15 January 2009 10:58 [Source: ICB]
Correction: In the article headlined: "Chemicals to capture CCS potential", please read: "There are currently 33 industrial/chemicals plants using carbon separation technology today, adds White," in paragraph 35, instead of: "There are currently 33 industrial chemical plants that are capturing carbon using GE's IGCC, adds White." A corrected story follows:
Will the chemical industry benefit from carbon capture technology?
CARBON CAPTURE and sequestration (CCS) technology might still be at an experimental and development stage, but several companies, including those in the chemical industry, are lining up to take advantage of its opportunities.
The Intergovernmental Panel on Climate Change (IPCC), which provides climate-change information, identified CCS as the most promising technology for the rapid reduction of global emissions.
Carbon dioxide (CO2 ) is said to be capturable in significant quantities from five main pollution sources, namely ammonia production power generation from fossil fuels industrial production facilities, such as cement, coal-to-chemicals, and steel plants energy processing, such as coal and gas-to-liquids operations and well heads at gas fields.
The IPCC estimated that CCS can reduce global emissions by up to 55% by 2100, according to Graeme Sweeney, executive vice president of future fuels and CO2 at Anglo-Dutch oil and chemical major Shell.
"Major volumes of oil, gas and coal are still needed to meet rising global demand for energy in the coming decades. Left unmitigated, the cumulative global carbon footprint will be dire for people and the planet. Only CCS has the potential to cut the resulting CO2 emissions at the speed and scale required," says Sweeney.
The Paris, France-based International Energy Agency (IEA) reported in its Energy Technology Perspectives 2008 report that CCS would need to contribute nearly one-fifth of the necessary emissions reductions to reduce global greenhouse gas emissions by 50% by 2050 if its cost is reasonable.
"CCS is therefore essential to the achievement of deep emission cuts," said Nobuo Tanaka, IEA director, in a recent statement. "If we do not successfully demonstrate CCS soon, it will raise costs significantly for other climate-mitigation options."
CCS MARKET WILL BE SUBLIME
The global CCS market value is expected to increase to over $236.3bn (€172.8bn) by 2012 from $88.7bn in 2007, a compounded annual growth rate of 22%, according to US consulting firm BCC Research. There are currently three main processes used for CO2 capture: post-combustion, precombustion and oxyfueling combustion.
Post-combustion capture involves chemical stripping of CO2 using amine solvent scrubbing, membrane separation or cryogenic separation after the combustion of the fossil fuel for the generation of power. It can be retrofitted to conventional power plants but is said to be expensive, according to a CCS report from US-based Citigroup Research.
The post-combustion market was valued in 2007 at nearly $51.5bn and is the most mature, with the largest share of the CCS market, according to BCC. Precombustion is the second-largest segment, worth $34.6bn.
The process, according to Citigroup, involves the removal of CO2 using the same methods as post-combustion, but the fossil fuel is gasified first by reacting with oxygen or steam prior to power generation. Hydrogen is also produced in this process.
The precombustion method can be retrofitted to natural gas power plants and integrated gasification combined-cycle (IGCC) plants, but cannot be retrofitted to conventional, pulverized coal power plants.
Oxyfuel combustion, which is still at a demonstration phase, can be retrofitted to conventional power plants, according to Citigroup. The process involves burning fuel in a nearly pure oxygen environment, resulting in a concentrated exhaust gas stream of CO2, which is either absorbed using solvents or adsorbed onto membranes and subsequently captured.
Oxyfuel combustion is currently a $500m sector, according to BCC.
All processes are technologically viable, says Jeff Chapman, CEO of the UK-based Carbon Capture and Storage Association. The problem, he says, is that not enough plants have been built at a size necessary to be able to assess the cost of the plant and guarantee its performance.
"Although there are some technical challenges, which are typically associated with all new technologies, every element of CCS is proven that it can work," adds Chapman.
THE ROLE OF CHEMISTRY
At this stage, the exposure of chemical companies in this burgeoning field is centered on gasification expertise, production of catalysts and reagents to enable chemical capture, and most importantly, the participation of the industrial gases sector, which is said to be the principal beneficiary of CCS processes.
