- CCUS specifically refers to Carbon Capture, removal, transport, Utilization, and Storage from industrial facilities, power plants, and ambient air.
- CCUS will likely be a significant component of the US steel industry’s net zero initiative regarding greenhouse gas emissions.
- Energy, industrial, and technology companies, as well as environmental and energy policy organizations will all need to work together to develop commercial scale technologies.
Components of CCUS are proven technologies that have been used in a wide range of industries since 1972 when several natural-gas processing plants in the Val Verde area of Texas began employing carbon capture to supply CO2 for Enhanced Oil Recovery (EOR) operations. Since then, more than 200 million tonnes of CO2 have been captured and injected deep underground. Notably CO2 being used for EOR provides economic benefit hence the capture of it for utilization makes sense.
The Infrastructure Investment and Jobs Act, which was passed on November 5 and signed by President Biden November 15 includes over $12 billion in funding over a five year period focused on CCUS. These include:
- SCALE Act: $4.6 billion in financing for CO2 transport and storage infrastructure.
- Direct Air Capture Hubs: $3.5 billion to create 4 regional DAC hubs.
- Demonstration Projects: $2.54 billion over four year period.
- Large Scale Pilot Projects: $937 million over four year period.
- Carbon Utilization Program: $310 million over a five year period.
- Carbon Capture Technology Program: $100 million over five year period
Annual CO2 emissions reductions of 210-250 million metric tons resulting from these provisions are projected by 2035. When we think of infrastructure and benefit provided the steel industry we typically think of bridges and roads. However the infrastructure around climate change mitigation, or the green economy, will be heavily dependent on steel. Often times we hear a common refrain of, “we can’t afford it”, when discussing infrastructure. If we think about it more in terms of investment and not expense we can frame the discussion more positively. What is relevant is that demand for around 5 millions tons of steel could result from every $100 billion invested in infrastructure. Consider a proposed interconnected transport and storage network associated with the SCALE Act and then consider what this means for steel (see map on next page).
For steelmakers, ultimately the transition to hydrogen based steelmaking processes provide the best green option. That is many years and billions of dollars in the future. The U.S. industry today operates with lower carbon emissions intensity than much of the world. This is due to a high percent of EAF production combined with natural gas and DRI production. The momentum in the EU provided their Emissions Trading System (ETS) combined with high percent of operating BFs vs EAFs suggests a quicker adoption of green technology as BFs are replaced. The U.S. however, with modern EAF and DRI facilities in place with years of operation still ahead could be well served with CCUS as a bridge to hydrogen based production further in the future.
Provided the infrastructure build out for transporting CO2 represented by SCALE Act, CCUS becomes even more attractive. Additionally, tax credits under 45Q of the Internal Revenue code provide further incentive to capture and sequester carbon.
And it is not just steelmakers that can benefit from CCUS technology. Production of cement, fertilizer and methanol, and natural gas processing all represent prospects for CCUS. And more so given the development of hub systems in the infrastructure network that helps to bring economic viability to lower scale operating systems.
Provided the transport systems in place, the targets associated with GHG Reduction Strategies, subsidies associated with tax credits, it is only a matter of time that new and innovative ideas become part of the net zero solution. This includes removal of existing carbon from the atmosphere. Yes, trees may be the most technologically advanced means of removing carbon from the atmosphere. Still, the technology to capture carbon is being researched and an example, Metal Organic Framework, MOF, resembling the use of enzymes used in photosynthesis, can possibly be key to further reducing emissions associated with natural gas.
Ultimately, CCUS will be critical 1) in eliminating carbon emissions in hard to decarbonize industrial processes and 2) as a bridge toward future green energy and processes. Tax credits, governmental policy and regulatory support, and financial support of research and commercial projects are all necessary to drive CCUS to scale necessary in support of near zero economy.
