GLOBAL STATUS OF CCS

Figure 3 – Pipeline of Commercial facilities since 2010 by capture capacity (Mtpa)
*2021 capacities adjusted to reflect this year’s change to how capacity tonnages are interpreted, to facilitate comparison with 2022 figures.

Figure 3 shows the increase in the capacity of CCS projects from 2010 until September 2022 (the final bar represents the project development status as of mid-September 2022). In 2022, the Institute has formally adopted a revised approach to estimating total CCS capacity (see below).

Figure 4 – Commercial CCS Facilities by number and total CO₂ capture capacity (mid-September 2022)

The facility counts in Figure 4 also include transport and storage projects that do not include capture. These provide essential infrastructure for the industry to develop. As explained in the notes below, they do not contribute to capture capacity tonnage figures, to avoid double-counting of project capacities.

Notable project developments in the 12 months since the last Global Status report include:

• Drax Power Station in the UK announced the world’s single largest bioenergy with CCS (BECCS) project, with a world-scale 8.0 Mtpa capacity across two units.
• The Klemetsrud Waste-to-Energy CCS project in Norway moved to In Construction, having secured funding. This is the first commercial-scale CCS project applied to a waste-to-energy facility.
• Glacier CCS Project – capture technology firm, Entropy, commissioned a CO₂ capture facility on a natural gas-fired reciprocating engine, the first of its kind at commercial scale and an important milestone given the importance of future capture from natural gas combustion streams worldwide.
• Air Products announced its blue hydrogen project in Louisiana, incorporating natural gas gasification technology.
• ORCA, the world’s first commercial direct air capture with carbon storage (DACCS) facility, was commissioned in Iceland. Its follow-up, the MAMMOTH project, was then announced.
• In Australia, the Bayu-Undan project by Santos has moved into Front End Engineering and Design (FEED). This project will capture CO₂ from LNG production in Darwin and transport it via pipeline across the maritime border between Australia and Timor-Leste for offshore geological storage. A key feature of this project is repurposing an existing natural gas pipeline for CO₂
• Occidental, in partnership with DACCS technology company Carbon Engineering, announced that construction will commence on a 500 ktpa direct air capture project in the Permian Basin in the US. The plant is said to be capable of scaling up to a 1 Mtpa capacity. This is in the context of Occidental’s stated plans to develop a fleet of 70 – 135 such facilities around the world by 2035.

MEASURING GLOBAL CCS CAPACITY BY CAPTURE CAPACITY

In prior years, most CCS projects were full-value chain. This means they tended to incorporate a single CO₂ capture plant with its own dedicated CO₂ compression, transport (usually pipeline) and storage systems. This meant that when describing the CO₂ flow capacity (in tonnes per year) of these systems, the capacity of the capture plant, transport and storage systems were all aligned and operating as a single integrated system.

Today, CCS networks are becoming the predominant method of CCS deployment. CCS networks involve the use of shared transport and storage infrastructure. Some CCS-related developments, such as shipping projects, pipelines, or new storage facilities, do not involve CO₂ capture at all, and handle CO₂ captured by third parties.

If the CO₂ flow capacities of these non-capture sites were counted in our statistics, there would potentially be a double-counting of global CCS capacity, as CO₂ capacity would have already been included in our figures for capture plants upstream.

To avoid this problem, and ensure compatibility with our historical capacity statistics, only CO₂ capture capacity will be included when determining global CCS system capacity (Mtpa). This is why project pipeline charts and figures now explicitly refer to ‘by capture capacity’, a change from the earlier title “Capacity of CCS facilities”.

Dedicated transport and/or storage projects will still be counted in total facility numbers, but will not contribute to global CCS system capacity. Facility counts can be somewhat arbitrary depending upon where the boundaries between transport and storage facilities in networks are drawn. Therefore, total system capacity is a better guide to the growth of the CCS sector than facility counts.

Note on the change to the interpretation of capacity tonnages in 2022

Historically, Global Status of CCS reports have reported tonnage in millions of tonnes per annum (Mtpa) based on the mean of the proponent-reported range of plant capacities. For example, if a proponent said it was targeting 1–1.3 Mtpa for its project, our reports have stated this as 1.15 Mtpa.

For projects in the Early Development stage, such ranges are often provided because there is uncertainty about the final specifications for the project. However, as projects progress to later stages and to construction, design capacities are typically locked into a single design capacity figure. This can make these ranges misleading, especially if the lower-end estimate is carried over from earlier project stages. The effect has been an overall understatement of CO₂ capture capacity for the sector as a whole.

