From being expensive and dangerous, to being warmly welcomed

As usual, the viewpoint of the individual, including their basic assumptions, is crucial for the conclusions they arrive at. Over the years, industrial CDR (such as Bio CCS and DACCS) has been warned against as a costly or dangerous ‘distraction’, to becoming increasingly welcomed and is now frequently mentioned as a requirement for achieving climate goals. This is similar to the change in opinion over time around CCS. Before 2020, while the EU’s climate goal was an 80-95% reduction in greenhouse gasses by 2050 compared to 1990, there were many industrial organisations that strongly believed that CCS would not be needed before 2050. But since an ever increasing share of the global economy is now subject to a goal of net-zero emissions (now: 80%), the public discourse has changed dramatically in a short space of time – on CCS, CCU and CDR. That said, it cannot be guaranteed that any industrial CDR will be fit for purpose. The laws of physics, limited natural resources and the need to be profitable will continue to limit what can be realistically achieved. 

The strategy under development could include a goal of 5Mt CO₂ stored each year through industrial CDR

One important development worthy of mention is the EU strategy currently in preparation which could include a goal of 5Mt CO₂ stored each year through industrial CDR. During COP26 in November, the USA announced an initiative to remove 1 Gt CO₂ from the atmosphere (CDR) at a cost of less than $100/tonne by 2050. And in November the Swedish Energy Agency delivered its recommendation to the Swedish government of a support system to remove up to 2 million tonnes of CO₂ per year fro the atmosphere through Bio CCS by 2030.

In November, the IEA released its updated assessment on the status of DACCS and also recently published an article with recommendations as to how member nations could realise the potential BECCS represents. In their ‘Net Zero 2050’ scenario, the IEA says of DACCS that close to 90 Mt CO₂ per year will need to be extracted by 2030. According to the IEA, one of the steps that public authorities can take to promote a market for CDR is to buy CO₂ reductions directly from businesses offering it.

 

Text: TCM DA

Shah succeeds Robert Henricks, who has been acting Managing Director since September 2021.

– We are happy that Shah has agreed to lead TCM. He has solid professional background and broad experience from leading demanding projects with CO₂ capture, says Chairman of TCM’s Company Meeting, Svein Ingar Semb. Semb represents Gassnova SF, which on behalf of the Norwegian state has a stake in TCM of 73.9 percent. Equinor, Shell and TotalEnergies are TCM’s other owners, who agree with the promotion of Shah.

Looking forward to getting started

– TCM is the world’s largest and most flexible test center for verification of CO₂ capture technologies, and a leading competence center in the field. I take on the leadership with humility, energy and great joy. We have a lot of excting tasks ahead of us in the development of technologies that contribute to reduce climate emissions, says Muhammad Ismail Shah.

Shah holds a Bachelor’s degree in chemical engineering from the University of Engineering an Technology in Peshawar, Pakistan. He also has a Master’s degree in oil and gas engineering from Aalborg University, Denmark. Shah started his professional career in 2008 with projects for the conversion of biomass to transport fuel. In 2011, he was hired as a technology consultant at Gassnova, and five years later seconded to TCM.

In addition to participating in the management of test projects for CO₂ capture technologies at Mongstad, Shah has also written a number of research-based publications on the topic.

Muhammad Ismail Shah is married, has four children and lives in Alversund in Alver municipality.

Acting CEO Robert Henricks returns to his role as Operating Officer at TCM. – It has been a demanding period of great activity at TCM under Henrick’s leadership, at the same time as an ongoing pandemic. We thank him for his excellent efforts, says Svein Ingar Semb.

About TCM

TCM is advancing carbon capture for a cleaner and greener future, by bridging the gap between technology developers, science and industrial application of CO₂ technologies. The main objective of TCM is to test, verify and demonstrate different technologies related to cost-efficient and industrial scale CO₂ capture.

TCM also offers advisory services for carbon capture projects. The aim is to facilitate the spread of carbon capture technology in varous industries. Technology Centre Mongstad is thus an important part of Norway’s contribution to the fight against climate change.

Historic reductions in the cost of renewable energy are greater than predicted

Essential to understanding the results of the analysis is the emphasis it places on the historic cost reductions in renewable energy (wind/solar + battery) being greater than predicted in most of the analysis models (‘integrated assessment model’) that are used internationally. That the IEA and others have systematically underestimated the reduction in cost of renewable energy in trend projection analyses matches with a range of experiences in the sector.

However, the conclusions drawn in the article are easy to understand

The value of CCS is more stable when it is employed in areas that are less exposed to competition from renewable energy – such as from process-related emissions (i.e. cement works) and carbon negative solutions (BECCS and DACCS). ‘Value’ here means the marginal reduction of societal costs provided by a climate initiative compared with not adopting the initiative. The value of CCS is less stable when CCS is used in combination with fossil fuel-based energy as it is in direct competition with renewable energy – such as gas power with CCS and blue hydrogen production. In these areas, the value of CCS is reduced by between 61% and 96% compared with what the authors believe to be more normal assumptions about the cost development of renewable energy. 

Should contribute to significant reductions in emissions up to 2050

The supported projects must be particularly innovative and act as major contributions to significant reductions in emissions up to 2050. The Fund aims to support a wide range of technologies, industries and geographical locations in the EU. The projects selected this time around had profiles in industries regarded as ‘hard-to-abate’, and where the project itself will result in significant reductions in emissions. 

