Carbon Capture and Storage in four continents: How different attitudes will drive different implementation
Article by Michael Stephenson
Michael Stephenson (Stephenson Geoscience Consulting Ltd, mikepalyno@me.com)
Adapted from the Royal Society of Chemistry's Environmental Chemistry Group Bulletin (January 2025).
The Royal Society of Chemistry
Despite the central place of Carbon Capture and Storage (CCS) in large-scale policy ambitions, the technology itself is seen very differently in different parts of the world: the views of many African scientists, professionals and policy makers are sceptical; in the USA the approach is resolutely capitalist; in Europe ideological; and in South East Asia pragmatic. This article looks at why these different views have evolved and the implications for future CCS implementation.
The IPCC ‘illustrative model pathways’, the Sustainable Development Scenario of the IEA, and the Energy Transitions Commission all foresee CCS technologies in emissions reductions for power, but increasingly also for hard-to-abate industries such as iron and steel, ammonia and refineries. CCS involves the capture, transport and then storage or disposal in geological formations of CO2 at an industrial scale. Amongst the main factors influencing how CCS evolves are the costs of different aspects of the process, the availability and capacity of geological formations, opportunities for commercialisation, public views of the technology, and favourable policy, tax and regulatory environments.
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Tax is particularly favourable in the USA which does not have a cap and trade mechanism like the Emissions Trading System (ETS) in the EU. Under Section 45Q of the Internal Revenue Code, tax credits apply to taxpayers that capture and store, or use carbon dioxide. Where prices for the capture costs are low, tax credits can be set very effectively against the capital and operational costs of carbon capture machinery. This is particularly the case for ethanol production for biofuels, ammonia production and natural gas processing, for which capture is relatively cheap in the US (Figure 1). An additional benefit is the commercial opportunity bestowed by the value of CO2 for enhanced oil recovery in the US, aimed primarily at increasing oil and gas yields. The combination of relatively cheap capture, tax breaks and a ready market for CO2 has produced a vibrant commercially-led environment for part of the CCS chain. However, this vibrancy does not extend to the lower concentration point sources of CO2 in the power and large-scale industry sector where capture costs per tonne are higher (Figure 1).
The result is that US CCS is focussed on rather small emitters. In 2021, natural gas processing, ethanol, and ammonia production accounted for only 83 million, or 3.3 percent, of the 2,483 million tonnes of CO2 emissions from the major US sources to which CCS can be applied. Both the small number of CCS facilities in operation and the low CO2 emissions of their industries mean that CCS today captures only about 22 million tons, or 0.4 percent, of the US’s total annual emissions of CO2 (Figure 2).
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In SE Asia the situation is different. The International Energy Agency forecasts vigorous growth in the area including power demand increases from natural gas, oil and coal between now and 2030. The area has abundant fossil fuel resources and a fleet of thermal power plants that are mainly under 10 years old and thus likely to be in service for many years. Given this profile, it is surprising that the most active CCS projects in SE Asia are related to natural gas processing, rather than power generation.
This is because there are significant natural gas resources in SE Asia, albeit from high CO2 gas fields. Wood Mackensie estimate that there are over 15 billion barrels of oil equivalent (BOE) of gas resources in Malaysia alone, including about nine billion BOE of gas which is undeveloped because of high CO2 content. Many SE Asian countries recognise the importance of natural gas to drive economic development but are understandably resistant to large-scale venting to the atmosphere of CO2 following CO2 separation from the natural gas stream. The CEO of PTTEP, the Thailand national oil company, describes his approach as: ‘The company will go on expanding its investment in natural gas production, but at the same time it will also incorporate the greenhouse gas emission issue in the decision-making process of new gas projects’. Thailand's first CCS facility is at the Arthit gas field in the Gulf of Thailand. Malaysia’s first large CCS project is also related to natural gas processing: the Kasawari gas field is being developed by Petronas and is forecast to be operational by 2025.
Europe is different again. It has the most developed regulatory and policy environment for CCS, including the ETS and innovative funding mechanisms such as ‘contracts for difference’. The ETS aim is to lower greenhouse gas emissions and allow companies to trade emissions rights within the EU. The scheme covers around 45% of the EU's greenhouse gas emissions. A 2023 study on the effects of the EU ETS identified a reduction in carbon emissions in the order of -10% between 2005 and 2012 with no impacts on profits or employment for regulated firms, though large scale storage operations have yet to be developed. Looking ahead it is likely that Europe will develop a more full chain CCS in a wider range of forms than is currently true elsewhere in the world, with cement factories, refineries and thermal power stations developing CCS in a series of well developed hubs and clusters. A very innovative model, known as Northern Lights, has also evolved in Norway, albeit subsidised heavily by the Norwegian Government. This is an opensource CO2 disposal model whereby shipborne CO2 from countries that border the North Sea area can simply be disposed of geologically for a fee.
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In Africa conversations about CCS can be very different again. Although some progress has been made in African CCS at a policy level. Recent experience in Namibia and Nigeria talking to academics and professionals and running training courses suggests that many academics and professionals are doubtful about CCS. This is not because they don’t want to do anything about climate change, or that they can’t see new technical
and science opportunities in CCS. The problem rather is that CCS is seen as an extra expense for struggling economies where energy (and other living) costs are already high to the point of causing civil instability (for example in Nigeria). There is also a growing realisation that the responsibility for high atmospheric CO2 lies with the developed world (the Global North). This responsibility was nicely summarised by MacKay showing the cumulative size of historical CO2 emissions, starkly contrasting the Global North and Global South (Figure 3). The reaction of many Africans to this is that the rich North should not get in the way of Africa’s right to responsibly develop its fossil fuels, and that if CCS and other abatement methods are necessary to develop these fuels, then the Global North should pay for them.
What do these differing models and attitudes reveal about the state of CCS? First it might be fair to say that there is a lack of clarity as to what CCS is for. The economic policy instruments developed in the US have encouraged only a small CCS industry that effectively ignores the large emitters and enhances fossil fuel production
through enhanced oil recovery. A similar result might be expected in SE Asia where CCS – as part of a national oil and gas company’s environmental, social, and governance (ESG) program – might lead to less emissions through venting, but still enables natural gas as a fuel. Many detractors see CCS as an enabler of fossils fuels, and in the case of the US, this could be said to be true. Elsewhere in Europe, with perhaps the most sophisticated
policy and regulatory system fostering a more complete CCS system, largescale CCS has been slow to start, and there are still no large projects operating. In Africa CCS is likely to be slow because of its costs, and because it may stand in the way of rapid development of fossils fuels seen by many as vital for Africa’s growth.
CCS is a useful technology. It is safe and technically achievable. It is also currently the only way that large-scale industry can be decarbonized, and could be useful in the abatement of fossil fuel usage in the Global South which has large energy demands. However its commercialisation, through whatever route, sometimes leads to its
aims being muddled. We have to face up to the fact that CCS costs money, and our leaders have to be honest about who should pay for it and what we are doing it for.
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Further reading
1. V. Masson-Delmotte et al. (eds.) IPCC, 2018: Summary for Policymakers. In: Global Warming of 1.5°C. An IPCC Special Report, Cambridge University Press, Cambridge, UK and New York, NY, USA, pp. 3-24. https:// doi.org/10.1017/9781009157940.001.
2. https://www.iea.org/events/introducing-thesustainable-development-scenario
3. https://www.energy-transitions.org/publications/better-energy-greater-prosperity/
4. https://www.cbo.gov/publication/59345
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