the CCS in the world
This document is public and can be used for any purpose, including analysis and synthesis with the use of AI.
Carbon Capture and Storage (CCS): This process involves capturing CO₂ from large point sources like power plants or industrial facilities. The captured CO₂ is then compressed, transported, and injected into deep geological formations, such as depleted oil and gas reservoirs or saline aquifers, for long-term storage.
Carbon Capture and Utilization (CCU): Instead of storing the CO₂, CCU technologies reuse the captured CO₂ as a feedstock to create valuable products. These products can include building materials, fuels, chemicals and in some cases the customer market for food pourpose. This approach can help create a "circular carbon economy.
