The Science and Policy Behind Vacuuming the Air

February 3, 2021

Carbon Capture, Utilization, and Storage (CCUS) refers to the capture of carbon dioxide (CO2) from a pipe or the atmosphere. The captured gas may then be recycled for industrial processes or stored underground.

CCUS methods are more complex than simply vacuuming the atmosphere and hiding the gas under a rug—CCUS involves CO2 capture, transportation, utilization, and storage.

Capture – Sorbent materials effectively bind CO2 and compress it into liquid form.
Transportation – The liquid is carried via pipes or vehicles to its destination.
a. Utilization – The captured CO2 is used to convert chemicals, enhance oil recovery, or for alkaline remediation.

b. Storage – The liquid is stored in rock formations several kilometers underground.

To meet the 2016 Paris Climate Agreement, the majority of greenhouse gas (GHG) emission reductions are expected from renewables and improvements to efficiency. But while these mitigation measures intend to help accelerate a climate-friendly transition, these practices don’t address the GHGs already in the atmosphere. The Global Carbon Capture and Storage Institute estimates that 2,500 Carbon Capture and Storage (CCS) facilities, with a capacity of 1.5 million tonnes per year, are needed to meet the goals of the Paris Climate Agreement. Therefore, the acceleration of clean and efficient energy solutions requires the simultaneous deployment of CCS technologies.

Made in America, Buried Underground

Backed by U.S. Congress, George W. Bush introduced the 45Q tax credit for carbon storage in the Energy Improvement and Extension Act of 2008. The credit provided project developers $20 per tonne for storage and $10 per tonne for use in enhanced oil recovery (EOR).

In 2018, the U.S. Department of Energy reformed the 45Q tax credit under the FUTURE Act (Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions), which extended the credit to $35 per tonne for EOR and $50 per tonne for geologic storage by 2026.

The Future is Now

Since 2017, the International Energy Agency expects more than 30 new integrated CCUS facilities throughout the world have been announced. If all these projects were to proceed, the amount of global CO2 capture capacity would more than triple to around 130 million tonnes per year.

In Canada, most CCS projects are implemented for EOR, including six out of the seven large-scale CCS facilities. The exception is the Shell Canada Energy Quest Project, the only large-scale project of its kind in Canada, which focuses on carbon storage, not EOR.

Since its opening, the Quest facility has captured more CO2 than expected and stored it safely 2 km underground. To date, Quest has captured and stored over 5 million tonnes of CO2, the most CO2 of any CCS facility with dedicated geological storage.

Could Canada Adopt Q45?

CCS projects require a high upfront cost. All CCS projects in Canada are heavily subsidized by the government. For example, Quest received $745 million from the Alberta Provincial Government and $125 million from the Government of Canada to build and operate the facility.

As an alternative to direct government funding, policy makers could incentivise the implementation of CCS technologies. This is the case in the US, where the 45Q tax credit of $50 USD per tonne incited the development of dozens of CCS projects. In comparison, the CCS Knowledge Centre states that in Saskatchewan, EOR incentives allow for only 1% of taxes to be recovered. For this reason, only a handful of CCS projects exist in Canada, and only the Shand Power Station is under feasibility study for CCS. Despite Canada’s historical and technological lead in CCS, the FUTURE Act could soon fuel the US’ lead on CCS technologies.

In theory, the national carbon price should encourage the deployment of CCS. But the price is vulnerable to political shift. With the Conservative Party’s support for a tax incentive based on storage, a tax similar to Q45 would provide greater confidence to investors looking to advance CCS technologies in Canada.

We’re at a point in time where a variety of emission reduction technologies must be implemented to meet environmental commitments worldwide. CCS presents an opportunity to clean the oil, gas, and power industries to achieve these ambitious climate goals. CCS is a disruptive technology that can help significantly reduce the GHG intensity of large emitters, with the option of retrofitting existing infrastructure. High capital costs and lack of economic incentives have hindered its implementation. Federal funding has already proved necessary to test the technology and demonstrate its efficacy. The question remains as to what political approach will better help capture the CO2 that we continue to emit onto the atmosphere.

The Science and Policy Behind Vacuuming the Air

Made in America, Buried Underground

The Future is Now

Could Canada Adopt Q45?

About the Author

Rodrigo Cubedo

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