Businesses and Carbon Capture: A Path to Sustainable Development
Businesses seeking to lead on sustainability and meet net-zero commitments should be working to decarbonize their Scope 3 emissions. These include fossil fuel, steel, and fertilizer companies with hard-to-reduce emissions.
Both these businesses and their big customers are hoping that a new technology suite — carbon capture, removal, and storage — will save them. For example, in 2022 Exxon announced a partnership with CF Industries and EnLink Midstream to capture and store up to 2 million metric tons of carbon dioxide emissions annually from its manufacturing complex in Louisiana.
However, watchdog groups argue that investing in these technologies will just prolong the reliance on industries with heavy environmental footprints instead of phasing them out.
This suite of carbon technologies doesn’t have a long history of successes. Removal and capture is a relatively new, expensive technology that removes only a small percentage of carbon from the atmosphere and has had some failures. But boosters of carbon capture and removal hope that an increase in investment and incentives can change that performance trend, creating both a new, highly impactful climate technology and an opportunity for the oil and gas sector to be part of the green transition.
Funds are flowing
Recently the carbon removal and capture sector has been supercharged by the Inflation Reduction Act of 2022 (IRA), which extends and expands tax credits from the 45Q tax credits of 2008 and increases payments to businesses, from $50 for every metric ton of CO2 they sequester up to between $60 and $85.
Companies are responding. Every week it seems there is a new announcement about some aspect of the novel carbon capture, removal, and storage technologies — whether a flashy investment or a bureaucratic step forward.
In May alone:
- JP Morgan Chase inked a huge $200 million deal with Climeworks, a startup that pulls carbon directly out of the atmosphere and stores it underground.
- The Gold Standard, a carbon crediting body, opened a public consultation on a new methodology for carbon capture and geological storage that integrates biomass fermentation.
- The U.S. Department of Energy invested $251 million in four large-scale carbon storage and transport projects in the Gulf Coast, Colorado, Alabama, and Wyoming.
On the operational side, in late April Louisiana began moving through a process to take control from the Environmental Protection Agency over granting permits to oil and gas companies for drilling Class 6 wells, which are used exclusively to store CO2 by pumping it into natural features in subterranean rock formations. If approved, Louisiana will become the third state after North Dakota and Wyoming to have this power. The Louisiana State House also passed legislation to prepare for the Class 6 permitting and provide the state with potential revenue sharing on state lands where companies may sell credits for the carbon they store. And in July, a new carbon capture demonstration pilot for a natural gas plant run by Calpine opened in California.
What is the difference between carbon removal, carbon capture, and carbon storage?
Carbon removal, carbon capture, and carbon storage are three distinct processes that make up a package of solutions.
Technological carbon removal, also known as direct air capture, usually refers to pulling carbon dioxide directly out of the atmosphere, which is what startups Climeworks and Heirloom focus on. This process addresses historical emissions of carbon already in the atmosphere. (There are also nature-based solutions, such as planting trees and cultivating healthier soils, but let’s focus on the technological solutions for now).
By contrast, carbon capture, also called point-source carbon capture, focuses on stopping emissions from a single industrial process from entering the atmosphere in the first place. Its goal is to curb future emissions. The point sources are usually from those hard-to-abate industries: Think power plants, natural gas processing, ethanol refining, and the production of fertilizer, petrochemicals, hydrogen, iron, and steel. These activities lack viable alternatives for production without creating greenhouse gas emissions.
“Within the next decade it’s very unlikely you’re going to be able to electrify those [industries] for technical reasons,” said Greg Upton, interim executive director and professor at the Center for Energy Studies (CES) at Louisiana State University (LSU).
However, retrofitting a petroleum plant to include carbon capture technology would suck up all the emissions at the source — kind of like adding a tank to the end of your car’s exhaust pipe. Then CO2 is pressurized and transported via pipeline to a well where it is injected into the ground for storage. With this system, no carbon from the manufacturing process escapes into the atmosphere.
Is carbon capture the right use of resources?
High-emitting sectors are looking to decarbonize for a variety of reasons, including placating investors and preparing for upcoming regulation such as the expected SEC climate rules and state and international policy, according to David Dismukes, professor emeritus at CES.
“This is not to make any money or even to generate offsetting revenue streams,” he said. “Usually, they’re doing it because they’ve got requirements in other countries. The second reason is it’s just the ESG concerns for raising capital. ‘Am I going to get dinged by Wall Street if I don’t go out and take care of this problem? I’m going to have a difficult time raising capital.’”
Carbon capture and carbon removal each have their critics who argue the technologies are too expensive and don’t encourage sustainable development, but carbon capture has become a bit more of a lightning rod as it gives companies with the highest emissions a direct pathway to continue their entrenched business models. Carbon removal’s tactic of addressing past emissions, on the other hand, seems more of a way to rectify old mistakes instead of continuing them, according to advocacy groups such as Carbon180.
However, almost all the models in the 2022 Intergovernmental Panel on Climate Change report that keep the earth to 1.5 Celsius degrees of warming use carbon capture.
The IPCC’s Climate Change 2022: Mitigation of Climate Change report states that such pathways “involve substantial reductions in fossil fuel consumption and a near elimination of the use of coal without carbon capture and storage.” And it states that net-zero industrialized processes will need carbon capture to mitigate the remaining emissions. The report also identifies retrofit
SDGs, Targets, and Indicators
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 7: Affordable and Clean Energy
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 13: Climate Action
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 7.2: Increase substantially the share of renewable energy in the global energy mix.
- SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
- SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Investment in carbon capture, removal, and storage technologies
- Expansion of tax credits for carbon capture
- Number of carbon capture and storage projects
- Reduction in greenhouse gas emissions from hard-to-abate industries
- Number of CO2 sequestration projects
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 7: Affordable and Clean Energy | 7.2: Increase substantially the share of renewable energy in the global energy mix. | Investment in carbon capture, removal, and storage technologies |
| SDG 9: Industry, Innovation, and Infrastructure | 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes. | Expansion of tax credits for carbon capture |
| SDG 13: Climate Action | 13.2: Integrate climate change measures into national policies, strategies, and planning. | Number of carbon capture and storage projects Reduction in greenhouse gas emissions from hard-to-abate industries Number of CO2 sequestration projects |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: greenbiz.com
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