Showing posts sorted by relevance for query carbon capture. Sort by date Show all posts
Showing posts sorted by relevance for query carbon capture. Sort by date Show all posts

Saturday, August 12, 2023

SCI-FI-TEK-ILLUSION
Carbon Capture Could Be the Key to the Energy Transition


By Julio Friedmann
Aug. 11, 2023 

Workers inside the Carbon Engineering Innovation Centre, a Direct Air Capture research and development facility, in Squamish, Canada
James MacDonald/Bloomberg

About the author: Julio Friedmann is chief scientist at Carbon Direct.

Amid all the grim news about wildfires and other disasters exacerbated by a warming climate, there is room for optimism. Today, there are dozens of companies across the globe willing to build systems to capture carbon from and permanently store it. Their rise has been hastened by the passage of new laws in the U.S., Canada, Europe, China, and elsewhere. Carbon capture may be unfamiliar to many people, but that probably won’t be true for long.

Carbon capture is a set of technologies with the sole purpose of mitigating climate change. These technologies harness chemical and physical processes to capture CO2 from the air itself or at the source of emission, such as from industry, energy, and other sectors. It can then be safely stored in geological formations, permanently keeping it out of the atmosphere, or used in other applications like making concrete, or fuel. Though deployment of carbon capture incurs additional costs, it directly reduces greenhouse gas emissions. In some cases, carbon capture can also be used to remove CO2 from the atmosphere and oceans.

The concept has been around for almost a century. The first project began operation in 1938, and the first large-scale project to inject CO2 into the ground launched in 1972 at the Sharon Ridge oilfield in Texas. About 24 years later, Norway launched the world’s first integrated carbon capture and storage project (Sleipner) in the North Sea, strictly to reduce climate impacts.

The most recent reports from the Intergovernmental Panel on Climate Change and the International Energy Agency highlight the urgent need for rapid deployment of carbon capture technologies. Net-zero emissions must be met by the early 2050s to limit global warming to 1.5°C, a level that will prevent catastrophic damage. To achieve this, these technologies will need to be used to capture over one billion tonnes from existing facilities and another billion from the atmosphere by 2030, with roughly four to eight billion tonnes per year captured from existing infrastructure and an additional three to 20 billion tonnes removed from the air and oceans by 2050. These are enormous volumes, equal in size and scale to today’s oil and gas sector. Significant investments will be required for this effort to succeed.

As a climate mitigation tool, carbon capture is versatile, scalable, and relatively low-risk and low cost. Carbon-capture technologies can serve in many sectors: electricity generation, heavy industry, agriculture, transportation, hydrogen production, and more. Carbon capture also offers a wide range of utility. It can be used, among others, to reduce emissions in hard-to-abate industries such as existing cement and steel mills, and potentially to remove CO2 from the air and oceans at an accelerated pace. Because it requires only earth-abundant materials, carbon capture can scale quickly and be used across a wide variety of geographies.

With this long history, builders and operators of carbon-capture projects also view the risks of deployment as generally low. This means, in many markets and sectors like heavy industry, aviation, and maritime, carbon capture is also the lowest-cost option for climate abatement. A single project can be very large, representing over five million tons per year of CO2 reduced or removed. Policy is playing a big role in the advancement of carbon capture. Several recent laws are providing significant support for innovation and investment. The Bipartisan Infrastructure Law, passed in 2021, provided support for CO2 infrastructure, including $500 million a year to assess geological storage sites for safety, quality, and effectiveness. The Law also created a $3.5 billion program to create direct air capture hubs, which the Department of Energy just awarded. It also gives new loan authorities to the Department of Transportation to build CO2 pipelines. And it provides millions to the EPA to hire and train CO2 storage regulators.

In 2022, the Inflation Reduction Act included major provisions for carbon capture, recognizing its critical role in climate mitigation. These provisions include a tax credit of $85 a tonne for capturing and permanently storing CO2 from a point source, such as a power plant. A higher tax credit, $180 a tonne, is available for direct air capture and storage. These tax credits provide 12 years of projective benefits for companies, making carbon capture a viable business in the U.S. These incentives make all the difference. Specifically, they make it more profitable to capture and store CO2 than to release it, with huge benefits to investors and the climate.

Studies from Princeton University and others find that provisions of these two laws could boost carbon capture in the U.S. to the tune of 100 million tonnes per year by 2030 and 400 million tonnes per year by 2035. Most of the reduction will come from heavy industry, with some also coming from electricity generation. That level would be ten times the abatement of all the carbon capture and storage plants operating worldwide today. Since the passage of the IRA, more than 150 projects have been announced worldwide, with 70 new projects in the U.S. alone bringing the U.S. total to 175. If all U.S. projects are built, their climate abatement could exceed an astonishing 162 million tonnes of CO2 reduction per year.

When done well, carbon capture is elegant, returning extracted carbon to the earth’s crust. Controversy around carbon capture comes from questions about doing it well.

At its best, carbon capture reduces the local environmental impacts and could save billions of dollars in health costs. If poorly executed, carbon capture could add to the environmental burdens already disproportionately shouldered by frontline and disinvested communities. Ultimately, these projects must be managed carefully to succeed and earn trust.

Controversy also stems from distrust of energy companies that hope to use the technology to decarbonize their operations and produce low-carbon fuels. There are concerns that carbon capture will, though reducing emissions, extend the use of fossil fuels. Oil and gas companies, industrial facilities, and utilities will need to work hard to gain the confidence of communities, environmental groups, and investors. Otherwise, deployment in these sectors will be slow, expensive, and difficult.

Finally, carbon capture technologies face a narrative challenge. Many people are not as familiar with them as they are with windmills, solar panels, or nuclear plants—things they’ve seen in action.

Despite the challenges, as carbon capture technology extends its reach it will become more visible and familiar, leading to more acceptance. With support from new laws, carbon capture may come to be seen as commonplace and essential for the energy transition.

Guest commentaries like this one are written by authors outside the Barron’s and MarketWatch newsroom. They reflect the perspective and opinions of the authors. 

Tuesday, July 20, 2021

500 organizations in Canada, U.S. urge feds to stop investing in carbon capture technology

By Cloe Logan | News | July 20th 2021
NATIONAL OBSERVER

The signatories say carbon capture investment will only lead to more fossil fuel extraction.
Photo by Harrison Haines/Pexels

Investment in carbon capture technology will hinder Canada’s transition away from fossil fuels and exacerbate the effects of climate change, says a new letter co-signed by hundreds of organizations.

Over 500 environmental groups and other organizations from Canada and the U.S. put the piece together, which ran as a full-page ad in the Washington Post and Ottawa’s Hill Times. It expresses their concern with government investment in carbon capture and the green guise associated with it.

Carbon capture, which stores emissions from coal and gas production as well as plastics manufacturing, transports CO2 to other locations, where it’s either stored underground or used for “industrial processes,” according to the Center for International Environmental Law (CIEL), one of the signatories on the letter.
miss out

The groups say most carbon capture helps the fossil fuel industry — the letter explains that almost 80 per cent of carbon capture funds more oil extraction.

Some experts have said the technology is better than nothing, but many share the same concerns as environmental groups. Proponents of carbon capture and storage argue it is crucial for helping heavy industry decarbonize, but critics say most carbon capture actually helps the fossil fuel industry by prolonging the use of oil and gas.

In Budget 2021, the federal government outlined a new tax credit for carbon capture-based projects, which will be available come 2022. The budget outlined a total of $319 million to be spent over seven years on “research, development, and demonstrations” of carbon-capture technology.

Just earlier this month, Ottawa put forward $25 million for a carbon capture project in British Columbia, which it says will capture 2,000 tonnes of CO2 per day. The CEO of Svante Inc, the Burnaby company behind the project, called Vancouver the “Silicon Valley of carbon-capture technology development.”

Provinces are also active in carbon capture funds: British Columbia has a program that allows companies to sell carbon offsets to the province, the government of Saskatchewan partnered with the federal government to help fund the Boundary Dam’s coal carbon-capture project, and the province of Alberta has also put money towards CO2 projects, such as the $745 million it put towards the Shell Quest Carbon Capture and Storage Project.

The U.S. government has a similar tax credit, legislation passed in 2008, which gives money to companies who capture carbon. Gas giant Exxon currently has one of the world’s largest carbon capture plants in Wyoming, for which it’s set to receive $70 million in subsidies if the project goes according to plan — money that will likely go into funding more oil and gas extraction.

