Looking toward the second half of this century, innovative ways to achieve net zero carbon emissions will be needed to stave off the worst impacts of climate change. Recent analysis suggests we will continue to use fossil fuels to meet our energy needs for several decades. If the collaborative efforts to meet the Paris Agreement are to address that reality, then while we continue to expand deployment of wind, solar and battery storage technologies, we will also need to explore other opportunities to keep these carbon emissions out of the atmosphere. Focused research, development, demonstration and deployment (RDD&D) aimed at converting carbon emissions into useful products poses a practical solution to lower carbon emissions toward that goal.
It’s encouraging that in the last 12 months, there have been three major milestones in capturing carbon emissions.
First, in November 2016, the Emirates Steel Industries Abu Dhabi CCS project came online. It is the world’s first steel plant retrofitted with carbon capture technology. The 800,000 metric tons of carbon dioxide the project captures each year will be transported by pipeline to nearby oil reservoirs for enhanced oil recovery (EOR). The International Energy Agency (IEA) has confirmed that CO2-EOR using manmade CO2 results in a net storage benefit of 0.19 metric tons of CO2 per barrel of oil produced, or a 37 percent reduction in the lifecycle emissions from the oil.
Then, in January 2017, NRG Energy announced that their Petra Nova project was completed on time and on budget. Petra Nova is America’s first coal-fired power plant retrofitted with post-combustion carbon capture technology, and is the largest of its kind in the world. The project captures roughly 1.6 million tons of carbon dioxide per year from a 240 MW slipstream of flue gas from the W.A. Parish Plant near Houston. The CO2 is transported by pipeline to a nearby oil field where it is used for EOR.
Finally, in April 2017, the Archer Daniels Midland Company announced that the Illinois Industrial Carbon Capture and Storage project in Decatur came online. It is the world’s first commercial-scale retrofit of an ethanol production plant with carbon capture technology. The project captures more than a million tons of CO2 annually and stores the captured emissions in a nearby saline formation.
These three capture milestones are very promising, but the IEA has warned that there are not enough carbon capture projects in development to meet global carbon emissions reductions goals. The problem is that first-of-a-kind projects are expensive; however, future builds tend to become less expensive as experiential learning and deployment at scale bring down technology costs—we have seen this with wind and solar energy technologies.
To bridge the gap, leadership from federal and state policymakers will be necessary, such as federal tax credits and state portfolio standards that were successful in scaling up wind and solar energy. For carbon capture, extending and expanding the Section 45Q tax credit would likely add more capture projects to the development pipeline. In July 2017, Senators Heidi Heitkamp (D-N.D.), Shelley Moore Capito (R-W.Va.), Sheldon Whitehouse (D-R.I.), and John Barrasso (R-Wyo.) introduced the bipartisan FUTURE Act, which would extend and expand the tax credit for projects capturing emissions from power plants and industrial sources and also for projects that capture carbon emissions directly from the atmosphere, a process known as direct air capture. The FUTURE Act is supported by 25 senators from both parties and from many regions of the country. In September 2017, a companion bill was introduced in the House by Agriculture Committee Chairman Mike Conaway (R-Texas) and is supported by a bipartisan group of 45 representatives.
Another powerful way to offset capture costs is to find a source of revenue for the captured carbon. That is why two of the three capture project milestones described above involve CO2-EOR. In the near-term, CO2-EOR is the largest source of revenue that can be used to offset capture costs. Looking into the future it will be important to scale up new sources of revenue from alternative uses of captured carbon.
There are a number of innovative efforts focused on scaling up utilization of captured carbon. The $20 million NRG COSIA Carbon XPRIZE was created to challenge inventors to find commercial uses for captured carbon. In October 2016, the NRG COSIA Carbon XPRIZE announced 27 semifinalist teams who are working on technologies as diverse as fish food, fertilizer, biofuels, and concrete. By next summer up to ten finalist teams will test their technologies at the Wyoming Integrated Test Center.
The Global CO2 Initiative was launched in January 2016 with a goal of capturing 10 percent of global annual carbon emissions and converting them into useful products. Last year, the initiative released A Roadmap for the Global Implementation of Carbon Utilization Technologies. The roadmap highlighted leading options for carbon utilization, such as building materials, chemical intermediates, fuels, and polymers that could use 7 billion metric tons of carbon dioxide per year by 2030 and lead to annual revenue of more than $800 billion. The roadmap answers questions many have asked about the potential cumulative scale in terms of carbon dioxide used and in terms of revenue; both are clearly significant.
In November 2017, at COP23 in Bonn, Germany, a follow up report was released by the Innovation for Cool Earth Forum (ICEF), the Carbon Dioxide Utilization ICEF Roadmap 2.0. It focuses on pathways for conversion of carbon dioxide that do not involve photosynthesis by algae or plants, since a lot of work has already been done in this area. It highlights that concrete (including both cement and aggregates) are near-term opportunities over the next three to 10 years because the basic physics and chemistry in these technologies are well understood. Commodity chemicals like ethylene, propylene, and methanol represent a medium-term opportunity over the next five to 20 years. Durable carbon materials like carbon fiber, graphene, diamonds, and carbon nanotubes are long-term opportunities.
The roadmap also reviews considerations related to lifecycle analysis. There is a lot of variety in how much carbon each utilization option will incorporate, how much energy will be used to convert the carbon to a useful product, what the market impacts will be on competitor products, how long the products will last and how they will be disposed. Reviewing all of these factors together helps determine the climate benefit of any given option to utilize captured carbon emissions.
Research priorities and next steps
To keep carbon emissions out of the atmosphere, we need to make progress on two tracks simultaneously: improved financing policies to help commercialize innovative technologies and robust support for RDD&D. On the first track, passing the FUTURE Act would provide a tax credit to projects that convert captured carbon into useful products, which would go a long way toward moving private capital into innovative projects.
On the second track of supporting RDD&D, maintaining federal support for research will be critically important. When Mission Innovation was launched, 22 nations and the European Union pledged to double their support for clean energy RDD&D. In the United States, the Trump administration proposed dramatic cuts to the Department of Energy budget for Fiscal Year 2018, but appropriations bills from the House and Senate were closer to previously-enacted levels.
Federal support for research on carbon utilization should focus on three areas: reducing technology costs and increasing the number of technology options; conducting lifecycle analysis to ensure that over time the focus is on permanently storing more of the carbon; and identifying how to scale up these options to meet climate goals.
Carbon utilization could open the door to new jobs and new industries in many regions of the United States. It also offers a path forward on the climate challenge by creating economic incentives for capturing carbon and keeping it out of the atmosphere. Even in a polarized political environment, the strong bipartisan support for the FUTURE Act and its companion bill in the House suggest that it is still possible to find areas of consensus. Policymakers should take advantage of the opportunity to make progress on reducing carbon emissions in a way that creates new economic opportunities.