Carbon Capture growth
In the last 2 months, two major initiatives in the Netherlands have announced the latest milestones in their progress to reduce industrial emissions through the use of Carbon Capture and Storage (CCS). In October, Porthos project took a final investment decision to develop the first major CO2 transport and storage system in the country. In November, Air Products announced that they will build, own and operate a state-of-the-art carbon capture and CO2 treatment facility at its existing hydrogen production plant in Rotterdam, and this plant will be connected to the Porthos system.
Nonetheless, all the operational facilities (around 40 all around the world) capturing emissions from the chemical industries, between 2012 and 2023, have dedicated their efforts to use the CO2 to enhance oil recovery. Similarly, all facilities under construction will continue with the same application. Only in the advanced development phase of the projected new facilities, do projects dedicated to geological storage start to take form, such as Lake Charles Methanol in the US, or BASF Antwerp (Kairos@C) in Belgium. Beyond that, in the early development project list, the number of projects dedicated to geological storage started to grow.
By 2030, most capture capacity will be used for the power sector, for the manufacture of low-carbon hydrogen and ammonia, or to abate emissions from industrial sources. And storing CO2 deep underground will overtake oil recovery as the primary destination for CO2.
“The European Commission in June 2023 called for evidence and public consultation on industrial carbon management to collect insights by late August to feed into the preparation of a new EU communication on CCUS deployment due by year end. The strategy will cover what role these technologies can play in decarbonising the EU economy by 2030, 2040, and 2050 and what policy and regulatory measures are needed to optimise their potential, including the deployment of EU-wide CO2 infrastructure.”
The European Union is recognizing the importance of some of these projects by funding them trough different mechanisms. For example, the Antwerp@C CO2 Export Hub project has secured €145 million in funding from the Connecting Europe Fund and Porthos has been declared a Project of Common Interest and awarded €102 million in subsidy for it.
The project Kairos@C, which is also located in the Port of Antwerp, has been supported by the Innovation Fund with €356.8 million. Moreover, this year in September, the Flemish Government pledged financial support to BASF Antwerp and Air Liquide Large Industry for their Kairos@C project, alongside co-financing approval for the Antwerp@C CO2 Export Hub.
Project Air, in Sweden, has also been supported by the Innovation Fund with €97 million. This project has been recently granted a changed environmental permit for Perstorp´s chemical plant in Stenungsund to allow for the production of more sustainable methanol.
The Inflation Reduction Act passed in the US increased tax credits for CCUS by 70%, making a viable business case for the technology in petrochemicals, steel, cement, and in some regions, power.
What to expect at COP 28?
Carbon capture and storage (CCS) projects could draw more attention at the UN COP 28 climate summit. President-designate Sultan al-Jaber has called for a 30-fold scale-up of global CCS capacity and COP28 could result in CCS targets.
The IPCC is clear that CCS and other carbon removal technologies are necessary to hit the Paris agreement's more ambitious temperature rise limit of 1.5°C, but only to offset hard-to-abate industry and existing fossil fuel infrastructure.