However, fixing fossil fuels isn’t possible, says Julia Levin, senior climate and energy program manager for Environmental Defence, one of the organizations that co-signed the letter. She calls carbon capture a “Trojan horse” that oil and gas companies can use to continue fossil fuel production, an opportunity to expand the industry that created the climate emergency.

“The government of Canada should not use any kind of financial support or tax incentive to prop up false climate solutions that only serve to delay the necessary transition off of fossil fuels,” she said.

Investment in carbon capture technology will hinder Canada’s transition away from fossil fuels, says a new letter co-signed by hundreds of organizations. #CarbonCapture

“Instead, we should be focused on real climate solutions including renewable energy and energy efficiency that are job-creating, safe, affordable and ready to be deployed.”


Not only does funding toward the technology hurt the environment, it affects the possibility of a just transition for fossil fuel workers and perpetuates health and environmental risks that disproportionately affect Black, Brown and Indigenous communities, says the Indigenous Environmental Network (IEN), a U.S.-based organization that also co-signed the letter.

“Oil, coal and gas will use these funds to build out more pipelines and concentrate fossil fuel pollution on already impacted Indigenous nations and environmental justice communities,” said Tom Goldtooth, executive director of IEN.

“Billions of dollars for carbon capture essentially redirects money away from renewable energy like solar and wind. We do not have time and money to waste on more questionable carbon capture infrastructure.”


July 20th 2021


Cloe Logan
Reporter
@CloeILogan

Keep reading


Alberta is gambling its future on carbon capture
By John Woodside | News, Business, Energy, Ottawa Insider | June 11th 2021

Wednesday, October 14, 2020

Carbon capture could be climate change solution, or a waste of time
Carbon capture and storage promises to scrub CO2 from the exhaust pipes of coal and gas plants, for sale or storage, but high costs have prevented wide-scale adoption. And some scientists hope it stays that way.


Carbon capture and store technologies promise to clear CO2 from power plants from the air, but a data analysis suggests CCS may not reduce levels by useful amounts. Photo
by Marak007/Pixabay

Nov. 8, 2019  (UPI) -- Earlier this year, the U.S. Department of Energy's Office of Fossil Energy announced $110 million in federal funding for research and development of carbon capture and storage projects.

According to DOE, carbon capture and storage technologies, or CCS, are "increasingly becoming widely accepted as a viable option" for coal- or gas-fired power plants to reduce their emissions.

Carbon capture technologies promise to scrub CO2 from the flumes and exhaust pipes of coal and gas plants. The captured carbon can be permanently buried underground or sold for other uses like making fertilizers or boosting oil extraction. The technologies have been tested on small scales, but high costs have prevented wide-scale adoption.

While subsidy-free wind and solar power now offer the cheapest sources of electricity generation in most major economies -- and continue to dominate new electric generating capacity -- only a handful of operating carbon capture facilities exist.

And quite a few climate scientists and clean energy advocates hope it stays that way.

"They're a boondoggle," Mark Jacobson, professor of civil and environmental engineering at Stanford University, told UPI.

The United Nations latest climate report calls on the world's governments to cut emissions in half by 2030 and to zero by 2040 in order to limit global warming to 1.5 degrees Celsius above preindustrial averages, a threshold for avoiding the worst impacts of climate change. The United Nations report -- and the cost minimization models used by the report's authors -- suggests carbon capture technologies could be part of the path to carbon neutrality.

Jacobson isn't convinced. He recently published a study in the journal Energy and Environmental Science suggesting these technologies do more harm than good.

SEE ABSTRACT BELOW

According to Jacobson, many of the models that purport to demonstrate the viability of carbon capture overestimate the technology's efficiency.

"All these other groups that use models, they just assume that the technology captures 85 to 90 percent," he said.

For his study, Jacobson didn't rely on models. He used the first six months of carbon capture data recorded at Petra Nova, a coal-burning power plant built in Texas with a post-combustion carbon capture treatment system. The data showed the technology was just 55.4 percent efficient during the six months, on average.

"But that's not even the major issue," Jacobson said. "The major issue is what is not even considered by their models, and that is that they literally built a natural gas plant to power their carbon capture technology."

Models favorable to carbon capture's potential ignore the upstream emissions and air pollution impacts, he said. In the case of Petra Nova, that is the emissions release and pollution caused by all that goes into constructing and fueling a gas power plant.

When Jacobson accounted for the upstream impacts, he found the Petra Nova project reduced the coal boiler's emissions by just 10 percent.

