Carbon Capture: Part 3

Major applications for carbon capture, and key metrics to evaluate technologies

In this post, we discuss how the cost of capturing CO2 is affected by source of CO2, size of the facility (scale), and the technology maturity level. These three of these factors are key to understanding the current landscape, and the impact of future investments in carbon capture technologies. Capturing CO2 from gases with a higher CO2 content will cost less. Larger facilities will have lower costs per tonne of CO2 captured than small facilities, up to a point. Finally, the first facility built is always significantly more expensive, for a host of engineering and financial reasons. For emerging technologies, the first few facilities built will initially appear less cost competitive until the associated construction and manufacturing processes are standardized.

Cost of Capture as a Metric

Carbon capture technologies are typically benchmarked by the cost (or expected cost) of capturing one metric tonne (1000kg) of CO2 at commercial scale ($/mt of CO2). This cost should include both the capital cost of purchasing the equipment and building the facility (CapEx), and operating expenses like utilities, labor, etc (OpEx).

The qualifier “at commercial scale” is critical because the per unit cost of capturing CO2 (and producing most commodity products) falls as the facility size increases. As a first approximation, engineers often use “The 6/10ths Rule”: as size increases, costs generally increase by the size ratio raised to a factor of 0.6. For example, if a 100,000 mt/yr carbon capture facility costs $100mm to build, a 1 million mt/yr facility will cost $390mm. [1]

The cost of CO2 capture also depends strongly on the source and CO2 content of the gas. As discussed previously, some industrial processes (such as ethanol production) produce nearly pure CO2 that can already be captured and utilized economically (at less than $20/mt CO2). However, the vast majority of CO2 produced by industrial processes is released to the atmosphere at 4–30% CO2. Moreover, additional clean up steps are required for capturing CO2 from some sources like burning coal, due to the sulfur content and nitrogen oxides that must also be removed.

Finally, the projected cost of carbon capture depends greatly on the technology maturity and underlying economic assumptions. To help ensure apples-to-apples comparisons, the National Energy Technology Laboratory (NETL) maintains a standardized methodology and reference cases for estimating the cost of point-source CO2 capture at commercial scale, reducing CO2 emissions from a specified coal and natural gas power plant by at least 90%. NETL funds the bulk of carbon capture research and development in the US, with a target of demonstrating technologies with an at-scale cost of $40/mt CO2 or less in the 2020–2025 timeframe. [2]

Cost estimates for capturing CO2 from the air (negative emissions technologies) are significantly more uncertain, and are highly sensitive to the assumed cost of electricity (in addition to design-specific assumptions). The most mature direct air capture company, Climeworks, has reported a cost of capture of $600/mt CO2 for its plant in Switzerland, which captures 900 tonnes of CO2/yr (pilot scale). A 2019 report from the National Academy of Sciences estimates costs of $147–228/mt CO2 for direct air capture, once these technologies have reached the 1 million tonne per year scale and been deployed repeatedly. [3]

Energy Requirements and Life Cycle Assessment

Both government incentives (California’s Low Carbon Fuel Standard) and private efforts are requiring greater transparency around how much CO2 is generated and emitted during the “carbon capture” process.

This starts with the amount of energy consumed per tonne of CO2 captured, generally expressed in gigajoules per tonne CO2 (GJ/mt CO2). The source of the energy used to power the carbon capture process has a large impact on another key metric, the cost of CO2 avoided, which considers the CO2 captured relative to the additional CO2 emitted (directly and indirectly) as a result of the carbon capture process. Using the National Academy of Sciences study on direct air capture [3] as an example, the cost of CO2 avoided is 35% higher than the cost per tonne of CO2 captured: $199–357/mt CO2. (In this case, the project costs are distributed across the CO2 captured minus the increase in emissions to power the process.)

Building on these simple metrics, Life Cycle Assessments (LCAs) are increasingly important for businesses in the CO2 mitigation space. An LCA goes beyond determining the cost of CO2 avoided to estimate the total impact of the project on emissions, water, and land use over the project lifetime. For credit-based incentives such as California’s Low Carbon Fuel Standard (LCFS), an LCA is required to determine net emissions that result from making and burning the fuel.