Solvent producers US-based Dow Chemical and Germany's BASF are both working to develop advanced amine-based scrubbing technology for the removal of CO2 from flue gases. BASF is specifically focusing on post-combustion technology because it can be retrofitted to existing power plants.
BASF is cooperating with power company RWE Power and gas and engineering company Linde, both German, in building a CCS pilot plant in Niederaussem, Germany, to remove CO2 from flue gases in a lignite power plant. The project is expected to start this year and to be completed by 2010.
The use of new solvents is expected to significantly increase the efficiency of the CO2 removal from flue gases in power plants, says Andreas Northemann, head of the gas treatment team at BASF's intermediates division.
"This project opens up a new and interesting perspective for BASF's gas treatment business," Northemann says. "We recognized the promising potential for this kind of application, should a legal framework for CCS be installed."
US-based Eastman Chemical, which has many years of experience in coal-gas technologies to produce feedstock for its chemical processes, also has a big interest in CCS development aside from reducing CO2 emissions, Citigroup reported.
"Eastman has an interest in the use of CO2 in enhanced oil recovery and is carrying out its project development and testing in the US," Citigroup said.
Industrial gases companies such as Linde, Air Liquide, of France, Praxair and Air Products, both US, are also expected to gain. Large quantities of oxygen are required for both the IGCC and oxy-combustion processes, according to Citigroup. These companies can also deploy their skills in CO2 purification and transport, as well as provision specialized equipment.
US-based Praxair's Chuck McConnell, vice president of oxy-coal and gasification, says the company's oxy-coal technology offers electricity generating utilities the opportunity to reduce CO2 emissions from existing and new coal-fired boilers by more than 90%.
Praxair expects to submit a funding proposal this month to the US Department of Energy's Clean Coal Initiative to demonstrate its oxy-coal and CO2 processing technologies in a 50MW coal-fired electric plant at Jamestown, New York, US.
"Individual components of the technology have been tested, but there has not been a demonstration of a fully integrated oxy-coal system to date," says McConnell. "If successful, the demonstration project would be the first of its kind in the US, integrating several technologies for the first time."
Air Products says its main interest in CCS technology is in the CO2 capture scope. The company is developing low-cost CO2 purification and compression technology for both gasification and oxy-fuel.
Both technologies are being advanced in pilot projects, says Steve Carney, commercial manager, carbon capture technology development at Air Products.
"Much of the cost of CCS resides in CO2 capture," says Carney. "Air Products' technology lowers this cost and builds on a corporate history of implementing advanced separation technology at an industrial scale."
The company is also developing next-generation air separation technology with its Ion Transport Membrane technology.
"Many CCS solutions require large amounts of oxygen. Our advanced technology holds promise to reduce oxygen costs [by] up to 30%," adds Carney.
Both Praxair and Air Products are principally involved in US projects, says Citigroup, while Linde is mostly working on European projects. A spokesman for Linde says the company is involved in all three types of CCS processing - in the supply of required oxygen the engineering and construction of plants and development of solvents and membranes that are used in the capture and separation of CO2 from the other flue gases.
"Research studies expect CCS to have a relatively high share of the world energy market by the year 2030. As a provider of CCS technologies, we expect to be a big part of this emerging low-carbon growth market," the Linde spokesman says.
The company also notes that as a producer of CO2, it can recycle the captured CO2 and use it as an alternative to chemicals that are even more harmful to the climate.
Carbon separation has long been used within the chemical industry, especially in downstream processes, says Keith White, director, gasification products at GE Energy. The company claims to be a leading provider of IGCC technology.
"Gasification technology for chemical processing has a long history of converting and separating carbon from syngas [synthesis gas] to drive various chemical processes," White says. "The same carbon separation technology can be applied now to the power generation industry that uses coal - a relatively low-cost, abundant, domestic resource for power generation and for industrial chemical applications." There are currently 33 industrial/chemicals plants using carbon separation technology today, adds White. GE says it is continuing to invest in advanced technology to help customers lower costs and improve performance from its gasification technology.
GLOBAL POLICIES NEEDED
GE says it is ready to commercially offer its IGCC solution with carbon capture to the power generation segment, but the deployment of a commercial plant will require a regulatory framework for carbon storage and a sufficient market price for carbon through a cap-and-trade system.
