A CCUS Framework Eyeing 750 Mil mt/year CO2 Capture by 2050

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  • Investment of $100-$150 billion needed through 2050
  • Steel, cement, oil & gas, petchems, fertilizers key sectors for CCUS
  • India’s theoretical CO2 storage capacity up to 600 Gt, mainly in west

Indian planning body NITI Aayog has proposed a carbon capture, use and storage policy involving clusters, a business model and financial incentives to help its adoption on a commercial scale, with the potential for India to reach 750 million mt/year of CCUS capacity by 2050, reports SP Global.

About CCUS

“India is prioritizing CCUS as a potential solution to decarbonize hard to abate sectors,” said Suman Berry, vice chairman of NITI Aayog.

CCUS is expected to play a major role in enabling the hydrogen economy in India, through the production of conventional or “blue” hydrogen produced via coal gasification with CCUS, it said.

Given the current cost structure of renewable hydrogen at $5-6/kg, cost-competitive conventional hydrogen production at around $2/kg can provide a pathway for the hydrogen economy in the future, it said.

“Nearly two-thirds of India’s 144 million mt/year crude steel capacity and 210 GW of coal-based power capacity have an age of less than 15 years and cannot be wished away or stranded and need to be made sustainable by retrofitting with CO2 capture and disposition infrastructure,” it said.

In a reference scenario, S&P Global Commodity Insights Global Integrated Energy Model (GIEM) forecasts India’s carbon emissions rising from 2.41 billion mt/year in 2022 to 2.89 billion mt/year in 2030, and further to 3.37 billion mt/year in 2045.

Use & storage

The report said the theoretical CO2 storage capacity of India is up to 600 gigatons (Gt), with more than half of that in the west of the country (389 Gt).

“Preliminary analysis shows that there is sufficient potential for creating regional CCUS clusters in each of five regions of India and sequestration in deep saline aquifers has the best potential in all the regions,” it said.

In terms of CO2 use, value-added products include making of green urea, polymers and building materials at a large scale and food and beverage items on a smaller scale, the report said. Enhanced oil recovery (EOR) is also a significant avenue for carbon use.

“The total urea consumption in India is over 30 million mt/year, and thus green urea provides a significant opportunity for CO2 utilization at scale,” it said.

There is a large market for aggregates and concrete in India, providing a pathway for utilizing CO2 for producing building materials through concrete curing and aggregate formation, it said.

Finance body

The report proposed setting up a Carbon Capture Finance Corporation of India, which would be an institutional mechanism to support CCUS project funding, capital and cash costs.

“While the funding for the initial demonstration projects can be achieved through direct government grants and funds, for CCUS to reach scale in India, it is also important to… establish a financial framework such as a Carbon Capture Finance Corporation to support CCUS projects across their lifecycle,” the report said.

“Over time (probably beyond 2050), the policy should transition to carbon taxes, so as to enable reaching India’s net zero goals by 2070,” it said.

Costs & subsidy

The total subsidy amount required by the year 2050 to support 750 million mt/year of CCUS is estimated to be around Rupees 2.1 trillion ($26 billion), the report said.

“By investing in CCUS projects, along with the utilization of a part of the incremental tax revenue generated, it should be possible to fund the carbon capture credits, eventually leading to subsidy-neutral CCUS operations,” it said.

It proposed subsidies for CO2 sequestration/storage at Rupees 4,100/mt up to 2040 and Rupees 3,000/mt up to 2050, and for CO2 EOR at Rupees 3,000/mt to 2040 and Rupees 2,400/mt to 2050.

Existing carbon capture

Currently carbon capture in India is confined to certain industries and applications where it is part of the process, such as manufacturing urea, it said. India’s urea production is about 24 million mt/year, where captured CO2 is utilized in the ammonia-to-urea conversion process.

CO2 is also captured as part of the gas conditioning process in the gasifiers of Reliance Industries in Jamnagar in Gujarat (10 million mt/year of petcoke gasification capacity) and JSPL in Angul in Odisha (2 million mt/year of coal gasification capacity), but the CO2 is largely released to the atmosphere, it added.

There are currently a few pilot scale carbon capture projects — IOCL R&D’s amine and biological enzyme-based carbon capture plant and Tata Steel Jamshedpur’s pilot scale carbon capture plant for capturing 5 mt/day CO2 from blast furnace gases.

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Source: SP Global

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