Carbon Capture and Storage

Low Carbon Energy Technologies Series | October 2015
Carbon Capture
and Storage
At a crossroads
Carbon Capture
and Storage
At a crossroads
Carbon Capture and Storage (CCS) is a viable and cost-

competitive technology for limiting carbon dioxide
emissions. At the top of political agenda in the late 2000s,
the demonstration of commercial-scale CCS projects has
since lost momentum, and only projects related to upstream
oil and gas are moving forward. Now at a crossroads, CCS
demands strong policy support due to its high up-front costs
and project complexity. It is only likely to play a significant
role in climate-change mitigation if there is genuine
determination to reach the 2°C target.
The content of this summary is based upon the Carbon Capture and Storage at
a Crossroads FactBook.
For the complete FactBook and other FactBooks by the A.T. Kearney Energy Transition
Institute, please visit www.enery-transition-institute.com.
2 Summary FactBook | Low Carbon Energy Technologies Series | October 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.
Any copy or extract has to refer to the copyright of the A.T. Kearney Energy Transition Institute.
CCS is expected to play an important role in achieving least-cost
portfolio approaches to mitigating CO2 emissions
The rise of atmospheric CO2 concentration needs to

be mitigated Fossil-fuel use has
As CO2 emissions and the atmospheric concentration been responsible for
of CO2 reach record highs, room for maneuver in mitigating the majority of manmade
the adverse effects of climate change is becoming CO2 emissions since
dangerously tight. There are three complementary options
for mitigating CO2 -induced climate change: limiting fossil-
the Industrial Revolution
fuel consumption, expanding CO2 sinks (e.g. forestry),
and preventing fossil-fuel combustion emissions from
escaping into the atmosphere in a process called Carbon
Capture and Storage (CCS). Figure 1. Global annual CO2 emissions (excluding land-use)
CCS is one of several mitigation options GtCO2 per year
In the lowest-cost pathway to limiting the global increase in
temperature to no more than 2°C (2DS Scenario), the IEA Historical Future emission-
60 6DS Scenario “do-nothing”
estimates that CCS will contribute to 13% of cumulative emissions reduction levers
CO2 emission reductions by 2050. The IPCC, meanwhile, 55 Cumulated contribution (2012-2050)
estimates that attempting to achieve the 2°C target without 50 30%
CCS would more than double mitigation costs, and may not 45
be feasible at all.
40 13%
35 8%
30
25 49%
20 +2.6% -2.6%
15
2DS Scenario: lowest-cost pathway
10 to limiting the concentration of GHGs
to a level that would give a 50%
5 chance of limiting the global increase
0 in temperature to a maximum of 2°C
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Cement Gas Oil Coal and solid biomass Renewables CCS Nuclear Efficiency & fuel switching
Source: IEA (2015) “Energy Technology Perspective”; Carbon Dioxide Information Analysis (CDIAC)
CCS refers to a set of CO2 capture, transport and storage technologies that
are put together to abate emissions from various stationary CO2 sources
Figure 2. CCS value chain
Capture Transport Storage

CO2 Sources
Upstream O&G Gas sweetening Underground geological storage

• Natural Gas Processing • CO2 /CH4 separation • Deep saline aquifers
• Depleted oil and gas fields
• Unmineable coal seams
Heavy industries
Post-combustion
• Steel Pipelines Beneficial reuse of CO2
• Cement • CO2 /N2 separation
• Enhanced oil/gas recovery
Oxy-fuel combustion • Enhanced coal bed methane
• O2 /N2 air separation unit • Synthetic fuels
Power generation
• Oxy-fuels boiler – Algae biofuels
• Coal
– Formic acid
• Gas
– Synthetic natural gas
• Petroleum coke Ship • Urea yield boosting
• Biomass Pre-combustion
• Gasification or reformers • Mineralization
• CO2 /H2 separation • Polymer processing
Industrial hydrogen production
and use
• Chemicals (ammonia) Other options in R&D
• Synthetic fuels • Storage in basaltic formations
– Coal-to-liquid Additional equipment • Ocean storage
– Steam methane reforming • Compression Networks & hubs • Working fluid for enhanced
– Biomass-to-liquid • Dehydration geothermal systems
• Refineries (fuel upgrading)
Source: A.T. Kearney Energy Transition Institute analysis
CCS is already a reality in power generation, natural-gas processing and
industrial hydrogen plants
CCS is real Storage site identification remains of prime importance

