Innovations in Carbon Capture: Turning Emissions into Opportunities

Why we need carbon capture

The Paris Agreement was an international treaty adopted in 2015 that marked a significant global commitment to addressing climate change. It set out to achieve net zero carbon emissions by the middle of the century, limiting global warming to well below 2 (ideally to 1.5) degrees Celsius above pre-industrial levels and thereby averting potentially catastrophic climatic and environmental consequences.

Unfortunately, progress has been limited and global carbon emissions remain on an upward trajectory. Global energy-related CO₂ emissions grew by 0.9% or 321 Megatons in 2022, reaching a new high of over 36.8 Gigatons.¹

In fact, many scientists now believe that the carbon budget for a 1.5-degree temperature rise will not only be exceeded but eclipsed.

Why is this the case? The fact is that many of the significant policy interventions required to restrict carbon emissions globally have been dismissed on economic grounds. Instead, it is easier for policymakers to take the path of least resistance and point to future technological advancements that will solve the climate change problem.

But do these technological advancements exist? As the saying goes, prevention is better than cure, but if our efforts to prevent emissions are proving ineffective, perhaps there are other ways we can reduce carbon dioxide from entering the atmosphere. Carbon capture is one such technology.

Captured carbon can be stored and even used in industrial processes

Captured CO₂ can be stored underground in geological formations. The most popular commercial method is to turn the captured carbon into supercritical fluid and store it in the ground. It can even be injected into deep formations under the earth. Alternatively, it can be used for a range of industrial processes, such as algae cultivation. This involves the captured CO₂ being used to promote the growth of algae which can then be processed into biofuels, animal feed, or other high-value products.

Point-source carbon capture is a proven technology that works

Point-source carbon capture installed in coal-fired power plants is a highly viable technology. Almost all applications will successfully capture around 85-90% of carbon and some even higher. Although as the rate of capture approaches 100%, marginal costs increase substantially so the overall effectiveness is an economic tradeoff.²

These high capture rates are due to the concentration of carbon in factory emissions which is why point-source technology is so effective. Unfortunately, the opposite is true when it comes to removing carbon directly from the air. The global average concentration of CO₂ in the atmosphere is around 415 parts per million. This means that for every million air molecules, approximately 415 of them are CO₂ molecules.³ Carbon is, therefore, far more diluted in the air than it is from a natural gas plant, meaning it is significantly more challenging (and expensive) to capture.

Carbon capture is already having an impact

According to a report by the Global Carbon Capture and Storage (“CCS”) Institute, approximately 40 million tons of carbon are currently captured and put in the ground each year. In 2022, there were 61 new facilities added to the project pipeline bringing the total number of operational CCS projects to around 30. At the time the report was issued, there were another 11 facilities under construction and over 153 in development.⁴

Carbon capture technology has been slow to gain traction due to high costs and the absence of economic drivers. At present, it remains far cheaper to pollute CO₂ into the environment than to capture and store it. Efforts by policymakers to reduce greenhouse gas emissions such as carbon credits, although well-intentioned, have been somewhat ineffective as they rely on offsetting emissions rather than reducing them at the source. There are also the challenges of verifying and monitoring offsets to consider which are complex and prone to loopholes.

Carbon capture is becoming increasingly cost-competitive

According to the International Energy Agency (IEA), the cost of CCS is expected to fall by 30% to 50% by 2030.⁵

This would make CCS cost-competitive with other low-carbon energy options such as wind and solar power. This innovation and subsequent cost reduction we have seen so far has largely been the result of significant investment in research and development as well as government support such as carbon pricing, subsidies, and tax breaks.

• • In 2022, the United States introduced significant initiatives to accelerate CCS project development. These include new funding from the 2021 Infrastructure Investment and Jobs Act and favourable adjustments to CCS tax credits under the 2022 Inflation Reduction Act (“IRA”). The IRA introduces enhancements to the 45Q tax credit scheme in the United States, which directly benefits carbon capture technologies. The Act increases the value and availability of tax credits for CCS projects by adjusting the credit amounts for inflation. This helps incentivise and support investments in carbon capture technologies and infrastructure by providing financial incentives and reducing the overall cost of implementing carbon capture projects. By enhancing the 45Q tax credit scheme, the IRA has addressed one of the main barriers to widespread implementation: cost.
  • The European Union launched the Net Zero Industry Act in March 2023, aiming for an annual injection target of 50 million metric tons of CO2 by 2030. They have also streamlined permitting processes for CCS. Notably, the pilot phase of Project Greensand in Denmark became operational in March 2023. This project involves transporting CO2 from Belgium to be stored in a depleted oil field in the Danish North Sea.⁶
  • Demonstrating commitment, the United Kingdom allocated GBP 20 billion in its Spring Budget 2023 to advance early-stage CCS projects.⁷
  • Indonesia achieved a significant milestone by finalizing its legal and regulatory framework for CCS in March 2023, setting an example for the region and establishing a solid foundation for CCS activities.⁸
  • In China, three new CCS projects began operations in 2023, furthering the country’s engagement in CCS technology. Meanwhile, Japan took steps towards commercialization by selecting seven candidate projects for support.⁹

The funding of research and development along with supportive policymaking are significant drivers of innovation, economies of scale and cost reduction. All these actions also collectively demonstrate the increasing global recognition of CCS as a vital tool in addressing carbon emissions and advancing towards more sustainable energy practices.

Case study: Aker Carbon Capture ASA

Aker Carbon Capture ASA (“Aker”) is a Norwegian company focused on developing and providing CCS solutions. It is a subsidiary of the Aker group, a prominent industrial investment company in Norway.

Norway has shown considerable support for CCS technology thereby nurturing a fertile environment for companies such as Aker to grow. The Norwegian government’s allocation of funds for CCS research, development, and the initiation of projects like the Longship project underscores their commitment. This project involves capturing industrial CO2 emissions and transporting them for storage beneath the North Sea.

Aker aims to support the transition to a low-carbon economy by helping industries reduce greenhouse gas emissions. Aker’s point-source carbon capture systems can be integrated into various industrial facilities, such as cement and waste-to-energy plants, refineries, and hydrogen production facilities.

One key project involves a partnership with the Norwegian cement producer Heidelberg Norge. Aker is developing a full-scale carbon capture, conditioning, compression, heat integration, intermediate storage and loading facility for a cement plant in Brevik (Norway). The capacity of the carbon capture facility corresponds to approximately half of the annual CO₂ emissions from the Brevik plant. CO₂ is to be captured from the flue gases of the cement kiln using waste heat recovered from the cement plant and the CO₂ compression plant through a proprietary heat integration technology.¹⁰

Aker also focuses on the utilization and storage of captured CO₂. It explores opportunities for CO₂ reuse in various applications such as the production of sustainable fuels, chemicals, and building materials. Additionally, the company works on developing safe and permanent storage solutions for CO₂, ensuring that captured emissions are securely stored underground to prevent their release into the atmosphere.

By providing comprehensive CCS solutions, Aker aims to help industries achieve their emissions reduction targets and contribute to the global efforts to combat climate change. Their technologies and expertise in carbon capture and storage support the decarbonization of industrial processes, enabling the sustainable transition to a low-carbon future.