Governments and companies are investing massively in carbon capture and storage projects, but the technology has yet to reach scale
NO ALTERNATIVE
For some existing processes, carbon emissions are inevitable leaving CCS the only decarbonisation option
LONG TERM SCALE-UP
Impact of CCS on hard-to-abate sectors may not be felt until after 2030
KEY QUOTE
There is increasing political commitment and will to allocate funds and carry significant economic risks in regards to CCS investments
The Danish government is betting $2.39 billion to support new carbon capture and storage (CCS) projects. The goal of the fund is to develop the CCS sector and to have the country’s first plants in operation by 2025. The money was put forward as part of the Danish government’s CCS strategy presented in 2021. It is specifically targeted towards some of Denmark’s biggest carbon emitters: combined heat and power (CHP) plants and heavy industry. To put the $2.39 billion investment into perspective, the Danish government has so far set aside $190 million of public funds for the development of Power-to-X technologies as part of the recent furore around green hydrogen. “[It is] a huge and ambitious investment”, says Brian Vad Mathiesen, an energy professor at Aalborg University. But it is also investment in a technology that is not yet entirely established. “We don’t have large scale CCS facilities, we don’t have the infrastructure and it requires very large upfront investments. So we should be conscious in regards to the potential of CCS—especially when looking at our expectations about how much carbon we expect to capture before 2030,” he adds. One of those interested in the Danish government’s programme is cement manufacturer, Aalborg Portland—the company is part of a sector that on a global level is responsible for around 8% of the total global carbon emissions and with 2.2 million tonnes of carbon emitted annually. Aalborg Portland has the biggest carbon footprint in Denmark. Thomas Uhd from Aalborg Portland agrees that CCS is “not yet plug and play”. It requires significant capital investment and comes with its own economic risks. But CCS is, “A necessary solution for us if we are to meet the increasing price tag on CO2 and live up to climate ambitions. Our focus on CCS is based on the assessment that it will not be technologically possible to produce cement without energy-intensive processes,” he says.
GAINING MOMENTUM CCS has been on the table for years, but so far deployment has been slow to take off with only around 20 commercial CCS operations worldwide. However, momentum is building, according to the International Energy Agency. The acceleration is due to a shift in thinking of where CCS could be used, believes Karsten Capion from the Danish green think tank Concito. “An important factor is that we are abandoning the idea of CCS as a way to keep using fossil fuels in broader terms and beginning to see CCS as a solution specifically for the hard to abate sectors and for negative emissions. This is paving the way for political commitment and for the economic incentives necessary to bring CCS to scale,” Capion says. As well as Denmark, Norway, Sweden, the UK, the US and the Netherlands have also intensified CCS efforts. The UK government has recently selected two sites in the north of England to develop multi-billion dollar carbon capture projects by 2025 as the first step towards fulfilling ambitions of cutting 20-30 million tonnes of CO2 a year from heavy industry by 2030. It has pledged $1.4 billion over the next decade to create a total of four carbon capture plants. The Dutch government, meanwhile, intends to spend $2.5 billion on a large-scale CCS project. Norway is investing $1.9 billion. In the US, President Biden’s infrastructure legislative package unveiled in 2021 put aside $12 billion—the largest amount of funding ever to carbon capture projects. “Carbon capture is obviously a key tool available today for reducing process emissions from industrial manufacturing,” US climate envoy John Kerry said. “There is increasing political commitment and will to allocate funds and carry significant economic risks in regards to CCS investments. Things are moving forward right now and creating a whole new situation for rolling out and scaling up CCS,” says Eivind Berstad from Norwegian think tank Bellona. 
Green cement
Aalborg Portland wants to cut emissions from its processes by 30% before using CCS
SURVIVAL STRATEGY Aalborg Portland has a target of a 30% reduction in carbon emissions by 2030—some 660,000 tonnes of CO2— without using CCS. Aalborg will instead make improvements to its energy efficiency, increase the use of biomass power generation and develop new types of cement. Uhd says that they are pursuing further reductions beyond 2030 and that they are “relying on CCS” for this. “Even if we pull out all the stops in regards to energy sources and innovation, we still expect there to be at least around 30-40% of the carbon emissions related to cement production remaining. For this, we are deeply dependent on CCS. It is far too early to say when we will have a full-scale CCS facility up and running and how much it will capture,” says Uhd. For the Danish cement producer, the focus on CCS has been further accelerated in the last couple of months because of changes in the EU Emissions Trading System (EU ETS) and the decision by the Danish government to introduce a carbon tax. “The economic incentives are changing drastically right now. If we just look at the EU quota system, we are expecting an increase in our expenses from $34 million this year to $100-150 million in 2030—that includes our current reduction target. So it is clear that we have a financial interest in getting CCS up and running,” says Uhd. Aalborg Portland expects to have its first test CCS facility up and running in 2022. It is also part of a consortium behind the so-called Project Greensand 2, which has been granted almost $30 million by the Danish government for CO2 storage in the North Sea. Danish cement engineering firm FLSmidth has also intensified its CCS efforts—as part of its ambition to create a carbon-neutral cement facility by 2030. “We consider CCS to be a cornerstone in our carbon reduction ambitions,” says Carsten Riisberg Lund from the company. More specifically FLSmidth expects CCS to be, “The only solution available to around 30% of the carbon emissions stemming from cement production,” Riisberg Lund adds. FLSmidth is involved in one of the sector’s first and so far most ambitious CCS facilities at the Norcem/Heidelberg Cement Brevik plant in Norway. The plan is to have a CO2 capture facility operating and capturing up to 400,000 tonnes of carbon a year from one of the plant’s two kilns by 2024. “The [Norwegian] plant is a clear example that CCS is progressing in the industry and is on the way to becoming an important part of the industry’s decarbonisation efforts,” says Riisberg Lund. FLSmidth has also launched several CCS initiatives and partnerships with other engineering firms including UK-based Carbon8 Systems and American Chart Industries. The company is additionally looking at different sites that could be a candidate for the Danish government funding.
