Carbon capture utilization and storage ("CCUS") refers to technologies that enable carbon dioxide ("CO2") emissions from industrial sources to be captured and either used in a way that limits or prevents them from being emitted into the atmosphere or enables them to be sequestered underground or otherwise stored for long-term (ideally permanent) isolation from the atmosphere.
The ability to capture and permanently store CO2 is expected to play a vital role in reducing global CO2 emissions and achieving "net zero" carbon emissions, which is a key goal for corporations, industries, and governments.
This White Paper will explore:
- The fundamentals of CCUS technologies;
- CCUS's role in the energy transition;
- The CCUS value chain;
- CCUS business models; and
- CCUS in the Asia-Pacific ("APAC") region, including recent developments, opportunities and risks, and future outlook.
WHAT IS CCUS?
CCUS broadly comprises of three distinct approaches and associated technologies:
- Carbon capture and storage ("CCS");
- Carbon capture and utilization ("CCU"); and
- Carbon dioxide removal ("CDR") or "negative emissions technologies."
While sharing common elements, CCS, CCU, and CDR can be distinguished by:
- The source of captured CO2;
- The destination of captured CO2; and
- Ultimately, whether the approach has reduced CO2 emissions or removed CO2 already emitted into the atmosphere (i.e., "net negative").
Many of the technologies underpinning CCUS are mature and have been implemented for decades, such as conventional CCS and CCU used in enhanced oil recovery. However, as the importance of meeting emissions reduction targets increases, novel applications of existing technologies and nascent technologies are emerging, backed by significant public and private investment. Unfortunately, many of the positive policy initiatives announced in recent years that would have otherwise improved financing prospects for CCUS projects have been offset by rising inflation, high interest rates, increasing project lead times, and permitting delays.
While deployment has trailed behind expectations, momentum has been growing in the development of a global CCUS industry. As of July 2024, there were 628 projects in various stages of development and production across the value chain, including 50 operational facilities and 44 under construction.1 Although CCUS development has increased significantly in recent years, there is a long road ahead. Operational projects around the globe have an aggregate annual capture capacity of 51 million tons per annum ("Mtpa"), with a further 365 Mtpa of projects in the pipeline.2 The International Energy Agency ("IEA") Net Zero Roadmap, which sets out global cross-industry targets for achieving net zero CO2 emissions by 2050, currently estimates that 6,040 Mtpa of CO2 will need to be captured by 2050 (3,736 Mtpa from fossil fuel and industrial processes, 1,263 Mtpa from bioenergy, and 1,041 from direct air capture).3
CCUS AND THE ENERGY TRANSITION
The reality of the situation is that the world is unable to entirely avoid production of CO2, but the continuing development of new technologies can help reduce carbon emissions in hardto-abate sectors while significant sources of CO2 emissions, such as fossil fuel-based power generation and transportation, are phased out and replaced with low-carbon alternatives.
As policymakers around the world accelerate their decarbonization efforts, there is a growing social acceptance that CCUS has a major role to play in achieving net zero emissions. This has been apparent in the scientific community for some time: Both the United Nations' Intergovernmental Panel on Climate Change and the IEA have outlined a fundamental role for CCUS in reaching net zero emissions by 2050,4 in particular for hard-to-abate sectors like cement, steel and fertilizer production, power generation, and natural gas processing. According to the IEA, "reaching net zero will be virtually impossible without CCUS."5
The IEA has identified four critical roles CCUS can play in the transition to net zero:
- Tackling emissions from existing energy assets;
- As a solution for sectors where emissions are hard to abate;
- As a platform for clean hydrogen production; and
- Removing carbon from the atmosphere to balance emissions that cannot be directly abated or avoided.
CCUS is by no means a silver bullet and will need to be deployed alongside other solutions, including renewables and battery technologies, sustainable fuels, and "green" hydrogen (noting that CCUS technologies also enable the production of "blue" hydrogen6). CCUS has, however, a number of advantages that complement these other solutions:
- It is cost-effective (at least for certain industrial and power generation applications);
- It relies in part on established technologies and knowledge; and
- It can be deployed to offset stubborn emissions that renewables struggle to replace.