It would be much better, Jacobson contends, to simply build renewable energy to produce the equivalent power provided by the Petra Nova plant. In fact, Jacobson suggests it would be better to simply do nothing than increase upstream air pollution inputs with inefficient carbon capture projects.

James Mulligan agrees that all things being equal, renewable energy is superior to carbon capture as an energy solution for climate change mitigation. But according to Mulligan, things aren't always equal.

Billions of dollars are spent every year on new gas power plants, and thousands more power plants with purchasing agreements ensure they will be online for many more years.

Mulligan argues Jacobson's contention that it would be better to not do anything at all than to deploy carbon capture technology is based on flawed assumptions.

"Jacobson is a huge advocate of 100 percent renewable," Mulligan told UPI. "His research is a good reminder that we should be shooting for as much renewable as possible, but he's trying to kneecap an entire technology by painting a very shoddy picture of the very first power plant."

Mulligan's first issue is with Jacobson's use of Petra Nova's efficiency data.

"I'm not sure if someone botched the deployment of the system, or they simply weren't operating at full capacity in their first six months," he said. "Jacobson doesn't know either, because he doesn't ask. But we know this technology can capture up to 90 percent of CO2 emissions."

Mulligan likened Jacobson's assumption to taking an umbrella out in the rain, failing to open it up and concluding that it doesn't work.

"If we did that, we'd be called fools," Mulligan said.

Supporters of carbon capture technology suggest steps can be taken to reduce upstream emissions and other environmental impacts. Carbon capture systems also can be powered by renewable energy.

Jacobson's research suggests the Earth and its atmosphere would be better off if renewable energy were built to replace fossil fuels, not power technology designed to reduce the emissions of fossil fuel sources.

But scenarios might exist in which renewables aren't a viable option, Mulligan said.

"Renewable energy is great for providing electricity. Less great for providing on-demand high-quality thermal energy for industrial processes," Mulligan said. "It also does nothing for emissions from concrete. In these applications, even groups like Greenpeace and Sunrise acknowledge we'll likely need CCS."

A risk also exists that as renewable energy becomes the dominant source of energy, its reliability will become an issue. Solar and wind are cheap, but they're not available all the time. Until better, cheaper battery storage technologies come along, some fossil fuel plants will need to continue to operate to maintain the power grid's reliability and ensure prices don't skyrocket.

It would be better, Mulligan argues, if regulation mandated that fossil fuel power plants that must continue to exist, for whatever reason, be retrofitted with carbon capture technology.

But Jacobson's isn't the only study that has painted carbon capture in an unfavorable light. Another paper, published last spring in the journal Nature Energy, found that renewables were far superior to CCS from the standpoint of energy return-on-investment.

"Given its net energy disadvantages, carbon capture and storage should be considered a niche and supplementary contributor to the energy system, rather than be seen as a critical technology option as current climate agreements view it," Denes Csala, a lecturer in energy storage and system dynamics at Lancaster University, said in a statement.

Carbon capture has allies in the oil and gas industry and the labor sector -- many unions see it as a lifeline for fossil fuel industry jobs -- and has been characterized as "essential" to climate change mitigation by the International Energy Agency. The United Nations has acknowledged that the technology could be used as one of many solutions for carbon emissions reductions.

But plenty of environmental advocates remain opposed. In 2017, Michael Bloomberg told a crowd at the Bloomberg New Energy Finance summit that the technology was "a figment of the imagination." Last year, Al Gore told Axios that he thought carbon capture was "nonsense."

Critics of carbon capture worry that the technology will usurp public and private funds that otherwise might be used for renewable energy, as well as further entrench the interests of the fossil fuel industry, which controls much of the technology involved in carbon capture.

A report published this year by the Center for International Environmental Law echoes these concerns.

"We need to transition away from reliance on fossil fuels," researchers wrote. "Anything that moves us toward greater reliance will not be a solution, and the push for geoengineering is likely to do exactly that."

Another report by Clean Air Task Force, an environmental non-profit group friendly to "low carbon" alternatives to renewables determined the development of carbon capture technologies would not displace wind and solar projects.

Mulligan agrees that CCS should mostly be reserved for special circumstances, but he doesn't think the technology should be impugned unconditionally.

"I don't want to take the CCS option off the table," he said. "This isn't about doing CCS instead of renewable energy. This is about managing the risk that our first-best preference for decarbonization fails to fully and completely deliver on a tight timetable."