KNOWN UNKNOWNS CSS is, however, still associated with a lot of insecurities and risks. With the Brevik plant in Norway regarded to be the first full-scale capture facility in the cement industry, the sector will have to wait two years from seeing worthwhile results. This leaves cement manufacturers with a lot of unknowns when looking at the technology, infrastructure, its efficiency and consequently the business case. In addition, several CCS facilities have so far not been able to catch as much carbon as expected, while the Norwegian Brevik plant has gone significantly over budget. “We are lacking examples of how CCS is working in real life. Examples that can demonstrate how the entire value chain operates, show the efficiency, and the levelised costs of CCS,” says Berstad from Bellona. Despite budget overruns and potential delays, “The Brevik CCS facility [has the potential] to be an important international demonstration project for others in the industry to learn and be inspired from,” he adds. 
SCALE EFFECT Most projects see CCS technologies only having a limited impact on carbon reduction. To move that needle, there is undoubtedly the need for huge investments over the coming years if CCS is to take off as a climate solution at any real scale. According to the Danish government, the CCS funding could pave the way for the removal of 0.4 million tons of CO2 by 2025 and 0.9 by 2030—in comparison, Denmark’s current carbon emissions is 43 million tons. “The $2.39 billion should be regarded as a first of many public funds earmarked for CCS, if it is to make an important contribution to limiting Denmark’s emissions,” Concito’s Capion says. Riisberg Lund meanwhile expects carbon reductions from CCS to become significant within the European cement sector between the years 2024-2028 but not until after 2030 for the rest of the world’s cement industry. The lack of scale in CCS facilities and infrastructure around it is, according to Vad Mathiesen, something that should make governments and companies sceptical in regards to expecting large carbon reductions based on CCS looking towards 2030. “It is not a technology that we can allow ourselves to count on in regards to 2030 targets. There are far too many uncertainties. This does not mean that we should not invest in it, but that we should base our reduction ambitions on other and more well-known sources,” says Vad Mathiesen.
BUSINESS CASE One of the things that could help bring CCS to scale faster is improvements in the price tag, which, according to Capion, is coming down. “The business case of CCS is non-existent when using it as a way to keep coal a part of the electricity production, but when it comes to the hard to abate sectors it is beginning to make economic sense—especially as it is becoming more and more expensive to emit carbon.” The price per one ton of captured and stored carbon varies from project to project but when looking at the investment from the Danish government targeted at hard-to-abate industries the price is expected to be $134 per tonne. Some recommendations say that the announced carbon tax in Denmark should be $223 per tonne—this scenario makes CCS a more economically attractive investment. “This is making CCS a viable solution,” says Berstad. “The willingness to take upfront economic risks by governments are also making CCS more feasible for companies.” At Brevik, the Norwegian government committed to take full risk of delay and a majority of the risk of cost over-run.
STORAGE FACILITIES Another factor that could help improve the business case further is the expansion of infrastructure, especially if storing large amounts of CO2 from onshore facilities becomes a reality, says Capion. “This would make it much cheaper because it would lower costs for both storing and transporting CO2,” he says. In the Danish CCS strategy, there are explicit plans and funds earmarked for exploiting this possibility further. In the short term, however, the Danish government is primarily focusing on storage in the North Sea with the establishment of underground storage facilities, which will begin this year. “Storage is the biggest challenge right now,” says Bellona’s Eivind Berstad. The Norwegian government approved a new carbon storage facility last year. It is expected to be in operation from 2024 and to have a capacity of 1.5 million tonnes annually. But there has been interest from customers demanding as much as 48 million tonnes annually. “This clearly shows that we need a political focus on getting storage capacity significantly expanded,” Berstad adds. •
TEXT Anna Fenger