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A Deep Dive into the UK and European CCUS Landscape

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A Deep Dive into the UK and European CCUS Landscape

​The Carbon Capture, Utilization, and Storage (CCUS) sector across the United Kingdom and Europe is currently in the throes of significant transformation. This article will explore this exciting phase of change, bringing into focus the key trends and driving factors that are shaping the CCUS industry's trajectory.


The Imperative of CCUS in the Climate Change Fight

It is important to underscore the role that CCUS technologies play in mitigating the climate crisis. While they may not be the ultimate panacea to climate change, they are instrumental, especially in aiding industries with high carbon emissions in their decarbonization efforts. This is particularly relevant in the bid to achieve net zero emissions.

The International Energy Agency (IEA) posits that the existing global capture capacity must surge by nearly 30-fold by 2030 to align with net zero goals. This is a monumental task that calls for rapid and collaborative action from all stakeholders. Emerging projects in the EMEA (Europe, Middle East, and Africa) region and around the globe are promising, but their full potential can only be realized through large-scale operation.


Policy and Landscape of CCUS in Europe

Europe, being one of the world's largest carbon markets, is a bubbling hub for carbon capture initiatives. As of the end of 2022, there were 71 existing or planned projects which, combined, could deliver a capture capacity of around 80 MtCO₂ per year by 2030. A particularly noteworthy initiative is the Porthos project at the Port of Rotterdam in the Netherlands. Also under development are two secure geological storage sites beneath the North Sea that could provide a total storage capacity of 300 Gt, equating to nearly 80 years of current emissions.

The European Union's policy framework employs a carbon pricing system on CO₂ emissions within the bloc, known as the European Union Emissions Trading Scheme (EU ETS). This system caps industry emissions, compelling heavy emitting industries to purchase emissions allowances. As the allocation of free allowances is gradually scaled back and prices for allowances hover around €100 per tonne, the incentives to deploy CCUS within the region are growing.

However, the ETS system isn't devoid of risks. It could potentially render companies within the bloc less competitive internationally and even lead to higher pump prices for customers as heavy emitters pass on additional costs. Despite these risks, government incentives and a regulatory framework are crucial to scale up carbon capture solutions across the region.


Investment in Innovation and Infrastructure

The European Union has set aside a funding pot of €1 billion, as part of a wider €3 billion fund for low-carbon projects, to finance innovative decarbonization initiatives, including CCUS projects. This is part of the REPowerEU Plan. The policy framework also encourages investment in new infrastructure for carbon capture, transportation, and secure geological storage.

In response to the Inflation Reduction Act (IRA) legislation in the United States, which offers significant tax breaks and subsidies for new capture projects, the EU is creating its own package of incentives to prevent investments from leaving Europe for America.

Brussels is formulating an incentive package designed to attract green businesses to EU member states.


The Power of Hubs and Clusters

Looking beyond mainland Europe, the United Kingdom has pioneered several CCUS hub and cluster projects. These initiatives involve local CO₂ emitters that leverage their proximity to share common CCUS infrastructure in order to reduce emissions.

A prime example is the Zero Carbon Humber project that aspires to be one of the world's first net zero industrial regions. Mitsubishi Heavy Industries (MHI) is collaborating with Drax to provide carbon capture services to its bioenergy power station near Selby. With this collaboration, Drax Power Station aims to become one of the largest sources of Carbon Dioxide Removals (negative CO₂) globally.

Furthermore, a feasibility study is being conducted to explore the potential of using captured CO₂ from the plant to produce proteins for sustainable animal feed, fostering the circular economy.

Post-Brexit, the UK has established its own emissions trading scheme (UK ETS), replicating the EU ETC's "cap and trade" carbon pricing policy. The UK is committed to achieving net zero by 2050 and has announced a £20 billion support package to encourage early development of carbon capture projects. Hub and cluster projects empower emitters to share common CCUS infrastructure to reduce emissions.


The Role of Innovation in Progress

In a sector that's still in its infancy, innovation plays a crucial role in bringing new CCUS projects online across EMEA. As a leading innovator of CCUS solutions, MHI has developed a number of proprietary technologies designed to capture and transport carbon dioxide from power plants and industrial facilities.

One such innovation is the new KS-21 amine-based solvent that offers greater stability against degradation and reduces volatility, environmental impact, and operating costs.


The Power of Modular Designs and Trade

Contrary to the notion that big technologies, big infrastructure, and big projects define heavy industry, smaller players can also make a significant impact. Alongside bespoke capture systems built for power stations and large-scale industrial facilities, MHI has developed a compact carbon capture system, dubbed "CO₂MPACT", aiming to reduce costs and shorten manufacturing and installation lead times.

The compact CO₂ Capture system, "CO₂MPACT" can be easily transported to different sites.

One of the compact CO₂ capture systems, which recently started commercial operation in Japan, has the capacity to capture 0.3 tonnes per day (tpd) and is based on a highly versatile standardized design requiring minimal installation space. This small size will allow the application of carbon capture technologies to a wider range of industrial applications, including small utilities.


