CCUS & net-zero: The importance of Carbon Capture to achieve our climate goals.

Carbon Capture, Utilisation and Storage (CCUS) has emerged as a pivotal player in the fight against climate change. The process that captures carbon dioxide emissions from sources like power plants and industrial processes, preventing them from entering into the atmosphere, gains awareness. The captured carbon can then be utilized for other purposes or stored safely underground.

by Fabian Weber | 27. July, 2023

CCUS & net-zero: The importance of Carbon Capture to achieve our climate goals.

The Intergovernmental Panel on Climate Change (IPCC) asserts that  limiting global warming to 1.5 degrees Celsius would require a 45% reduction in global CO₂  emissions by 2030. Achieving these ambitious goals would be virtually impossible without  the help of CCUS technologies. According to the International Renewable Energy Agency  (IRENA), (, in scenarios aiming for net-zero, CCUS together with BECCS  must account for nearly 20% of the cumulative emissions reductions needed by 2050. Right  now, according to the International Energy Agency (IEA), there are around 40  commercial carbon capture facilities globally, with a total annual capture capacity of over 45  Mt CO₂. Since January 2022, seven new large-scale capture facilities have started operating,  including projects in the United States, Belgium, and China. Over 50 new capture facilities  are planned to be operational by 2030. However, the current pipeline of projects is only about  a third of what is required in the net-zero emissions scenario for 2030! 


Also the Global CCS Institute underscores the urgend demand of more CCS projects (Carbon  Capture & Storage) with compelling statistics. They reported in their latest issue of "Global  Status of CCS 2022", that 61 new CCS facilities were added to project piplines bringing the  total number to 30 CCS projects in operation, 11 under construction and 153 in development.  Under perfect conditions and when all projects are completed, the CO₂ capture capacity  would increase about 44% to 244 million tons per annum (Mtpa).


To highlight some crucial advancements that have been made recently, we want to highlight  some projects. For instance, Drax has announced the largest bioenergy with CCS (BECCS)  project globally, capable of handling an impressive 8.0 Mtpa across two units. In another  development, the Klemetsrud Waste-to-Energy CCS project in Norway, the first commercial- scale CCS applied to a waste-to-energy facility, has moved to the construction phase after  securing funding.


Moreover, the Glacier CCS Project has marked a significant milestone with the  commissioning of a CO₂ capture facility on a natural gas-fired reciprocating engine by  capture technology firm, Entropy. This is the first commercial-scale facility of its kind,  highlighting the future potential of capture from natural gas combustion streams worldwide. 


Meanwhile, Air Products has announced a blue hydrogen project in Louisiana (U.S) that  incorporates natural gas gasification technology. In Australia, the Bayu-Undan project by  Santos - which will capture CO₂ from LNG production in Darwin and transport it for offshore geological storage - has entered the Front End Engineering and Design (FEED) phase. A  distinguishing aspect of this project is the repurposing of an existing natural gas pipeline for  CO₂.


In conclusion, CCUS is more than just an option — it's a necessary instrument in our toolkit  to reach net-zero emissions and combat global warming. It is a powerful tool in the effort to  limit global warming to 1.5 degrees Celsius. Governments start rising awareness and projects  pipelines are filling up around appropriate investments in CCUS technologies. 

1. How government policies & regulations can support  the adoption of CCUS technologies

The recent unveiling of the Intergovernmental Panel on Climate Change (IPCC) "Mitigation  of Climate Change" underscores the urgent necessity for Carbon Capture Storage (CCS)  technology to mitigate the impacts of climate change. Although models indicate the potential  of CCS to significantly contribute to global warming limitation goals to 1.5  ̊C, present rates  of deployment are woefully inadequate compared to the modelled pathways. The report also  emphasizes the role of CCS in mitigating emissions in sectors where they cannot be easily  reduced.


The relevance of CCS in the ongoing international climate talks, particularly the articles 6  (market mechanisms and non-market approaches) and 14 (global stocktake) of the Paris  Agreement, is undeniable.

Advancing Carbon Capture and Storage: A (very) quick look at legal and  regulatory developments

The global policy, legal, and regulatory environment for CCS is dynamic, with significant  developments in many jurisdictions in the last months. While some early-mover nations are  focusing on addressing these issues, others are in the initial stages of developing their policy  response to support CCS deployment. In the following section we give an update about latest  developments.

North America: Incentive strategy

In North America, regulators and policymakers are strengthening CCS-specific frameworks,  providing financial incentives and new regulatory frameworks. Canada's policy and  regulatory environment is further strengthened by a proposed federal investment tax credit for CCS. In the US, the federal government is committing project-specific and infrastructure  funding through the "Infrastructure Investment and Jobs Act". The US's successful 45Q tax  credit scheme was enhanced through the Inflation Reduction Act of 2022, and there are  ongoing efforts to expand CCS-specific legislation at the state and federal levels.


In Europe, the EU's Innovation Fund for CCS and the buoyant EU Emissions Trading Scheme (ETS), coupled with policy initiatives from member states, strengthen the supportive policy  environment for CCS. Several countries in the region have announced new initiatives and  committed further support to projects. In the UK, the government has progressed its post- Brexit plan for energy transition, announcing initial hubs and refining the business model for  transport and storage. Norway and the Netherlands have also strengthened their policy and  regulatory commitments to CCS. Additionally, other member states are re-engaging with  CCS, completing regulatory frameworks, removing barriers, and providing policy support.

