CCS Project Development: Key Enabler for CCS Pathway

Key Take Aways

1. Emission Challenge: Industrial emissions account 30% of total US emissions. Chemical, Refining, Iron & Steel, Cement and Food & Beverages are top 5 industries with most industrial hard-to reduce emissions.
2. CCS Pathway:The Carbon capture and storage (CCS) is the only feasible technology that can deliver deep emission reductions in many of the above industrial processes and prevent carbon dioxide (CO2) from being released in atmosphere and achieve climate mitigation targets

3. Barriers to CCS Upscaling

The technology, however has not scaled u[p at the rate required. There are several market failures and risks that are barrier to he private investment and CCS scale up., including

1. Insufficient policy framework support

2. Insufficient value on carbon reduction (revenue model)

3. Coordination failure risk across the value chain (Capture, Transport and Storage)

4. Storage liability and other project risks (including hard-to-reduce risk).

1. Structured Project development: The structured project development process helps deliver the project
2. Project Elements That help overcame barriers operational:
   1. CO_2-EOR revenue stream helps in commerciality
   2. CO₂ capture from natural gas processing plant (already part of oil & gas facility) helps reduce capture cost
   3. 45Q Tax credit helps reduce tax burden and provide for revenue stream
   4. Government grants were single most element that helped bridge the equity gap.
   5. Existing transportation & storage infrastructure enabled CCS projects and help reduce the costs

Future CCS trends

Future CCS project pipeline is moving away from historical trends. The newer applications are storage in Saline aquifer (historically EOR), hard-to-abate industries (historically NGP), hub & cluster development (vs stand-alone) and more on offshore (historically, onshore).

 

BOTTOMLINE

The CCS is only viable pathway that can provide deep emission cuts. Structured approach to project development can help  mange project risks leading to scale-up.  The growing US pipeline of CCS projects indicate that CCS project development would be a crucial skill, essential for the success of CCS pathway to reduce emission.