Is Profitable Climate Capture Practical?
Action on the global climate is not a question of "if" but "how". Over 140 countries covering ~90% of global emissions have announced or are considering net-zero targets. CCS will be a crucial part of reduction efforts.
To reach net-zero emissions by 2050, the IEA's latest World Energy Outlook estimates that carbon prices need to be in place in all regions and reach US$130/US$250 per metric ton by 2030/2050 in advanced economies and US$90/US$200 per metric ton in major emerging economies (China, Brazil, Russia, and South Africa).
For CCS projects, the carbon price is simply the revenue line if there is no other economic benefit from using the carbon captured, such as for carbon sales or sales of by-products.
One should look at the regulatory environment and storage capacity to understand the relevance of CCUS at a country level. The US, Canada, and Australia may hold the most prospect for commercial carbon capture deployment. Unsurprisingly, these nations also have mature oil and gas industries that can enable the faster development of a new carbon capture network. Synergies can come from geological data and technical capabilities to rapidly de-risk storage sites, existing pipeline infrastructure, and skilled labor.
In our view, the quickest way to scale CCUS is to form regional "hubs", which gather CO2 from multiple sources (e.g., heavy industry and power generating facilities) transport and then store it using shared infrastructure- benefiting from an overall network effect.
Currently, there are ~40 CCUS hubs in development around the world, according to the IEA and Oil & Gas Climate Initiative’s (OGCI) CCUS Hub. Nearly all announced CCUS hubs involve so-called "industrial clusters", where the emission sources/facilities are close and linked by pipeline.
Once captured and transported, the CO2 must either be "utilized" or "stored" permanently in deep geological formations. In general, there is more than enough storage to accommodate the CO2 storage requirement through 2100 to aid substantially in limiting temperature change to 1.5C.