Technip Energies: Global deployment of CCS needed in all sectors as ‘essential’ piece of decarbonization puzzle

France’s engineering and technology company Technip Energies has hosted a webinar on the topic of carbon capture, utilization, and storage (CCUS), portraying it as an “essential component” of the energy system, which is paving the way toward achieving net-zero goals. As global players embark on emission reduction quests, the French firm is adamant that CCUS is part of the solution to the climate woes. Which steps need to be taken to enhance the viability of this decarbonization tool in the energy transition arsenal?

Technip Energies’ quarterly ‘Techno & Transition’ webinars are designed to address a technological theme linked to the energy transition. The French player’s experts present how currently available technologies are designed and operated in the fields of LNG, decarbonization – such as carbon capture and storage (CCS), blue hydrogen, and ammonia – sustainable chemistry, and carbon-free energies, including green hydrogen and floating offshore wind.

The latest webinar focused on CCUS, offering a didactic overview of the global carbon capture market, its dynamics, value chain, economic challenges, and the different types of technology available. According to Manuel Jacques, Technip Energies’ Technical Expert for CO2, carbon dioxide separation technologies primarily consist of separating CO2 molecules from gas and rely on four main technologies: absorption, adsorption, membrane, and cryogenic.

Within its ‘Net Zero by 2050’ roadmap –  published in 2021 – the International Energy Agency (IEA) estimated that the world would need to capture 4 billion tons of CO2 every year by 2035, and 7.6 billion tons by 2050. With this at the forefront, the CCUS technology is deemed to be the key, alongside renewable energies and energy sobriety, to decarbonize industries over the coming decades.

As a result, Technip Energies has embraced CCS and revealed Canopy by T.EN, an integrated suite of flexible and modular post-combustion carbon capture solutions – powered by Shell CANSOLV CO2 capture system – in June 2023 to bring to “market a range of optimized and reliable carbon capture solutions, including the Canopy C200 modular solution, allowing any type of emitter to decarbonize its operations quickly, efficiently and affordably,” as explained at the time by the company’s SVP Decarbonization Solutions.

While discussing primary greenhouse gas (GHG) contributors, Christophe Malaurie, Technip Energies’ SVP Decarbonization Solutions, underlined that CO2 was the biggest volumetric contributor to global warming with long-term persistence. According to Malaurie, the power sector remained dominant in global emissions contributions, as CO2 emissions from electricity and heat generation grew by 1.8% in 2022 to reach an all-time high of 14.65 Gt, despite growth in renewables.

Therefore, global CO2 emissions are expected to continue to rise if there is no intervention to bring them down. Technip Energies’ SVP Decarbonization Solutions used a quote from Fatih Birol, IEA’s Executive director, to hammer home the importance of CCUS, as Birol said that energy and climate goals would be “virtually impossible to reach” without CCUS.

“To stabilize or even reduce concentrations of CO2 in the atmosphere, the world needs to reach net-zero emissions. This requires significant change. Now,” urged Malaurie, who is convinced that joint efforts are required rather than competition to decarbonize the world with CCUS, which is expected to contribute almost 8% of global CO2 emission reductions by 2050.

While shedding more light on the carbon capture market outlook for 2030, Rebecca Eason, Technip Energies’ Head of Market, CO2 Management, pointed out that the roll-out of CCUS projects was being stepped up, with projects in the pipeline and those ongoing totaling 623 Mtpa and encompassing 634 projects. However, she believes that “CCUS must be deployed globally and in all sectors,” as the IEA’s capture requirements by 2030, which are part of the net zero 2050 trajectory, amount to 1 Gtpa.

Eason uses Rystad Energy’s CCUSCube as a source to confirm that the current projects in operation total 43 Mtpa and cover 73 facilities. She elaborates that the global CCUS demand by 2030 includes 574 Mtpa, which is split throughout different regions: North America 238 Mtpa, Europe 198 Mtpa, Asia 70 Mtpa, Middle East 34 Mtpa, Australia 29 Mtpa, Africa 3 Mtpa, and South America 2 Mtpa.

Currently, a different set of country-specific schemes are driving global CCUS investment, such as the U.S. Inflation Reduction Act (IRA), which turbocharged decarbonization with $369 billion set for low-carbon initiatives, including 45Q tax relief. In addition, there is also Canada’s CCUS investment tax credit of $2.6 billion (about $1.9 billion); UK Spring Budget’s £20 billion (around $25.1 billion) for CCUS; EU Connecting Europe Facility (CEF) €6 billion (approximately $6.6 billion) for energy and decarbonization; and U.S. Infrastructure Investment & Jobs Act’s $12 billion for CCUS development.

