CO2CRC Insights | October 2020

CO2CRC is Australia’s leading carbon capture, utilisation and storage (CCUS) research organisation

CO2CRC INSIGHTS | October 2020

Policy: Federal government Technology Roadmap identifies CCS as priority area for investment

Policy: Federal Budget support for low emissions technologies

Investment: Massive investment in CCS "vital" - IEA

Projects: Gorgon confirmation of 3m tonnes of CO₂ stored

Collaboration: Australia-Japan CCUS/Carbon Recycling Workshop

Investment: Mitsubishi Heavy Industries announces it will build a CCS system for ships

Policy and Investment: Norwegian government announces USD1.8 billion in funding for Longship CCUS project

Policy: US Department of Energy announces USD72 million in new funding for CCS

Research: US study finds CCS is a key element in zero-emissions electricity goals

Policy: US Department of Energy study builds case for CCUS in Wyoming

Investment: Seven US states commit to CO₂ transportation plan

Policy: UK government releases response to consultation on CCUS

FEATURE: Economic stretch goal - $20 per tonne of CO₂

Policy: Federal government Technology Roadmap identifies CCS as priority area for investment

The government's recently-released Low Emissions Technology Statement has identified carbon capture and storage as one of five priority investment areas that have the potential to enable Australia to deliver the strongest economic and emissions reduction outcomes.

Carbon capture and storage is featured in two ways in the Statement. One of the four priority technologies identified as requiring government and private investment is "Scaling geological and biological sequestration to provide globally significant permanent sequestration of CO₂". In addition, one of the five "stretch targets" is achieving CO₂ compression, hub transport and storage for less than $20 per tonne.

CCS is also a necessary component of clean hydrogen production, which is identified as a separate stretch target.

Leading industry figures believe the CCS stretch target is achievable. CO2CRC CEO David Byers welcomed the Low Emissions Technology statement, pointing out that "Australia is uniquely positioned to be at the forefront of the global scale-up of CCS technologies. It has ready access to the latest carbon capture and storage technologies and expertise, some of the world’s best deep sedimentary basins in which to store CO₂ and an internationally recognised resources industry and researchers."

Policy: Federal Budget support for low emissions technologies.

Following the press release of 17 September 2020 by the Prime Minister and the Minister of Energy Emissions Reduction, the Federal budget confirms investment in carbon capture projects. The funding forms part of the government's New Energy Technologies investment package.

$50 million will be made available to support CCS pilot projects, and will be administered via the Carbon Capture Use and Storage Development Fund. Hydrogen projects also form a key component of the strategy, with support for clean hydrogen, whether produced from gas or coal coupled with CCS or from renewables.

The investment package also includes an additional $193.4 million to guaranteed baseline funding of $1.43 billion over 10 years that will be made available for the Australian Renewable Energy Agency (ARENA) for grants to clean technology projects. The Government also announced it will introduce new legislation so ARENA and CEFC can support new and emerging low emissions technologies, such as carbon capture and storage.

Investment: Massive investment in CCS "vital" - IEA

Fatih Birol, Executive Director of the International Energy Agency (IEA) has advised that without CCS, it will be "virtually impossible" to achieve global energy and climate goals. He pointed out that global CCS capacity is just 40 million tonnes per year, against a 2009 IEA target of 300 million tonnes by 2020.

The IEA's Sustainable Investment Scenario requires emissions from energy to drop to net zero by 2070, with CCS accounting for 15% of this reduction. Carbon capture and storage is one of the four IEA pillars of the transition to cleaner energy.

Projects: Gorgon confirmation of 3m tonnes of CO₂ stored

In Western Australia, Chevron is operating the world’s largest CCS project and recently confirmed that it had reached the milestone of storing 3 million tonnes of CO ₂. The 40-year project will capture and store CO₂ from the Gorgon LNG project and once at full operating capacity will reduce lifetime greenhouse gas emissions by 40 per cent.

Chevron Australia managing director Al Williams confirmed that by sharing the learnings from the Gorgon project with industry and government, Chevron aimed to support the increased deployment and cost-effectiveness of CCS in Australia.

Collaboration: Australia-Japan CCUS/Carbon Recycling Workshop

On 30 September an Australia-Japan CCUS/Carbon Recycling (CR) Workshop was Co-Chaired by CSIRO and Japan’s Research Institute of Innovative Technology for the Earth (RITE)

The workshop attendees heard the latest updates on policies for CCUS/CR in Australia and Japan from the Department of Industry, Science, Energy and Resources (DISER) and Geosciences Australia (GA) and Japan’s Ministry of Economy, Trade and Industry.

Research activities from Japan were shared from the General Environment Department, New Energy and Industrial Technology Development Organisation, RITE, and Japan CCS Co provided an update on the Tomakomai CCS Demonstration Project.

Representatives from CSIRO, ANLEC R&D, and CO2CRC provided updates on Australian CCUS/CR research. The workshop ended with a very positive discussion on opportunities for future collaboration.

Investment: Mitsubishi Heavy Industries announces it will build a CCS system for ships

Japanese ship-maker Mitsubishi Heavy Industries has announced what it is touting as the world's first "carbon capture at sea" project. The demonstration involves converting the design of an existing CO₂ capture system for onshore power plants to a marine environment and installing it on board an actual ship in service. The initiative will contribute to the goal of the global shipping industry to reduce emissions by 50% by 2050.

Maritime transport is an important source of emissions, accounting for 2.5% of the global total. A recent Japanese research project found that on-board CCS could reduce emissions by up to 90%.