If there's one thing on which those friendly to and antagonistic towards CCS can agree, it's that carbon isn't properly priced by world governments or major economies. One way to fix that would be a carbon tax.

"We don't have a lot of CCS because we don't have a real price on carbon," Mulligan said.

But while a carbon tax and a real price on carbon would make CCS projects viable in the short run, a hard price on carbon also likely would accelerate the demise of fossil fuel energy and prove a boon to renewable energy and storage technologies.

The health and climate impacts of carbon capture and direct air capture



Abstract

Graphical abstract: The health and climate impacts of carbon capture and direct air capture

Data from a coal with carbon capture and use (CCU) plant and a synthetic direct air carbon capture and use (SDACCU) plant are analyzed for the equipment's ability, alone, to reduce CO2. In both plants, natural gas turbines power the equipment. A net of only 10.8% of the CCU plant's CO2-equivalent (CO2e) emissions and 10.5% of the CO2 removed from the air by the SDACCU plant are captured over 20 years, and only 20–31%, are captured over 100 years. The low net capture rates are due to uncaptured combustion emissions from natural gas used to power the equipment, uncaptured upstream emissions, and, in the case of CCU, uncaptured coal combustion emissions. Moreover, the CCU and SDACCU plants both increase air pollution and total social costs relative to no capture. Using wind to power the equipment reduces CO2e relative to using natural gas but still allows air pollution emissions to continue and increases the total social cost relative to no carbon capture. Conversely, using wind to displace coal without capturing carbon reduces CO2e, air pollution, and total social cost substantially. In sum, CCU and SDACCU increase or hold constant air pollution health damage and reduce little carbon before even considering sequestration or use leakages of carbon back to the air. Spending on capture rather than wind replacing either fossil fuels or bioenergy always increases total social cost substantially. No improvement in CCU or SDACCU equipment can change this conclusion while fossil fuel emissions exist, since carbon capture always incurs an equipment cost never incurred by wind, and carbon capture never reduces, instead mostly increases, air pollution and fuel mining, which wind eliminates. Once fossil fuel emissions end, CCU (for industry) and SDACCU social costs need to be evaluated against the social costs of natural reforestation and reducing nonenergy halogen, nitrous oxide, methane, and biomass burning emissions.

THE REALITY IS THAT CCS IS NOT GREEN NOR CLEAN IT IS GOING TO BE USED TO FRACK OLD DRY WELLS SUCH AS IN THE BAKAN SHIELD IN SASKATCHEWAN
https://plawiuk.blogspot.com/2014/10/the-myth-of-carbon-capture-and-storage.html

ALSO SEE https://plawiuk.blogspot.com/search?q=CCS

Sunday, November 26, 2023

 

High cost, low profitability and storage challenges: Is carbon capture a realistic climate solution?

NO

A stack of trays holding treated limestone, used to absorb CO2 form the air, at Heirloom's new plant, in Tracy, California.
By Angela Symons & Leah Douglas with Reuters

Here's why carbon capture is no easy solution to climate change.

Carbon capture technology is central to the climate strategies of many world governments.

It is also expensive, unproven at scale, and can be hard to sell to a nervous public.

This currently makes the model of capturing carbon dioxide emissions from the air and storing them for money unworkable.

As nations gather for COP28 - the 28th United Nations climate change conference - in Dubai at the end of November, the question of carbon capture’s future role in a climate-friendly world will be in focus.

So where are we up to with carbon capture and what stands in the way of its widespread deployment?

What is carbon capture?

Carbon capture is a way of reducing carbon emissions by capturing them at the source or removing them from the atmosphere.

The most common form of carbon capture technology involves capturing the gas from a point source like an industrial smokestack. 

From there, the carbon can either be moved directly to permanent underground storage (CSS) or it can be used in another industrial purpose first - a process known as carbon capture, utilisation and storage (CCUS).

Another form of carbon capture is direct air capture (DAC), in which carbon emissions are captured from the air.


Carbon dioxide storage tanks are seen at a cement plant and carbon capture facility in Wuhu, Anhui province, China, September 2019.REUTERS/David Stanway/File Photo

How many carbon capture projects currently exist?

There are currently 42 operational commercial CCS and CCUS projects across the world with the capacity to store 49 million tonnes of carbon dioxide annually, according to the Global CCS Institute, which tracks the industry. 

