Carbon Capture and Storage: A Critical Tool for Fighting Climate Change

Global #carbonemissions are continuing their upward climb. In 2021, their global levels topped 37 billion metric tons. And while global efforts to decarbonize are taking off in several key sectors – from energy to farming – these are not nearly as fast as they should be.

If we want to uphold the commitment to the 1.5°C target set by the Paris Agreement,?we must do more than just increasing efforts to reduce emissions.?We will also need to deploy technologies to remove carbon from the atmosphere. One of these processes – Carbon Capture and Storage (CCS) – is being watched closely by companies and governments.?We sat down with IFC’s CCS expert, Ruth Hupart , to learn more about how it works and how it can make a difference.

?What is carbon capture and storage? How long has it been around?

Carbon capture and storage, commonly abbreviated as CCS, is a process that consists of capturing the carbon dioxide produced by electric power plants or other industries– for example, steel or cement manufacturing. The CO2 is separated and trapped at the source, then compressed, transported, and stored deep underground.?Sometimes the captured CO2 is used for making other products, such as plastics, concrete, or biofuel.?This version of the technology is called CCUS, which stands for “Carbon Capture, Utilization and Storage”.

CCS is a proven technology that has been around for almost a hundred years.?It was pioneered in the 1930s, when the natural gas industry began extracting CO2 from natural gas to enhance its purity. In 1972, oil companies began experimenting with compressing captured CO2, transporting it to oil fields, and injecting it into underground oil deposits to increase their oil recovery levels.??

Why is this technology important for addressing #climatechange?

Scientists agree that without carbon capture, the world will most likely fail to meet the goals of the #ParisAgreement.?Capturing emissions before they enter the atmosphere is especially vital for greening hard-to-abate sectors, where energy efficiency and switching to renewables won’t be enough. For example, consider the production of cement, where the underlying chemical processes emit CO2 regardless of fuel sources.?At its core, CCS is another tool that can help us limit global warming by removing pollution at its source and even from the air itself.

How widely is it used?

As of 2022, there were 30 commercial-scale operational CCS plants and over 160 additional facilities under construction or in the development pipeline – i.e., more than 190 large CCS projects around the world. And the numbers are growing. The majority of these are in North America and the EU, but LAC, Asia-Pacific and the Middle East are also entering the market.

What makes a CCS project successful?

As with any technology, progress depends on public incentives and deterrents. For instance, CCUS took off in the US due to recent measures that nearly doubled the tax credit amount companies receive for every ton of captured and utilized CO2.?

On the deterrent side of the equation, Norway’s 1991 decision to start taxing CO2 emissions generated by the offshore oil and gas activities led to the development of the first commercial offshore CCS project in the North Sea. Over 20 countries have explicitly included CCUS as part of their plans to fulfill their Paris Agreement obligations.

The sector and size of the asset, as well as purity of the CO2 emission stream matter a great deal for an average CCS project. For instance, the fertilizer industry and chemical manufacturing produce highly pure emissions.?The technology can be either retrofitted onto existing plants or built anew.?That’s the easy part.?The hard part is putting in place a business model that can generate revenue with the captured CO2. Early movers are more likely to find off-takers in the utilization market, but even for them, success is not guaranteed.

Many recently announced large scale projects result from partnerships between governments, energy giants, and hard-to-abate sectors. Increasingly, we are seeing development of CCS hubs and clusters. In this model, you can achieve economies of scale in transporting and storing CO2 captured from multiple, collocated sites. Whether or not the process is economically attractive also depends on the price of carbon and government incentives in any given host country.

How can CCS be deployed in emerging markets?

One of the barriers to deploying the CCS technology more widely in emerging markets, where IFC - International Finance Corporation operates, is the lack of government support. Another challenge is the lack of data regarding the most promising geological storage locations.?However, on the bright side, we believe that many emerging economies have high potential for capturing and storing CO2.?In fact, it’s a win-win: Not only will this further the fight against climate change, but it can be another resource for these countries to monetize.

What is IFC doing in this space?

IFC is working ahead of the project cycle to create markets for CCUS in the countries where we operate and is building capacity among clients on the potential to decarbonize their operations using CCUS.

Our two active CCS advisory projects are in Nigeria and Timor-Leste. In Nigeria, we are mapping emissions sources and geological storage locations identify potential hubs. The project has a special focus on industrial applications, and is also looking at legal and regulatory requirements for the industry to take off. In Timor-Leste, IFC is helping the government develop a legal and regulatory framework that could help develop a geological site situated in the Timor Sea.?

What would it take to help CCS take off and move to scale in emerging markets?

We need to gather more data, and we need to do it quickly!?First, we need to map out where CO2 can be stored.?Second, we must build domestic capacity and technical know-how.?And third, we need better legal and regulatory environments for everything from monitoring storage wells to permitting pipelines that transport the captured CO2 to locations where it can be stored or utilized. This technology can be a real game changer that allows developing countries to follow a low carbon development pathway even as they continue to industrialize.

How did you get into working on CCS?

I think my generation was the first to learn about climate change in school.?And it was always painfully clear to me that climate was going to be one of the defining public issues of my adulthood. At first, I thought the solutions were going to come from the government – so I moved to Washington, DC, and worked as a legislative aide to be part of that change.?But after a while, I saw that businesses also needed to be part of the solution, and in many cases could make change happen faster than government. So I got my MBA and was grateful to find a position at IFC that allows me to focus on business-led climate solutions.

When I started working in climate change fifteen years ago, everyone was focused on expanding renewable energy and retiring fossil fuels.?To the extent that anyone thought about CCUS, it was seen as a harmful distraction.?CCUS clearly is not a magic bullet for decarbonization. But we know we need every tool available to us to stop global warming.

This is an exciting time to work on CCS, especially at IFC. With enabling legislation and incentives in North America and Europe are accelerating deployment of CCUS, many companies are starting to formulate strategies for emerging economies. IFC is uniquely positioned to open carbon capture markets in developing countries.

What is your typical day like at work?

Right now, I’m focused on managing the advisory project we are carrying out in Nigeria. We are working with diverse partners, including the Office of the Vice President, the Nigerian Geological Survey, and private sector companies and industry associations. Collecting data about emissions and geological storage is a massive undertaking, and in addition to this, we are building capacity through a series of technical workshops. It’s very gratifying to see companies and organizations start to put together internal teams to explore CCUS, in large part due to our efforts.