Publication Overview
The aim of this study is to assess the feasibility of select carbon capture and utilisation (CCU) routes based upon CO₂ conversion through hydrogenation, in terms of their climate change mitigation potential. The results of this study will be of interest to organisations/individuals involved with climate-change scenario modelling, as well as RD&D financial sponsors. The commodities selected for investigation were methanol, formic acid, and middle distillate hydrocarbons (synthetic fuels: diesel, gasoline, jet fuel), with a focus on catalytic hydrogenation pathways. Results of CO₂ emissions, costs and energy consumption for formic acid, however, will not be presented in detail in this Overview, as the analysis has shown that the abatement is limited to 2 MtCO₂ due to the small market size. (Results for formic acid are available in the full report.)
Publication Summary
- Hydrogenation routes require a supply of hydrogen and CO₂, and the origins of these feedstocks impact the overall cost and emissions of CCU pathways. Hydrogen is the most significant cost and emission component for both methanol and middle distillate hydrocarbon CCU production routes.
- Production of commodities via CCU routes is more expensive than fossil routes. All realistic combinations of feedstocks result in higher costs than the counterfactual route under both near- (2020s) and long-term (2050s) assumptions. In the near-term, CCU commodities were found to be at least twice the cost of their fossil counterparts. In the long-term, cost premiums can decrease significantly due to reductions in the cost of green hydrogen and CO₂ capture.
- Economic competitiveness of CCU routes is reliant on a ‘cost of emission’ being applied. For the optimal pathways considered, cost parity could be achieved in the long-term by implementing a cost of emissions between USD 120-225/tCO₂.
- CCU can offer a lower emission commodity production pathway provided a low-emission electricity source is used for green hydrogen production. Using grid electricity (representative of current European grid mixes) for electrolysis is expected to result in CCU methanol and middle distillate hydrocarbon routes having greater emissions than their fossil counterparts, the same applies to the use of unabated fossil hydrogen production.
- The method of accounting for utilised CO₂ has important consequences. For routes with higher production emissions than their counterfactual, CCU commodities can only claim to have lower emissions than the counterfactual commodities if they are able to account for the utilised CO₂ as offsetting some of their production or end-of-life emissions.
- Avoiding > 1 GtCO₂ requires very high levels of market penetration. CCU methanol and middle distillate hydrocarbons have the potential to abate over 1 GtCO₂ but only if methanol captures the entirety of the current market and then expands into the heavy-duty trucks market plus the plastics markets, and if middle distillate hydrocarbons capture the entirety of today’s aviation fuels and heavy-duty trucks market. Formic acid does not have the potential to reach 1 GtCO₂ as even if the CCU product were to penetrate the entire formic acid market, the abatement currently achievable is limited to approximately 2 MtCO₂. • Energy demands might become a barrier limiting large-scale CCU deployment. Under the investigated ‘ambitious CCU’ scenario, middle distillate hydrocarbons would require about 26,000 TWh of electricity, almost the entire current electricity production globally.
- CCU pathways must be designed carefully to ensure lower life cycle emissions than the counterfactual. Co-location of assets may reduce costs, particularly in regions with high potential for renewable electricity. CCU could provide an attractive solution in regions with limited CO₂ storage, or with cost or public acceptance challenges for carbon capture and storage (CCS).
- Recommendations: ▪ Lab scale research and pilot-demonstrations are necessary to address technical barriers. ▪ More life cycle assessment (LCA) and techno-economic assessment (TEA) studies are needed, especially on hydrogen and renewable electricity production. ▪ Policies are required to mandate the use of low-carbon products and to increase the cost-competitiveness of CCU products. ▪ Streamlining approval processes and standards could help enable timely market entry for new CCU products. ▪ Further clarity and global consistency of the accounting of CO₂ in CCU routes is needed. ▪ CCU pathways can benefit from advances in CO₂ capture and hydrogen production as well as the sharing of infrastructure with large-scale CCS projects.