15 large-scale integrated projects are already capturing Early estimates of available underground storage space CCS is a necessary and
28.5 MtCO2 per year in order to store it in deep saline seem to indicate massive theoretical potential globally, technically viable technology
aquifers or in oil reservoirs as part of enhanced oil-recovery mostly in deep saline aquifers. Yet, these global estimates for limiting emissions
(EOR) operations. This is equivalent to the CO2 output of mask local constraints: according to the Global CCS from thermal power plants,
9 GW of coal-fired power capacity. In addition, seven other Institute, “the importance of undertaking storage-related
projects have reached a final investment decision. Overall, actions this decade to prepare for widespread CCS
heavy industries, and oil &
all but one of the projects are related to the oil and gas deployment post-2020 cannot be overstated” gas processing
industry, in which CO2 is either captured at a low cost from
oil & gas processing plants or is sold for use in EOR.
Demonstration, rather than R&D, is mostly needed Figure 3. Distribution of the 22 large projects1 in operation or past final investment decision (FID)
Industry players are adamant that the individual As of October 2015
components of CCS have been proved to be technically Lower costs Passive storage Storage via enhanced oil recovery (EOR)
feasible and are ready to be demonstrated on a large scale
in other industrial sectors, such as cement, steel, and pulp O&G Processing 2
5 large projects 8 large projects

and paper production. Research and development (R&D) Decrease of capture costs 1 past FID 1 past FID
efforts accelerated in the early 2000s, and investments are 4 operating 7 operating
now substantial (~$1.6 billion in 2013, equivalent to that in
wind or biofuels). Public laboratories and corporate players
– chemicals companies, utilities, and oil and gas firms – are Industrial Hydrogen3
focusing on developing efficient capture processes that 1 past FID 1 past FID
would reduce the CCS energy penalty (about 20%) and 3 operating
water-consumption penalty (between 10% and 80%,
depending on the capture process. Innovation needs in
CO2 transport are less obvious: 50 CO2 pipelines, with a Power or Heavy Industry
combined length of 6,600km, already operate in North
3 past FID
America, transporting over 60 MtCO2 annually, mostly for 1 operating
EOR purposes. As for CO2 storage, field demonstrations
rather than lab tests are most needed, in order to improve High costs
scientists’ understanding of how CO2 behaves when - No storage revenues Storage revenues +
injected underground.
O&G-related Proven Final investment descissions made Standstill
Note: 1 “Large projects” refers to integrated CCS projects above 0.6 MtCO2/year. 2 Natural-gas processing plant, oil sand upgraders or synthetic natural gas
3 Steam methane reformers or coal gasification plants producing hydrogen for chemicals or fertilizers. FID: Final Investment Decision
Source: A.T. Kearney Energy Transition Institute analysis based on GCCSI database (accessed October 2015)
Individual technologies are now sufficiently proved to enable large-scale
integrated demonstration projects in the power sector
Figure 4. Investment-risk curve of CCS technologies and integrated plants

Capital Requirements x Technology Risk
Post-combustion power plant Integrated CCS project

Aquifier storage and monitoring
Pre-combustion power plant Capture technology
Syngas plant with CCS
Oxy-combustion power plant (synthetic natural gas, fertilizer, industrial hydrogen) Transport technology
Oil and gas field storage and monitoring
Steel with CCS
Storage technology
CO2 shipping Natural-gas processing with CCS
2nd gen. CO2 seperation 1st gen. solvents for CO2 /N2 (flue gas) seperation
Cement with CCS (solvents, sorbents, membranes,
looping, pressure and temperature swing) Membranes for CO2 /CH4 seperation
Large EOR projects for oil and gas industry