"Large-scale CCS from power generation faces a challenge from the lack of clear policy and regulatory support. If regulatory barriers are addressed, and large-scale demonstration projects have been completed, we expect that we could deploy commercial IGCC with CCS by 2020," White says.
Shell says the cost of first-generation major industrial facilities with CCS is too high for the industry to bear alone, since CCS today adds costs, but yields no revenues.
"To bridge this funding gap, short-term economic incentives need to be put in place by governments, or CCS will be delayed and unlikely to be commercialized by 2020," says Sweeney. An IEA estimate of $30bn-50bn is needed to realize a global cooperation goal from the G8 nations to launch 20 full-scale CCS demonstration projects in the next few years, he adds.
CLEAN TECH INVESTMENTS TO SLOW IN 2009
Venture capital investment for clean technology is expected to decline this year compared with the all-time peak experienced in 2008, according to two recent reports from market research and financial service firm Cleantech Group and market information provider Greentech Media, both US.
Some of the challenges predicted this year, according to Cleantech Group, include a doubled rate of failure for clean tech start-ups delays in global climate change and US carbon cap-and-trade legislation and a shake-out in thin-film photovoltaic solar because of previous overinvestments and inflated valuations. The group also predicts that this year will be full of acquisitions of green growth assets as governmental and corporation research and development on energy and other clean technologies are expected to be flat.
Cleantech Group is still optimistic about the investments in energy efficiency and wind. Other growth sectors include integrated energy management systems, smart grid, carbon content reduction in supply chains, and next-generation solar materials and systems.
In its preliminary 2008 results for clean technology venture investments, the group reported global clean tech venture investment in 2008 reached a record $8.4bn (€6.4bn), despite the 35% dip in the fourth quarter (Q4) compared to Q3.
Cleantech executive chairman Nicholas Parker said he had expected the Q4 slowdown. However, it is important not to be sidetracked by this decline, he noted.
"In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation," said Parker.
The top clean technology sectors in 2008 were solar, biofuels, transportation, and wind. Solar accounted for almost 40% of total clean technology investment dollars in 2008, followed by biofuels at 11%, according to Cleantech Group.
Greentech Media expects 2009 to be the year of smart grid, energy storage, and energy efficiency. Investment in traditional clean tech sectors such as solar and biofuels are expected to wane this year as investors are now looking at energy storage and efficiency, recycling, water, cleaner coal and environmentally sound IT.
They expect continued investments, albeit more cautiously, into clean tech as the underlying macro forces driving the sector remain unchanged and it looks well-positioned to be a significant part of the new US administration. Greentech Media reported that 2008 investment exceeded $7.7bn in more than 350 deals. 2008 Q4 investment was $2.5bn, while Q3 2008's was $2.9bn.
The reports show that clean tech is not immune to the global recession. Further investments hang in the balance of global policies to enforce legislation and subsidies to support these industries.
WANTED: CARBON DIOXIDE
What to do with all that carbon?
THE TECHNOLOGY for carbon capture might already be available, but the sequestration step for CO2 is mostly still at the development stage.
One way of resolving the CO2 storage dilemma is to recycle the captured gas for use in enhanced oil recovery applications.
Another, notes Derek McLeish, CEO of California-based Carbon Sciences, is to also recycle the captured CO2 as feedstock for fuel and chemical manufacture.
Carbon Sciences is currently developing a way of transforming CO2 using low-energy biocatalytic processes into methane, ethane and propane in order to produce gasoline, diesel, jet kerosene and other portable fuels. The company expects to complete a prototype demonstrating its CO2-to-fuel technology by the first quarter of 2009.
"Our research shows that our CO2-to-fuel process is linearly scalable. When the prototype is completed, we will intensify our business development efforts with the ultimate goal of licensing this technology to oil and gas companies and large CO2 emitters," says McLeish.
The company's original business is its CO2-to-carbonate technology, which combines CO2 with industrial waste minerals and transforms them into calcium carbonate. McLeish says it is in the process of commercializing this technology.
"Most of the precipitated calcium carbonates (PCC) usage is in the production of paper and paper coatings, which is a $12bn [€9bn] business in the US," McLeish says.
"With our CO2-to-carbonate technology, we were actually able to capture about 440kg of CO2 for every tonne of PCC produced," he adds.
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