While still in its infancy, interest around the carbon capture and sequestration (CCS) market is continuing to grow. Of the 185 operational and planned CCS projects BTU Analytics tracks around the globe, 71 projects have been announced in 2022, up from 63 project announcements in 2021, meaning almost all project announcements have come within the last two years. Even more staggering is the fact that the 71 project announcements this year represent 130 Mt/y of capacity, up 430% from the 30 Mt/y of capacity announced in 2021. However, those following these announcements will notice that each project is exploring or utilizing some different kind of technology. The difference in these technologies will be a determining factor in the economics of each project, as well as what sector or industry will benefit from being able to capture carbon in each specific way. Therefore, this Energy Market Insight will explore the broad differences in CCS technologies being explored and implemented today.
In general, CCS can be broken down into four different kinds of technology: pre-combustion, post-combustion, oxyfuel, or direct air capture (DAC).
Pre-combustion: this technology type involves separating CO2 from a feedstock before any actual combustion happens or capturing CO2 resulting from fermentation processes. When you see this, think ethanol or fertilizer plants. Fertilizer plants utilize natural gas as a feedstock for their processes, and before the gas is burned in any way, it is treated and the CO2 is removed. This creates a concentrated CO2 stream that can be captured. Alternatively, ethanol plants capture nearly pure CO2 that is emitted as a by-product of ethanol fermentation. The high concentration of CO2 at both facilities reduces energy, separation, and compression costs, but the process is specific to targeting certain kinds of industrial process emissions.
Post-combustion: this technology is about capturing emissions after fossil fuels have been burned, such as at a power plant. In this case, the fuel is burned, which gives off CO2 and other gases. Due to the nature of how the gas is burned, the concentration of CO2 is low, meaning it still needs to go through a separation unit, which increases the costs associated with running the equipment.
Oxyfuel: this technology is similar to post-combustion capture, but instead of the natural gas being burned in air, which is made up of mostly nitrogen, some oxygen, and trace amounts of other gases, the fuel is burned in pure oxygen. This means the resulting emissions are steam and pure CO2, which cuts down on the costs of extracting CO2 from an impure stream and allows oxyfuel technology to capture close to 100% of emissions. Oxyfuel can be retrofitted to some plants on a case-by-case basis and would not be as suitable to power plants that are burning lower quality fuels, such as lignite coal.
DAC: while not strictly its own type of technology, DAC is worth mentioning in this discussion because it is so different from the other technologies listed above. DAC uses energy in the form of heat and electrons to pull CO2 out of the air with a chemical reaction involving a solvent. This form of CCS has advantages, such as being location agnostic since the unit can be placed virtually anywhere and is not limited by needing an existing plant or unit to capture the CO2. On the flip side, DAC is energy intensive, and without zero carbon electricity, DAC contributes little net carbon removal, or in some cases, even adds carbon to the air. Also, it is still very expensive.
To give some context as to where the world is with these different technologies, of the 37 Mt/y of global operational CCS capacity that BTU Analytics tracks, only around 4.5 Mt/y of that is post-combustion. However, the above graphic shows that post-combustion CCS capacity is expected to grow, in large part because post-combustion technology is better suited for a broader range of sectors and industries, including power plants and industrial facilities that use combustion technology in their processes. There have also been several DAC announcements, including Occidental Petroleum (NYSE: OXY) recently announcing an intention to deploy 135 DAC facilities worldwide by 2035.
CCS is still an emerging technology, but the boom in recent announcements indicates growing momentum in the space. If you are interested receiving more detailed analysis on CCS and other energy transition related topics, email email@example.com with the subject line “Energy Transition” to be the first to receive samples of our forthcoming reports and analysis.