DNV: Turning Point Arrives for CCS

Global carbon capture and storage (CCS) capacity is forecast to quadruple by the end of the decade, reaching 270 million tonnes per annum (mtpa) of CO₂ and investment projected to hit $80 billion, according to a report released June 12 by Norway-based quality assurance and risk manager DNV.

The growth, led by North America and Europe, is expected to continue through 2050 as captured volumes rise to 1.3 billion tons of CO₂/year, up from today’s 41 mtpa of CO₂. The report, part of DNV’s energy transition series, indicates that development of CCS projects across the world has reached a “turning point” as companies—including the North Lights joint venture of Equinor, Shell and TotalEnergies and others such as Occidental Petroleum—scale up projects.

CCS involves capturing CO₂ emissions from industrial processes or from the burning of fossil fuels in power generation. The greenhouse gas is permanently stored underground. The process is considered a promising way to lower emissions and slow climate change.

“So far, the heavy lifting on carbon capture development has been done within oil and gas production,” DNV Energy Systems CEO Ditlev Engel said during a June 12 webcast. “In the longer term, CCS will increasingly address hard to decarbonize emissions such as those produced through the production of cement and steel.”

But obstacles still exist. These include technical, economical and other challenges such as public perception and regulation. The biggest barrier, according to DNV, is policy uncertainty. Though DNV said policies have firmed across many regions, it acknowledged that shifting priorities could impact project deployment.

“Policy shifts, not technology or cost, have been responsible for many CCS project failures,” Engel said.

The report was released at a pivotal time for the energy sector. Artificial intelligence and data centers, electrification, industrial expansion, population growth and economic development are pushing up global energy demand. Increasing energy production to meet demand is likely to lead to higher emissions, if low-carbon and renewable energy sources are not used widely. CCS is one way to help mitigate the impact.

However, CCS growth—alongside the $700 billion in anticipated investments through 2050 and falling costs as technologies mature and scale—won’t be enough to make a substantial dent in global emissions. By DNV’s best estimates, CCS growth will capture only 6% of global CO₂ emissions by 2050. Political turmoil, shifting budgetary priorities and the removal of needed finance for such projects were listed as factors.

The forecast

While DNV anticipates CCS capacity will reach 270 million tonnes of CO₂ per annum by 2030, the facilities are not expected to operate at full capacity, said Jamie Burrows, global segment lead of CCUS for DNV.

“We anticipate around 210 million tons per annum actually being captured and stored. Around two-thirds of the additional capacity will come from North America and Europe with additional projects emerging in the rest of the world,” Burrows said. He added, “The project pipeline has never been stronger.”

There are about 62 mtpa of CCS capacity in operation today. Another 44 mtpa of capacity is under construction, and more than 300 million tons per annum of projects are in various stages of development, Burrows said.

He also noted increasing recognition from governments that see CCS as essential for lowering emissions. Some have even set CCS specific targets.

“A good example of this would be the EU’s recent announcement of an obligation for 44 oil and gas producers in EU member states to contribute to a collective 50 million tons per annum CO₂ storage target by 2030,” Burrows said before turning to corporate commitments to deploy CCS. “If we look at oil and gas majors—including BP, Shell, Chevron and Exxon—we have seen that they’ve introduced targets from anywhere between 10 and 30 million tons per annum of operational capacity by 2030.”

Most of the CCS projects in the nearer-term forecast are expected to be associated with natural gas processing. That will shift from 2030 onward when more projects emerge in manufacturing as sectors such steel, cement and chemicals work to lower emissions.

Also, “In the second half of the century, we think [CCS] will play a far greater role in carbon dioxide removal,” including direct air capture (DAC) and bioenergy with CCS, Burrows said.

The movers

Among the companies moving forward with projects are the Northern Lights joint venture company, Equinor and Oxy.

Northern Lights, the world’s first large-scale CO₂ transport and storage project offshore Norway, is scheduled for first CO₂ injection this year. Its first phase of installations can store up to 1.5 million tons of CO₂ per year. The JV partners reached a final investment decision earlier this year for the second phase, which will increase capacity to 5 million tons of CO₂ per year. It takes partnerships to lift such large projects, said Sigrid Borthen Toven, vice president of low carbon solutions for Equinor. It also takes customers.

“Going back to the first phase of Northern Lights, we had not a single signed customer to it, but still we believed that we could have those customers coming and they did,” she said. “And that is also what we see now for Phase 2.”

Customers include cement company Heidelberg Materials, the Hafslund Celsio waste-to-energy plant, fertilizer company Yara International, Ørsted and Swedish district energy provider Stockholm Exergi.

“We are ready to start up with Phase 1. ... We actually this week are testing the commissioning of our ships. So, there’s real liquid CO₂ that has been captured at Heidelberg Cement Factory that has been transferred at our first vessel,” said Tim Heijn, managing director of Northern Lights. “We’re in the process of commissioning. During the summer, we will start operations, bring the volume to Øygarden [Norway]. Once we have sufficient volume to dewater the pipeline, we will start actually real injection in the underground. So, super exciting to see that move.”

Across the pond in Texas, Occidental Petroleum’s 1PointFive is nearing startup of its DAC project called Stratos. The facility is designed to capture and store up to 500,000 metric tons of CO₂ annually.

“The facility is on track for startup this year with a ramp up of the initial 250,000 metric tons capacity by year end,” said William Barrett, CO₂ manager for Oxy. “The second half of the capacity is expected to be operational as soon as the middle of next year.”

With Class VI permits in hand to drill sequestration wells onsite and work underway on IT solutions, accounting and verification, “it’s all coming together. It’s really looking good,” he said.

The challenges

With more than 50 large-scale CCS facilities in operation today, Burrows said the technology itself is well proven. However, deployment of CCS in new ways have introduced some technical challenges—such as with aluminum smelting—that must be addressed.

“Given the diversity of emission sources and gas compositions, it is necessary to adapt existing capture technologies and, in some cases, develop entirely new approaches,” according to the report.

The report also pointed out that there are also still concerns with existing technology. For amine absorption, the most mature technology for commercial-scale carbon capture projects, “concerns remain around the capital intensity, energy consumption, environmental impact and solvent degradation of this technology,” it stated.

Eduard Romanenko, the report’s lead author and senior researcher at DNV, said CCS is quite expensive.

“There are lower cost applications such as ammonia production [and] natural gas processing, but in most cases the cost in terms of USD per ton of CO₂ avoided is far above $100,” Romanenko said. “And in some applications, such as cement, iron and steel, it could go way above $200 per ton of CO₂.”

DNV forecasts average CCS costs will drop by an average of 40% by 2050—mainly for transportation and storage—as projects scale. Projects in the pipeline until 2030 could see an average cost reduction of around 14%, Romanenko said.

Falling costs are already evident—including for Oxy’s Stratos. DAC is on the higher end of CCS projects.

“For example, the first phase has 34 air contactors. These are where the atmosphere actually passes through our liquid sorbent and the CO₂ is absorbed from the atmosphere,” Barrett said. “Through efficiency designs, we’ve been able to decrease the amount of those contactors to from 34 of them down to 24.”

That means less opex and capex. Oxy expects to see a 10% to 15% savings from the modifications, he said, noting additional improvements could that take it past 20%.