Beginning with this report, design capacities (upper end of ranges, if given) will be used. If a range is revised when moving from Early Development to Advanced Development, for example, the new capacity figure will be used and the facility entry updated accordingly. This may mean a given project’s stated capacity will be adjusted one or more times over the project life cycle.

One effect of this change is that the 2022 capture capacity in the project pipeline bar chart is not directly comparable with previous capture capacities. A portion of the increase from 2021 to 2022 is due to this measurement change, and a portion is due to growth in projects.

The project pipeline, in terms of facility numbers and capture capacity, is now at a record high. Since 2017, capture capacity has grown at a compound rate of over 34 per cent per annum.

Capture capacity (on a 2022 basis – see explanatory note above) in the pipeline has grown substantially in the past 12 months. This includes an impressive near-doubling of capture capacity in the Advanced Development state (projects undergoing Front End Engineering Design), from 49.4 Mtpa in 2021 to 97.6 Mtpa in 2022. Advanced Development means projects have received significant funds for engineering development, demonstrating a higher level of commitment to project development and a higher probability of moving to funding approval and construction, so this increase is significant for future project growth.

By facility count growth, the US continues to lead the way globally, with 34 new projects since 2021^[1]. Other leading countries in the past year include Canada (19 new projects), the UK (13), Norway (8), and Australia, the Netherlands and Iceland (6 each).

Figure 5: World Map of CCS Facilities at Various Stages of Development

Significant contributors to the growth of Early Development and Advanced Development pipelines are featured in the tables below.

Figure 6 – Significant contributors to Early Development growth in 2021–22

Figure 7 – Significant contributors to Advanced Development growth in 2021–22

FOOTNOTES

1. This includes dedicated transport and storage projects.

CLIMATE POLICY TRENDS AND ANALYSIS

The publication of the much anticipated Intergovernmental Panel on Climate Change (IPCC) Working Group III (WG3) Report, Mitigation of Climate Change, has increased awareness of the need for CCS, illustrating its effectiveness and viability through widescale deployment across various scenarios and sectors. However, while large-scale fossil-based energy and industry sources are posed to increasingly include CCS in modelled pathways to limit warming to 1.5˚C, current rates of deployment are far below those found in the modelled pathways. The relationship between CCS and technology-based carbon dioxide removal (CDR) is highlighted in counterbalancing emissions where they cannot be mitigated. Widening the lens to consider overall social, environmental and economic impacts across mitigation options, an analysis of the relationship of CCS to the sustainable development goals (SDG) found synergies in goals 3, 7, 8, 9 and 12. A brief published by the Global CCS Institute discusses in further detail the key takeaways for CCS in the WG3 report (1).

Figure 8: The UN Sustainable Development Goals (source: The United Nations)

In current international climate negotiations, Articles 6 (market mechanisms and non-market approaches) and 14 (global stocktake) of the Paris Agreement remain the most relevant for CCS. As Article 6 matures with significant developments in the technical work and the establishment of its supervisory body, clarity is still needed on the transfer of existing CCS methodologies from the Clean Development Mechanism (CDM) to the upcoming mechanism under Article 6. Looking at Article 14, the global stocktake (GST) – which runs until 2023 and repeats in five-year cycles – presents a timely opportunity for CCS experts to engage in technical dialogues (TD) with parties that could inform updated nationally determined contributions (NDC) at the heart of achieving the objectives of the Paris Agreement.

Figure 9: CCS in Country NDCs and CCS International Legislation

TOWARD  CLOSER REGIONAL COOPERATION

The role of closer, regionally focused cooperation in achieving CCS deployment has arisen as a further and important consideration for both governments and industry over the past 12 months. The emergence of new markets and applications for CCS technologies, enhanced national commitments to achieving net-zero and the commercial opportunities posed by the deployment of CCS networks, has led to greater scrutiny of opportunities beyond national boundaries. Further progress with projects under development in the North Sea, as well as proposed activities in Southeast Asia and the wider Asia-Pacific region, are indicative of this approach.

To support this ambition, attention has inevitably turned to the requirements necessary for achieving them and, in particular, the development of a supportive policy, legal and regulatory landscape. National governments and corporations with an interest in developing projects with a transnational element are now actively considering and promoting issues surrounding transboundary regulation, as well as the development of regional frameworks and mechanisms that will support the development of CCS networks.

