Why carbon capture is crucial

Cinderella is forced to sit by the fire and mind the coals. Carbon capture, use and storage (CCUS) has not even got that far, let alone attending the ball. But now this unloved but vital technology is in demand at not one, but three parties.

Carbon dioxide is the main greenhouse gas, responsible for increasingly dangerous levels of global warming. CCUS traps the CO2 emitted from burning coal, gas, oil or wood, or from industrial processes. It then buries it deep underground safely and permanently, or recycles it to make useful materials, such as cement, or stable minerals.

CCUS facilities operating around the world, such as the Emirates Steel plant in Abu Dhabi, have capacity for about 40 million tonnes annually, or about one-thousandth of humanity’s total emissions. The International Energy Agency says this needs to reach 1.7 billion tonnes as soon as 2030 and 5.7 billion tonnes by 2050. For context, the time between now and 2050 is about the same as from the start-up of Sleipner in Norway in 1996, the world’s first full-scale carbon dioxide storage project, to today.

Carbon capture is often dismissed as unnecessary, unproven or risky by environmentalists. But it is crucial for three reasons.

First, unlike renewable energy — green groups’ favourite climate solution — CCUS cuts industrial emissions such as those from cement-making or steel manufacture.

Second, instead of throwing away the current energy system, it adapts it. It has become increasingly apparent that the wholesale replacement of a bicentennial fossil-fuelled economy with solar, wind and batteries is not possible at the required pace — whether logistically, economically, socially or politically.

Third, monoenergetic plans have proved themselves expensive and unreliable. That is, an energy system founded either on a fossil fuel, nuclear power, or renewable energy, is vulnerable to commodity supply shocks, technical breakdowns or weather. War, drought, ice storms and reactor repairs have proved that amply across California, Texas, Europe and China during the past two years.

Even if CCUS might appear more costly on a simplistic head-to-head comparison with solar or wind, it adds predictability, diversity and flexibility, making the whole energy complex cheaper and more resilient.

In 2017, CCUS’s recent low point, fewer than 50 facilities were operating or under development worldwide. That leapt last year to nearly 200. Exciting new technologies that will reduce the cost of capture are emerging. As plants are built, developers will gain experience to accelerate further progress.

Most of the advance, though, has come from rethinking the business model. Instead of painstakingly developing individual projects of less than one million tonnes per year each, national and local governments are working together with energy companies, industries and ports to assemble carbon hubs. Governments have begun auctioning underground carbon dioxide storage space, with oil companies and specialists attracted to a valuable new business line.

Often these hubs can be combined with the “hydrogen valleys” of European terminology: the production of “blue” hydrogen from fossil fuels requires carbon capture, and hydrogen-using industries such as fertilisers, steel and refineries cluster around ports.

So, which three parties have invited our Cinderella, and why? First, in North America, the US has introduced a tax credit of $85 per tonne of carbon dioxide captured. To bring on board Senate swing voter and coal baron Joe Manchin, from the fossil-friendly state of West Virginia, President Joe Biden had to offer generous incentives for CCUS, among a smorgasbord of other low-carbon technologies.

Meanwhile, fossil fuel powerhouse Canada has a carbon price of C$50 (US$37) per tonne, rising to C$170 per tonne by 2030. The high-emitting oil sands of Alberta, in particular, need CCUS to survive in a climate-friendly world.

Second, in Europe, the cost to emit carbon dioxide hit a record €99 (US$99) per tonne in mid-August, before slipping back. Norway, Denmark, the Netherlands and the UK have advanced a number of hubs and cross-border capture systems. CCUS can extract maximum value from the remaining petroleum assets in the North Sea.

Carbon capture also offers a solution to Europe’s dilemma: it needs more non-Russian oil, gas and even coal today, but it cannot give the exporters the long-term commitments they want because of its net-zero carbon goals. Converting power plants and factories to ultra-low emissions can resolve this conundrum.

Third comes the Middle East. The UAE’s latest emissions reductions plan includes 5 million tonnes of capture annually by 2030. Qatar will use CCUS to cut the carbon footprint of its new liquefied natural gas plants. Saudi Arabia is developing a 5-9 million tonne per year hub at Jubail, and Egypt has begun exploring its options as it prepares to host the Cop27 climate conference in November.

The motive in this region is the need to ensure the long-term viability of the oil, gas and petrochemical industry in a world of increasing climate urgency. Europe is flirting with fossil fuels again because of the unwelcome attentions of Russia, but from 2026 it will phase in a tariff on imports with a high carbon footprint. Gulf makers of steel, aluminium, plastics, fertilisers and other such materials need to decarbonise to retain access to markets.

Despite this progress, carbon capture needs to go much faster. Environmental groups should move from scepticism and obstructionism to sensible support. The Middle East, and other regions with low or no direct incentives for carbon capture, such as China and India, need explicit policy. Then this fairy-tale technology can emerge from neglect to stardom.

Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis