[Tech Report] In the Net Zero Era, 'Carbon Reservoirs' Gain Spotlight in Exhaust Gas Fields

CCS Technology Captures Carbon from Fossil Fuel Combustion and Refining Processes
and Stores It Again in Depleted Gas Fields and Others

There is a bridging technology in the energy transition process from fossil fuels to renewable energy. It is CCS, so-called 'CO2 Capture and Storage' technology.

This technology allows capturing carbon dioxide from the largest emitters such as power plants, steel, cement, and petrochemical factories. The key is to store it in spaces that do not affect the atmosphere. The captured carbon dioxide is compressed or liquefied and transported via pipelines or ships to be stored in deep underground layers more than 1000 meters deep.

As CCS technology gains attention, unexpectedly, oil development companies are also in the spotlight. This is because the places transformed into carbon dioxide storage spaces are precisely depleted gas fields and oil fields. After capturing carbon, a permanent storage location is needed, and carbon dioxide is re-injected into the empty spaces left after drilling natural gas or oil. Since these layers originally contain fossil fuels, they are suitable for stable storage of carbon dioxide separated from the atmosphere. Companies that invested in gas and oil drilling can use the equipment already installed. Companies that led carbon emissions are ironically gaining an advantageous position in the CCS business and undergoing a 'reversal' to become eco-friendly companies.

As we move toward a carbon-neutral era, the value of depleted gas fields is expected to rise further. Securing CCS technology is emerging as a survival strategy for companies ahead of environmental protection. The global market research firm Industriaq estimates that the CCS market size will reach $25.3 billion (about 33.4 trillion KRW) by 2026.

CCS technology is also advantageous for securing carbon emission permits. Carbon dioxide reduced through CCS can be recognized as carbon emission permits. Recently, the price of carbon emission permits has risen as various eco-friendly regulations have been fully implemented. The price of European carbon emission futures (December contract) on the ICE exchange rose from about 51 euros per ton in January this year to 74 dollars per ton currently. Carbon emission permits are rights to emit greenhouse gases, and companies allocated these permits must use greenhouse gases within the assigned range. Companies that cannot reduce carbon must purchase carbon emission permits. Companies engaged in CCS can devise a revenue model not only from the business itself but also from securing carbon emission permits.

Domestic companies are also entering the CCS business using depleted gas fields. SK E&S is promoting a project to convert the Bayu-Undan gas field located offshore southeast of Timor-Leste into a carbon dioxide storage site. Additionally, they plan to secure more fields capable of storing carbon dioxide in Australia and Southeast Asia to bury carbon dioxide generated from LNG power plants and other sources in Korea. The 'Shepherd Project,' which stores carbon dioxide generated from the Ulsan and Yeosu industrial complexes in depleted oil and gas fields offshore Sarawak, Malaysia, is also underway. This project is a consortium of seven companies including Samsung Engineering, Samsung Heavy Industries, and SK Energy. The POSCO Group is also analyzing the feasibility of a CCS project near Borneo Island, Malaysia.