1.1 Background

In July 2009, the 17 partners of the Major Economies Forum (MEF) on Energy and Climate agreed that transition to a low-carbon economy “provides an opportunity to promote continued economic growth as part of a vigorous response to the dangers created by climate change.”

A number of action plans were developed with the intention of stimulating efforts to advance a broad range of clean energy technologies, including carbon capture and storage (CCS). The Carbon Capture, Use and Storage Technology Action Plan (CCUS) sought to analyse the emissions reduction potential of CCS, discuss barriers to development and deployment of CCS technologies, and describe best practices and policies that are successfully advancing CCS globally. As a result, priority actions for acceleration of CCS were recommended both domestically and internationally.

One priority action outlined in this Action Plan was to:

…encourage the use of captured CO2 to generate revenue that can partially offset the cost of CO2 capture, as a transitional measure to assist the accelerated uptake of CCS.

As an early response to the CCUS Technology Action Plan the Global CCS Institute, on behalf of the Government of Australia, the United States, and the United Kingdom, has undertaken an independent assessment of the potential for the use of captured CO2 (CO2 reuse) to accelerate the uptake of CCS.

1.2 Purpose

As noted above in Section 1.1, one recommendation of the CCUS Technology Action Plan was to:

…encourage the use of captured CO2 to generate revenue that can partially offset the cost of CO2 capture, as a transitional measure to assist the accelerated uptake of CCS.

The purpose of this report is to investigate existing and emerging uses for CO2 and to address the question of how, and to what extent, CO2 reuse technologies can accelerate the uptake of CCS.

The Intergovernmental Panel on Climate Change (IPCC) Special Report on CCS (2005) included a chapter dedicated to mineralisation and industrial uses of CO2. The context of the IPCC report was consideration of industrial use as a CO2 mitigation technique, and the findings in this context were not encouraging.

It is important to note that this report is not about the CO2 mitigation potential of industrial use of CO2. Although mitigation potential is a factor in the overall picture, the primary question this report seeks to answer is how the industrial use of CO2 might accelerate the uptake of CCS. It may seem counterintuitive that using CO2 instead of sequestering it (i.e. taking the ‘S’ out of ‘CCS’) could accelerate CCS. This issue will be explored in detail, but to address this concern up front, below are three examples of how the use of CO2 might directly or indirectly accelerate the deployment/uptake of CCS:

  1. EOR can provide a revenue supplement for CCS projects in favourable locations and, when combined with MMV, can provide valuable storage learning as well as underpinning wider community acceptance of geological storage.
  2. Deployment of a greater number of CO2 capture plants may lead to accelerated learnings and a faster rate of cost reduction for capture technology.
  3. Some reuse technologies may also result in permanent carbon sequestration, such that they may be regarded as an alternative form of CCS.

1.3 Scope and context

Part 1 of this report investigates existing and emerging CO2 reuse technologies including determining the current status of the technologies globally. Part 1 also considers the current and future potential market size for each reuse technology in order to understand the CO2 utilisation potential. Technologies are short-listed based on their potential to demand CO2 on a scale commensurate with the emissions generated from power plants and other large industrial CO2 sources, a key to their ability to contribute in some form to accelerating CCS.

The short-listed technologies undergo a categorisation, a high-level comparison and a more detailed evaluation and analysis process. The technology categorisation outlines key differences between the short-listed technologies which will have an impact on the technologies’ ability to accelerate the uptake of CCS. The technology comparison is a high level comparison focusing on technology maturity, potential for revenue generation, level of investment required to achieve commercialisation, CO2 emissions from reuse technologies and applicability of the technologies to developing countries. The technology evaluation builds on the technology comparison and considers a broad range of factors, including scale and potential demand, commercial viability, environmental and social issues such as CO2 equivalent emissions resulting from the reuse technology. An initial assessment of the technologies’ potential to (1) accelerate cost reductions for CCS and (2) accelerate alternative forms of CCS is also undertaken.

Part 2 of the report builds on the assessments in Part 1 and considers the broader economic and commercial framework for CO2 reuse. An understanding of the key costs and revenues associated with CCS is provided to explore the potential impact that different CO2 reuse technologies can have in accelerating the uptake of CCS. Part 3 of the report assimilates key findings from throughout the report to arrive at recommendations for further action.

The descriptions and evaluation of the technologies presented herein represent only a snapshot in time, and their progress in the forthcoming years may lead to different conclusions if the technologies are reconsidered in the future. Furthermore, the level of evaluation has been limited by the level of information available about technologies, which is inevitably tied to their overall development status (the publicly available information about technologies closer to commercialisation tend to be more abundant). For example, some promising CO2 to liquid-fuels technologies were identified, including catalysed solar reforming and engineered photosynthetic microorganisms for direct fuel secretion, however the level of information available about the technologies made further evaluation impractical.

