Carbon capture and storage is likely to be a key topic at COP26, with almost all scenarios under the United Nations’ Intergovernmental Panel on Climate Change (IPCC) seeing the technology as vital in limiting global temperature rises.

In order to limit temperature increases to just 1.5 degrees Celsius above pre-industrial levels, the IPCC estimates 10 gigatonnes (10 billion tonnes) of carbon dioxide will need to be captured and permanently stored annually by 2050.

To put this into perspective, only about 40 million tonnes per annum of CO2 equivalent are captured by the 26 CCS projects currently in operation.

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Consultancy Wood Mackenzie has a slightly more conservative estimate than the IPCC, saying between 4 and 6.5 GT of CO2 will need to be removed annually by 2050, which will still require a rapid increase in projects globally.

“The pipeline of announced projects, which has quickly expanded this year, could take this to around 400 million tonnes by 2030,” says Wood Mackenzie energy transition principal analyst Mhairidh Evans.

“From there, aligning with the lower 1.5-degree warming limit of the Paris Agreement implies CCS capacity would need to expand 15-fold in 20 years.”

However, Evans claims it will “require many stars to align” in order to reach the scale of CCS expansion needed to keep global temperature rises in check.

She adds it will require an acceleration in cost reductions, a step-change in investment levels, and targeted policy and regulatory support, as well as permanent geological carbon storage becoming much more widely available than it is today.

With such an expansive and rapid roll out of CCS deemed essential in limiting global temperature rises, the technology is likely to form a key topic of discussion among world leaders at the upcoming COP26 summit.

Moving the agenda forward

Guloren Turan, general manager of advocacy and communications at the Global CCS Institute, tells Upstream the international think tank is hopeful more countries will commit to net zero emissions targets in the lead-up to the global climate summit in Glasgow “to move the climate agenda forward”.

“In regards to COP26 itself, like others we would like to see the finalisation of the Paris Rulebook, including the implementation rules for Article 6, which may accelerate the deployment of CCS,” she adds.

Article 6 aims to establish a market mechanism for climate action and mandate an overall mitigation of global emissions.

According to the International Chamber of Commerce, Article 6 could help establish a policy foundation for an emissions trading system, which could help lead to a global price on carbon.

Evans says a global response to carbon pricing will be a key talking point for CCS at COP26.

“There is still a gap — in many cases a large gap — between the cost of CCS and the commercial incentive companies have to apply it,” she tells Upstream.

“Placing CCS centrally inside national strategies with targeted incentive structures is needed to expand CCS at net zero pace.”

Recent analysis by Wood Mackenzie shows that the average cost of carbon capture and sequestration is higher than today’s carbon pricing levels, and warns that CCS costs are likely to increase, with the projects already in the pipeline deemed to be “the low-hanging fruit”.

The consultancy notes natural gas processing costs less as CO₂ removal is already built into the process. However, addressing emissions in the fossil-power sector and other post-combustion industries is more complex and will be more expensive.

Wood Mackenzie's cost analysis places the cost of CCS within a range of roughly $40 per tonne for CSS associated with natural gas processing to more than $100 per tonne for CCS attached to both coal and gas power generation.

The consultancy also highlights a significant gap in its research between the cost of CCS and current carbon prices, with the global average carbon price currently sitting around $20 per tonne.

Reduced costs

As industry scales up and technology improves, Wood Mackenzie forecasts that costs will fall roughly 20% by 2050.

The anticipated rising cost of energy in the coming decades, and the cost to service CCS projects, which currently require large amounts of energy to run, are seen as barriers that could prevent project lifetime costs from falling much further.

However, the consultancy notes the creation of CCS hubs provides a potential pathway forward for industry to collaborate and drive down costs even further.

Wood Mackenzie’s research finds CCS hubs have lower investment and lifetime costs, while adding they have the potential to lower project breakevens by a further 20-25%, on top of technology cost reductions.

However, with time of the essence in meeting global climate goals, Wood Mackenzie notes the main drawback to CCS hubs is that they take longer to plan, fund and develop, while also requiring “significant” public funding.

Despite the challenges ahead, Turan still believes that building out the required CCS capacity to limit global temperature rises is achievable.

“The task at hand to achieve net zero, and specifically to ramp up CCS deployment within the short timeframe required, certainly isn’t easy but is achievable," she says.

"What happens in the next decade will be crucial to enabling CCS to reach the necessary scale in time to limit the impacts of global warming.

“The investment required is well within the capacity of the private sector, which spent over $2 trillion in the energy sector in 2018. What’s more is that we’re already seeing enormous progress in the space.”