What is a CCUS hub?
A CCUS hub takes carbon dioxide from several emitting sources, such as heavy industries and power, and then transports and stores it using common infrastructure. A CCUS hub can be more complex to establish than a CCUS value chain on a single point source, managed by one company; but CCUS hubs bring many benefits, including lower unit costs, reduced risk and the ability to standardize and scale up quickly. For emitters, the hub offering opens up CCUS as a decarbonization option without them having to take responsibility for building pipelines and drilling storage wells and without long-term liability for the stored CO2.
Most CCUS hubs will be based around industrial clusters, where emission sources are close together, as in Net Zero Teesside, Rotterdam or China Northwest. But some will be geographically scattered, collecting emissions sources by pipeline or ship, as in Northern Lights in Norway.
What are the pros and cons of a CCUS hub over a single project?
Faster scale up.
CCUS must expand rapidly to play a role in reaching climate goals. At present, the average large-scale CCUS project captures and stores around 1 Mt of carbon dioxide per year. Early CCUS hubs are aiming at around 5-10 Mt a year or more by 2030 and expect exponential growth. Future hubs are likely to be even larger.
Lower costs and investment risks.
Collective transport and storage infrastructure brings economies of scale in construction and operations, specifically in compression, dehydration, pipeline and storage. At the same time, shared lessons and standardization will bring down the costs of carbon capture and reduce risk. In the early stages of appraising potential new storage sites for hubs, sharing costs and risks make it simpler to get started in areas that have not been developed.
More government support.
A hub can decarbonize an entire industrial region, saving jobs and attracting clean new industries. With such social and economic benefits, on top of its contribution to meeting climate goals, a hub is much more likely than an individual project to gain government support. Efforts to create hubs in the UK, for example, have ensured that the government develops policy incentives for emitters and operators. The Norwegian and Dutch governments worked to change European regulations on the cross-border export of carbon dioxide, and both Northern Lights and Porthos attracted large-scale EU funding. The Northern Lights JV has gained support from standard setter Verra and emitting industries to take a new look at carbon accounting for CCUS. The four CCUS projects that received support from the EU Innovation Fund in 2021 are all connected to a hub.
This is the main disadvantage – and the reason we have set up this platform. A CCUS hub is a multi-stakeholder undertaking, which magnifies the need for careful communication and alignment between partners. Decisions on commercial relations, risk management and long-term investments must all be agreed between emitters, operators and government – who are all acting with different drivers and timescales. Countries that are pioneering hubs, such as the UK, Norway and the Netherlands, are building on years of frustrating attempts to get large-scale CCUS off the ground. They have learned lessons from these failures and are now applying them to make CCUS hubs a reality.
What conditions have driven hub development so far?
Three conditions have come together to enable the development of the three most advanced CCUS hubs around the North Sea in Europe.
- Confidence that CO2 storage capacity exists, due to previous work on CCUS and the involvement of companies with subsurface and transportation experience.
- Northern Lights/Longship in Norway built on lessons learnt by Equinor and the government over 20 years of experience storing CO2 under the North Sea. Shell is using its transportation experience to lead the CO2 shipping solution.
- Net Zero Teesside in the UK built on the White Rose project which focused on the Endurance reservoir that is now being used by the hub’s transport & storage operator, Northern Endurance Partnership.
- Porthos in the Netherlands is based on the ROAD project in the Port of Rotterdam, and CO2 suppliers Shell and ExxonMobil have engaged their upstream subsurface engineers to build confidence in storage capacity.
- National and regional support to incentivize and build confidence for the large, high risk capital investments initially required.
- In Northern Lights/Longship, the Norwegian government has committed to national political objectives for CCUS and, in the first phase, is subsidizing 80% of investment costs for both emitters and transport & storage infrastructure.
- In Net Zero Teesside, both regional and national authorities are politically committed to supporting this region and its industry base through the energy transition. The hub is now part of the East Coast Cluster, fast-tracked for UK government support.
- In Porthos, the Port of Rotterdam wants to position itself as a clean industrial hub and national authorities are committed to industrial decarbonization.
