CO2CRC is Australia’s leading carbon capture, utilisation and storage (CCUS) research organisation
This redistributed version of the March Insights newsletter contains a corrected and updated version of the Feature story: Australian First Study into Seal Capacity for Hydrogen Geological Storage

  • Policy: Federal government launches new $50 million CCUS Development Fund

  • News: HESC Commencement of hydrogen production

  • News: CO2CRC establishes technical consultancy company - CO2Tech

  • Policy: UN report calls for greater investment in CCUS

  • Research and policy: IEA – calling CCUS “too expensive” misses the big picture

  • Investment: Engie and Equinor team up for low-carbon hydrogen project

  • Policy: Head of Mitsubishi Heavy Industries urges European governments to invest in CCS

  • Policy: UK government launches new industrial decarbonisation strategy

  • Investment: UK energy firm announces plans for emissions negative biomass energy plant with CCS

  • Investment: US joint venture announces plans for world's largest CCS project

  • Investment: Abu Dhabi national oil company seeks carbon capture partnerships

  • Investment: Canadian CCUS project achieves million-tonne milestone

  • Investment: Mitsui takes stake in major UK CCS project

  • FEATURE: Australian First Study into Seal Capacity for Hydrogen Geological StorageStorage
Policy: Federal government launches new $50 million CCUS Development Fund
The Australian Ministers for Energy and Emissions Reduction and Resources, Water and Northern Australia announced in early March the launch of the new Carbon Capture, Use and Storage Development Fund.
The Fund will make $50 million available to reduce technical and commercial barriers to deploying CCUS technologies and to identify potential project sites. Policymakers hope that Australia will emerge as a leader in carbon storage, leveraging natural advantages such as globally recognised geological formations.
Angus Taylor - Minister for Energy and Emissions Reduction - underlined the importance of carbon capture technologies, stating that they will play a crucial role in Australian efforts to achieve net zero emissions.
News: HESC Commencement of hydrogen production
The Hydrogen Energy Supply Chain (HESC) Pilot Project has announced the commencement of operations. The HESC Pilot is developing a complete hydrogen supply chain, creating hydrogen gas via the gasification of Latrobe Valley coal, transport to the Port of Hastings for liquefaction, and shipment to Japan.
CO2CRC played an important role in the HESC project with responsibility for conducting FEED (front end engineering and design) studies and EPC (engineering, procurement and construction) services for delivery of the pilot hydrogen refining facility.
Victorian Treasurer Tim Pallas said “The HESC project will assist in establishing local hydrogen skills, capabilities and infrastructure that will provide a platform for the development of a broad hydrogen industry in Victoria and Australia.” The Victorian government is also investing in the related carbon capture and storage project known as CarbonNet.
In a joint media release with Minister for Resources, Water and Northern Australia, Keith Pitt, Angus Taylor, Minister for Energy and Emissions Reduction, said “A commercial-scale HESC project could produce up to 225,000 tonnes of clean hydrogen per year with carbon capture and storage. It’s a great example of Australian resources supporting new low emissions energy production.”
News: CO2CRC establishes technical consultancy company - CO2Tech
CO2CRC announced the launch of CO2Tech, a multi-disciplinary technical consultancy that will provide advisory and project management services across the CCUS value chain.
According to CO2CRC CEO David Byers, "CO2Tech will be pleased to work with industry customers to help them achieve their emissions reductions goals by applying individualised technologies and techniques that result in lower costs for capturing, storing or utilising CO2.”

