Capturing carbon, and selling it
Although CO2 is a large part of greenhouse gas (GHG) emissions, processed CO2 is a valuable product with an attractive revenue stream
The Clean Power Plan, announced in 2015 by President Obama and the U.S. Environmental Protection Agency (EPA) was an important step in reducing emissions. The goal was to lower CO2 emissions from existing coal-fired power plants 30% below 2005 levels by 2030. The plan includes strong standards for power plants and customized goals for states to cut carbon emissions.
The power generation industry has sought ways to minimize carbon emissions including operating modes, energy generation feedstock and adding better carbon capture technologies to decrease emissions. However, new processes and systems are costly. The power industry struggles to justify the economics of meeting new U.S. regulations calling for cleaner air. An approach to solving this dilemma is creating a revenue stream to help power companies optimize carbon capture investments.
The average coal plant generates 3.5 million tons of CO2 per year. In the U.S. alone, burning coal emitted 1.87 billion tons of CO2 in 2011, according to the U.S. Energy Information Administration (EIA). Coal generates 44% of the Nation’s electricity and is the biggest air polluter in the U.S. Coal pollutes when it is mined, transported to the power plant, stored and burned (see Figure 1).
Carbon dioxide capture and storage (CCS) is a set of technologies that can reduce CO2 emissions from new and existing coal-and gas-fired power plants and other large industrial sources such as cement production and natural gas processing facilities. CCS could play an important role in reducing greenhouse gas (GHG) emissions, while enabling low-carbon electricity generation from power plants.
CCS is the process of capturing CO2 before it enters the atmosphere, transporting it and storing it (carbon sequestration) for centuries or millennia. Usually, the CO2 is captured from large point sources such as a chemical plant or coal-fired or biomass power plant, and then stored in an underground geological formation. The aim is to prevent the release of CO2 from heavy industry with the intent of mitigating the effects of climate change. Although CO2 has been injected into geological formations for several decades for various purposes including enhanced oil recovery (EOR), long-term CO2 storage is a relatively new concept.
Carbon capture and utilization (CCU) and CCS are sometimes collectively discussed as carbon capture, utilization and sequestration (CCUS). This is because CCS is a relative expensive process that yields a product with an intrinsically low value (i.e., CO2). Hence, carbon capture makes economically more sense when being combined with a utilization process where the cheap CO2 can be used to produce high-value chemicals and other products to offset the high costs of capture operations.
CO2 can be captured directly from an industrial source such as a cement kiln, using a variety of technologies including absorption, adsorption, chemical looping, membrane gas separation or gas hydration. As of 2020, about one thousandth of global CO2 emissions were captured by CCS. Most projects are industrial.
As estimated in the U.S. Inventory of Greenhouse Gas Emissions and Sinks, more than 40% of CO2 emissions in the U.S. are from electric power generation and industry. CCS can reduce CO2 emissions from power plants that burn fossil fuels by 80 to 90%. CCS Technologies applied to a 500 MW coal-fired power plant that emits around 3 million tons of CO2 annually reduces GHG emissions (with a 90% reduction efficiency) equivalent to reducing annual electricity-related emissions from more than 300,000 homes.
EPA’s Greenhouse Gas Reporting Program includes facilities that capture CO2 to supply it to markets for injecting it underground. According to the program, carbon capture is being done at more than 120 facilities in the U.S., mainly from industrial processes. The CO2 is used for EOR, food and beverage manufacturing, pulp and paper manufacturing and metal fabrication.
The costs to capture CO2 from power plants, large industrial manufacturing facilities and other sources are significant. When there is no apparent return on investment (ROI) for producers and manufacturers to invest in these technologies, it is difficult for them to justify the investment. CCS potentially offers an opportunity for emitters to capture CO2 to meet the clean power plan requirements and sell it to recover some of the cost of capturing and purifying it. Based on the current CO2 demand, CCS can offer attractive investment returns on carbon capture technology.