The challenges associated with a more regionally focused approach are particularly significant where CO₂ is transported from one country for storage in another nation’s territory. The ability of project proponents to fully recognise the contribution of these transboundary storage activities within national and international accounting and crediting schemes has been raised by several government and industry parties as an important issue to be addressed. Similarly, the absence of detailed legal and regulatory regimes for the technology in many nations worldwide also creates uncertainty as to how storage operations will be regulated. In addition, these transboundary storage projects will also call into play several wider international, regional and domestic legal frameworks that will all require careful navigation to ensure they do not unwittingly pose further barriers to proposed activities.

Few examples exist where these CCS-specific issues have been addressed. However, the consideration of transboundary issues within the international marine agreements provides an important model. The amendments to the London Protocol and the approach adopted by the parties to date, are indicative of the need to swiftly address these challenges. The 2019 agreement by the parties to the protocol, to allow for the provisional application of a 2009 amendment to Article 6, finally enables parties to avail themselves of provisions explicitly aimed at supporting the transboundary transportation of CO₂ for the purposes of geological storage. To date, however, only the Republic of Korea, Denmark, the Netherlands and Norway have formally submitted a declaration on the provisional application of the 2009 amendment. The Institute’s own analysis demonstrates there is significant potential for further activity within the auspices of the London Protocol to address these challenges and drive regional collaboration (2). An increasing focus on the development of regional networks or individual projects, which in many instances will require the transportation of CO₂ across international maritime boundaries, emphasises the need for a renewed focus on the role of the treaty and the national frameworks in supporting deployment.

REGIONAL POLICY, LEGAL AND REGULATORY DEVELOPMENTS

The global policy, legal and regulatory environment for CCS remains dynamic, with significant developments in many jurisdictions over the past year. While a number of early-mover nations have adopted a renewed focus toward addressing these issues, several countries are now in the initial stages of developing their policy response to support and facilitate the technology’s deployment.

In North America, regulators and policymakers have continued to strengthen their existing CCS-specific frameworks to offer further financial incentives and provide new and additional regulatory frameworks. Canada’s robust policy and regulatory environment has been further strengthened by a proposed federal investment tax credit for CCS, while in the US, the federal government has committed further project-specific and infrastructure funding through its Infrastructure Investment and Jobs Act (US). Additional enhancements to the US’s successful 45Q tax credit scheme were made through the introduction of the Inflation Reduction Act (US) of 2022, while expansion of the nation’s CCS-specific legislation also continues, with planned state-level legislation and new federal legislation to regulate leasing and provide oversight of offshore CCS operations.

The announcement of project support through the EU’s Innovation fund for CCS, coupled with a buoyant EU Emissions Trading Scheme (EU ETS) and further policy initiatives from individual member states, continues to strengthen the supportive policy environment for the technology in Europe. Several countries within the region have sought to build upon this momentum, announcing new initiatives and committing further support to projects. In the UK, the government has progressed its post-Brexit plan for energy transition, announcing two initial hubs and further refining its business model for transport and storage. Norway and the Netherlands have also sought to strengthen policy and regulatory commitments to the technology and the two nations were the first to deposit declarations on the provisional application of the London Protocol amendments. On another positive note, several other member states are also seeking to re-engage with CCS, to complete regulatory frameworks, remove barriers and provide policy support.

Recent policy, legal and regulatory developments across the Asia-Pacific region highlight the increasing focus of government and industry on the technology as well as the significance of these issues in supporting its more widespread deployment. In Australia, the new Labor government has committed to strengthening baselines for major emitters under the existing safeguard mechanism, a decision that may offer further support to CCS projects. The development complements the earlier release of the CCS-specific methodology under the national Emission Reduction Fund, which will provide a formal revenue pathway through the generation of carbon credit units. The governments of Japan and China have also taken further steps in the past year, introducing new climate and energy policies and in the case of Japan, announcing a commitment to the development of a CCS-specific regulatory framework.

Significant regional potential for the technology has led to several important developments in Southeast Asia. The governments of Indonesia and Malaysia have made several policy announcements in line with their commitments to supporting more widespread deployment. The government of Indonesia has released a draft of its region-first CCS-specific legal and regulatory framework, with Malaysia also indicating that it too is in the process of developing a CCS-specific regulatory regime. While other countries within the region have announced projects or taken tentative steps toward deployment, their policy and regulatory regimes remain underdeveloped and will require further intervention to support more widespread deployment.

REFERENCES

1. Al Amer, N. (2022) CCS in the latest IPCC report “Mitigation of Climate Change”.
2. Havercroft, I. and Consoli, C. (2022) Developments and Opportunities – A Review of National Responses to CCS Under the London Protocol.