CO2Tech will have access to the Otway International Test Centre (OITC) and CO2CRC’s expertise via commercial agreements.
Policy: UN report calls for greater investment in CCUS
In early March, the United Nations Economic Commission for Europe (UNECE) released a report calling for scaled up investment in CCUS. The report highlighted that CCUS is an essential part of efforts to achieve emissions neutrality.
"Countries need to include CCUS in long-term strategies and commence retrofitting existing infrastructure." notes the report.
The authors state that some countries (US, UK and the Nordic zone) are leading the way in CCUS development, but that scale and cost remain challenges. The report recommends increasing research, identifying potential storage locations and sharing knowledge across Europe
Research and policy: IEA – calling CCUS “too expensive” misses the big picture
A recent commentary article released by the International Energy Agency (IEA) addressed cost concerns raised by critics of carbon capture utilisation and storage (CCUS). The article presents a nuanced picture of the spectrum of CCUS applications, and how costs for each are evolving.
The authors point out that the cost of carbon capture varies greatly depending on the source of the emissions - USD 15-25/t CO2 for industrial processes producing “pure” or highly concentrated CO2 streams (such as ethanol production or natural gas processing) to USD 40-120/t COfor processes with “dilute” gas streams, such as cement production and power generation.
Limiting the availability of CCUS would considerably increase the cost and complexity of the energy transition by increasing reliance on technologies that are currently more expensive and at earlier stages of development.
The article also highlights that for many industrial processes - including cement and steel-making - CCUS remains the best (or only) means of carbon abatement available.
Investment: Engie and Equinor team up for low-carbon hydrogen project
French energy major Engie and Norwegian firm Equinor have announced that they will collaborate on low-carbon hydrogen, capturing and storing CO2 emissions off-shore. The two companies signed a memorandum of understanding to explore the development of a low-emissions hydrogen value chain across Belgium, France and the Netherlands.
Neither company is a stranger to blue hydrogen projects, and both have committed to making the alternative fuel source available to their customers. According to Grete Tveit, Equinor’s senior vice president for Low Carbon Solutions: "We believe that hydrogen and CCS will be vital if we are going to succeed with the transition [to low-emissions energy]."
Policy: Head of Mitsubishi Heavy Industries urges European governments to invest in CCS
Group CEO and President of Mitsubishi Heavy Industries Kenji Terasawa published an opinion piece in late February emphasising that despite the impressive growth of renewable energy sources in Europe, they will not single-handedly enable net-zero carbon emissions by 2050. He urged European governments to include CCS as a focus area in emissions reduction strategies.
Mr Terasawa points out that CCS can remove more than 90% of the CO2 generated by many industrial processes and can contribute to new forms of fuel for long-distance transport. CCS can also improve the environmental performance of fossil fuel-to-hydrogen projects; a necessary first step to stimulate demand and enable an eventual shift to green hydrogen.
The article concludes with a call for greater coordination among policymakers to support research and commercialisation of CCS and CCUS technologies.
As part of its own R&D efforts, Mitsubishi Heavy Industries has developed a proprietary solvent for capturing CO2 that will undergo testing at Norway's Technology Centre Mongstad (TCM).
Policy: UK Government launches new industrial decarbonisation strategy
The UK government has announced the launch of a new Industrial Decarbonisation Strategy that will see £171 million put towards hydrogen and carbon capture and storage (CCS) projects. The dedicated £171m funding is part of a larger £1 billion investment.
The £171m earmarked for CCS will support CCS projects across England, Scotland and Wales, including:
  • Scotland (St Fergus, Aberdeenshire) - £31m towards storage engineering studies to support Scotland’s Net Zero Infrastructure project
  • Teesside – £52m allocated to decarbonise the industrial cluster in Teesside, led by both Net Zero Teesside and the Northern Endurance Partnership
  • North West (Merseyside) – Close to £33m to support two HyNet North West CCS projects in North West England
  • Humber – £21m to support net zero efforts in the Humber region, led through a collaborative effort by the Zero Carbon Humber Partnership, along with £12m to decarbonise Immingham, North East Lincolnshire
  • South Wales – £20m to support the development of a net zero industrial zone in South Wales, led by the South Wales Industrial Cluster
With a government commitment to reach net-zero by 2050, the Industrial Decarbonisation Strategy seeks to support the UK’s legislated climate targets.
Investment: UK energy firm announces plans for emissions negative biomass energy plant with CCS
Drax - a UK energy company that operates an electricity plant in North Yorkshire that has been largely converted from coal to biomass - has announced plans to progressively add CCS capacity. 

