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The emergence of CCUS hubs is making it easier for industrial companies in sectors like cement, steel, chemicals, fertilizers and waste-to-energy to consider CCUS as part of their pathway to net zero.
Finding the right business model to finance carbon capture is still tough, but that is changing in some countries as carbon prices rise, new low carbon product standards are introduced and innovation funding is directed to companies in hard-to-abate sectors.
In the exhaust from industrial processes and fossil fuel powerplants, carbon dioxide is mixed in with nitrogen, oxygen and other gases. So CCUS first separates out the CO2. The main method currently used to do this is amine scrubbing. Flue gas is piped into the bottom of a vertical reactor vessel, where it rises up through a mist of a CO2-absorbing liquid (usually an amine solution). The scrubbed gas is released at the top, with typically 90% or more of its carbon dioxide removed. The amine then goes to another vessel where high-temperature steam takes out the CO2. Finally, the near-pure carbon dioxide is compressed ready for transport.
In this early phase, emitters may need to test this technology on their processes. This will depend on the maturity of the capture technology and the industrial applications it has already been applied to. Testing would require additional expenditure by the emitter in the feasibility (pre-FEED) phase.
The exact cost depends to a great extent on the mixture of gases captured. If there is a high proportion of carbon dioxide, at high pressure and on a large scale, it is relatively easy to capture, making costs lower than for dilute or low-pressure exhaust gases.
For industries making fertilizers or ethanol, capture cost is well below $50 per tonne; for steel it can be around $100 per tonne, rising up to around $250 per tonne for aluminium.
Compression costs will vary depending on the capture and associated industrial process but can be high to meet pressure specifications.
Local storage and loading costs may be relevant if transportation of CO2 to the permanent storage site is to be done by truck, ship or rail.
Emitters need certainty on the specifications (around purity and pressure) of CO2 to be delivered to the transport & storage operator. The tighter the specifications, the higher the costs for the emitter. Impurities such as water, nitrogen, sulphur oxide, nitrogen oxide, carbon monoxide, hydrocarbons and mercury can have major implications, eg corrosion, for CO2 transportation and storage infrastructure and on how the CO2 behaves once it is injected into the target reservoir deep underground.
Before committing to expensive FEED studies, the emitter needs to get a clear understanding from the transport & storage operator that the proposed reservoir has sufficient permanent storage capacity and that the injection wells will work.
A key part of the commercial negotiations between emitter and transport & storage operator are around the allocation of risks. Emitters face project risks around technology, construction, price and operations, which are common to any infrastructure investment. For hubs, the specific project risks are around volume, leakage and multi-stakeholder project development.
Emitters face hard-to-reduce risks include revenue risk, relating to an insufficiently high carbon price, cross-chain risks arising from the interdependency of the CCUS value chain, and long-term storage liability risk.
Identify a potential CCUS hub in your region
The CCUS Hub is designed to support policy-makers, potential hub developers and emitters interested in setting up a CCUS hub by sharing learnings from the most advanced hubs and identifying new ones.