When considering the economic and commercial framework for CO2 reuse, generally a global perspective has been taken, with some consideration of likely typical regional conditions. However, it is not feasible to consider for example the supply/demand balance of each sub-region of each sovereign state around the globe. Because of the global perspective taken in such analyses, it should be noted that local conditions superior for the deployment of CO2 reuse may occur, where the demand for products derived from CO2 may be high.

The economic and commercial perspectives for early CCS demonstration project development are distinctive in that they are centred largely on EOR due to its maturity, and where, in the absence of carbon constraints, CO2 for reuse provides a modest revenue stream. While this report highlights the value of the relatively well-defined potential of EOR to accelerate early CCS demonstration project development, the bulk of the report covers the longer-term opportunities that could ultimately arise from the full suite of emerging CO2 reuse technologies.

1.3.1 Inclusions

This report considers technologies that use anthropogenic CO2, where the CO2 is concentrated to some degree (greater than its atmospheric concentration). In particular, the report considers technologies that utilise CO2 otherwise emitted from large point sources, such as power stations, refineries, gas processing plants and fertiliser plants. It differentiates between high concentration sources, such as gas processing plants and fertiliser plants, which can be supplied at relatively low cost (<US$20/tonne) and the low concentration sources such as power, steel and cement plants that require capture technologies to concentrate the CO2 and for which the supply cost is relatively high (US$50–100/tonne).

The report considers non-captive uses for CO2, e.g. uses where the CO2 needs to be sourced external to the process. The distinction between ‘non-captive’ and ‘captive’ CO2 (as defined in Section 1.4.4) is important to note, as statistics for urea manufacture show a global requirement for over 100 Mtpa of CO2. On the face value this appears to be an excellent market for captured CO2. However, this CO2 is produced from the fossil fuel feedstock to the urea production process, and therefore CO2 does not need to be sourced externally. In reality, the CO2 balance of urea production is not so straightforward, and some potential for CO2 use remains. Urea production is one of the short-listed technologies considered within this report and refers to the opportunity to utilise non-captive sources of CO2 only. This is discussed further in Part 1 Section 2.2 in the report.

1.3.2 Exclusions

The report does not consider the use of atmospheric CO2, as this classification is so broad that it covers essentially all photosynthetic activity, and fails to address the specific aim of accelerating CCS technology as applicable to large point sources.

The report does not consider captive uses for CO2, e.g. uses where the CO2 is an intermediate product in the process (as explained above in Section 1.3.1). This is because captive processes do not offer any opportunity to provide additional demand for captured CO2 into the future.

1.4 Definitions used in this report

1.4.1 CO2 reuse

The definition of CO2 reuse used for this report is as follows:

Any practical application of captured, concentrated CO2 that adds value (such as revenue generation, or environmental benefit), and which can partially offset the cost of CO2 capture, as a transitional measure to assist the accelerated uptake of CCS.

This definition is best described as a statement of what would constitute an ‘ideal’ CO2 reuse technology.

For the purposes of undertaking a stock-take of CO2 reuse applications, a broader definition of CO2 reuse was adopted as follows:

Any practical application of captured, concentrated CO2 that adds financial benefits (e.g. revenue generation) or provides environmental, social or other benefits.

1.4.2 CCS

The definition of CCS as considered in this report is the capture, compression, transportation, and long term storage of CO2 in suitable subterranean geological reservoirs.

1.4.3 Alternative forms of CCS

Reuse technologies that also permanently store CO2 are considered to be an alternative form of CCS, referred to as ‘alternative CCS.’ Permanent storage is most simply defined as storage considered permanent under an emissions trading scheme or greenhouse emission legislation. This is likely to require that a product retain its carbon dioxide equivalent content for at least hundreds of years, or have an extremely slow CO2 release rate.

1.4.4 Captive and non-captive

Captive use refers to processes wherein CO2 is only an intermediate product in a chemical manufacturing process, and where it is ultimately consumed in a later process step (e.g. urea processing). As CO2 is not a feedstock but an intermediate product, captive processes offer no opportunity for providing additional demand for CO2 in the future.

Non-captive CO2 use is where the CO2 needs to be sourced external to the process.

1.4.5 Bulk CO2

Bulk CO2 is considered to be unprocessed gaseous CO2, with a CO2 content typically in excess of 95 per cent.

1.5 Structure of this report

This report is presented according to the process outlined in Figure 1.1

Figure 1.1 Report structure

Part 1 and Part 2 of the report are presented as follows:

Figure 1.2 Part 1 and 2 structure