After decades of stop-start development, the technology looks like it is ready for lift-off as a key enabler for a low-carbon economy. But there are plenty of hurdles remaining, reports Mike Scott
When the UK’s influential Committee on Climate Change was considering the technologies that could help the country to reach its target of net-zero emissions by 2050, it identified a number that were important, but only one that was essential, according to the National Physical Laboratory.
That technology was carbon capture and storage (CCS). CCS has been around for a number of decades. During the early part of the century, it was seen as a way for fossil-fuel power generators to continue producing electricity using coal or gas as an alternative to renewable technologies, but “that never really happened”, says Guloren Turan, general manager for advocacy at the Global CCS Institute.
In the early 2000s, CCS got to the point where it could be deployed more cheaply than renewables, says John Oakey, professor of energy technology at Cranfield University’s Centre for Energy and Power. “But the costs of renewables plummeted and progress on CCS ground to a halt.”
The IPCC report sets out four pathways to net-zero, three of which have CCS at their heart
Now, though, interest is growing again, with the project pipeline increasing over the last three years. “There were 17 completely new facilities in 2020, bringing the total number of commercial and pilot projects in operation to 26,” Turan says. While this is encouraging, it remains far short of what is needed to meet climate targets. “We need to go from 26 facilities to 2,000 by 2050.”
One key catalyst behind renewed interest in the sector was the publication in 2018 of the Intergovernmental Panel on Climate Change’s 1.5C report, which highlighted the need for the world to reach net-zero emissions by 2050 to avoid dangerous climate change, she adds. “It really crystallised people’s thinking. The report sets out four pathways to net-zero, three of which have CCS at their heart.”
A new report from the International Aluminium Institute says that CCS, combined with improvements in fuel efficiency; alternative fuels including green hydrogen; and other emerging technologies like inert anodes, could address 15% of the sector’s process emissions.
HeidelbergCement is to install the world's first full-scale CCS facility in a cement plant in Norway, while another leading cement company, LafargeHolcim, has teamed up with Schlumberger New Energy to develop CCS solutions. Leading steelmakers around the world, including ArcelorMittal, ThyssenKrupp, Nippon Steel and Posco are looking at hydrogen and carbon capture options to meet their net-zero commitments.
Another important driver is the ongoing scaling up of the hydrogen economy. Hydrogen is seen as a vital tool in decarbonising the global economy because it can be used to heat homes; fuel modes of transport that will be hard to electrify such as heavy trucks, ships and aircraft; and replace fossil fuels in hard-to-abate sectors such as steel, aluminium and cement. These industries are starting to set out their plans to decarbonise. (See Will green hydrogen fulfil high hopes for trucking and shipping emissions?)
“Hydrogen was always seen as something for the future, but it is imminent now as a very important energy vector,” says Turan.
If we only rely on green hydrogen to reach net-zero, we will be seriously delayed
Almost all hydrogen produced today is “grey”, made from natural gas using a process called steam methane reforming (SMR), and mostly used in industries such as refining and chemicals. This is relatively cheap but enormously polluting; for every tonne of hydrogen produced, 10 tonnes of CO2 are generated and currently released to the atmosphere.
However, it can be decarbonised by using CCS to capture the CO2 to produce what is known as “blue” hydrogen. In time, “green’” hydrogen, which uses renewable electricity to separate the gas from water, will dominate the sector. But in the short term, blue hydrogen will be vital to accelerate the use of clean hydrogen, says Nils Røkke, executive vice-president, sustainability, at Norwegian research foundation Sintef Energy, and president of the European Energy Research Alliance (EERA).
This is because it simply involves retrofitting CCS technology to existing production facilities, while green hydrogen requires new electrolysers to be built, as well as huge amounts of green power that have not yet been installed. “Blue hydrogen can be delivered at scale quite quickly. If we only rely on green hydrogen to reach net-zero, we will be seriously delayed,” Røkke says.
Developing green hydrogen is a lot more complicated than people think, adds Oakey.
Currently, blue hydrogen is between half and a third of the price of green hydrogen. Electrolyser capacity is forecast to surge during this decade, which will cut the price differential, but not for a number of years. Blue hydrogen could also play a key role in creating new markets for hydrogen, which can then switch to green hydrogen when capacity catches up, he suggests.
Geographically, the U.S. is the clear leader in CCS, both in terms of the number of facilities in operation and in having the most supportive policy in the form of a CCS tax credit, Turan says. But there is growing interest around the world, with different regions each having a different emphasis. “Markets in the Middle East that are big gas exporters are looking at exporting hydrogen (which would involve using CCS to create blue hydrogen). There is a lot of interest in Japan, the UK and Europe, too, although the EU is very focused on green hydrogen” she adds.
In markets with a large amount of coal-fired power generation, such as China and India, there is more interest in stand-alone CCS, says Oakey. But capturing the gas from hydrogen production is more efficient than capturing it from a power station chimney, he adds.