CCUS Applications Across Europe

Innovations like these are already at work supporting regional efforts to reach net zero emissions across many of EMEA's industries. And while CCUS solutions can already be applied to many industries, leading companies like MHI continue to work with different sectors to develop new solutions for various flue gas sources.

We are proud to be part of the UK's first carbon capture initiative in the cement industry, using MHI's advanced KM CDR Process and the proprietary KS-21 solvent. This has led to the development of the preliminary front-end engineering design (pre-FEED) for a carbon capture plant at the Padeswood cement works in Flintshire in Wales, with an annual CO₂ capture capacity of 800,000 tonnes. Captured CO₂ will be transported to a secure storage site in a spent gas field off the country's North West coast.

In the steel industry, a multi-year trial of the company's carbon capture technology is underway as part of a collaboration with ArcelorMittal at its Gent steel plant in Belgium. A feasibility study is being conducted to support progress to full-scale deployment.

In the Middle East, MHI is conducting a feasibility study to apply its core carbon capture technologies at Aluminium Bahrain BSC (Alba), an aluminium smelter plant in Bahrain, the largest smelter in the world ex-China. Success here will represent the first commercial application of carbon capture technology in the aluminium sector.

Despite a growing number of new projects across the EMEA region, more action is needed to meet climate targets. Policymakers in the EU and other regional powers, along with original equipment manufacturers and private companies across many hard-to-abate sectors, must work together to create a framework that encourages investment in new CCUS capacity.

With decades of expertise and development, MHI deploys a range of solutions across the CCUS value chain throughout the EMEA region: from advanced carbon capture technologies to long-distance transport.

Innovation, collaboration and expertise are essential components of regional efforts to help EMEA's energy and industry majors realize their net zero ambitions. That's why we are continually pushing the boundaries to develop new and more effective CCUS solutions.


The UK’s Perspective on CCUS

The UK views CCUS as an opportunity for economic growth and a key part of achieving net-zero emissions. The country's long-term strategy aims to capture 47 million tons of carbon dioxide (CO2) by 2050. The government plans to invest in research and development, CO2 transport and storage infrastructure, and demonstration projects, and will provide incentive payments to project developers. In addition, the government has established several institutions that bring together government, industry, and academia to advance the sector.

The UK's vision for CCUS is to drive cost declines so the technology can be deployed at a large scale in the 2030s. This effort was initially part of a broader Industrial Strategy for the country, aiming to make the UK the "world's most innovative economy". However, following the Covid-19 crisis, the government shifted to a new Plan for Growth, which focused on infrastructure investments and research and development (R&D) spending, and adopted a Net Zero Strategy established in 2021.

The UK government has committed to legally binding carbon reduction targets and aims to become net zero by 2050. To that end, the UK government's March 2023 budget announced a £20 billion support package to encourage early development of carbon capture projects. The package aims to create 50,000 jobs, attract private sector investment, and help capture 20-30 million tonnes of CO₂ annually by 2030, as part of wider efforts to support 500,000 new green jobs by 2030.


The CCUS Landscape: A Global Perspective

While Europe has significant potential for offshore CO2 storage, particularly in the North Sea, other regions are also exploring CCUS opportunities. For instance, Norway's Utsira formation, an offshore saline formation, is seen as the largest potential sink for CO2 in Europe, with a storage capacity of up to 16 GtCO2.

Germany, too, has an estimated storage capacity of around 20 Gt, mostly offshore in the North Sea. Meanwhile, the Netherlands' storage capacity is estimated to be between 2.7 Gt and 3.2 Gt, most of it in depleted gas fields.

Despite these promising capacities, the investment environment for CCUS in Europe needs to continue improving. This requires adopting more ambitious climate goals and increasing policy support for clean energy technologies. The European Commission's net-zero emissions target within its 2050 long-term climate strategy, part of the recently announced European Green Deal, is a step in the right direction.

In light of these developments, a growing number of CCUS projects are emerging in Europe, each targeting industrial hubs and contributing to the sector's growth.


Key Takeaways and The Path Forward

The CCUS sector in the UK and Europe is at an exciting juncture. Its role as a key player in the fight against climate change is becoming increasingly apparent, and the sector is showing signs of significant growth and innovation. However, challenges remain.

For CCUS technologies to become mainstream, there needs to be a robust policy framework that encourages investment, fosters innovation, and provides incentives for adoption. Collaboration and coordination across stakeholders are key, as is the need to address public perception and acceptance of these technologies.

Moreover, the industry needs to move beyond relying solely on subsidies and explore other revenue streams. This includes leveraging green premiums, voluntary carbon markets, and the valuation of CO₂ as a feedstock.

Finally, the industry needs to ensure that it is investing wisely and strategically. This requires a deep understanding of end markets, a commitment to bold environmental, social, and governance (ESG) commitments, and a willingness to embrace new collaborations and partnerships.

The journey ahead for the CCUS sector is challenging but promising. With the right strategies, collaborations, and policy support, the sector can play a pivotal role in the transition towards a sustainable and low-carbon future.