Enhanced coal-bed
methane 3rd gen. separation technologies 1st gen. sorbents & solvents for CO2 /N2 /CH4 separation
(mineralization, bio-sequestration,
cryogenic, ionoc liquids…) CO2 injection in oil fields
CO2 pipelines
Atmospheric CO2 scrubbing Air-seperation unit
“Valley of Death”
First-of-a-kind commercial projects

Labwork Bench scale Pilot scale with ongoing optimization Widely-deployed
Research Development Demonstration Deployment Mature Technology
Maturity
Source: A.T. Kearney Energy Transition Institute
CCS can be a very competitive mitigation option, but its high up-front
costs demand strong political will
CCS is perceived as a costly technology because its large, Some other industrial plants with CO2 separation already
indivisible up-front costs only bring long-term, uncertain built into their processes – such as natural-gas processing Carbon prices are generally
climate benefits. Each commercial-scale CCS project can or steam methane reforming – could easily abate their CO2 too low to render CCS
cost up to a billion dollars in capture costs alone, although emission via CCS, at costs as low as $14/tCO2 avoided. commercial on their own
they are capable of abating over 1 MtCO2 per year for
Finally, bioenergy coupled with CCS (BECCS) could scrub CO2
several decades (the equivalent of taking more than
out of the atmosphere while producing renewable energy,
200,000 cars off the road over the lifecycle of the plant).
allowing a return to pre-industrial atmospheric carbon
First-of-a-kind projects incur high risk premiums, and, in the
conditions over the long run.
absence of robust carbon-pricing mechanisms (€7/tCO2
in Europe, $20/tCO2 tax credit in the U.S.), direct public
financial support is required to cover the up-front cost of Figure 5. Current costs of CO2 avoided by CCS in the U.S., relative to the same plant without CCS
large-scale CCS projects.
$/tCO2 avoided
Yet CCS could be an effective way to curb CO2 emissions in the 160
power sector: in power generation, current abatement costs 150 PV abatement costs in 2015 in Germany2
range from $48 to $114/tCO2 avoided in the U.S., which 140
is no more expensive than installing offshore wind or solar
plants, especially if the carbon-intensity of the electricity
120
being displaced is significantly lower than that of coal (for 106
instance, if nuclear or hydropower account for a high share
of a country’s power fleet). In the U.S., cheap natural gas
100 92
prices have brought down cost estimates of gas-CCS
80
79
electricity below their coal-CCS counterpart, and might 70 70
provide baseload, carbon-free electricity at prices similar
to nuclear. With capital costs of CCS expected to decrease 60 67
by 8% for each doubling of capacity installed, CCS power 53
could be fully competitive with other clean electricity supply 40 49 49
between 2030 and 2040 in Europe and in the U.S. under
20 US sequestration tax credit: $20/tCO2 stored
the IEA’s 2DS scenario.
20
Perhaps more importantly, no alternative exists for cutting 14 EU carbon trading scheme, and average
0 grant per CCS project1: ~7€/tCO2 avoided
emissions from industrial applications CCS CCS CCS CCS CCS CCS
(Gas processing) (Hydrogen) (Steel) (Cement) (Coal) (Natural Gas)
Steel and cement production, for instance, are carbon-
Note: Range of studies at 8% discount rate for CCS power plants, and 10% for other; 1 Sum of all allocated grants over the cumulated CO2 abatement of all large projects that
intensive industries, indispensable for the construction of have received public capital grants, assuming a plant lifetime of 30 years; 2 35.2 TWh of Solar PV generated in Germany in 2014 avoided about 23 MtCO2 during the year
our future infrastructure. (0.66tCO2 /MWh), at a cost of about €143/tCO2 avoided if using the January 2015 feed-in-tariff price of €95/MWh for utility-scale PV plants (Fraunhofer 2015)
Source: GCCSI (2015), “The costs of CCS and other low-carbon technologies” for coal and gas; IEA (2011) “Industrial Roadmap for Hydrogen”;
GCCSI (2011), “Economic assessment of CCS technologies”. Fraunhofer (2015), “Recent facts about PV in Germany”
The CCS project pipeline has been dramatically reduced in size since the
demonstration phase began and will largely miss its initial targets
CCS entered the demonstration phase in 2009