4/7 projects incorporate CCS as a part of their solutions

6 out of 7 projects feature a large element of renewable energy or a transition from fossil to renewable energy. 4 out of 7 incorporate CCS as a part of their solution. 5 out of 7 were based in Northern and Western Europe, with none in Central and Eastern Europe. 3 of the projects include elements on the production/use of hydrogen, such as the Swedish HYBRIT project using green hydrogen for steel production. One project involves capturing biogenic CO₂ (CCU) from waste for use in chemicals and biofuels. Announcement no. 2 from the Fund is ongoing, with a €1.5 billion pot. 

The CCS Environmental Analysis is prepared by Gassnova’s analysis team.

‘Voluntary carbon markets’

Today, the EU restricts the use of such carbon credits bought outside the EU. If climate negotiations succeed, this will increase confidence in various ‘voluntary carbon markets’ and increase demand for international projects which cut greenhouse gas emissions.

Allow for more technology transfer

In 2021, it is expected that the turnover of such voluntary credits (i.e CO₂ credits that are not directly regulated by national authorities) is expected to reach $1 billion, with a price of well below $10/tonne. The volume in voluntary markets is limited when compared with regulated quota markets, but this volume is increasing and may allow for more technology transfer to emerging economies and access to more affordable climate initiatives for countries and industries with fewer alternatives.

The policy implementation

The IEA does not paint a very positive picture with regard to the policy implementation of the participating countries in relation to registered ambitions, and it points out that efforts must be considerably strengthened if targets are to be achieved.

On the other hand, the IEA highlights the fat that an increasing degree of electrification is contributing to the rise of a new energy economy driven by political priorities, technological innovation, and a broad desire to tackle climate change.

The IEA estimates that these changes could drive a market that, by 2050, could be larger than today’s oil industry.

Four recommended priorities will be presented for 2030

1. Increased pressure on electrification, almost doubling power generation using renewables and nuclear power, etc,
2. A sustained strong focus on energy efficiency, including altered consumer behaviour, which can overall contribute to a fall in energy use of one third measured against GDP,
3. Almost 80% reduction in methane emissions, especially in oil and gas production and
4. Almost tripling investments in advanced, clean technologies, including CCUS, batterers, biofuels, DACCS and synthetic fuels.

102 projects are currently in development

In total, 102 projects are currently in development, while projects that are operational or under construction have remained mostly unchanged since 2013 – 32 projects – with a total capacity of around 40 million tonnes of CO₂. In Europe, the UK (18) and the Netherlands/Belgium (10) dominate the synopsis of projects in development. When sorted by emission source, hydrogen production (13) and power generation (10) dominate.

HyNet North West and East Coast Cluster

The chosen clusters are HyNet North West (Merseyside and nearby areas) and East Coast Cluster (Teesside/Humber). By 2030, the Government plans to have established four such CCS clusters, with a combined capacity to capture and store 20-30 MT CO₂. Infrastructure development will receive funding from the government’s CCS Infrastructure Fund, which has set aside £1 billion. HyNet will develop a hydrogen net, so that local industry is able to change from fossil fuel-based energy to hydrogen.

24 companies have signed a memorandum of understanding with HyNet, which is led by gas distribution company Cadent and project development company Progressive Energy. East Coast Cluster is led by Northern Endurance Partnership, which consists of the energy companies BP, Eni, Equinor, National Grid, Shell and Total Energies. The purpose is to capture CO₂ from various types of local industry and store it in the UK’s side of the North Sea.

A final agreement will be signed by the Minister once necessary socioeconomic assessments have been made. If a deal cannot be made with one of these clusters, the Scottish Cluster is listed as a reserve candidate.

Increased energy demand

There seems to be a consensus that the main reasons are related to increased energy demand in connection with the post-pandemic reopening of the economy, as well as the failure of energy companies to increase supply quickly enough due to low investments over time. The fact that the crisis has hit Europe harder may be linked to its considerable dependence on imported natural gas, less gas storage than usual and less wind than normal, to name a few reasons. As the reopening happens across the world, it puts pressure on all suppliers of coal and gas. This has increased energy prices, which in turn will drive inflation in society, which can lead to social unrest over time. At its highest in October, gas prices in Europe were 7x what they were a year ago.

Impact Europe’s energy strategies?

Even if the IEA believes that the energy crisis cannot be attributed to the growing dependence on variable renewable power, opinion on this is divided. Nevertheless, it is difficult to estimate how the energy crisis will impact Europe’s energy strategies, and thus its climate efforts. The EU president’s perspective is that the EU is currently too dependent on natural gas, especially from Russia, and that focusing on renewables, batteries and energy security will become more important in the future. Others believe that the EU’s energy transition has not been sufficiently thought out, should have a longer timeline, and should invest more in natural gas to faster phase out coal. Nuclear power and CCS will certainly become more relevant in public debate going forwards.

More ambitious Nationally Determined Contributions 

This year’s climate negotiations are significant because this is the first time since the Paris Agreement was signed in 2015 that all countries will submit more ambitious Nationally Determined Contributions (NDCs). This year’s report from UNEP notes that the new, updated NDCs, along with already announced plans, will make real positive contributions to the climate.

Nevertheless, the updated NDCs are not nearly enough to meet climate goals; This year’s calculations show that emissions in 2030 will only be 7.5% lower than similar calculations made last year, while they need to be 30% lower by 2030 in order to meet the 2°C goal, and 55% lower for the 1.5°C goal. In concrete figures:

Under current policy, global emissions in 2030 will be 55Gt of CO₂, which is on par with current emissions, while the 1.5°C target requires that emissions in 2030 are brought down to 25Gt. UNEP also states that although all stated national ambitions (such as net-zero emissions by 2050) will be fully implemented by those countries who have agreed to them, the global temperature rise in 2100 could be 2.2°C.