Martina Lyons at IRENA picks out the highlights of their new report “Reaching Zero with Renewables: Capturing Carbon”. Carbon capture is going to be expensive, so should be focussed on hard-to-abate industrial sectors, as well as bioenergy plants. Lyons breaks down the target carbon capture volumes, costs and the investments required, as well as looking at the consequences of different strategies and carbon prices. Scaling up this technology, over the past two decades, has moved much slower than many analysts predicted. So all cost predictions for the wide variety of solutions – CCS, CCU, CDR, BECCS, etc. – are uncertain and vary by application. But a new wave of interest is seeing policymakers adding it to their plans. The EU’s Fit for 55 documentation makes recommendations for support. And at COP26 the EU, the UNFCCC, the U.S., Canada and Saudi Arabia have all included it in their presentations and events.

CCS, CCU and CDR in 1.5°C Scenario focuses on the hard-to-abate sectors

To reach 45% CO₂ emissions reduction from 2010 levels by 2030 and net-zero by 2050, IRENA’s 1.5°C Scenario foresees that the 90% of the solutions to bring us to net-zero by 2050 involve renewable energy through direct supply, electrification, energy efficiency, green hydrogen, and bioenergy combined with carbon capture and storage. And only in residual use of fossil fuels and some industrial processes, such as cement, chemicals and iron and steel, decarbonisation efforts may require CCS and CO₂ removal technologies and measures.

The status and potential of CCS, CCU and CDR technologies and their roles alongside renewables in the deep decarbonisation of energy systems is being explored in a new IRENA report Reaching Zero with Renewables: Capturing Carbon.

Under this Scenario, CCS and CCU for fossil fuel and process emissions in the industry need to be scaled to reach 3.4 Gtpa by 2050 and would require cumulative investments of around USD 0.9 trillion between 2021 and 2050. They are limited to the most essential applications, with 2.3 Gtpa in 2050 applied to the cement, chemical and iron and steel sectors, and 1.1 Gtpa in 2050 applied to the production of blue hydrogen from natural gas with CCS, which equals to 30% of the total hydrogen supply.

A larger role for BECCS/BECCU: global potential, costs

Net-zero pathways rely on BECCS (bioenergy with carbon capture and storage) and partially BECCU (bioenergy with carbon capture and utilisation) but these are currently unproven in most contexts. To use them extensively requires both a scaling up of CCS deployment and strategies to ensure sufficient suitable and sustainable biomass feedstock supplies. BECCS and BECCU can, in principle, be utilised in a range of processes but the optimum application of BECCS requires a more detailed investigation of costs, logistics, and sustainable biomass supply chains, and will be highly country and context specific.

IRENA assessed the global potential to capture and store CO₂ with biomass at 10.1 Gtpa by 2050. Of that potential, the 1.5°C scenario assumes that 44% which equals 4.5 Gtpa by 2050 will be captured and stored.

This would require circa 40-50 EJ of biomass, which represents a third of the total biomass used in the energy systems. The IPCC’s 6^th Assessment Working Group 1 Report published in summer 2021 under their scenario assumes BECCS to remove 5 Gtpa of CO₂ by 2050. IRENA mapped other 18 transition scenarios to see where they agreed and disagreed. Capturing and storing 4.5 Gtpa of CO₂ by 2050 would require cumulative investments of more than USD 1.1 trillion between 2021 and 2050.

Target opportunities

The most significant opportunities for BECCS are:

• cement kilns with biomass providing the fuel;
• chemical plants with biomass as the feedstock to produce bio-methanol or bioethanol;
• biogas upgrading where the CO₂ fraction of biogas is separated for the production of biomethane;
• iron and steel production in blast furnaces for iron production, where charcoal can be used as both a fuel and a reducing agent during the transition or if more blast furnaces utilising biomass and CCS are retained. But in the 1.5°C Scenario by 2050 the role of BECCS is low, as the scenario assumes a nearly complete transition away from blast furnaces by then;
• power and heat generation with biomass providing some or all of the fuel using wood pellets, sugarcane bagasse or municipal solid waste. In the past decade, a small number of coal power plants have been converted into 100% biomass power plants or are in the process of doing so, and only one fully converted power plant – Drax, UK – has a publicly announced plan to add CCS. The Drax power plant has converted its four coal-fired units, each rated at circa 660 MW, to biomass and is planning to retrofit CCS to at least two units. Each unit would capture circa 4 Mtpa. If we aim to capture 4.5 Gtpa, we would require over 1,100 such units around the world or an equivalent. However, most BECCS applications will be much smaller than this.

DACCS needs further development and validation

Direct Air Capture and Storage (DACCS) and Utilisation (DACCU) technologies are in the early stages of development and a long way from reaching the gigatonne-scales needed to be impactful. Current operating commercial plants capture a negligible amount of CO2 at 0.9 ktpa, and one other plant under development would add an additional 21 ktpa of CO2 capture. According to this early experience, projects face high energy, water and land requirements, but offer flexibility in terms of their location.

The technology is comparatively more expensive with the most frequently quoted estimate at USD 600–800/tCO₂ avoided. Newer studies estimate lower costs in the range of USD 94–232/tCO₂ avoided but these numbers are only theoretical and will need to be demonstrated.

The energy requirements differ by the technology used but are significant in all cases. Around 200 TWh is required per 100 Mt of CO₂ captured. Thus to capture 4 Gtpa by 2050 would consume 8,000 TWh of electricity per year, which represents about a third of the electricity use today. In IRENA’s 1.5°C Scenario, electricity use increases approximately three-fold to reach 70,000 TWh, so the additional use for DACCS would require a further 11%. That is an additional demand and comes on top of an already herculean scale-up in electricity supply. The implications of the large-scale use of DACCS for the global power system will be significant, but not insurmountable.