Sources of CO2

The source of CO2 significantly affects the cost and type of carbon capture technology used, so it’s worth additional discussion. Sources of CO2 vary widely in composition, from the low quantities found in air (400 parts per million, ppm) to greater than 90% produced in fermentation processes (e.g. making beer and bio-ethanol production). The typical CO2 content of different gases and estimated cost of capture are shown in Table 1. [4]

Table 1. Sources of CO2 [4]

To visualize why carbon capture from concentrated sources like cement production and coal-fired power plants is cheaper than capturing it from a more diluted source like air, think about how much easier it is to pick a pint of blueberries when there are tons of blueberries on a bush, versus at the end of the season when very few are left. Capturing CO2 from a concentrated source is like picking berries on a farm, where you are likely limited by how fast you can pick, rather than searching a large area for blueberries.

Likewise, a key difference between capturing CO2 from air versus a concentrated source like a power plant is the amount of air you need to gather, process to gather a single tonne of CO2. The concentration of CO2 in air is 100 times lower than the exhaust from natural gas power plants, and 300 times lower than the exhaust from burning coal. [5] Direct air capture systems must handle hundreds of times more gas, requiring much larger equipment and more energy to capture the same amount of CO2.

Existing carbon capture facilities in the US capture CO2 from sources with high CO2 contents. Of the 17 million metric tonnes (mm mt) of CO2 captured in the US in 2018, 14 mm mt came from low-cost, almost pure CO2 sources such as ethanol production, natural gas processing, and excess CO2 at ammonia plants, with costs less than $20/mt CO2. [4] Since the gas from these sources already contains >90% CO2, it is more cost effective to remove the other components (mostly water) rather than “capture” the CO2 — this is why the cost is so low. An additional ~1mm mt/yr is captured from bioethanol production at ADM’s Illinois Carbon Capture and Storage project and sequestered in an underground saline reservoir rather than being sold. The remaining 2–3mm mt/yr came from true carbon capture facilities, including NRG’s Petra Nova project (1.4mm+ mt/yr), and the Port Arthur hydrogen plant project operated by Air Products (1mm mt/yr). All received significant grants from the DOE’s National Energy Technology Laboratory (NETL).

A notable non-point source project on the horizon is the proposed engineering study and collaboration between Carbon Engineering (a direct air capture company) and Occidental Petroleum to determine if a 1mm mt CO2/yr facility in the Permian Basin of TX is economically viable. The facility would be powered by cheap surplus natural gas, the captured CO2 would be used for EOR, and Occidental could potentially claim a “carbon negative barrel of oil” eligible for LCFS and 45Q credits.

This example underlines the value of co-locating carbon capture with a) transport or storage infrastructure and b) cheap energy. For any CO2 captured to be monetized, it must be transported to where it can be utilized, stored or sequestered. Storing and sequestering CO2 is a major logistical challenge; if there are not enough “cheap tonnes” of CO2 in a given region to justify a pipeline, storage facility, or utilization facility, more expensive sources of CO2 may come into play.

Looking ahead, many experts think that carbon capture from dilute sources (and particularly direct air capture) will not see significant traction until after more concentrated sources are exhausted, given the higher cost of capture. However, there are some cases where public incentives, environmental regulations, transportation considerations, and business plan innovation can create opportunities for seemingly less cost-effective technologies.

The next two posts in this series describe carbon capture technologies that exist today and are in development.

Notes

1. In this example, $100mm x (10)^(6/10) = 390mm. To estimate the cost of other equipment at a larger scale from the cost of smaller equipment:
   [Cost of big equipment] = [Cost of small equipment] x ([Size, big]/[Size, small])⁰.6. For the aspiring engineering student, an online explanation.
2. Source: NETL Carbon Capture Fact Sheet
3. Source: National Academy of Sciences, “Negative Emissions Technologies and Reliable Sequestration: A Research Agenda” 2019, Ch. 5.
4. Source: National Petroleum Council Study, “Meeting the Dual Challenge: A Roadmap to At-Scale Development of Carbon Capture, Use, and Storage”, Topic Paper #1, December 12, 2019. See Table 2.1.
5. Assuming that both direct air capture (DAC) and point-source systems remove 90% of the CO2 in the incoming gas stream; some DAC systems remove <50%, so even more air must be handled.

Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in seed-stage companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation and computing.