This post will assess the importance of Carbon Capture, Utilisation, and Storage (CCUS) technologies for Refiners. It will look at current CCUS projects in Europe and explore the potential challenges and opportunities that downstream players will face when trying to implement CCUS technologies into their operations. Considering the impact of multiple challenges, this post will show the importance of associations, regulatory frameworks and cross-industry collaboration as vital aspects of CCUS being incorporated into downstream.
Current CCUS Projects
Challenges and Solutions
Potential of CCUS for Downstream
A growing public awareness around carbon emissions and increased media coverage on climate change have created new environmental pressures for refiners in Europe. Decarbonisation is driving the need for Carbon capture and as refiners look at ways to offset emissions, CCUS technologies are becoming increasingly important. This post will look at current CCUS projects, challenges and solutions and then on the potential of CCUS for downstream.
Faith Birol, executive director of the IEA described CCUS as ‘The most critical technology’ and stated that without it, ‘reaching our international climate goals is practically impossible’. Further, the IEA Sustainable Development Scenario states that CCUS account for 7% of the cumulative emissions reductions needed globally by 2040.
IEA: Emissions reductions for key industry subsectors (cement, iron and steel, chemicals) by mitigation strategy
Source: IEA 2019. All rights reserved. Notes: The Reference Technology Scenario (RTS) includes current country commitments to limit emissions and improve energy efficiency, including Nationally Determined Contributions (NDCs).
Current CCUS Projects
Clearly, CCUS technologies have the potential to play a vital role to play in helping meet targets set out in the Paris Agreement, which stated the goal of zero net emissions in the second half of this century. CCUS technologies have the capability to reduce GHG emissions from fossil fuels and in a sustainable way. As such, companies including BP, Equinor, ENI, Occidental Petroleum, Shell, Total and the Port of Rotterdam are investing in and developing CCUS projects across Europe.
Net Zero Teesside project
BP, ENI, Equinor, Occidental Petroleum, Shell and Total are all supporting the Net Zero Teesside project. The Project, in Teesside the North East of England, can enable capture of emissions including gas and biomass power and hydrogen production. The project is being developed to store up to 6Mt of CO2 each year and will be one of the world’s first commercial carbon capture utilisation and storage projects for a gas-fired power plant.
Northern Lights Project
Equinor, Shell and Total are cooperating on the Northern Lights Project which plans to includes transport, reception and permanent storage of CO₂ in a reservoir in the northern part of the North Sea. The full-scale project is a result of The Norwegian government’s ambition to develop a full-scale CCS value chain in Norway by 2024.
Project Porthos – Port of Rotterdam CO₂ Transport Hub & Offshore Storage
Project Porthos is a joint project between the Port of Rotterdam and EBN and Gasunie. The project would capture CO2 generated by industry in Rotterdam’s port area and store it in depleted gas fields deep below the North Sea seabed. In December 2019 the Project signed agreements with ExxonMobil, Shell, Air Liquide and Air Products, each of which committed to using the CO2 infrastructure.
World Resources Institute: Carbon Capture & Sequestration Flow Chart
Source: World Resources Institute: 2009.
Whilst there is clearly research, investment and development happening in CCUS across Europe, and interest and commitment from companies to be involved, large-scale adoption for refineries faces multiple challenges. CCUS technologies and projects are not currently economical and the lack of ready technologies does not provide potential investors with certainty. Further, current Carbon Capture technologies are highly energy consuming and there is a need to develop technologies that are less energy consuming so that it makes sense for refiners to implement CCUS technologies into their operations.
The downstream industry does not currently have a position about Carbon Capture. There is a lack of incentives and clear responsibility in Europe about who will take responsibility of storage for example and in countries such as France where there is a real lack of storage sites, it will be unlikely that CCS technologies are widely implemented. This lack of developed regulatory frameworks coupled with the lack of ready technologies may inhibit the widespread deployment of CCUS in downstream and other industries the near future.
Whilst saying this, it is important to separate CCS and CCU technologies as both are at different stages and come with their own unique opportunities and challenges. On the one hand CCS is available today and is the lower cost solution and thus will be vital in the short term for reducing emissions for refiners. On the other hand, whilst CCU is relatively nascent in comparison to CCS, it has a much larger potential in terms of emission reduction and time frame. However, issues are threefold, firstly technology is not widely ready and has not yet been successfully implemented in any European refineries. Secondly the market for CO2 use is minimal in comparison to the amount which will need to be permanently stored and thirdly, there is a lack of regulatory framework to foster R&D and implementation.