The facility currently operates six biofuel-fed units. CCS capacity is slated to be added to the first of these units by 2027, and the second by 2029.
The technology - known as Bioenergy with Carbon Capture and Storage (BECCS) - would reportedly capture as much as 95% of emissions from the 47-year-old facility. Emissions would be transported to the planned zero carbon hub in the Humber region, which has been mentioned in this newsletter before
Investment: US joint venture announces plans for world's largest CCS project
Summit Agricultural Group and Green Plains Inc announced in mid-February a partnership to create the world's largest carbon capture and sequestration project. A new company - Summit Carbon Solutions - has been established to manage the project.
Once at scale, the Midwest-based facility will capture and store up to 10 million tons of CO2 per year. Emissions sources targeted include nearby biofuel refineries, reportedly helping them lower their emissions by 50%.
The project is currently in its engineering and design stage.
Investment: Abu Dhabi National Oil Company seeks carbon capture partnerships
The Abu Dhabi National Oil Company (ADNOC) is seeking to reduce its operating emissions and increase rates of carbon storage.
The company has already announced a CCS partnership with Total, and is seeking other partners with the capacity to capture and store emissions from fossil-fuel power plants, and from heavy industry such as steel and cement making.
Sultan Al Jaber, group CEO, stated that “there is no credible way of reaching global climate goals without seriously advancing and ensuring the widespread adoption of carbon capture and storage.”
Investment: Canadian CCUS project achieves million-tonne milestone
Enhance Energy, a Canadian carbon mitigation company, has announced that their projects have resulted in the sequestration of more than one million tonnes of CO2, some of which has been used for enhanced oil recovery. This was achieved in just eight months of at-scale operation.
Enhance Energy founded the Albert Carbon Trunk Line project. The CO2 transport infrastructure is now operated by Wolf Midstream.
According to Canadian Minister of Natural Resources, “Carbon capture technology creates jobs, lowers emissions, and increases our competitiveness. It’s how we get to net-zero.”
Investment: Mitsui takes stake in major UK CCS project
Japanese investment bank Mitsui has announced the acquisition of a 15.4% stake in Storegga Geotechnologies (SG), which is developing the Acorn project, one of the UK's largest CCS initiatives.
Other investors in Pale Blue Dot Energy - the wholly owned SG subsidiary that is implementing the Acorn project - include Singapore firm GIC and Australia's Macquarie Group.
"Mitsui believes providing low-carbon solutions to hard-to-abate industries such as energy will be critical in achieving net-carbon zero targets." stated Masaharu Okubo, Chief Operating Officer of the Energy Business Unit.
FEATURE: Australian First Study into Seal Capacity for Hydrogen Geological Storage
Over the next 20 years, as Australia advances its plan to develop a hydrogen (H2) export industry, storing H2 at sufficient volume will become a critical supply chain need. Whether used for export or domestically (e.g. in the gas supply network), temporary storage of the large volumes of H2 produced will be needed to balance large anticipated fluctuations between supply and demand. Compared to storage in surface infrastructure (tanks, pipelines), geological storage of H2 in porous reservoirs addresses a critical gap for an effective large-scale, reliable H2 supply chain.  

Appraisal of underground hydrogen storage is attracting increasing attention globally. Here in Australia, a foundational step along this pathway has been taken with the competion of the first comparative study of technical storage containment requirements for carbon dioxide (CO2), methane (CH4) and hydrogen.
The study, on seal capacity for gas storage, was conducted by Jarred Watkins from The University of Adelaide’s Australian School of Petroleum and Energy Resources, with support from CO2CRC. 
Porous geological storage of gas requires a reservoir rock (such as a sandstone) overlain by a low permeability caprock or seal (such as a mudstone). Understanding the physical and chemical rock properties of the seal, and in particular the ‘seal capacity’ is critical to determining the safe maximum volume of gas that can be stored in target geological formations.
Seal capacity refers to the volume of gas that a caprock can retain before gas would flow into the caprock. Properties that influence seal capacity include capillary threshold pressures (the pressure between two immiscible fluids against the pore spaces in the rock), fluid density, wettability (the ability of a liquid to maintain contact with a solid surface) and the interfacial tension (the force of attraction between the molecules at the interface of two fluids). The determination of seal capacity is achieved primarily through petrophysical analyses such as Mercury Injection Capillary Pressure (MICP) tests. 
The study involved the desk-top conversion of MICP data to subsurface gas and formation fluid conditions for CO2, CH4 and H2 respectively. Caprock samples from seven Australian basins were evaluated to determine and compare their respective capacity for the retention of the three different gases.
Seal capacity is already proven for CH4 and CO2. However, a significant conclusion of the study is that, despite its low density and small molecular size, the seal capacity for H2 is very good, capable of safely containing similar volumes to that of methane. The study gives the necessary assurance that porous geological systems present a viable storage option for the large volumes of H2 that would be required to support Australia’s emerging hydrogen economy.
The Watkins study is an important input to the H2@Otway Project, a field demonstration of geological storage of hydrogen which is currently under examination by CO2CRC, CSIRO and Monash University. This assessment will be featured in a future edition of CO2CRC Insights. 
The Watkins study is available to CO2CRC Members via the Publication Tracking System: THE20-6276.