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PERTH (miningweekly.com) – Advisory firm Wood Mackenzie (Woodmac) has called for urgency to meet the seven-billion tonnes of carbon capture required to meet global net zero goals by 2050.
Speaking in Houston this year, Woodmac’s head of carbon capture, utilisation and storage (CCUS) Mhairidh Evans said that energy efficiencies, renewables and alternative fuels will not be enough to meet net zero by 2050.
“We need a huge amount of carbon to be captured out of our industries and the power sector to decarbonise the last miles that can’t be easily reached by green electrification or alternatives. Right now, we are on track to meet our base case scenario, which forecasts two-billion tonnes a year of carbon dioxide (CO2) capture and removal by 2050, though this corresponds to a 2.5o global warming scenario. For net zero by 2050 and a 1.5o compliant scenario we would need seven-billion tonnes a year. To come close, we need to get shovels in the ground quickly.”
Currently, Woodmac is tracking globally planned CCUS capacity at 1 400 mt/y CO2, across all types of projects, including capture, transport and storage, with the US leading in this activity with 33% of all projects.
“We do see an exciting project pipeline and some markets are well-positioned for strong growth, particularly the US,” said Evans.
“While no country has the perfect approach, the US market stands out as the global leader in many ways. There is substantial support for emitters to decarbonise with the Inflation Reduction Act tax credit, and for companies to build out the infrastructure value chain of CO2 transport and storage with the Infrastructure Investment and Jobs Act. The US also has vast geological carbon storage resources that can be developed by companies with upstream oil and gas know-how. It is really the most attractive market in the world to start a CCUS business right now.”
Despite opportunities for growth, governments and developers do face several challenges and hurdles to scaling up the industry, added Evans.
“It’s clear we need investment, but the industry is still somewhat hesitant as developers are facing high costs, evolving technologies, unclear business models, and nascent policy and regulation,” said Evans.
“We also need more emitters to come on board with carbon capture. There are companies proposing new CO2 storage hubs every month at the moment, but there is a limited pool of ready customers.
“Costs are an issue as well, as the Inflation Reduction Act tax credit isn’t quite enough to cover the cost of carbon capture for every project, though it should cover many. We expect costs to fall, potentially up to 30% this decade. However, with the Inflation Reduction Act tax credit being open to projects starting construction as far away as 2033, companies could decide to wait for costs to fall before committing. This would mean a delayed impact of projects, and climate change is not waiting.”
Australian Resources Minister Madeleine King this week reiterated that CCUS would play an important role in reducing carbon emissions in Australia, particularly in the hard-to-abate sectors.
“Australian resource projects, backed by the Commonwealth Scientific and Industrial Research Organisation and our universities, are world leaders in developing commercial‑scale carbon capture technologies.
“Australia hosts the world’s largest commercial CCS project, Chevron’s Gorgon liquefied natural gas project at Barrow Island in Western Australia. Eight-million tonnes of stored CO2 is not to be sneezed at.
“There are currently 18 CCS projects at various stages of progress in Australia, aiming to collectively sequester 20-million tonnes of CO2 a year by 2035.”
King also recently announced the opening of bidding for the 2023 Offshore Greenhouse Gas Storage Acreage Release.
The release of new acreage builds on the government’s investment to improve regulations to support offshore CCS projects as part of a A$12-million package in the last Budget.