The Zero Emission platform have suggested that ‘Highly industrialised regions such as North-Rhine Westphalia (NRW) in Germany could reduce emissions by 95% in 2050 if connected to CO2 transport and storage resource’. Clearly it is important to incorporate both CCS and CCU in order to reduce emissions and further research, development and investment are vital for CCUS technologies to be implemented in downstream.
How to overcome challenges?
There needs to be cross-industry collaboration to make CCUS a wider reality. Research and development is one area for focus and is vital in order to develop the technologies needed to enable refiners to incorporate CCUS into their operations. Currently there are CCUS associations and coalitions forming across Europe. For example, the CCUS projects Network which includes and supports major industrial projects underway in Europe and ALIGN CCUS which ‘unites science and industry in a shared goal of transforming six European industrial regions into economically robust, low-carbon centres by 2025’. Associations such as these not only help to fund CCUS research and development and foster an environment of exchanged ideas and expertise but pertinently, they help foster cooperation across regions, industries and governments to assist in developing technology and vital regulatory frameworks such as carbon trading schemes. In order for refiners to benefit from developing CCUS technologies, it is vital that they are part of such schemes.
On Wednesday 11th March, UK Chancellor Rishi Sunak delivered his first budget speech and whilst Coronavirus unsurprisingly dominated, Sunak announced some major ambitions for CCS. In their 2019 manifesto, the Conservative’s pledged to invest £800m in CCS and the Chancellor has committed to this, promising to establish at least two CCS sites in the UK between now and 2030. The government also announced it plans to support, through customer subsidy, the creation of at least one privately financed gas fired CCS power station. Whilst the BBC’s Simon Jack suggested that ‘Many will feel that is way too slow to develop a vital technology’, the fact that the government is committing time and investment into CCS shows it is noticing its critical role in the UK reaching its climate goals and is taking a step in the right direction.
United States Environmental Protection Agency: CCS Schematic (Subsurface depth to scale, 5,280 feet equals one mile). The general CCS process and shows a typical depth at which CO2 would be injected.
Source: United States Environmental Protection Agency, 2020.
What are the opportunities for downstream?
CCUS technologies have the potential to strengthen business models for refiners in the future. CCUS could be an important part of the supply chain in a circular economy and can make the circular economy a sustainable and long term reality.
In relation to this, CCUS can play a role in improving the image of the downstream industry amongst the public and the media. If the industry takes a position on CCUS, it could help to address the long term PR problem downstream faces and through refiners taking steps towards carbon capture and reducing emissions, the perception of the industry can change.
These coupled with the real ability to make refinery operations greener and reduce emission through CCUS technology are vital to maintain the downstream industry in an era in which renewables are becoming increasingly cost competitive and the narrative in Europe is becoming increasingly green.
One European refiner that has recently taken a step towards incorporating CCUS technologies into their refinery is Swedish operator Preem. In early 2019, Preem awarded Aker solutions to perform tests and studies of carbon capture technology at Scandinavia’s biggest oil refinery in Lysekil. Further, Equinor and BP are spending increasing amounts of time and money in research and development efforts to do with CCUS, with a view to implementing technologies in the near future.
The Oil and Gas Climate Imitative (OGCI) are also taking actions to accelerate the development and deployment of CCUS technologies. OCGI has 13 IOC and NOC members including Equinor, Eni, Repsol, Shell, BP & Total, who are all collaborating on investing in solutions and projects around CCUS with a view to implementing CCUS into refinery operations in the near future. Co-operation between these downstream players is helping to facilitate large-scale commercial investment in CCUS and shows the importance of collaboration.
Carbon capture, GHG reduction and other clean technologies is a topic in our Call for Papers for this year’s ERTC. ERTC 2020 is taking place from 16th-19th November at Hotel Melia Castilla, Madrid, Spain. If you would like to submit a paper on this or any other topic then follow this link to find out more. The deadline for submission is: 27th April 2020.
Written by Sarah Casey, the World Refining Association | Published on 23rd March 2020 | Read our post on Waste Recycling
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