At that time, CCS was at the top of the political agenda: Investments in CCS projects
declared global public financial support exceeded remain insignificant compared
$30 billion through various economic-stimulus packages; with those in renewables
70 integrated projects were in various stage of planning; and amounted to less than
and the IEA had recommended that 100 projects be
storing 250 MtCO2 / year by 2020.
$2 billion per year on average
over the 2007 – 2013 period
The demonstration phase has stalled
As of end-2014, the pipeline of large-scale CCS projects
had progressed far more slowly than initially hoped. Final
investment decisions taken since 2008 have amounted Figure 6. Maximum potential CCS capacity Figure 7. Cumulative spending on integrated
to less than $14 billion and involve only 13 new integrated installed in various forecasts CCS plants
projects. More worryingly, very few new projects have MtCO2 /year $ billion
been identified since 2012, several promising ventures 250 IEA (2009) 2020 target 1
20
255 MtCO2 /year
have been cancelled and almost no new firm investment (100 projects) 18.6
225
decisions have been taken.
200
As a result, committed public funding has decreased
Money spent or that remains committed to supporting CCS GCCSI (2010) 15 6.5
175
maximum projected capacity2
initiatives has been reduced from $30 billion to $10 billion. GCCSI (2011)
150 maximum projected capacity2
In reality, the financial support required for each project has
GCCSI (2012)
been so large that governments have rarely had the political 125 maximum projected capacity2
2.6
GCCSI (2013) 10
will to subsidize CCS to the extent required: proposed maximum projected capacity2
grants have represented $4-$30 per tCO2 avoided over 100 GCCSI (2014)
maximum projected capacity2
the lifetime of the plant, which is generally lower than 75
required to pay for the installation costs of CCS. In addition, GCCSI (2015)
maximum projected capacity2 5
depressed carbon prices in Europe, public opposition to 50 64 MtCO2 /year 9.5
onshore storage, and the complexity of CCS projects have in 2020 (39 projects)
25
resulted in promising projects being cancelled in the
advanced stages of planning. Furthermore, public funds 0 Year end 0
allocated to cancelled projects have not been reallocated. 2014 2015 2016 2017 2018 2019 2020 2008 2009 2010 2011 2012 2013 2014
Public spending on Public spending on Private funding on
Note: 1 BLUE Map target, lowest-cost pathway to stabilize global warming R&D and projects demonstration plants demonstration plants
below 2°C; 2 Total identified project pipeline; prior to FID past FID past FID
Source: A.T. Kearney Energy Transition Institute; GCCSI (2010, 2011, 2012,
2013, 2014, 2015), “Global Status of CCS”; IEA (2009) “Technology Note: Private R&D figures are undisclosed
Roadmap for CCS” Source: IEA (2015) “Energy Technology Perspective”
Committed public funding is a fraction of initially hoped-for levels, due to depressed
carbon prices, projects being cancelled and funds not being reallocated
Figure 8. CCS political attractiveness curve
Announced global public support to CCS exceeds $30 billion as part of recovery plans
Atractive
COP 19 conference in Copenhagen postpones global climate-change mitigation plans to 2015

IEA CCS
Roadmap Public opposition to onshore storage in Europe
G8 leaders pledge to
build “20 new large-scale Economic crises deepens in Europe
CCS demonstration projects”
EU CCS Directive
CCS included in Clean Development Mechanisms of the Kyoto Protocol
Shale revolution makes cheap natural gas available in the US:

various coal CCS projects cancelled
IPCC Special
EU ETS carbon price collapses UN COP 21 on Climate Change
?
Report on CCS
NER 400 and EU 2030 energy ?

