[C Tech Now] 'Carbon Dioxide' Dust Together Builds an 'Economic Powerhouse'... CCUS Accelerates

UK Government Announces Recent 'CCUS Vision'
30 Million Tons of CO2 Storage and 5,000 Jobs

ExxonMobil Invests 26 Trillion KRW in Low-Carbon Technologies
South Korea Plans Project Utilizing Donghae Gas Field

Efficient for Industries with Inevitable Carbon Emissions
Some Criticize as 'Extending Oil's Lifespan'

Technology Over 50 Years Old but Recently Gaining Attention
International Trend Recognizes Carbon Reduction as Essential Technology

On the 20th of last month, the UK government ambitiously announced the ‘CCUS Vision,’ pledging to invest ?20 billion (approximately 33.617 trillion KRW) by 2030 in carbon dioxide capture, utilization, and storage to store 20 to 30 million tons of carbon dioxide annually and create 5,000 jobs.

This plan came shortly after member countries agreed to accelerate CCUS technology at the 28th United Nations Climate Change Conference of the Parties (COP28) held in the same month. Global oil company ExxonMobil agreed last month to establish a carbon capture pilot plant with the Dutch company FuelCell Energy. ExxonMobil plans to invest $20 billion (approximately 26.36 trillion KRW) in low-carbon technologies such as CCUS by 2027.

As an international consensus has formed that CCUS is essential to achieve carbon neutrality (net zero) by 2050, related investments are rapidly increasing. South Korea also saw a surge in interest after the Carbon Capture, Utilization, and Storage Act (CCUS Act) passed the National Assembly plenary session on the 9th. The government recently selected the ‘East Sea Gas Field Utilization Carbon Capture and Storage (CCS) Demonstration Project’ as a preliminary feasibility study target. If this project passes the final feasibility review, full-scale CCS projects can proceed domestically.

A ‘Bridge’ to Carbon Neutrality

CCUS refers to technologies that capture carbon dioxide emitted from power plants or industrial sites and either store or utilize it. It is broadly divided into two types: Carbon Capture and Storage (CCS) and Carbon Capture and Utilization (CCU). CCS involves capturing carbon dioxide, compressing and liquefying it, then storing it in deep saline aquifers (deep underwater geological formations containing saltwater) or depleted oil and gas fields. CCU uses carbon dioxide directly without special treatment or converts it into carbon compounds or other products.

CCUS differs from existing technologies in that it is a post-emission carbon reduction method. If greenhouse gas emissions such as carbon dioxide cannot be reduced to zero, the idea is to capture carbon dioxide that has already been released. It is a core technology to achieve net-zero carbon emissions by 2050. Particularly in industries like cement manufacturing, where carbon dioxide emissions are unavoidable during production processes, CCUS is the only carbon reduction method.

CCS Facility Installed at Korea Midland Power's Boryeong Thermal Power Plant

Of course, there are opponents of CCUS. Some environmentalists argue that this technology only prolongs the life of fossil fuels. There is also analysis suggesting that considering the energy used throughout the entire process of capturing, transporting, utilizing, and storing carbon dioxide, the actual carbon reduction effect may not be significant.

Nevertheless, internationally, CCUS is recognized as an essential technology for carbon reduction. The Intergovernmental Panel on Climate Change (IPCC), in its 2022 climate change report, included CCUS as a major reduction measure in the power generation and industrial sectors under scenarios limiting global temperature rise to 1.5 degrees Celsius. According to the International Energy Agency’s (IEA) ‘2023 Net Zero Roadmap,’ CCUS accounts for 8% of the cumulative carbon reduction contribution in the 2050 carbon neutrality scenario.

Globally, CCUS projects have also significantly increased. According to the Global CCS Institute, as of the end of June 2023, there were 392 CCS facilities worldwide, a 102% increase from the previous year’s 194 facilities. During the same period, carbon dioxide capture capacity rose from 241 million tons per year to 361 million tons. The IEA reports that CCUS projects are underway in 45 countries worldwide as of 2023.

Trends in CCUS Facilities and Carbon Dioxide Capture Capacity (Source: Global CCS Institute, as of the end of June 2023)

However, more aggressive CCUS investment is needed to achieve carbon neutrality by 2050. The IEA predicts that if currently announced CCUS projects materialize, about 400 million tons of carbon dioxide could be captured annually by 2030. This represents only 40% of the capture capacity needed by 2030 (1 gigaton). Whether investment plans will materialize remains uncertain. Only about 5% of announced CCUS projects have reached the final investment decision stage.

◇ Economic Feasibility Unresolved Despite Over 50 Years of History = Although CCUS has recently gained attention, it is actually a technology over 50 years old. In the United States, CCUS technology was used in 1972 at the Val Verde natural gas plant for Enhanced Oil Recovery (EOR). This method involves injecting carbon dioxide into oil or gas fields to increase extraction volumes.

Despite criticism that using captured carbon dioxide to expand fossil fuel extraction diminishes the carbon reduction effect, most CCS facilities to date have focused on EOR.

The reason is that capturing and storing carbon dioxide incurs astronomical costs, while there are few viable means to monetize it. This is why economic feasibility and effectiveness are cited as the biggest obstacles to expanding CCUS. According to BloombergNEF, the cost of capturing carbon dioxide, including transportation and storage, ranges from $92 to $130 per ton. Technologies to utilize captured carbon dioxide for other purposes are being developed but have not yet reached commercial levels.

Since a business model has not yet been established, countries are offering various incentives to promote CCUS adoption. The most proactive is the United States. Under the Inflation Reduction Act (IRA), the US provides a tax credit of $85 per ton for carbon dioxide captured at industrial facilities. For Direct Air Capture (DAC) facilities, which are similar to CCS, the support is $180 per ton.

The European Union (EU) signed the world’s first cross-border CCS agreement in 2022. The EU is conducting 11 CCS projects through its Innovation Fund. In Europe, many multinational CCS projects are underway, especially utilizing deep saline aquifers in the North Sea region.

Japan announced a CCS technology utilization promotion roadmap in January last year to achieve carbon neutrality by 2050. Japan aims to store 6 to 12 million tons of carbon dioxide annually by 2030 using CCS technology and plans to provide subsidies for private sector projects.

Kumho Petrochemical officials are holding a groundbreaking ceremony for the CO₂ capture and liquefaction plant, a key facility of the carbon capture, utilization, and storage (CCUS) project, at the Yeosu 2nd Energy Plant in Jeonnam on December 1 last year. Photo by Kumho Petrochemical

Domestically, many companies have announced CCUS projects. Kumho Petrochemical held a groundbreaking ceremony on December 1 last year for a carbon dioxide capture and liquefaction plant at its Yeosu 2nd Energy Complex in Jeollanam-do. The company expects to capture and reuse about 69,000 tons of carbon dioxide annually. Korea National Oil Corporation, Hyundai Engineering & Construction, and SK IE Technology (SKIET) are participating in the East Sea Gas Field CCUS project.