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Why carbon capture is key to reaching climate goals

Carbon-capture and storage technologies could help limit polluting carbon emissions

Carbon-capture and storage technologies could help limit polluting carbon emissions Image: Getty Images/iStockphoto

Ayla Majid
Founder and Chief Executive Officer, Planetive
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Davos Agenda

  • Carbon-capture and storage (CCS) technology has emerged as a robust and innovative tool to reduce carbon emissions and make progress towards net zero goals.
  • The CCS market is experiencing rapid growth, evidenced by an expected compound annual growth rate of 6.2% from 2023 to 2030.
  • Public-private partnerships are going to be the key to unlocking carbon capture.

Faced with the immediate and serious challenge of climate change, carbon-capture and storage (CCS) technology has emerged as a robust and innovative tool to reduce carbon emissions and make progress towards net zero goals. Moving forward, the global energy community must work together to maximize the use and efficiency of CCS and ensure that its climate potential is not squandered.

In simple terms, CCS involves capturing carbon from industrial and exploration and production processes, transporting it and injecting it in underground geological formations to lock it away from polluting the atmosphere and contributing to the greenhouse effect. Similarly, carbon capture, utilization and storage (CCUS) follow the same first two steps as CCS, but instead of sequestering the carbon underground, the carbon is transformed into industrial goods that can be used in other industrial processes or converted into biofuel and reusable plastics.

Valued at $3.28 billion in 2022, the CCS market is experiencing rapid growth, evidenced by an expected compound annual growth rate of 6.2% from 2023 to 2030. The rise of CCS is also made clear by the rapid proliferation of carbon capture and sequestration efforts across the globe. The number of CCS projects being proposed or underdevelopment is expected to reach over 300 million tonnes per annum by 2030 (Btpa) (IEA, 2023).

Operational and planned capacity (Mt CO2 per year) . carbon-capture and storage
Operational and planned capacity (Mt CO2 per year). Image: IEA

As the global community seeks to reduce the impact of the hard-to-abate industries and meet rising demand for decarbonization projects, the carbon-capture and storage industry shows no sign of slowing down. Most energy experts view the technology as an integral part of future energy systems. Recent BloombergNEF research suggests that an additional 1.5-15.5 gigatonnes of CO2 (GtCO2) removal capacity could be deployed from 2030-2050 to avoid global warming above 1.5°C. While, globally, scientists predict that up to 10 GtCO2 will need to be removed annually from the atmosphere by 2050, with an increased removal capacity up to 20 GtCO2 per year by 2100 to meet the required goals.

Much of the optimism surrounding the CCS industry is derived from the success of existing projects, with energy companies and governments around the world hoping to reproduce the decarbonization results achieved elsewhere. The US Petra Nova project offers a prime example. It has effectively captured more than 1.6 million tonnes of CO2 annually from a 240-megawatt power plant in Texas. Meanwhile, in Canada, the Boundary Dam CCS project in Saskatchewan has offered a new standard as one of the world's first large-scale coal-fired power plants with integrated CCS capabilities.

In Norway, the Northern Lights Project, a tripartite alliance between Equinor, Shell and Total, is showcasing Norway's expertise in transporting and storing CO2 from diverse industrial sources across Europe.

Continued innovation represents a key dimension of the CCS industry, as new solutions and modern methods can vastly improve the capacity and flexibility of CCS projects. This is seen all over the globe, such as in the UK, where the H21 North of England venture has laid the foundation for transitioning the gas grid to hydrogen and linking it with CCS to achieve significant emissions reductions.

The Middle East is a key player in carbon capture

A fair share of the innovation and progress surrounding CCS is now emerging from the Gulf. The Gulf Co-operation Council (GCC) accounts for more than a tenth of the world’s gas production and almost a quarter of the world’s oil. While the region is not a large emitter in absolute terms, per capita carbon dioxide is still at a significantly high level. Targeting a responsible transition, the region is pivoting towards becoming a climate leader and making CCS a key part of its strategy.

For example, earlier in 2023, the Abu Dhabi National Oil Company (ADNOC) launched the world’s first carbon-capture and storage project in an underground saline reservoir. Leveraging the Earthshot prize-winning carbon-capture and mineralisation (CCM) technology from 44.01, the venture will see carbon transformed into rock formations in Fujairah, thus guaranteeing permanent and more sustainable storage.

CCUS initiatives in Saudi Arabia, Qatar and the UAE contribute approximately 10% of the worldwide carbon dioxide capture, amounting to 40 million tonnes. Looking ahead, such a position of leadership is unlikely to change, especially as ADNOC alone aims to sequester five million tonnes by 2030 and by 2035, Qatar is aiming to store more than 11 million tonnes of CO2 per annum, while Saudi Arabia strives to achieve an ambitious 44 million tonnes.

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Carbon capture is proven to make a difference

Enabling the widespread use of carbon capture will certainly help combat climate change. A recent study by the Center for Climate and Energy Solutions found that carbon capture, if executed effectively, could reduce global greenhouse gas emissions by 14 per cent by 2050. When combined with other carbon reduction measures, carbon capture is one of the most crucial pieces in the puzzle of mitigating climate change. Indeed, a recent Intergovernmental Panel on Climate Change (IPCC) report stated that carbon capture technologies are ‘unavoidable’ in global emissions reduction plans.

Although promising, CCUS still needs to make huge progress. Worldwide, only 0.1% of carbon dioxide was captured in 2022. Moreover, the carbon-capture market has a long way to go. A report by McKinsey found that global uptake of carbon-capture technologies must expand 120 times from current levels by 2050 to meet net-zero targets.

This raises the vital question of what is needed to unleash the full power of carbon capture. Part of the answer to this question lies in the practical realities of carbon capture; emerging technologies are delivering positive results, but their widespread implementation faces barriers to mainstream use. Another McKinsey report cites several reasons for why this might be the case: a lack of established revenue streams, making business cases challenging; projects are large and unproven; fear of a public perception of ‘greenwashing; and an uneven and uncertain policy landscape.

Carbon capture requires public and private collaboration

Candid and productive dialogue is required between the public and private sectors to tackle climate and carbon management issues to chart an effective and practical pathway forward. Hard-to-abate industries have a huge role to play. Major industry events, such as the international energy platform ADIPEC, which recently took place in Abu Dhabi, can play a pivotal role in this, bringing together stakeholders from across the energy industry and key players linked to hard-to-abate industries. If we want to create a better dialogue around critical technologies, such as carbon capture, we must ensure a diversity of voices around the table, including the energy industry, technology enablers, climate finance and government players.

Likewise, CCUS must be a key discussion for COP28 where public and private sector players will join hands to address the deep climate challenges. This is a clear opportunity for energy leaders like those in the Gulf to add another feather in their climate leadership cap by creating a holistic ecosystem for carbon management.

The opportunity presented by carbon capture is huge, with Exxon estimating that the market will be valued at $4 trillion by 2050. Public-private partnerships are going to be the key to unlocking carbon capture. It’s the responsibility of the public and private sectors to find more opportunities to have open and action-oriented dialogues. In doing so, we can truly unleash the power of carbon capture and engender a new era in global emissions reduction.

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