- Understanding of the CCUS hub value proposition by a group of stakeholders involved in knowledge building and lobbying – smoothing the pathway and creating a broader ecosystem.
- Knowledgeable ministers have driven support at the top of the house. In Norway, governments and industry learned how they needed to work together from failed attempts to start CCUS facilities in the 1990s.
- Industry associations have brought things together at lower levels – such as the Energy Technologies Institute (ETI) and the Carbon Capture and Storage Association (CCSA) in the case of Net Zero Teesside.
- Cross-national engagement between ministers and policy makers from Norway, the UK and the Netherlands who talk frequently to exchange information, provide support and explore how a potential network of linked projects can be created to reduce costs and risks.
In North America, CCUS ecosystems have also developed in areas such as the US Gulf Coast and Alberta, where the Quest CCS facility has operated for over six years. In the US, CCUS evolved initially in relation to enhanced oil recovery projects but increasingly as part of low carbon business transformation. Multi-stakeholder coalitions have been responsible for developing and shepherding the 45Q carbon storage tax credit legislation through the US Federal Government legislative process and building knowledge among policy-makers.
- Multi-stakeholder coalitions have been responsible for developing and shepherding the 45Q carbon storage tax credit legislation through the US Federal Government legislative process and building knowledge among policy-makers.
- Knowledge sharing by groups of emitters and potential hub developers, including OGCI, has also been crucial to get state-level support and regulations in place and to help industrial emitters to understand the options.which focused on the Endurance reservoir that is now being used by the hub’s transport & storage operator, Northern Endurance Partnership.
Where in the world are CCUS hubs possible?
OGCI is analyzing the global potential for CCUS hubs as part of the Global Hub Search tool. We have reviewed the potential for CCUS hubs in 52 countries, focusing on how much carbon dioxide can be captured and stored, and at what cost (techno-economic potential), as well as the environment for policy, regulation and commercial readiness.
Most of the 52 countries have potential CCUS hubs that cost below $100/tonne for capture, transport and storage, assuming existing technology costs. These span all world regions, and add up to 933 Mt of abatable annual emissions, equivalent to around 2% of total emissions.
The most promising near-term opportunities are in regions where high techno-economic potential meets a supportive environment. The project identifies 23 such potential CCUS hubs, representing 319 Mt of annual emissions that could be abated.
Can CCUS hubs be set up even where there are no good local storage options?
Yes. Where there is no convenient storage site, it may be possible to create a geographically distributed CCUS hub, with ships or a pipeline carrying carbon dioxide to a distant storage site. The cost of using ships for transport is more expensive on a large scale than a localized hub based on pipelines, but a shipping solution has two advantages: it supports the gradual development of a CCUS hub, and allows one storage facility to serve several smaller CCUS emission clusters.
The Northern Lights project in the North Sea is the most advanced example of a distributed hub and it is already building ships to safely carry large volumes of carbon dioxide. Several projects in Europe are looking at the potential of using ships as part of their development strategies, expanding beyond pipelines to offer services to new emissions clusters. Projects in Singapore and Japan are investigating distributed hubs to overcome their lack of suitable storage sites. Several countries, including China and Saudi Arabia, are exploring the possibility of providing storage services to the world.
Can CCUS hub support carbon removals?
Negative emissions, also known as carbon dioxide removal, require carbon dioxide to be taken out of the atmosphere and then stored. This is possible through various natural and engineered approaches, and some of the most promising involve CCUS technology.
Removals are already being built into hub concepts. At the Net Zero Teesside hub, one power station will burn biomass, in a process known as bioenergy with carbon capture and storage (BECCS). Northern Lights is collaborating with Climeworks, one of the leaders in direct air capture (DAC) technology, to explore the potential of locating a facility close to the collection point for storage under the sea.
Even CCUS hubs that don’t include carbon removal technologies will help indirectly, doing their bit to drive a massive scale-up of CCUS infrastructure. This will enable the kind of multi-gigatonne negative emissions that will be needed in the next few decades.