Carbon Capture Outlook Shows Signs of Brightening

It took decades for solar panels and wind turbines to break into the mainstream. Now carbon capture and storage (CCS), another technology vital to the energy transition, is showing signs of joining them.

CCS (sometimes it’s CCUS, for carbon capture, utilization and storage) has been around for decades in limited applications like EOR, in which the CO₂ from operations is reinjected into wells to help extract more oil. Since the Paris Agreement in 2015, there’s been more emphasis on the idea of keeping CO₂ from reaching the atmosphere by storing it underground.

As the International Energy Agency (IEA) puts it: “Deployment has been behind expectations in the past but momentum has grown substantially in recent years, with over 700 projects in various stages of development.”

Carbon capture got a boost in the U.S. with the passage of the Inflation Reduction Act in 2022, which raised the federal tax credit to $85/ton from $45/ton for capturing and storing carbon emissions from industrial facilities. Other countries have increased the incentives for storing carbon, as well, so carbon capture is progressing in Europe, Japan, Canada, Brazil and elsewhere.

The concept is straightforward: Equipment at industrial and power plants catch the exhaust from operations and filter out the CO₂. The CO₂ is then compressed and moved, usually by pipeline, for storage or reuse. It’s the best answer available at the moment for industries like steel and cement, essential economic sectors that generate high levels of emissions.

Here are a few of the promising projects under way:

• The energy services company SLB powered up a project in the Netherlands in January that can capture up to 100,000 metric tons (mt) of CO₂ per year;
• In the Midwest, Summit Carbon Solutions is planning a network to capture the CO₂ from the region’s dozens of ethanol plants.
• Net Power has built a demonstration plant in La Porte, Texas, that generates power and creates a pure stream of CO₂ for sequestration. Net Power’s investors include Occidental Petroleum, Baker Hughes, Constellation and SK Group.

The second wave

Last year, SLB acquired Aker Carbon Capture and created a joint venture called SLB Capturi that puts the company front and center in the carbon removal and reduction market, said Damien Gerard, vice president of industrial carbonization at SLB.

“This is a business we’ve been in for 25 years and we know how to do this, and this is all subsurface and leveraging what we know from oil and gas,” Gerard said in an interview with Oil and Gas Investor. “But we came to realize that to be a useful player in the CCS industry, we needed to be across the full value chain.”

Gerard said the first cycle of CCS, intended to abate emissions from coal plants in the U.S. and Europe, is over. The second wave began in 2018 with the introduction of the 45Q tax credit for companies that capture and store CO₂ from industrial plants; that credit was expanded as part of the Inflation Reduction Act.

“We’re still somehow in that second wave and we still hope that CCS will be applied to heavy industry and hard-to-abate [facilities],” Gerard said. “In the meantime, I think there is a shift toward those industries that have the potential to be economic immediately because they manage to stack up several vectors of value.”

For instance, a natural gas power plant with CCS would benefit from the tax credit while also offering buyers a reliable source of low-carbon electricity.

The buyers have changed, too. Instead of selling electricity to a public utility that might struggle to pass the cost to its ratepayers, generators can sell to large companies through corporate power purchase agreements, helping them meet their low-carbon objectives.

In January, SLB Capturi powered up its first modular carbon capture plant at a waste-to-energy plant in the Netherlands. In February, it completed installation of key components at a CO₂ capture facility in Denmark.

Signs of progress

SLB Capturi offers standardized carbon capture plants called Just Catch, developed over the past two years. The modular approach offers huge advantages over custom engineering, Gerard said, just like Ford’s Model T did for car buyers 100 years ago.

“We have the black Ford model, and it’s either a small one or a big one or a very big one,” he said. “Most of the piece of kit will be manufactured and assembled in the factory and put together on site in a matter of months as opposed to a matter of years.”

Gerard sees one more sign that a carbon capture breakthrough is imminent: the development of markets in places where policy isn’t strongly supportive, an effect of policy in large markets that has gone global.

“You’re seeing a lot of activities in place where there is zero policy,” he said. “There’s no policy in Brazil, but they have a huge ethanol industry that produces ethanol and SAF for the rest of the world. And if that ethanol has significantly lower footprint than anything else that you can buy, people will pay a premium for that.”