CCUS VALUE CHAIN
The CCUS Value Chain is divided into four key areas: capture, transport, storage, and utilization.
Capture
In order to capture CO2, it must be separated from other gases produced during industrial processes or fossil fuel combustion. Capturing carbon is often the most significant cost component of CCUS processes, but also represents the best opportunity for value creation through increased efficiency and technological innovation. Different capture methods and technologies are available or in development that are suited to different applications.
Transport
Once captured, CO2 is transported to a storage or utilization site. In order to do so, CO2 needs to be compressed, with the increased pressure causing the dense-phase CO2 to behave like a liquid. The compressed CO2 is then dehydrated before being sent to a transport system, typically a pipeline. Pipelines are the most common mode of transport for CO2, largely because they already operate as part of enhanced oil recovery activities; however, small-scale shipping of liquid CO2 via road and rail has already been undertaken. Large-scale shipping of CO2 is emerging as a key transport option and is not expected to face any significant technical barriers, given the experience of the gas industry in shipping gaseous fuels and cryogenic liquids.
Development of transport infrastructure for CCUS is crucial in expanding the availability of storage to industries that operate away from storage sites. Companies with experience in the transport and storage of fossil fuels are already playing a key role in the development of CO2 transport infrastructure.
Storage
Storage involves sequestering CO2 by injecting the captured CO2 into geological formations that are typically at least one kilometer underground. These formations include saline aquifers, oil and gas reservoirs, and formations of porous rock such as basalt and shale.
| No. | CCUS Technology | Description |
| 1. | Pre-combustion processes |
Converts fossil fuels into a mixture of hydrogen and CO2 before combustion. CO2 is separated and captured, which allows for the hydrogen to be burned as a fuel source without producing CO2. The main technology to achieve this is the use of physical solvents that operate at high pressures. Various adsorption and membrane technologies are also under development. |
| 2. | Post-combustion processes |
Captures CO2 from the exhaust gases produced during fossil fuel combustion. This process typically involves the use of solvents that can absorb CO2. The solvents are then heated to create a stream of high-purity CO2 for capture. Membrane separation technology is also under development for large-scale use. Post-combustion technology is less efficient that pre-combustion capture but can be more readily retrofitted to existing industrial applications (such as power plants) than other processes. |
| 3. | Oxy-fuel combustion processes |
Burns fuel in a nearly pure-oxygen environment, which produces a concentrated stream of CO2 that is easier to capture. The downside of this process is that oxygen production is highly energy intensive, and boiler and material redesign is often required. |
| 4. | Direct air capture ("DAC") processes |
Uses filter or chemical technology to capture carbon dioxide from the atmosphere directly, which is then concentrated for transport or storage. Because CO2 is much more dilute in the atmosphere, current DAC technology is more expensive and energy intensive than other capture methods. |
The higher temperatures and pressure in deep underground formations mean that CO2 will stay in a concentrated state, allowing for the storage of greater volumes.
Oil and gas reservoirs have unique strengths as storage sites as there may be opportunity to adapt existing production infrastructure, and extensive geological surveying of sites has already been undertaken.
Utilization
As an alternative to storage, CO2 utilization technology, also known as carbon conversion or carbon recycling, aims to reuse captured CO2 in existing processes or as an ingredient in new products, thereby displacing additional fossil fuel use.
In addition to CO2 use in enhanced oil recovery, CO2 utilization technologies are currently deployed in the production of fuel alternatives, plastics, biofertilizers, and building materials.
Where the captured carbon's utilization results in a closed loop over many decades or centuries (e.g., when incorporated into building materials), CCU may be considered removal. However, many CCU applications merely delay the emission of carbon into the atmosphere, which will not positively impact emissions reduction targets.
Footnotes
1 Global CCS Institute, The Global Status of CCS: 2024 ("Global Status of CCS 2024").
2 Global Status of CCS 2024.
3 International Energy Agency, Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach: CCUS, 2023.
4 Global Status of CCS 2024.
5 International Energy Agency, CCUS in Clean Energy Transitions, 2020.
6 "Green" hydrogen is produced using electricity from renewable resources. "Blue" hydrogen uses steam to separate hydrogen from natural gas and relies on CCUS technologies to capture and store production emissions.
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