That is about 0.13 per cent of the world’s roughly 37 billion tonnes of annual energy and industry-related carbon dioxide emissions.

Some 30 of those projects, accounting for 78 per cent of all captured carbon from the group, use the carbon for enhanced oil recovery (EOR), in which carbon is injected into oil wells to free trapped oil. Drillers say EOR can make petroleum more climate-friendly, but environmentalists say the practice is counter-productive.

The other 12 projects, which permanently store carbon in underground formations without using them to boost oil output, are in the US, Norway, Iceland, China, Canada, Qatar and Australia, according to the Global CCS Institute

It is unclear how many of these projects, if any, turn a profit.

About 130 direct air capture facilities are being planned around the world, according to the International Energy Agency (IEA), though just 27 have been commissioned and they capture just 10,000 tonnes of carbon dioxide annually.

The US in August announced $1.2 billion (€1.1b) in grants for two DAC hubs in Texas and Louisiana that promise to capture two million tonnes of carbon per year, though a final investment decision on the projects has not been made.

High cost of carbon capture is a setback

One stumbling block to rapid deployment of carbon capture technology is cost.

CCS costs range from €14 to €110 per tonne of captured carbon depending on the emissions source. DAC projects are even more expensive, between €550 and €916 per tonne, because of the amount of energy needed to capture carbon from the atmosphere, according to the IEA.

Some CCS projects in countries like Norway and Canada have been paused for financial reasons.

Developers say they need a carbon price, either in the form of a carbon tax, trading scheme or tax break, that makes it profitable to capture and store the carbon. Without that, only carbon capture projects that increase revenue in a different way - like through increased oil output - are profitable.

Countries including the US have rolled out public subsidies for carbon capture projects. The Inflation Reduction Act, passed in 2022, offers a $50 (€46) tax credit per tonne of carbon captured for CCUS and $85 (€78) per tonne captured for CCS, and $180 (€165) per tonne captured through DAC.

Though those are meaningful incentives, companies may still need to take on some added costs to move CCS and DAC projects ahead, says Benjamin Longstreth, global director of carbon capture at the Clean Air Task Force.

Some CCS projects have also failed to prove out the technology's readiness. A $1 billion (€1.15b) project to harness carbon dioxide emissions from a Texas coal plant, for example, had chronic mechanical problems and routinely missed its targets before it was shut down in 2020, according to a report submitted by the project’s owners to the US Department of Energy.

The Petra Nova project restarted in September.

A model of carbon capture and storage designed by Santos Ltd, at the Australian Petroleum Production and Exploration Association conference in Brisbane, May 2022.
REUTERS/Sonali Paul/File Photo

Problems with where to store captured carbon

Where captured carbon can be stored is limited by geology. This reality would become more pronounced if and when carbon capture is deployed at the kind of massive scale that would be needed to make a difference to the climate. 

The best storage sites for carbon are in portions of North America, East Africa and the North Sea, according to the Global CCS Institute.

That means getting captured carbon to storage sites could require extensive pipeline networks or even shipping fleets - posing potential new obstacles.

In October, for example, a $3 billion (€3.5b) CCS pipeline project proposed by Navigator CO2 Ventures in the US Midwest - meant to move carbon from heartland ethanol plants to good storage sites - was cancelled due to concerns from residents about potential leaks and construction damage.

Companies investing in carbon removal need to take seriously community concerns about new infrastructure projects, says Simone Stewart, industrial policy specialist at the National Wildlife Federation.

"Not all technologies are going to be possible in all locations," Stewart says.

Friday, May 05, 2023

TECHNO-MYTH

Carbon Capture Is Beginning To Take Off

  • As governments move to back carbon capture projects and corporations look to reduce their carbon footprint

  • In the U.K., the Spring Budget in March made up to $25 billion available for Carbon Capture, Utilization and Storage.

  • Companies are signing long-term carbon credit agreements with developers of carbon capture technologies, which supports the investment case of CCS projects.

Carbon capture projects and carbon removal credits have received new impetus with major government support over the past year as part of the solutions to cut greenhouse gas emissions and put the world on track to reach the Paris Agreement targets. 

In the U.K., the Spring Budget in March made up to $25 billion (£20 billion) available for Carbon Capture, Utilization and Storage (CCUS), while the U.S. Inflation Reduction Act has significantly raised the incentives for carbon capture projects, including direct air capture (DAC).  