The only country with a bigger ethanol industry than Brazil’s is the U.S., where carbon capture is making gains. Summit Carbon Solutions is developing a CCS project in the Midwest to link ethanol plants to a CO₂ pipeline network.

Summit’s project would collect CO₂ generated at 57 ethanol plants across five states and pipe it to a storage cavern a mile underground in North Dakota.

“Markets are beginning to demand low-carbon ethanol,” said Sabrina Zenor, director of corporate communications for Summit. “By lowering the carbon intensity, it opens access to those markets.”

Ethanol with lower carbon intensity can also be a feedstock for sustainable aviation fuel, Zenor said.

Power plants

Besides sequestering the CO₂, Summit is also finding buyers for it. Summit and the electrofuels producer Infinium have entered an arrangement for the supply of up to 670,000 mt of CO₂ annually at a proposed facility in North Dakota or South Dakota.

“CO₂ is a commodity with growing value, and Infinium’s eFuels technology is an important piece of the puzzle,” Summit CEO Lee Blank said. “By providing a reliable CO₂ supply, we’re helping unlock opportunities that support domestic energy production and economic growth.”

Some carbon capture efforts involve catching the emissions at coal and natural gas plants, which produced 37% of the nation’s electricity in 2023 while accounting for 49% of the sector’s emissions, according to the U.S. Energy Information Administration.

Scrubbers can help reduce emissions, said Danny Rice, CEO of Net Power, but “trying to capture CO₂ on the backside of a coal-fired power plant or a gas-fired power plant is really expensive.”

“It’s really challenging and it’s just hard to do, because you’re trying to separate out a small percentage of that exhaust, the CO₂ piece, from the nitrogen that came in from the air in the first place going into that combustion chamber,” he said. Air is about 78% nitrogen, 21% oxygen and 1% other gases.

Net Power’s solution is to take the nitrogen out of the air before combustion. The company has built a demonstration facility in La Porte, Texas, southeast of Houston, and is planning a utility-scale plant near Midland.

In March, Baker Hughes and Woodside Energy announced a joint initiative to use a small-scale Net Power platform designed for oil and gas and heavy industries.

“It’s an entirely new type of power plant with a proprietary cycle,” Rice said in an interview with OGI.

“We’re just combusting the natural gas with pure oxygen, so we remove the nitrogen from the air before it even gets into the cycle. That combustion process just creates water, CO₂ and a whole lot of energy to spin that turbine and generate power.”

At that point, collecting the CO₂ becomes just a matter of separating it from the water, “so it’s a more efficient, effective way to remove the CO₂ from a natural gas cycle,” Rice said. Plus, it gives the power plant a second revenue source in the federal 45Q tax credit for sequestering CO₂.

The design of the power plant is one carbon saver. Another is the location. Net Power’s idea is to build the plants near the CO₂ storage to save on transportation.

“We have really great places across the country where we have billions of tons of CO₂ storage capacity, but within 100 or 500 miles of that CO₂ sink, there’s no high concentrated sources of CO₂ that could be captured and sequestered,” Rice said. “We could put five or 10 Net Power plants right above these sinks and we can fill up these sinks with all of the CO₂ from our power plants over the next 30 years.”

Market potential

Who might want to use the power from such a plant? One guess.

“We’re seeing this load growth show up from data centers really driven by AI,” Rice said. “Not only do they need 24/7 reliable power, but they want it to be clean. And they need it at such a large scale—we’re talking half a gigawatt to a couple of gigawatts for each of these hubs they’re trying to deploy—the only real solution out there on the power generation side that can get them what they want on the timeline that they want it is going to be natural gas.”

There remains a long way to go for carbon capture. The IEA says CCUS will need to reach about 6 billion tons a year globally by 2050 to meet the goals of the Paris Agreement. ING Research reports that the U.S. and Europe combined are capturing 25 million tons a year now, or less than 0.5% of the target.

Gerard said the adoption curve for CCS has similarities with solar but the business model is quite different. Solar creates energy, CCS removes CO₂. Solar is designed for mass manufacturing, CCS is designed for use at industrial plants.

That means the 90% cost reductions in solar and wind that occurred in this century aren’t likely to be repeated for CCS, Gerard said. Not even over decades.

“You can achieve some cost reduction in CCS but not the with same kind of rules as you have in solar and wind,” he said.