NER 300 round 1 results in zero projects selected and climate policy announced
for funding. Funding is re-routed to other FutureGen 2.0 cancelled
First large-scale projection climate-change mitigation projects First CCS power plant begins operation
aquifer (Sleipner) Oil-price fall threat
China increases focus on CCS under to CO2-EOR?
Unatractive
its 5-year plan 12 new large, integrated

CCS projects are identified US and China issue joint statement
on climate change2 and announce
CCS collaboration initiative
IPCC new report confirms CCS as critical part of least-cost mitigation portfolio
Large methanol project with CCS & EOR
NER 300 round 2 results 7 EU projects cancelled cancelled for economic reasons
1996 2005 2008 2009 2010 2011 2012 2013 2014 2015
Note: COP: United Nation Conference of the Parties. NER: New Entrant Reserve fund for climate mitigation in Europe. EU ETS: European Emission Trading Scheme. 1 EU GHG reduction goal: 40% by 2030. 2 U.S. GHG reduction goal: 26-28% by 2030.
China’s reduction goal: from 2030 onwards.
Source: A.T. Kearney Energy Transition Institute
Figure 9. CCS Project pipeline: by region and lifecycle stage
(Excluding earliest stage of planning*)
Rest of
= 1 Mtpa of CO2
the World (area of circles proportional to capacity)
Operate Execute Define
In Salah1 Lula Uthmaniyah Abu Dhabi Gorgon2
Europe
Sleipner Sno⁄hvit ROAD Peterhead Don Valley White Rose
China
Sinopec Qilu Sinopec
Yanchang PetroChina Jilin Shengli
Canada
Great Plains Boundary Dam Quest ACTL Agrium ACTL Sturgeon Spectra2
United
States
Coffeeville
Air Products
Illinois Petra
Lost Cabin Industrial Nova Kemper TCEP HECA
Val Enid Shute
Verde Fertilizer Creek Century Plant
Operating 2016 2017 2018 2019 2020

Note: *Given the long lead time from planning to operation, typically 7-10 years, only projects past or near FID (define stage) are shown in this graph. Projects in the earliest stages of planning, such as “identify” and “evaluate”, have little chance of actually
operating before 2020. 1 Injection currently suspended. 2 Institute estimate of start date.
Source: GCCSI (2015), “Global Status of CCS”
CCS is advancing at two speeds: the only projects making headway are
those related to the upstream oil and gas industry
There are 33 large integrated projects in sufficiently advanced