We are currently seeing large financial commitments to speed-up DACCS deployment, which – if successful in driving the scale – would allow DACCS to offset some of the need for BECCS and could allow for capture of historical emissions elsewhere.

Progress in capturing CO₂ is far too slow

The pace in scaling up the use of CO₂ capture processes in the past two decades has been much slower than many analysts predicted, not only in the EU but globally. CO₂ capture capacities have doubled from a decade ago but still only reached 0.04 Gtpa of captured CO₂ representing less than 0.1% of global energy and process-related emissions. In addition to natural gas processing plants, where CO₂ needs to be removed anyway to produce natural gas that meets specific standards, the CO₂ capture has been concentrated in the power sector and this trend seems to continue, despite many plants being suspended or put on hold.

Fossil fuel-based power plants with CCS? Renewables outcompete them

At current costs, fossil fuel-based power plants with CCS cannot compete with renewable power. The LCOE (levelised cost of electricity) from these plants with a 90% capture rate is higher than the equivalent plant without CCS, given the higher capital costs, the energy penalty of CCS and other operating costs (personnel, parts and consumables). For example for a CCGT, the LCOE of a plant with CCS (including CO₂ transport and storage) is potentially 70–140% higher than that without accounting for residual CO₂ emissions and upstream methane emissions from fuel production and transport.

Future long-term cost reductions in CCS for power production are likely but the lack of momentum to date makes the near and medium-term CCS cost reduction potential uncertain. Given that renewable power production continues to be added at record capacity and costs continue to fall rapidly, the gap between CCS and renewable power is unlikely to narrow quickly. Fossil fuel power production with CCS is unlikely to be deployed before significant shares of renewables with storage are deployed as part of a net-zero pathway. This will mean very few plants will achieve high load factors, as they will have to flex to accommodate solar and wind generation, further impacting their economics.

Costs of CCS, CCU and CDR are uncertain and vary by application

Costs are a crucial factor in decisions on the future roles of CCS, CCU and CDR. CCS proponents claim significant potential for learning effects through learning-by-doing and learning-by-innovating, and project significant cost reductions going forward. It is not possible to validate such claims but, given the limited deployment to date and many cost reduction drivers, cost reduction through learning and economies of scale is likely – however, to what extent remains highly uncertain. Cost estimates including transport and storage of the most mature technologies per application are in range of USD 22-225/tCO₂ and within that range BECCS costs are between 20-105/tCO₂.

A lot needs to be done on multiple fronts in the next 10 years

EU’s Fit for 55: regulatory and policy pull for CCS, CCU and CDR

The political attention for CCS in the EU dates back to 2005, while regulating these technologies and providing the financial support mechanism started circa a decade ago. To reflect the development of that decade, the European Court of Auditors (ECA) in their 2018’s Special Report shared their perceptions why deployment of CCS had not scaled up as foreseen. They spelled out particularly adverse investment conditions, uncertainty in regulatory frameworks and policies, in some countries a lack of public acceptance, and a lower-than-expected carbon price during the period 2012-2017 that amounted to maximum of EUR 10/tCO₂. The ECA also reproached the NER300 programme’s project-selection procedures as complex and inflexible.

Now with the European Green Deal committing EU to reach net-zero by 2050, and the EU carbon price currently fluctuating between EUR 55-64/tCO₂, the discussions on the role of the CCS, CCU and CDR technologies have regained a new wave of attention from the policy makers and industrial stakeholders, particularly when decarbonising the hard-to-abate industry sectors. This has been acknowledged again in the 2020’s impact assessment for Fit for 55, which then followed up with several proposals that address hurdles of the CCS, CCU and CDR deployment.

Proposals under EU ETS would for example:

• incentivise certain types of CCU by exempting CO₂ emissions stored in a product (such as building materials) from the obligation to surrender allowances;
• address a need to regulate the accounting of the storage of CO₂ emissions from biomass (BECCS) through separate acts (and potentially create Carbon removal certificates);
• include Carbon Contracts for Difference to guarantee a fixed price for CO₂ abatement above current price through competitive tendering; and
• extend the transport of CO₂ to other types beyond pipelines, while including fuels meant for road transport of CO₂ under new ETS for transport.

Also, the EC’s proposed Carbon Border Adjustment Mechanism would speed up the phase-out of free allowances which may send a strong carbon price signal and direct industries towards CCS. The TEN-E and TEN-T regulations’ revisions aim to address the inclusion of CO₂ storage and other transport modalities. Even the Guidelines on State Aid are being revised to provide further exemptions for environmental protection and energy which in turn would support CCS deployment.

The first calls of the Innovation Fund, which is built on the NER300 programme, and has circa EUR 20 billion to spend between 2020 and 2030, awarded at least one large-scale and two small-scale projects focused on CCS. In addition, the EU continues to support EU CO₂ hubs, clusters and transportation networks through Connecting Europe Facility.

COP26

COP26 brings considerable attention to the carbon management technologies. The UNFCCC official side events discuss CCS and CDR as ways to accelerate decarbonisation of industries in Non-Annex 1 Countries, the EU Pavilion hosts several events on the same topic while the United States together with Canada and Saudi Arabia launched a Mission on Carbon Dioxide Removal technologies as part of the Mission Innovation Initiative to slash the costs of capturing CO₂ from the atmosphere.

A goal of zero or even net-zero looks particularly tough and even more so in some hard-to-abate sectors that have to date not received a lot of attention or focused effort. There are some signs that this is changing as different pathways including carbon management technologies are all gaining momentum and are being considered by policy makers and industry.

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Martina Lyons is an Associate Programme Officer, Innovation and end-use sectors, at IRENA