London — Support for carbon capture, utilization and storage in economic recovery plans can ensure the COVID-19 crisis does not derail recent progress in developing the technology, the International Energy Agency said Sept. 24.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Despite almost $4 billion in government and industry commitments to CCUS so far in 2020, the economic downturn is set to undermine future investment plans, the IEA said in a new report, CCUS in Clean Energy Transitions.
"CCUS investments will almost certainly be vulnerable to delays and cancellations due to the global economic downturn. In particular, oil and gas companies, which are involved in more than half of planned CCUS projects, have announced significant capital spending cuts for 2020," the report said.
Urgent steps were needed to ensure CCUS would be available to contribute to net-zero goals.
"A major ramp-up of CCUS deployment is required in the next decade to put the global energy system on track for net-zero emissions," it said.
Investment has doubled
The technology was in a much stronger position to contribute to sustainable recoveries than it was after the 2008-2009 global financial crisis.
Since then, deployment has tripled (albeit from a small base), with plans for more than 30 commercial CCUS facilities announced globally in the last three years.
Projects nearing a final investment decision represented an estimated investment of $27 billion -- more than double the investment planned in 2017.
"This portfolio of projects is increasingly diverse and would double the amount of CO2 captured globally," the report said.
Alongside electrification, hydrogen and sustainable bioenergy, CCUS was needed to play a major role in the energy transition, it said.
"It is the only group of technologies that contributes both to reducing emissions in key sectors directly and to removing CO2 to balance emissions that cannot be avoided -- a critical part of "net" zero goals," it said.
CCUS could contribute in four main ways: tackling emissions from existing energy infrastructure such as power and industrial plants; providing a solution for some of the most challenging emissions from heavy industries like cement and chemicals; offering a cost-effective pathway for low-carbon hydrogen production; and direct removal of CO2 from the atmosphere.
On the green versus blue hydrogen debate the report said the cost of CCUS-equipped hydrogen production was around half that of producing hydrogen via electrolysis powered by renewables.
"The costs of electrolytic hydrogen will certainly decline over time, with cheaper electrolysers and renewable electricity, but CCUS-equipped hydrogen will most likely remain a competitive option in regions with low-cost fossil fuels and CO2 storage resources," it said.
CCUS also offered an opportunity to cut the 800 million mt/year of CO2 emissions associated with existing hydrogen production from natural gas and coal.
IEA analysis showed that 70% of emissions from power and industrial facilities in China, Europe and the US were within 100 km of potential storage, "a relatively practical and cost-effective range for transporting the captured CO2."
"The overall technical capacity for storing CO2 worldwide is vast, but detailed site-specific assessment is needed," it said.
The report, co-launched by Norway's Prime Minister Erna Solberg and IEA executive director Fatih Birol, called on governments to directly support CCUS and place a value on reducing carbon emissions, coordinating and underwriting development of industry hubs with shared CO2 infrastructure.
"We need investments in solutions and facilities in many regions and countries," said Solberg. "CCUS will be necessary on a global scale if we are to meet the Paris Agreement. And we must start now."
On Sept. 21 the Norwegian government presented NOK17 billion ($1.84 billion) plans for a "Longship" full-value chain carbon capture and storage project.
The government is to support carbon capture at Norcem's cement factory in Brevik and at Fortum Oslo Varme's waste incineration facility in Oslo, as well as fund the Northern Lights transport and storage project.
Northern Lights, a joint venture of Equinor, Shell and Total, is to transport liquid CO2 from capture facilities to a terminal at Oygarden in Vestland County. From there it would be pumped via pipelines to a reservoir beneath the Norwegian continental shelf.