As governments move to back carbon capture projects and corporations look to reduce their carbon footprint, the market for carbon removal projects and carbon removal credits is expected to thrive in the coming years. 

The schemes face criticism from environmental advocates who say that carbon removal credits do not address the problem of emissions reduction and could lead to more greenwashing from the big polluters. 

Government Support Accelerates Carbon Capture Projects

The U.K. government pledged to provide up to £20 billion in funding for early deployment of Carbon Capture, Usage and Storage (CCUS) to help meet the government’s climate commitments. 

The government recognized the Viking CCS project as one of two leading transport and storage system contenders for the next phase of projects. This has incentivized supermajor B.P. to enter into an agreement with Harbour Energy, the biggest oil producer in the U.K. North Sea, to develop the Viking CCS project.

In the United States, the IRA increased credit values across the board, with the tax credit for carbon storage from carbon capture on industrial and power generation facilities rising from $50 to $85 per ton, and the tax incentives for storage from DAC jumping from $50 to $180 per ton. The provisions also extend the construction window by seven years to January 1, 2033. This means that projects must begin physical work by then to qualify for the credit. 

The significantly higher incentives in the IRA are giving impetus to projects. 

“The CCS market has just taken off,” Nick Cooper, CEO at carbon capture and storage developer Storegga, told the Financial Times

“This feels a bit like the U.S. shale boom 15 years ago”.

The historic legislation “builds the foundation for a budding direct air capture industry in the U.S.,” says Aaron Benjamin, UK and Europe Lead at Direct Air Capture Coalition. 

“Above all, the IRA sends a strong signal to the rest of the world that the U.S. is backing the reality of a carbon capture and removal industry,” Benjamin added. 

New Life For Carbon Capture Projects  

The IRA and the growing commitment of companies – from banks to the fashion industry – to become carbon neutral within a decade or two are spurring construction projects in the U.S. and the U.K. 

Occidental, for example, via its subsidiary 1PointFive, held last week a groundbreaking ceremony for its first Direct Air Capture facility in the Permian basin in West Texas. The facility, STRATOS, will be the world’s largest direct air capture facility, expected to capture up to 500,000 tons of CO2 per year. It will be the first of many such plants Oxy and 1PointFive plan to build, the oil giant says. 

DAC is the most expensive application of carbon capture, the International Energy Agency (IEA) says. Capture cost estimates for DAC are estimated at between $125 and $335 per ton of CO2 for a large-scale plant built today. 

But the incentives in the IRA could bridge the gap in costs, analysts say. 

Carbon Removal Deals Abound 

Companies are signing long-term carbon credit agreements with developers of carbon capture technologies, which supports the investment case of CCS projects, according to experts.  

Just last month, major deals for carbon removal and credits were signed. 

NextGen, a joint venture of climate project developer South Pole and Mitsubishi Corporation, announced the advance purchase of 193,125 tons of carbon dioxide removals (CDRs) from carbon removal projects, including from 1PointFive’s DAC project in Texas. 

Partners Group, a global private markets firm, signed last month a 13-year agreement with Climeworks, a Swiss provider of carbon dioxide removal via direct air capture. Partners Group announced last year that it would develop a decarbonization program to achieve net-zero corporate greenhouse gas emissions by 2030.  

“While a priority of the program will be to reduce the firm’s overall emissions, removing residual emissions via capture and storage of atmospheric CO2 will also play a role in achieving the net zero goal,” Partners Group said. 

“High-quality carbon removal must be scaled to gigaton level by 2050, and multi-year agreements like this one are a crucial lever,” said Christoph Gebald, co-founder and co-CEO of Climeworks. 

“Partners Group’s commitment to high-quality carbon removals underlines the leading role of the financial services industry in this scale-up.” 

Climate groups, however, are not convinced that carbon removal deals would accelerate global emissions reduction.  

For example, the European Commission’s proposed Carbon Removal Certification Framework (CRCF) “leaves many important questions unanswered and vital issues unaddressed, and could usher in an era of greenwashed and money-wasting carbon removals,” non-profit think tank Carbon Market Watch says

In the EC’s draft regulation, “there is a risk for the framework to be turned into a greenwashing exercise and provide another excuse for big polluters to avoid cutting their emissions,” according to WWF.   

By Tsvetana Paraskova for Oilprice.com