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Alison Manfredini: Carbon capture, utilization, and sequestration—or CCUS—has been described as an essential component to support the global ambition to achieve net zero. It is an integral part of the energy transition and industrial decarbonization, especially in hard-to-abate sectors.
Because of the processes associated with sectors like cement and steel, there is no viable solution to decarbonize without CCUS. But for this solution to reach the scalability needed to meet the net zero equation, a new market ecosystem needs to be established. This will create a CCUS industry where emitters and project developers collaborate across geographies to overcome the challenges we face today. These and other topics will be discussed in the round table addressing CCUS industry scalability, the challenges, and the future vision.
I’m joined with Frederik Majkut, Damien Gerard, and Gino Thielens. Thank you for being here. Fred, if I could start with you. CCUS is crucial for the energy transition. What scenarios and challenges do we anticipate in the next decade relating to the expansion of CCUS?
Fred Majkut: To deliver realistic net zero journeys, we'll have to rely on a number of pillars, right? Be it energy efficiency, uptake of renewables, uptake of low-carbon energy supply—and CCUS will be another key pillar. So when we look at scenarios—and really we’re running a lot of scenarios based on the International Energy Agency (IEA), Intergovernmental Panel on Climate Change (IPCC), and so on—all of these scenarios indicate that a massive uptake in CCUS capacity will have to take place.
So what do we mean by massive uptake? Today, the industry is capturing and storing around 40 million metric tons per annum. Throughout these decades we anticipate that by the end of the decade we'll be storing several hundred million metric tons per annum. And going into the next decade and the following one, definitely we will have to scale up to gigatons per annum to deliver this net zero ambition.
Damien Gerard: And maybe adding to that, there are two key elements for CCUS to happen in scale. One is to put value on carbon, and you create a value in carbon either by having a penalty to emitters, like a license to operate or a fee for each metric ton that you put in the air. Or you create a carrot, an incentive for emitters to do something about the emission. Now, the good news is that a lot of governments are working on mechanisms to enact policies. For example, recently the enactment of the US Inflation Reduction Act (IRA), which is actually putting a price on carbon and incentivizing emitters in doing CCUS. The same is happening in Europe with the Emissions Trading System (ETS), and we expect the same to happen in other markets around the world. We already see the emergence in the Middle East, in Brazil, in India and other markets, and hopefully more will happen.
The second part is economies of scale achievable through common infrastructure. So more and more we will see the emergence of hubs or networks, where emitters can actually tag onto an existing infrastructure and reduce the unit cost for everybody by using the same transport and storage.
Alison Manfredini: Thank you, gentlemen. You've highlighted a lot of complexity around CCUS. So Fred if I could come back to you. Can you expand on what we have learned so far and how confident we can feel about the future growth of the CCUS industry?
Fred Majkut: We have been participating in the CCUS industry for over two decades, and in the mid-2000s, we did see actually an uptake in CCUS project announcements. Today, we are much more comfortable in saying that the CCUS industry will scale up for a number of reasons.
First, last year for instance in 2021, we've seen a record number of CCUS projects being announced—more than twice as much as the previous record in 2008. As well as a major enabler or unlocker to CCUS at scale is what Damien’s referring to. You do need regulatory clarity. And we do see actually the regulatory landscape evolving very fast, which I think is going to be a major enabler to the scaling of CCUS, and as well obviously technology will play a key component in derisking future CCUS projects.
Alison Manfredini: So Damien, understanding the complexity of CCUS and across industry sectors, what kind of partnerships and business models are needed to enable CCUS expansion?
Damien Gerard: Well, I think it's important to put this into the context of where the CCUS industry will go. What will happen in the future is quite different from what happened in the past, which was mostly around natural gas processing into enhanced oil recovery (EOR)—done mostly by oil and gas players. The future will be, essentially, CO2 from industrial emissions and going into dedicated saline formations. These are very different contexts commercially and technically. So when you look at the competencies required to make CCUS happen at scale, you're talking about very different kinds of skillsets.
On one side you have gas separation and capture technologies. You also have transport over large, very long distances, and you have all the subsurface skills required to store CO2. When you look at those competencies, it's very difficult to see one company being able to do it all by themselves, and that will require people to join forces.
We'll see the emergence of an unusual kind of consortium. Companies and technologies together with private equity, together with midstream companies, oil and gas companies, and the emitters coming together to make those ventures happen. These are complex business models. They will require people to work together that haven't worked together before, and we want to play a role as well to enable those projects by bringing a set of technologies in the equation.
Gino Thielens: To add to that is our investment and technology expertise. We believe that makes us a better industry partner to work with.
Alison Manfredini: That's a great point that leads me into the next question, Gino. So Damien, we talked about partnerships and business models. And Gino, you took us into the technology space. These are key elements for a successful CCUS project. So what's really needed in terms of technology to support and accelerate growth of CCUS?
Gino Thielens: If you look at it from a project life cycle aspect of four distinct phases: So there's site screening, site evaluation, construction phase, and then operations. We have been and will continue to invest heavily in developing technologies across all those four phases. And those technologies really serve three purposes.
First one being, basically to better map and reduce risk. Second one is basically to reduce cost, because it is a cost-driven industry. And the third one is basically acceleration. Particularly in the planning phases, it's how can you accelerate the planning stages and get the project to a final investment decision faster.
If you look at it from a regulatory perspective, many of the regulators in the permitting process are still very much concerned with: Are the the risks properly understood, particularly with respect to potentially leakage, and are they properly mitigated? And a lot of our technology developments go in that direction. In addition, we have been investing quite strongly in developing the competencies of our workforce and developing workflows to manage these projects, because we believe that will help us to deliver projects in a more consistent manner. And it makes us a better partner for the companies that we work with in bringing value to the table.
Alison Manfredini: Thank you, Gino. Fred, I'm gonna come to you for the final question. Gino's highlighted the fundamental role of technology. When we look at such complex engineering projects, how do we see our solutions evolving to enable growth of CCUS and to achieve the ambition of CCUS?
Fred Majkut: I think as Gino and Damien pointed out, technology will have to drive derisking, which means today there's significant push back against CCUS because of foreseen risks of storing CO2 long term.
I think it’s a fair statement to say that a lot of CCUS projects have not gone through because of economics, and we as an organization I think it's fair to say we've been participating very heavily in the sequestration (or storage) part of the CCUS value chain and moving forward we are intending to enhance some of our solution workflows. As well, we are investing in developing disruptive technologies on the CO2 capture side to drive total project cost down and its life cycle economics. So this technology industrialization combined with a collaborative partnerships is what's going to drive the industry forward.
Alison Manfredini: Thank you, certainly sounds like a very exciting space and something we can all look forward to over the coming months and years. So again, thank you, very much appreciate you sharing your insights.
The CCUS industry needs a bold approach—an approach proven in technology and expertise. We tackle these challenges with a suite of innovative technologies and technical expertise along with digital capabilities for geological interpretation, simulations and monitoring, and investing in new technology development to answer the specific challenges for CO2 capture.
We validate each aspect of a CCUS project for economic feasibility and long-term reliability and partner with CCUS players to develop the solutions needed for global net zero ambitions. To achieve these ambitions, all scenarios show that CO2 capture and sequestration are needed at gigaton scale by 2050.
We are ready to apply proven technologies and the expertise needed to design CCUS solutions for different industrial sectors. And we are ready to forge new collaborations to accelerate and scale up the industry landscape of CCUS.