With COP26 on the immediate horizon, the world is looking to governments, climate experts and industry to lay out decisive plans and commitments to keep global warming to well below 2°C and preferably to a max of 1.5°C (compared to pre-industrial levels). In essence, a chance to take stock of what are they packing for their journey up the seemingly unconquerable mountain that is the climate challenge. After all, you’re going to need the right selection of tools in your arsenal to be able to complete the tough journey ahead…
As well as widespread adoption of renewable energies and greater energy efficiency (to cite a few of the necessary steps to a net zero future), carbon capture and storage (CCS) closely coupled with low-carbon hydrogen production, is of paramount importance when it comes to achieving net-zero targets. This is especially the case when looking to address hard-to-abate industries. However, to put into perspective the scale of what is needed, the IEA* state that the world needs to increase from the 40Mt of CO2 captured globally per annum today to 7,600Mt in order to achieve its Net Zero Emissions (NZE) Scenario by 2050—put another way, 190 times the size of the current global capacity. That’s quite a sheer face on the mountain path to 1.5°C. So, when CCS is described as “no longer an option, but a necessity”, one has to ask the question:
How can the world possibly scale CCS activity to the levels necessary to achieve these lofty ambitions?
Much like the broader climate challenge that the world faces, it’s fair to say that there is no single silver bullet. However, there are some fundamental areas that will likely go a long way to assist this:
1) MINIMIZE COSTS
Due to the cost-marginal nature of CCS projects, reducing costs is an imperative. Advancements in technologies will play a role, in tandem with hubs facilitating greater economies of scale by connecting multiple emitters to share in both risk and opportunity. However, further reductions can be made by optimizing infrastructure at the asset level, but also through intelligent optimization of the entire portfolio value chain, enabled by automation and machine learning.
2) CARBON POLICY AND INCENTIVES
Today, carbon capture demand is largely driven by policy. While carbon pricing can help drive emissions reduction, it alone is not enough to encourage the adoption of CCS over other methods of carbon abatement. Government policy will be necessary to accelerate the deployment of CCS, with incentives acting to unlock prospective investment.
3) LOW-CARBON HYDROGEN
Further incentivization to scale out CCS projects is via new markets for decarbonized hydrogen products. Blue hydrogen falls into the broad category of ‘low-carbon hydrogen’, whereby carbon is split from methane via reformation processes such that it can be stored. This will act in parallel with green hydrogen (electrolysis of water powered by renewables) to grow the global hydrogen economy. We need the ability to store energy at scale to offset periods of lower energy output from renewable sources, e.g. when the wind isn’t blowing or the sun isn’t shining, and hydrogen acts as a key enabler of this. Both demand and supply of low-carbon hydrogen are anticipated to grow rapidly, in excess of 50 times today’s levels in the NZE*, thanks to the roles hydrogen can play in heavy industries such as iron, steel, chemicals and cement, and within hydrogen-based fuels for aviation and shipping.
Countries like the UK are already laying out clear plans to scale blue hydrogen and CCS to support decarbonization of the country’s major industrial hubs, which can serve as a blueprint for future projects around the world.
As alluded to in the above points, much of these opportunities can only be realized through coordinated international collaboration. This requires cross-industry partnerships to be developed, bringing together emitters with technology and service providers, thereby breaking in to the most difficult to abate sectors. Partnerships building low-costs, speed and uncompromising quality into their guiding principles will be pivotal in accelerating the CCS market.
The world needs to dramatically decarbonize. We can only hope that both CCS and low carbon hydrogen feature during COP26 discussions, as they are well tested and rapidly scalable solutions that can deliver decarbonized industries at low cost today. We are in in decisive decade, and we need to scale solutions today to avoid the worst of climate impacts on our society and global ecosystem.
Progress to-date has been slow. We stand at the foot of the mountain as world leaders pull on their rucksacks to begin their climb.
Author information: Sam is a Market & Business Analyst for Energy Transition as part of Schlumberger’s Digital & Integration (D&I) division. Starting life a structural geologist, Sam has held a variety of positions since joining Schlumberger in 2014, spanning subsurface consultancy, product development, project management and coordination of AI & innovation projects with customers. Over the last 18 months, he has been focused on the analysis of evolving energy markets such as CCS, hydrogen, offshore wind and geothermal. Sam holds an MSc in Structural Geology and Geophysics from the University of Leeds in the UK.
*Source: IEA NZE - https://www.iea.org/reports/net-zero-by-2050
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