May-2024

Could carbon capture be the key to decarbonising heavy industry?

Carbon capture is an important option for reducing CO2 emissions and could be the linchpin for decarbonising hard-to-abate industries in the near term.

Suzanne Ferguson
Wood

Article Summary

Experts agree that the world is falling short of the climate goals set out by the Paris Climate Agreement in 2015. This is partly attributed to heavy industries, such as cement, steel, and chemicals, which account for 30% of global CO₂ emissions (WEF, 2020). Despite the perceived complexity and cost, carbon capture is the biggest opportunity we have to decarbonise these hard-to-abate sectors, particularly in the near term.

The industrial world is still largely fuelled by hydrocarbons. This is not because we lack technological solutions to decarbonise but because these solutions carry a higher abatement cost than decarbonising other sectors, such as the power sector, in many geographies.

Although reducing the fossil carbon emissions from these sectors will be key in accelerating efforts to meet net zero, companies operating within these industries are often unclear on how to proceed in identifying and then implementing the sustainable decarbonisation strategies that could work best for them. While it may be tempting to write off these hard-to-abate industries as not feasible to decarbonise, our climate goals will not be met without them.

Industry is often considered ‘hard to abate’ if it includes processes that require large quantities of very high-temperature heating, or if it includes non-heating-related fossil CO₂ generation inherent to its process chemistry. These conditions mean that the current process cannot be decarbonised in the near term simply by switching to renewable electrical power. Some industries, such as existing steel and cement plants and some chemical industry processes, meet one or both of these conditions. Fuel switching to low-carbon hydrogen, such as blue hydrogen (fossil-fed hydrogen generation with carbon capture) or direct application of post-combustion carbon capture, can allow all these existing hard-to-abate industries a feasible, near-term route to decarbonisation.

It is with this reasoning that business owners across the globe are being encouraged to deploy and integrate carbon capture technology into their operations. Despite having been around for decades, the technology is widely misunderstood, one of the main barriers to allowing it to scale up to its full potential. Understanding how to navigate this evolving technology, where hundreds of potential processes are in development, can often be overwhelming, resulting in some carbon capture and storage (CCS) and carbon capture utilisation (CCU) projects succumbing to pitfalls and bottlenecks due to not selecting a robust or optimised configuration early on.

In 2023, there were approximately 395 CCS projects in the pipeline worldwide; however, only 43 were operational, while almost 190 were in early development (Global CCS Institute, 2024). With the vast majority of carbon capture initiatives still in the front-end engineering and design (FEED) and pre-FEED phases, early engagement with experts in this field is essential.

Carbon capture could very likely be the linchpin for decarbonising these essential, carbon-intensive industries. However, failure to scale up the deployment of this technology at pace could be detrimental to our ability to reach net zero fast enough to avoid exceeding 2°C of global warming.

What makes an industry ‘hard to abate’?
Heavy industries make products that are essential to our modern way of life. From cars to hospital equipment, it would be impossible to simply switch off our dependency on them. Therefore, despite their emissions and energy intensity, the steel, cement, and chemical industries are with us to stay.

While there are some lower carbon options to make many of the materials we need, not all of these are yet demonstrated at scale, and we cannot afford to wait for an entirely new fleet of freshly built clean steel plants to be constructed, for example.

Beyond their critical role today, heavy industry sectors will provide many of the key inputs required for a sustainable energy transition. Much of the infrastructure needed to build a low-carbon economy will be made of steel and cement. For example, in the IEA’s Sustainable Development Scenario, steel demand for renewable power generation technologies such as wind turbines is nearly three times higher in 2070 than in baseline projections (IEA, 2019). Plastics and cement are also used for various clean energy technologies and infrastructure, including electric vehicles, wind turbines, and solar panels.

For some industries, there are as yet no low-carbon solutions available other than the use of carbon capture. For example, one of the main ingredients in cement, clinker, is made by heating limestone to very high temperatures in the calcination process. This process drives carbon dioxide (CO₂) off the limestone (CaCO₃) to produce the clinker, lime (CaO), as an unavoidable part of the process. In most existing cement plants, the heat for this process is also provided by burning fossil fuels, although more and more sites are switching to low-carbon fuels such as refuse-derived fuels and biomass to reduce their carbon footprint. However, it remains that up to half of the CO₂ emissions from such plants arise purely from the chemistry of clinker production.

Heavy industries also face further challenges when it comes to emissions reduction, particularly cost. Implementing decarbonisation projects in any sector can require high financial investment, though this can be particularly painful when the industry itself is already hard to decarbonise. Heavy industrial companies tend to have long-lived capital assets, typically around 40 years, and retiring these early to switch to alternative technologies can incur major costs. It has been estimated that the total cost to decarbonise heavy industry will range between $11 trillion and $21 trillion (Gross, 2021) through to 2050, depending on the development of innovation, policy framework, and the cost of renewable electricity.

Beyond the price tag, challenges can often arise from the existing sites’ logistics. Difficult ground conditions, building upon former landfills, or plants where underground records are incomplete or inaccurate and where space is highly contained, can pose serious challenges to implementing major new projects such as decarbonisation technologies. Water scarcity and existing water abstraction permits are common across many geographies. Climate-aggravated water stress on local environments makes sourcing additional water needed to support decarbonisation solutions such as carbon capture unlikely.

Access to capital can be difficult in hard-to-abate industries because many operate on thin margins, making large investments in new technology potentially very challenging. Many, such as steel and chemicals, are also typically trade-exposed, so there are concerns that if some countries take punitive financial action to reduce emissions but others do not, it may affect the competitiveness of heavy industry in the countries that do take action.