In 2025, we stand on the brink of carbon capture becoming commercially viable at scale. This is the year construction is expected to begin on the UK’s East Coast Cluster and capture of 1.5 million tonnes CO₂/year of carbon begins at Yara’s fertiliser plant (Netherlands) and Heidelberg Material’s cement plant (Germany). This captured carbon is destined for storage under the North Sea in saline aquifers - this is a process known as sequestration. 

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Sequestering CO₂ takes it out of the carbon cycle by locking it away for hundreds and potentially thousands of years either underground, in deep sea water or in minerals. Taking CO₂ out of the atmosphere stops it contributing to the greenhouse effect, helping to reduce global warming. 

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Sequestration is not the only way to prevent CO₂  from entering the atmosphere and contributing to global warming. Carbon is an essential building block that is used to make a diverse range of products: from  jet fuel to packaging to the synthetic fibers in your clothes. Today, these products are predominantly made using carbon from fossil sources - most oil drilled today is used to make transportation fuels, fertiliser, plastics and textiles. 

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Depending on the product, utilising captured carbon could lock it away for hundreds of years in a synthetic material or a few days in a fuel that is burnt just a few days later. The greater opportunity to reduce atmospheric CO₂ through utilising captured carbon is the reduction of demand for new fossil fuels. Providing alternative sources of carbon for the fuels and materials we have come to rely on in the 21st century not only prevents new sources of atmospheric CO₂ being released from fossil fuels, it also reduces global energy usage: fossil fuel production accounts for about 15% of global energy related emissions. 

So Which Is Better: Sequestration or Utilisation?

As is often the case with ground breaking technologies, there’s not a clear winner. 

Most sequestration projects, like Norway’s Northern Lights project plan to pump millions of tonnes/year of CO₂ into underground reservoirs leveraging existing infrastructure, such as pipelines and well heads, from the Oil & Gas industry. For these projects to be commercially viable, there needs to be a carbon price (set by a mandatory or voluntary carbon market) and sufficient volumes of CO₂ for the revenue to cover the cost of modifying and building infrastructure to deliver captured CO₂ to the injection site. Another consideration is location: the closer the emissions point is to the injection point, the lower the transportation costs. 

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When it comes to utilisation, the potential reduction in global warming depends on how much demand for fossil fuels is being displaced and how much longer the CO₂ will be kept out of the atmosphere for. Until recently, there was insufficient renewable power available for the energy intensive process of making fuels from captured carbon a net benefit.  

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How much the demand for fossil fuels is depressed by displacing fossil fuels with synthetic fuels made from captured carbon and renewable power depends on where the captured carbon came from. 

Not All Carbon Sources Are Created Equal

Carbon can be captured directly from the atmosphere by Direct Air Capture (DAC) or from industrial flue gases. DAC is between five and ten times as energy intensive as capture from an industrial flue gas as the concentration of CO₂ in the flue gas is much higher. Industrial carbon capture is, therefore, much more scalable, than DAC. 

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When it comes to industrial CO₂, there are two sources: fossil and biogenic. Fossil CO₂ derives from the combustion of fossil fuels, such as coal and natural gas. When left untouched, fossil fuels are carbon stores: they are stable chemical compounds that are found within the Earth’s crust. It is human actions that release this carbon into the atmosphere. 

Conversely, biogenic carbon is carbon that is cycling between biomass stores (e.g. plants) and the atmosphere. Human activities can change the rate at which it passes from biomass to atmosphere, but do not inject additional carbon into the carbon cycle. 

Biogenic CO₂ is released into the atmosphere  by the combustion of biomass, distillation and fermentation reactions. The distillation and fermentation reactions in whisky production emit large quantities of biogenic CO₂; as do the Anaerobic Digestion Reactors (ADRs) that  make bio-methane using biomass. 

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Carbon Capture Business Cases

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In the UK and EU, emissions of fossil CO₂ are regulated by cap and trade schemes. Emitters that can demonstrate that they have captured and sequestered CO₂ will be able to reduce their total CO₂ emissions, helping them stay below their industry’s cap and avoiding financial penalties. Emitters that are not in the scope of these regulations can generate and sell carbon credits instead. This creates clear business cases for industry to invest in carbon capture and sequestration. 

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Emitters will not be able to claim that they have reduced their emissions or generate carbon credits by capturing carbon that is then utilised unless the company utilising the captured CO₂ incorporates those emissions into their own product’s life cycle emissions. This business model is unlikely to work for producers of synthetic fuels, as, in order to command premium prices, they need to demonstrate a life cycle emissions reduction in comparison to fossil fuel alternatives. Additionally, reliance on captured carbon from fossil fuels prevents these new products from being fossil free. 

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Emissions of biogenic CO₂ are less likely to be within the scope of cap and trade schemes (notable exceptions include Energy from Waste facilities). For these emitters, the business case for carbon capture will either be driven by revenue generated from selling captured CO₂  for use as a feedstock or by selling carbon credits issued when they sequester CO₂ . Both models will likely incur transportation costs, but sequestration will have additional costs to inject the captured CO₂ into the storage facility. Therefore, the price of carbon credits and the value of any subsidies will need to be higher than the market price of CO₂ to make sequestration an attractive business model for emitters of biogenic CO₂.  

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If your business needs help developing a carbon business model or a guide in the complex world of carbon credits and offsets, contact us today to arrange a free consultation to find out how Innovative Energy Consultants can help. 

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