For years, the United States has had the technology to capture carbon dioxide from smokestacks before the planet-warming gas enters the atmosphere. But the carbon capture and storage hardware turned out to be so expensive and clunky that one of the only ways to make a so-called CCS investment pencil was to sell the CO2 to oil drillers, who inject the supercooled gas in the wells to reach the most difficult ones. reach the gross.
As a result, 73% of the 43 million tonnes of carbon diverted from smokestacks globally last year ended up producing more oil, negating any real climate benefits CCS might have had. In comparison, only 20% of this pollution ended up in underground storage aquifers, where it makes the biggest difference in terms of emissions.
By 2030, however, these numbers are expected to reverse. Thanks in large part to President Joe Biden’s federal climate law, only 20% of carbon is expected to go to oil drilling, while 66% goes to underground storage, according to a new study by energy consultancy BloombergNEF. Another 12% will likely be used in other industries, such as chemical production or soda carbonation.
Attempts to turn carbon dioxide from freely dumped waste into a valuable commodity have so far failed. Congress began encouraging carbon capture with a tax credit known as 45Q in 2008, but set the payment per ton of CO2 too low. Federal lawmakers tried to fix the problem in 2018 by raising the price to $35 a ton for CO2 used in oil drilling and $50 a ton for carbon stored underground. But it took the Internal Revenue Service until January 2021 to issue guidelines to find out how these credits could be used.
And even then, it made more sense in many cases to sell CO2 for oil drilling. With oil prices at $100 a barrel, selling CO2 plus a $35 credit would equate to $58 a ton, well above the fixed $50 earned for gas storage.
Under the recently passed Inflation Reduction Act, selling captured carbon to an oil driller is now worth $60 a ton. Combined with oil revenues at $100 a barrel, that ton of CO2 could bring in $73. But the federal government will now let polluters deduct $85 from their taxes for every ton of CO2 stored underground: a difference of $12 million for a company that could capture 1 million tons of CO2 every year.
CCS is cheapest at facilities whose flue gases are pure carbon dioxide, which means that only a few industries – such as processing natural gas or producing corn into ethanol – have actually benefited from the old payments . Under the higher credits, steel, cement and petrochemical manufacturers can make money from carbon capture facilities.
The sea change over the next eight years will come as the world deploys six times more CCS equipment than exists today, with the potential to capture 279 million tonnes of carbon dioxide per year.
This push alone will do little to change the trajectory of global warming, covering just 0.6% of current emissions and occurring overwhelmingly in wealthy countries, with the US dominating nearly half of the market. , and the UK and Canada lagging behind with 14% and 9% of the world’s carbon dioxide capture capacity, respectively.
But the researchers say it’s a necessary first step towards lowering costs for poorer countries with faster-growing emissions, where carbon capture can have the greatest global impact.
“These are still the usual suspects until 2030,” said Julia Attwood, sustainable materials manager at BNEF. “But once those countries build a lot of capacity and lower the cost for everyone, that’s when you’ll see countries like China and others in Southeast Asia follow.”
Still, it’s a controversial bet. After two decades of failed high-profile attempts to commercialize CCS, environmentalists have largely viewed the technology as a fig-leaf fossil fuel that producers use to justify continued investment in oil and gas production.
But experts say there are few alternatives to decarbonizing heavy industries, and that The first wave of infrastructure could also spur companies to not only capture and transport carbon from polluting factories, but also start cleaning up CO2 that was released long ago. Removing carbon from the atmosphere, where it can circulate for centuries, is necessary to reduce the damage caused by the past three centuries of fossil fuel-based industrialization.
While trees naturally suck in CO2 through photosynthesis, and some soil techniques could also help, the need for measurable and increased carbon removal is driving investments in so-called direct air capture, a type of carbon capture that essentially sucks CO2 out of the sky. Under the new 45Q tax credit, the federal government will pay between $130 and $180 per tonne of carbon dioxide removed by direct capture from the air.
“We believe the United States is now the best place in the world to do direct air capture given the available subsidies and the potential for transportation and storage that could come online,” Attwood said.
Transport and storage remain major bottlenecks. The United States has a small, aging network of highly pressurized pipelines to transport CO2. New pipelines are proposed, with the first set to be launched in the Midwest as a way to ship carbon dioxide from ethanol facilities to storage wells.
Earlier this month, the federal government started receiving applications up to $2 billion in loans for CO2 transport projects. But opposition is growing, fueled by fears of the health risks posed by CO2 leaks and concerns that federal regulators are falling short in keeping them safe.
The federal permitting process for the first permanent CO2 storage well, meanwhile, took more than half a decade. At least two states now have permission to complete their own permits without a separate federal process. But a faster and more efficient procedure that will appeal to local communities will be needed to further reduce emissions.
“We need to license the projects,” said Julio Friedmann, a leading carbon capture researcher and former Department of Energy representative who reviewed BNEF’s findings for HuffPost but did not participate in the review. ‘study. “It means doing a good job of fairness and justice. It means listening to the concerns of the communities that will host the projects. And that means state and federal government agencies are working hard to get the yes.
The planet has already warmed, on average, by 1.1 degrees Celsius. To avoid another disastrous warming of half a degree or more, Friedmann said, “Frankly, we need to be more aggressive in our deployment of CCS.”