Australia: Bolstering CCS Projects

In Australia, the Labor government's decision to reinforce baselines for significant emitters  under the existing safeguard mechanism may provide a boost to CCS projects. The move  aligns with the release of a CCS-specific methodology under the national Emission Reduction Fund. This fund establishes a formal revenue stream through the creation of carbon credit  units, which can be sold or used to offset the carbon footprint of businesses.

Japan and China: New Climate and Energy Policies

Japan and China are also proactive in steering new climate and energy policies. Japan, in  particular, has committed to a CCS-specific regulatory framework, signifying its intent to  enhance the technology's deployment. It has launched several pilot projects, signaling its  readiness to take on a leadership role in CCS advancements. China, the world's largest emitter of greenhouse gases, has also made significant strides. It has unveiled new climate policies that could reshape its energy landscape. The nation's  commitment to achieve carbon neutrality by 2060 has necessitated a substantial scaling-up of  its CCS projects.

Southeast Asia: Significant Potential for CCS Technology

Southeast Asia presents considerable potential for CCS technology, leading to key  developments in the region. Both Indonesia and Malaysia have announced policies supporting wider deployment of CCS, aligning with their environmental commitments. Indonesia has  introduced a draft of its first-ever CCS-specific legal and regulatory framework, emphasizing  its commitment to the technology. Malaysia, too, has indicated progress towards a similar  regulatory regime.

Challenges and the Way Forward

While these developments are promising, some countries in the region have only announced  projects and made preliminary steps towards deployment, with their policy and regulatory  regimes still underdeveloped. This underscores the need for further intervention to promote  broader CCS deployment.  In conclusion, the legal and regulatory landscape plays a crucial role in the deployment of  CCS technology. While Australia, Japan, China, and some Southeast Asian nations are  making significant progress, others have yet to follow suit. To achieve wider global adoption  of CCS, it's essential for governments to establish supportive policies and a conducive  regulatory environment.

2. How to encourage investment in CCUS technologies

Encouraging investment in Carbon Capture, Utilisation and Storage (CCUS) technologies  necessitates a multi-face approach.

First and foremost, raising awareness about the potential of CCUS in mitigating climate  change is crucial. This can be achieved through educational campaigns and public  discussions, highlighting the technology's role in achieving carbon neutrality.

Secondly, it's essential to create a favorable policy environment, which might encompass  incentives such as tax credits or subsidies for companies investing in CCUS technologies.

Thirdly, fostering collaborative partnerships between governments, private sectors, and  research institutions can advance research and development in this field, leading to  technological breakthroughs that can reduce the cost and increase the efficiency of CCUS  technologies.

Lastly, promoting transparency and knowledge sharing about the performance and benefits of existing CCUS projects can build investor confidence and spur further investment. This can  be facilitated through global databases and regular reports.

Unleashing investment potential: Implementing a portfolio of policies

To advance the deployment of Carbon Capture Utilisation and Storage (CCUS), a still further  elaborated, manifested and comprehensive policy framework is crucial. This includes policies  and measures specifically targeting and promoting CCUS investments.


One effective strategy that could be adopted by governments is to incorporate CCUS in their  national energy and climate strategies. For instance, the "EU Net Zero Industry Act" has  designated CCUS as a strategic net zero technology. Furthermore, by including CCUS in their Nationally Determined Contributions under the Paris Agreement, governments can demonstrate their commitment to this technology.


Creating a conducive environment for CCUS projects is also vital. This could involve the  introduction of a carbon pricing system to alleviate initial costs, providing loans and loan  guarantees to facilitate access to debt capital, and establishing tax credits to offset capital and operating costs.


High-cost CCUS applications, like those in power, cement, and steel industries, may require additional policy support. This can come in the form of R&D funding to lower costs, carbon contracts-for-difference to offer a stable revenue stream to operators, and public procurement programs for low-emission products/fuels to generate demand. These strategies can  collectively act as a catalyst to speed up the initial deployment of CCUS technologies.

Wanted: New business models and coalitions for effective CO₂ management and cross- industry coordination

New business models are already stepping up to the plate, offering dynamic and innovative  solutions to speed up the deployment of Carbon Capture Utilisation and Storage (CCUS). Key among all of these should be the concept of developing infrastructure that serves multiple users, thus creating economies of scale and broadening reach. 


For example, there's a growing trend towards 'as-a-service' models for CO₂ capture, transport, and storage where each segment within the chain is offered and managed by a third party, streamlining operations and boosting efficiency.


Generally speaking, incorporating former "waste product" CO₂ into revenue streams opens up fresh revenue generating prospects for CCUS facilities while simultaneously reducing CO₂  emissions. For instance, CO₂ can be sold to the growing production of synthetic fuels  together with hydrogen, plastics (polymers), chemicals (methanol, methane, urea) or for  enhancement and storage in building materials like concrete. Furthermore, the already  mentioned policies such as carbon credits or taxes can also create a financial incentive for  companies to capture and store CO₂, effectively turning it from a unwanted by-product into a  valuable resource.


Also needed is the shift from a full-chain to part-chain project mindset necessitates stronger  cross-industry collaboration, becoming even more critical as interest in CCUS hubs swells. As such, the duty is on industries to not only foster stronger ties with governments, but also form  strategic industry consortia or coalitions. These partnerships will be key in coordinating  efforts to efficiently build and expand cross-company CCUS centers, accelerating the  progress towards a cleaner, sustainable future.

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