Even as the global price of electrolysers looks set to fall, carbon-capture technologies continue to stay small-scale and expensive. CarbonCopy asks Carbon Clean’s Asam Rafi about what is needed for the sector to go mainstream
As CarbonCopy has reported, a global race is underway to bring down electrolyser prices. That should help users seeking to ditch carbon fuels for cleaner alternatives. As for firms without cleaner pathways, they can reduce their emissions through carbon capture. Existing technologies for capture, however, are too expensive, and run on too small a scale. Earlier this month, for instance, Orca, the world’s largest direct air capture unit, began running in Iceland. It cost $10 million and captures no more than 4,000 tonnes of carbon dioxide a year. Even in India, units running carbon-capture plants complain of high prices, making these installations unviable.
And so, CarbonCopy asked Asam Rafi, vice-president of sales, Carbon Clean, what is holding back industrial-scale carbon-capture projects. The UK-based firm focuses on “hard to abate” sectors such as cement and steel, apart from developing solutions for refineries and energy from waste. In India, it has installed the world’s first carbon capture plant from blast furnaces (Tata Steel). Its installation at Tuticorn Alkali and Chemicals is the world’s first carbon-capture project, which converts carbon dioxide to soda ash.
Excerpts from our interview.
There is a sense that, as scale picks up, electrolyser prices will fall. What is happening on the carbon capture front? Most installations—in India and outside—are still small-scale and expensive.
Yes. Carbon Capture, Usage and Storage (CCUS) installations have typically been small-scale. Carbon Clean is working on technologies that will bring the cost of carbon capture down by 50%. Until now, our technology introduced our solvent into tall columns from the top while flue gas entered from the base. As they mixed, carbon dioxide was captured by the solvent. The solvent was then heated to separate the carbon dioxide, and the regenerated solvent was recycled. These columns are extremely big—20-30 metres tall. In our new system, we have replaced them with rotating packed beds. Here, the solvent enters the machine from the centre and is dispersed radially outwards where it meets flue gas coming from the outer side of the casing in a counter-current direction. Since the bed is rotating, the process is intensified. The centrifugal force intensifies the mixing of the solvent and the flue gas.
Using this technology called CycloneCC, we expect the cost of carbon capture to come down to $30 a tonne on average.
Can you break down this new expected cost?
That is about capex and opex. Our raw material costs will come down—no large towers. The engineering and installation costs will come down as well. As for opex, by intensifying the mixing, the heat required for the process will come down, too. On the whole, we expect carbon capture to cost $30 a tonne on average at a time when the current cost ranges between $60-90 a tonne.
Will the market take off at that price-point?
Well, if the carbon tax is €50. And if carbon capture costs $60-90, it is not very attractive to do carbon capture. At $30, it gets much more attractive.
Tata Steel’s plant at Jamshedpur makes 10 million tonnes of steel a year. Are we then at a point where we can get a proportionately large CCUS installation?
Not quite. Carbon capture needs government support. What do companies do with the captured carbon? Some countries in Europe store it. The alternative is to convert that captured carbon into something that can be used. Which is what Tuticorin Alkali and Chemicals is doing. They convert carbon dioxide into soda ash and sell it to companies like Unilever Hindustan. Or you use carbon dioxide to make synthetic fuels. NTPC has announced an initiative for carbon dioxide from its power plants, which will be used to produce methanol.
In this approach, you have an ancillary revenue stream that pays for some of the carbon capture. The catch is that the supporting legislation is not there yet.
In Sweden, Liquid Wind is planning to combine hydrogen and carbon dioxide to produce methanol. They are able to do this because of the carbon tax rate in Sweden. In addition, you also need customers willing to pay a slight premium for these fuels. Even in the case of NTPC, the methanol they produce will be more expensive than conventionally made methanol.
What you are saying is particularly relevant to developing countries where it is still unclear how much financial support governments can extend to carbon capture projects. In which case, we are likely to see more ancillary revenue streams.
In Europe, some companies are trying to store carbon dioxide in the North Sea. These are compliance plays—the cost of storing the carbon is lower than the cost of paying the tax on those emissions. But yes, many countries might not incentivise large-scale carbon storage. And so, we might see projects like soda ash and synfuels. Methanol can also be used to make diesel, gasoline and kerosene.
The question is about viability. Tuticorin Alkali and Chemicals has to compete with smaller firms making cheaper soda ash from limestone, for instance. And of course, the emissions if the recycled product/fuel burns again.
Yes. In the case of Tuticorin, Hindustan Unilever is willing to pay for a decarbonised product. That is one point. Some of the buyers will be looking to reduce their emissions as well. For synfuels, too, they might be costlier than regular fuels, but the point again is that someone might be looking for carbon-neutral fuels.
So what you are saying is, other value chains trying to decarbonise will want to buy these. In effect, carbon capture needs a bigger ecosystem.
Yes. What we need is the tech, government regulations like carbon taxes, and companies that capture the carbon dioxide. And then, we need customers who buy that sequestered carbon dioxide. In Europe, for instance, some of the captured CO2 goes to greenhouses. The EU has taken the lead in much of this. They have created carbon taxes, carbon offsets, etc. It’s a carbon ecosystem.
It seems as though the viability of carbon-capture projects rests on carbon pricing. If it is priced too low, the viability of the sequestration unit will suffer. If it is priced too high, costs of goods will go up for customers. How does one, then, price carbon?
Carbon-capture projects are undertaken in response to many factors such as the need to achieve net zero or science-based targets and stakeholder pressure, as well as in response to economic drivers. Several factors contribute to the carbon price in any specific geography. In 2021, European carbon price records have been broken several times, and it is likely this trend will continue. Rising carbon prices continue to make the commercial case for heavy industries to embrace carbon capture as part of their decarbonisation strategies.
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