Recovering CO2 from power plants
In the industrial history of the U.S., some of the CO2 sources (ethanol and ammonia plants) were owned and operated by those who operated CO2 plants near the raw gas source. Many independent U.S. CO2 producers still operate as direct sales suppliers to consumers. However, since the emergence of the major gas companies through industry consolidation, most of the raw CO2 is sold to gas refiners.
There is a large margin difference between the price of raw gas from a producer and the price from a refiner/gas company. Raw gas prices direct from a source range from $5 to $25 per ton versus consumer market prices, which usually range from $60 to $100 per ton. In some high-priced markets with little regional competition or no local supply, CO2 can range from $150 to $300 per ton.
For 2010, total U.S. merchant CO2 production capacity was 40,000 tons per day (TPD). Most of the merchant CO2 is now from ethanol plants. Ethanol plants continue to be the dominant source of CO2 supply. Ammonia plants are expected to continue to lag as the number of plants shut down due to high natural gas prices from 2002 onward. This could change due to current low natural gas prices.
This same margin can apply to power producers who can efficiently capture CO2 from their processes. It is necessary to evaluate CO2 production costs, distribution and overhead from CCS schemes on a local basis, considering the regional nature of CO2 supply and its largest markets in the U.S. When the markets are understood and the costs and requirements for producing CO2 for the merchant trade are known, the risks for direct marketing can be properly evaluated.
CO2 as a product of value
Processed CO2 is a valuable product with an attractive revenue stream. It can be in short supply in many U.S markets. CO2 has a complex supply chain. Crude CO2 is typically produced as a byproduct, purified to a liquid state and delivered to points of distribution.
Applications include food processing, where it is used in freezing, chilling, packaging operations, beverage carbonization and decaffeination. Other CO2 markets include EOR, urea fertilizer production, pharmaceuticals and medicine, horticulture, fire suppressants, welding and lasers, refrigeration, clean water applications, propellant for aerosols and as a fumigant to remove infestation.
Another key application for CO2 is dry ice (see Figure 2). In the food industry it is used for meat processing, short-term food storage, in-flight catering and research and development (R&D). In dry ice blasting, dry ice pellets are used to replace sandblasting when removing paint from surfaces. It aids in reducing the cost of disposal and cleanup. For rubber and plastics industry uses, flash is removed from rubber objects by tumbling them with crushed dry ice in a rotating drum. In cryogenic tunnel and spiral freezers, high-pressure liquid CO2 is injected through nozzles that convert it to a mixture of CO2 gas and dry ice “snow” that covers the surface of the food product. As it sublimates (goes directly from solid to gas states), refrigeration is transferred to the product. Dry ice is also used extensively in the pharmaceuticals and biotech industries.
Demand for CO2
According to data available from SRI Consulting (March 2010), the global demand for CO2 is estimated at 80 million tons per year (tpy) based on SRI data. Of this amount, 50 million tpy are used for EOR in North America, while the remaining 30 million tpy is used in all other uses, predominantly the mature industries of beverage carbonation and food industry.
SRI estimates future demand will be 140 million tpy based on predicted growth of current technologies such as EOR, urea fertilizer and the implementation and commercialization of demonstration projects for the remaining technologies in line with their prospective development timeframes.
CO2 market opportunities
For industrial gas distributors, the growth potential in the CO2 product market is strong. Consolidation in the merchant CO2 business in the U.S. shows interest in this segment of the industrial gas business. Legislation and voluntary commitments to reduce the use of Hydrofluorocarbon (HFC)-based refrigerants have opened growth opportunities, especially for CO2 producers, according to SRI Consulting.
An emerging use of CO2 is in algae production. Algae can be a source for applications including fuel, renewable oil markets, chemical markets, in nutritionals and in health sciences. CO2 can be separated from flue gas emissions, purified and sold to commercial interests for use in algae production. Figure 3 is a flow diagram that demonstrates how the process of capturing, separating and infusing CO2 for use in algae farming operations takes place.
– This article appeared in the Gas Technology supplement.
Technology Services Inc.
U.S. Energy Information Administration (EIA)