The economic issues faced by the Petra Nova project are unlikely to go away any time soon
Not everyone is convinced that CCS’s time has come. “The plants that are in operation have not done brilliantly,” says Andrew Grant, head of climate, energy and industry research at Carbon Tracker. “There are challenges around scaleability and the cost challenges get worse because the alternatives keep getting cheaper.”
The world’s biggest CCS plant, the Petra Nova facility in Texas, shut in 2020. With an annual capture capacity of 1.4 megatonnes of CO2 per year, the facility was the world’s largest installation on a coal-fired power plant, according to research group IdTechEx. “However, during its three-and-a-half-year lifespan, it had faced several issues relating to commercial viability and unexpected shutdowns.”
While the technology performed relatively well, the plant, whose CO2 emissions were used in enhanced oil recovery (EOR), suffered from a sharp drop in oil prices. EOR is more energy-intensive than conventional oil extraction, so it needs high oil prices in order to be commercially viable.
“From a technical perspective, the Petra Nova project has been a valuable lesson that is likely to improve the next generation of carbon capture projects,” the research group says. “However, the economic issues faced by the project are unlikely to go away any time soon. CO2 utilisation, where CO2 is converted into industrially useful products, is still in its infancy, and so enhanced oil recovery (EOR) is one of the only ways that the carbon capture and storage process can be directly monetised. Commercial viability through EOR relies on high oil prices and can lead to questionable sustainability benefits, especially if the oil that is produced is burned without CCUS.”
At the same time, many people think the cost of green hydrogen, which is currently two to three times as expensive as blue hydrogen, could match it as early as 2030. The International Renewable Energy Agency said in a recent report that continuing cost reductions in solar and wind power, coupled with a massive scale-up in the production of electrolysers, could bring cost-parity.
The North Sea is becoming the focus point for blue hydrogen, with Norway and the UK leading the way. The UK government has pledged to become a world-leader in CCS, and to remove 10m tonnes of CO2 by 2030. It has also said it will “generate 5GW of low-carbon hydrogen production capacity by 2030 for industry, transport, power and homes, and aim to develop the first town heated entirely by hydrogen by the end of the decade”.
As with all emerging technologies, legislative frameworks have not always caught up with development ambitions
Meanwhile, Norway’s flagship Longship (carbon capture) and Northern Lights (transport and storage) schemes will initially capture 400,000 tonnes of carbon before ramping up to 1.5m tonnes a year by 2024. The first facilities to capture carbon will be a cement factory and a waste incineration facility. The gas will be shipped to a terminal on the coast and then piped to an undersea reservoir run by Northern Lights, a joint venture between Equinor, Shell and Total. Eventually, they hope to expand capacity to 5m tonnes a year and to sequester carbon from customers all over Europe. Cost has always been a key challenge to CCS, in part because there are still so few projects. One way to cut costs is through the development of "hub and cluster" schemes. The UK’s £1bn CCS infrastructure fund is looking to develop two hub and clusters by 2025 and another two by 2030, Turan says. “You have a number of emitters connected to a shared pipeline going to a common storage site. It reduces the amount of infrastructure you need to build. In places like Humberside and Teesside, there are so many large emitters that it makes good sense.”
The coastal location of the clusters not only gives them easy access to large-scale carbon storage sites under the North Sea, but also removes the need to build pipelines on land.
These clusters are already well under way, with H2H Saltend on Humberside planning to produce blue hydrogen, Net Zero Teesside building a carbon capture, utilisation and storage (CCUS) project in the north-east of England and HyNet doing something similar in the north-west.
There are still a number of barriers, says Dalia Majumder-Russell, senior associate in law firm CMS’s energy projects and construction group. “As with all emerging technologies, legislative frameworks have not always caught up with development ambitions. For CCS, while the technology is not new, commercial operations of full-scale projects are few and the regulatory frameworks are not yet tested. In addition, there is no clear legal and regulatory framework for hydrogen, which market players and investors would benefit greatly from.”
There is also a lack of administrative practice and guidance, she adds. While some jurisdictions, such as Austria, South Korea, and Japan, are simplifying the permitting processes for CCS and hydrogen projects, in many other jurisdictions the complexities in regimes are yet to be addressed. The burden on investors to engage stakeholders in this process also adds to the cost and time involved.
“As we have learnt from other new technologies, costs fall when there are enough projects to form a critical mass of investment. National policies, like the European Commission’s hydrogen strategy published last year, are key for attracting investment for more projects and thus driving down costs,” she points out.
It’s a different game now and we can see that clearly. Oil and gas companies are more proactive on their emissions reduction targets
While most of the technologies involved in CCS are fairly mature, there is still room for technological improvement. Most grey hydrogen is produced using SMR and when CCS is applied it can capture 85-90% of emissions. But an alternative technology, autothermal reforming (ATR), allows capture of 96-97% of emissions, says Røkke, and is likely to be used on new plants.
The industry also needs to identify and “characterise” storage sites and understand their geology, he adds, which can take five to six years.
Nonetheless, he says, “it’s a different game now and we can see that clearly. Oil and gas companies are more proactive on their emissions reduction targets and trying to get to climate neutrality.”