stages of planning to be representative of the current CCS CCS has become a reality
landscape: The vast majority are located in North America, in the power sector,
driven by EOR. In Europe, until relatively recently, there but remains dependent on
were plans to have 10 projects in operation by 2015. But synergies with the upstream
this has been scaled back to four projects – all in the North
Sea – none of which has even passed final investment
oil & gas industry
decision. Australia’s former ambition to demonstrate power
or industrial CCS has ended. In the Middle East, low-cost
CCS opportunities exist, but large-scale CO2 demand for
EOR is generally considered to be 20-30 years away. China Figure 10. CCS integrated project pipeline, excluding those in the earliest stage of planning
is the only country in which the CCS project pipeline is In MtCO2 /year
growing. It is also rapidly driving down the cost of capture,
having openly expressed an ambition to become an Plant type Storage type
exporter of capture-ready plants. 65 65
Power plants may account for 30% EOR may account for 70% of the
60 60
Globally, only five out of the 33 are clean power plants that do of operating capacity by 2020 operating capacity by 2020
55 55
not involve EOR, and none has reached a final investment
50 50
decision. This trend is likely to continue until 2020, as
45 45
non-EOR storage projects are more complex to coordinate,
40 40
depend on benign climate policies, and raise public-
35 35
acceptance issues and reservoir-discovery costs that
can be avoided in EOR storage projects. By the end 30 30
of the decade, operating CCS capacity should reach 25 25
60 MtCO2 / year, three quarters of which will be related 20 20
to the production of oil or gas, and less than a third to 15 15
power generation. 10 10
5 5
0 0
2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020
(year end) (year end)
Steel Power plant Industrial hydrogen O&G processing Dedicated resevoir EOR
Note: Projects in the earliest stages of planning, such as those categorized by the terms “identify” and “evaluate”, have been excluded from these graphs as they have
little chance of operating before 2020.
Source: Adapted from GCCSI (2015) “Global Status of CCS”
EOR might help drive CCS forwards during the present decade, but CCS
will only play a significant role in climate change mitigation if ambitious
climate policies are pursued
Growing demand for the beneficial reuse of CO2 for EOR could The outcome of future UN climate talks will be critical
drive CCS forwards during the present decade in the U.S. Thesuccess
to the long-term outcome of future
of CCS.
and, potentially, China. Preliminary studies expect EOR UN climate talks will be
to be technically capable of storing enough CO2 to allow critical to the long-term
for full-scale CCS deployment in various regions, with the success of CCS.
notable exceptions of Europe and Asia. Although the recent
fall in oil prices may have some negative impacts on
demand for and the price of CO2 for EOR in the U.S., it
could also accelerate CCS projects in the North Sea, which
are sometimes viewed as opportunities to postpone the
decommissioning of unprofitable offshore infrastructure. Figure 11. CO2-EOR in the U.S.: Oil production and CO2 supply (1986 – 2020)
In the long term, the IEA estimates that the contribution of CCS
to climate mitigation is likely to remain marginal if only energy
policies adopted and proposed as of mid-2015 are Kbbl/Day In 2014 there are 136 CO2-EOR projects MtCO2 /year
650 in the US, connected to 17 CO2 sources, 150
considered. CCS will only play a significant role in climate- US oil production from CO2-EOR (left scale) 12 of which are from industrial capture.
change mitigation if there is genuine determination to 600 140
US CO2 sources for EOR (right scale)
reach the 2°C target. Stricter carbon policies will be required 550 Capture from power or industrial plants Historical data Projections 130
to develop CCS beyond upstream oil and gas, and the Capture from gas processing plants 120 60 MtCO2 /year
outcome of the 2015 UN climate talks in Paris will be critical 500 anthropogenic
Natural CO2 sources 110
to the long-term success of CCS. 450 CO2 supply,
100 equivalent to
400 90 10 GW of coal
350 80 power plant
with CCS
300 70
250 60
50
200
40
150
30
100
20
50 10
0 0
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: US DOE NETL (2014), ‘Near-Term Projections of CO2 Utilization for Enhanced Oil Recovery”
Conclusion About the A.T. Kearney Energy Institute
Carbon Capture and Storage is one of the most underrated The A.T. Kearney Energy Transition Institute is a nonprofit organization. It provides leading insights on
climate-change mitigation options available today. It is widely global trends in energy transition, technologies, and strategic implications for private sector businesses
and public sector institutions. The Institute is dedicated to combining objective technological insights with
regarded as technically capable of abating vast amounts of
economical perspectives to define the consequences and opportunities for decision makers in a rapidly
carbon dioxide from the atmosphere at competitive costs. changing energy landscape. The independence of the Institute fosters unbiased primary insights and the
Yet, unless associated with a beneficial reuse of CO2, CCS ability to co-create new ideas with interested sponsors and relevant stakeholders.
represents only a cost center for project owners. Therefore,
the CCS industry is at risk of never developing beyond the few
subsidized projects, unless proper prices are associated with
Acknowledgements
carbon emissions.
A.T. Kearney Energy Transition Institute wishes to
acknowledge Mr. Juho Lipponen, Head of the CCS Unit at
A.T. Kearney Energy Transition the International Energy Agency (IEA). His review does not
imply that he endorses this FactBook or agrees with any
Institute FactBooks specific statements herein. The Institute gratefully
Natural Gas Series acknowledges the 45 companies (oil and gas, utilities, coal,
– Introduction equipment providers) interviewed during the preparatory
– Gas Hydrates phase of the study and also extend acknowledgements to
the International Energy Agency (IEA), the Global CCS
Low Carbon Energy Technologies Series Institute (GCCSI) and Bloomberg new Energy Finance
–C arbon Capture and Storage (BNEF) for their support in providing data and reviewing the
– Wind report. Finally, the Institute also wishes to thank the author
– Solar PV of this FactBook for his contribution: Bruno Lajoie.
– Solar CSP
– Storage
– Hydrogen
Water & Energy For further information about the A.T. Kearney Energy Transition Institute and possible ways of collaboration,
Smart Grids please visit www.energy-transition-institute.com or contact us at contact@www.energy-transition-institute.com.
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Low Carbon Energy Technologies Series | October 2015