With EU emissions rules for maritime transport tightening, new shipping technology applications like this are of growing importance.

Policy and Investment: Norwegian government announces USD1.8 billion in funding for Longship CCUS project

In mid-September, the Norwegian government submitted a white paper describing "Langskip" (Longship), a major carbon capture and storage project to be undertaken in cooperation with the private sector and neighbouring countries.

The government will contribute USD1.8 billion to the cost of the project, with an additional USD0.9 billion to be raised from other sources including the private sector and other national governments. The project will boost the capacity of the Northern Lights CCS facility, which is to be constructed by Shell, Equinor and Total.

Longship is being billed as the first full-scale CCS project and builds on 35 years of CCS research at the SINTEF research institute and the Norwegian University of Science and Technology (NTNU).

Policy: US Department of Energy announces USD72 million in new funding for CCS

The United States DOE has announced an additional USD72 million to support the development of carbon capture projects and technology. The funding will be administered by the Carbon Capture, Utilisation and Storage R&D Programme.

USD51 million of the funding is slated for CCS projects associated with coal and natural gas energy and industrial projects, while the remaining USD21 million will support projects that seek to remove CO₂ directly from the atmosphere.

Research: US study finds CCS is a key element in zero-emissions electricity goals

A new report from the California-based Energy Innovation think-tank has found that CCS is likely to be an important part of zero-net-emissions strategies. All five scenarios presented in the report involved deployment of CCS, either in its own right or as an element of clean hydrogen production.

The report concludes that the falling cost of renewable energy coupled with the broadening application of CCS provide viable technological pathways to a zero-net-emissions US energy sector by 2035.

Policy: US Department of Energy study builds case for CCUS in Wyoming

A recent study exploring the benefits of retrofitting existing coal-fed electricity plants with CCS has found the technology compares favourably with other emissions reductions strategies.

As well as comparing favourably in terms of costs, CCUS was found to have the potential to reduce emissions by 39% over the baseline case.

According to Energy Deputy Secretary Mark Menezes “This study shows that through innovative technologies, like CCUS, we can develop affordable energy more cleanly, and clean energy more affordably,"

Investment: Seven US states commit to CO₂ transportation plan

Pennsylvania, Kansas, Louisiana, Maryland, Montana, Oklahoma and Wyoming have announced plans to establish a regional CO₂ infrastructure plan.

The seven states signed a memorandum of understanding (MoU) to collaborate and leverage resources to reduce emissions, create jobs and utilise natural resources.

As Department of Community and Economic Development Secretary Dennis Davin explained, “Carbon capture technologies provide a critical component to addressing our climate challenge by providing the means to capture, utilise and store carbon associated with power generation, industrial manufacturing and other carbon intensive operations.”

Policy: UK government releases response to consultation on CCUS business models

A response to consultation on potential business models for CCUS issued in recent weeks by the Department for Business, Energy & Industrial Strategy included a commitment to developing CCUS this decade.

The UK government recently completed a broad-based consultation seeking input on business cases for CCUS development. 72 responses were received from large and small businesses, researchers, unions and individuals.

Based on input received, the government repeated its commitment to investing at least GBP800 million to establish at least two CCUS facilities this decade. Targets associated with CO₂ transport and storage, industrial CCUS, power CCUS and hydrogen production were all included in the response.

The response committed to releasing further details before the end of 2020, and a final business model by 2022.

FEATURE: Economic stretch goal - $20 per tonne of CO₂

Carbon Capture and Storage (CCS) has been identified as one of the five priority low emissions technologies for Australia. As part of the Government’s first Low Emissions Technology Statement, the Government has identified economic stretch goals to make the new technologies as cost-effective as exiting technologies. For CCS, the target is CO₂ compression, hub transport, and storage under $20 per tonne of CO₂.

The establishment of a stretch goal for CCS provides an exciting mission for government, business and researchers. The goal is achievable with the right policy settings and investment in technology development and project deployment. This is consistent with the conclusions of leading independent academic and industry technoeconomic studies.

Australia has ready access to the latest carbon capture and storage technologies and expertise, some of the world’s best deep sedimentary basins in which to store CO₂ and an internationally recognised resources industry and researchers. The investment by the Australian Government will ensure that Australia can capitalise on its already strong base in CCS technologies and access to natural resources to grow the industry to ensure job creation and economic growth while reducing Australia’s emissions.

The value of CCS is its versatility as a technology. Its applications extend from natural gas processing and power generation to steel and cement production, where emissions are hard to abate due to inherent process emissions and high temperature heat requirements.

Producing clean hydrogen from gas or coal paired with CCS also offers the most cost-effective, reliable, and flexible pathway to large-scale hydrogen production.

CCS projects also offer a large-scale emissions reduction opportunity (millions of tonnes per annum (Mtpa) for 20-plus years), which is an order of magnitude higher than many other abatement options. For example, the Gorgon LNG Project is progressively ramping up to full capacity of up to 4Mtpa of safe and permanent storage of CO₂. The Victorian CarbonNet Project plans to geologically store around 5Mtpa CO₂ each year and Santos is examining a large-scale commercial CCS project to be located in the Cooper Basin with a scalable potential to store up to 20 Mt of CO₂ per year.

The shared learnings from these commercial projects and the continued support for R&D in CCUS will enable Australia to reach the economic stretch goal of $20/tCO₂ and increase deployment of CCUS technologies to reduce Australia’s emissions and become a global leader in CCUS.