Eason also mentions 30 carbon tax initiatives worldwide, including Sweden’s carbon price of $127 per ton; 31 ETS systems active worldwide with carbon prices ranging from $7 – 98 per ton; and the Australian carbon credit unit scheme of AUD 50 or $32.88 per ton. Technip Energies’ Head of Market for CO2 Management underscores that the global CCUS market may increase to over $50 billion by 2030 while the EU Innovation Fund sets a total budget of €10 billion from 2020 – 2030 for low-carbon technologies.

While diving into the economic challenges of CCUS, Eason explains that the development of global carbon pricing is ongoing while the UK and Europe have already set up active carbon trading markets. Currently, direct carbon pricing instruments cover around 30% of global emissions, thanks to ETS mechanisms being well established in the UK and EU since 2005 with EU ETS carbon price exceeding €100 per ton and Carbon Border Adjustment Mechanism (CBAM) acting as an additional EU import tariff.

Moreover, Eason, which outlines that costs vary across the CCUS value chain based on the type of industry and storage solution, notes that costs remain high compared to the carbon price, thus, partnerships are being forged to curb the costs of CCUS. Regarding the ways to boost CCUS economics, Technip Energies’ Head of Market for CO2 Management claims that biogenic CO2 certificates and utilization strategies can help to enhance economics along with governmental funding.

As the current climate urgency gathers momentum, CCUS continues to be seen as part of the spectrum of decarbonization solutions aiming to usher in a carbon-free world. In light of this, Technip Energies’ webinar points out that diverse technologies and efforts are required to advance CCUS, including government incentives, effective carbon pricing implementation, and cost reduction by standardization and industrialization.

Recently, Wood Mackenzie, an energy intelligence group, emphasized that emerging sectors could not usher in net zero by 2050 without carbon capture, utilization, and storage. Due to this, additional investment in decarbonization through more CCUS projects was recommended. At the time, Wood Mackenzie was tracking globally planned CCUS capacity at 1,400 Mt CO2 Pa and the U.S. was in the lead with a 33% share of those projects. 

Despite hopes that CCS would lend a helping hand in reaching net-zero goals, the International Energy Agency’s recent edition of the Net Zero Roadmap reduced projections for CCS deployment in 2030 by around 40% compared to the original NZE scenario, due to – what it described as – “a history of unmet expectations.” 

Many environmental activists and organizations claim that CCS is being touted as a climate silver bullet, but they see it as a lifeline for new oil and gas developments. In line with this, a new report from the Center for International Environmental Law (CIEL) paints CCS as a “dangerous distraction” from real progress on climate change rather than a means of slashing the existing carbon footprint.

Spurred by the findings in the report, CIEL has recommended a stop to the dash for offshore CO2 storage hub developments along with the strengthening of regulatory regimes at the global level to prevent alleged harm from offshore CCS projects.

While there can never be a one-size-fits-all solution to reaching net zero, the right roadmap is expected to leverage the contributions of various regions and industries. Currently, no matter how the numbers are crunched, they do not add up to net zero by 2050, as outlined by the IEA, TotalEnergies, and many others. The tides are also turning in favor of more fossil fuels, as the shift towards more gas, with an emphasis on LNG, is being observed throughout the world during the energy transition era.

High hopes are placed on COP28, which is kicking off next week in the UAE. Will this conference bring greater action towards net-zero ambitions at a time when a big question mark hangs over previously established targets? This remains to be seen, but fossil fuels continue to reign supreme in the global energy mix by controlling the lion’s share of 80%.

Bearing this in mind, ExxonMobil’s Chairman and CEO, Darren Woods, said at the APEC Summit in San Francisco last week that the plan to tackle climate change and energy demands would need to go beyond expanding wind, solar, and EVs. According to ExxonMobil’s CEO, the world needs to commit to solving its “energy and emissions challenges simultaneously” to bridge the global North-South divide. 

Woods stated that the problem was not oil and gas but emissions, echoing Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, who underscored that “the climate enemy is emissions, not fossil fuels” while addressing a WA Energy Club luncheon in Perth, Western Australia.