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01 / Introduction

Carbon capture, use and storage (CCUS) involves first capturing carbon dioxide generated through industrial processes, power generation and certain hydrogen production methods, as well as active capture through greenhouse gas removal technologies that range from engineered to nature-based solutions. Then the captured carbon dioxide is either used, for example in chemical processes, or stored permanently in disused oil and gas fields or in naturally occurring geological storage sites.

According to the UK鈥檚 industrial decarbonisation strategy, CCUS technology is not meant to replace but rather to support decarbonisation efforts, and is essential if the UK is to meet its net zero ambitions by 2050. With less than 30 years left, time is of essence to scale up CCUS. However, the UK government has so far had limited success in deploying it.

CCUS鈥檚 critical role in UK decarbonisation has been under discussion since the 2003 energy white paper. Initial commitments to deploy it were made in 2007, only for the first two demonstration competitions to be cancelled in 2011 and 2012. These disappointing outcomes are likely to have informed the opinion of the Global Carbon Capture and Storage Institute, which in 2018 stated that the UK had only an 鈥渁verage鈥� level of national interest in the technology 鈥� despite having one of the world鈥檚 most favourable environments for commercial deployment of CCUS and ranking fourth in the Global Carbon Capture and Storage Institute鈥檚 CCS Readiness Index.

CCUS will be essential to enable the green transition, earning it a separate point of its own in prime minister Boris Johnson鈥檚 Ten Point Plan. In addition, CCUS technology is necessary to enable the realisation of at least five other Ten Point Plan commitments.

With the need for the technology clear and policy being rapidly developed, the key question now is whether the funding model can be put in place to make it an investable proposition. This has come closer after this month鈥檚 COP26 climate conference in Glasgow, following the finalisation of proposals for a global carbon credits market that will attract new investment into the carbon abatement market.

The long-awaited Net Zero Strategy: Build Back Greener was published last month, accompanied by the UK鈥檚 heat and buildings strategy. Together they complement Decarbonising Transport: A Better, Greener Britain and the industrial decarbonisation strategy, which were both published earlier this year.

All these policies emphasise the role that CCUS will play in our transformation to a carbon neutral world. With the chancellor鈥檚 autumn Budget having reaffirmed an allocation of 拢1bn for the CCUS infrastructure fund, and 拢1bn for the net zero innovation portfolio, it seems the stage is set for deployment of the technology to succeed. However, expectations need to be managed carefully, as there are multiple challenges ahead.

CCUS is a curious case, since it is both established and in development. It has been safely operated at a relatively small scale by the gas and oil industry for almost 100 years. But the reductions to global emissions that must be delivered to tackle the climate crisis require carbon capture to be scaled up at unprecedented levels 鈥� almost 140 times, to the equivalent of over 5 billion tonnes of carbon dioxide each year.

Below we will describe the current state of the art in CCUS, the major challenges ahead, and what is needed to overcome them. We will also clarify what impact CCUS technology will have on construction and the built environment.

02 / How CCUS is crucial to reaching net zero ambitions

The Climate Change Committee has stated that CCSU is 鈥渁 necessity, not an option鈥� on the UK鈥檚 pathway to become a net zero economy by 2050. In its sixth carbon budget, there is not a single scenario that CCUS is not a part of. For some sectors it will be required as a temporary solution, for example as gas-fired electricity generation is phased out. For others it must become an inherent part of daily operations.

Looking at the major sources of emissions and the strategies to mitigate (or eliminate) them, we can broadly distinguish four major applications of CCUS:

Accelerating progress in hard鈥憈o-decarbonise sectors

While many sectors can decarbonise by shifting to renewable electricity, there are some that will still require other sources of power and will need to deal with emissions that originate outside the power supply, such as the petrochemical sector.

These issues are especially relevant to construction materials manufacturers. Cement, steel, bricks and roof tiles are all products that take huge quantities of energy to produce, in particular requiring extremely high temperatures that cannot always be achieved with electric power systems. In the short term they are likely to rely still on natural gas while the transition to green hydrogen is taking place.

Many of these industrial users are located in clusters, creating the opportunity to attract large-scale investment into CCUS. This is the sector that government policy is prioritising.

Enabling the energy transition

The move away from fossil fuels is taking place gradually, and the pace of transition depends on the timely creation of sufficient infrastructure for renewable energy generation.

Currently, the main sources of electricity in the UK (according to the National Grid) are gas (42%), renewables (23%) and nuclear (17%). In the long term nuclear will continue to have a key role, while the share of renewables generation will increase. However, there will always be a demand for readily available power generation sources, as currently provided by gas 鈥� hence the importance of CCUS. Ultimately gas will be replaced by green hydrogen, but before this happens the transition to blue hydrogen will start taking place. Because blue hydrogen is produced from natural gas, CCUS will play an essential role in eliminating the CO2 associated with this process. As such, it can help eliminate the obstacles to early hydrogen implementation for power and heat and will accelerate the investment in infrastructure upgrades.

Ensuring resilience in the energy supply system

The rising proportion of renewables in the UK energy mix presents challenges to continuity and resilience of supply. Wind and solar energy supplies are both variable, owing to a range of factors including weather conditions.

Back-up and stabiliser sources are needed to ensure the robustness of the electricity network, including battery storage, pumped storage and diesel and gas-fired generators. In the long term, a larger proportion of renewable energy will be stored in batteries or in the form of green hydrogen and used to stabilise the network when needed. But at least in the medium term natural gas is likely to remain the go-to option for large-scale dispatchable power. CCUS will be needed to mitigate the carbon footprint of this essential component of the energy system.

Mitigating unavoidable carbon emissions

There is, finally, a category of unavoidable carbon emissions that will continue to require ongoing removal long after the UK reaches its net zero target. An example from the construction sector is cement production, which emits CO2 because of the chemical reactions involved.

Aviation and shipping are also among the sectors that, while they may become more efficient, will continue to generate a carbon footprint after 2050. And we must not forget that we ourselves are also a big source of CO2 鈥� the globe鈥檚 6.8 billion breathing people contribute approximately 2.5 million tonnes of CO2 each year.

For such unavoidable emissions as these, greenhouse gas removal (GGR) technologies will be deployed to remove the additional CO2 from the atmosphere. The most likely technology to be used for this is direct air carbon capture (DACC).

Achieving our net zero ambitions is simply not possible without employing large-scale CCUS. The following section will describe the status of this technology and the challenges that lie ahead.

03 / The evolution of CCUS from use in the oil and gas industry to saving the planet

CCUS is not entirely a new kid on the block. Its story started in the 1930s with the purification of natural gas through removal of the CO2 by using chemical solvents. Slowly the process of capture was improved through the use of increasingly efficient chemicals. In the 1970s a use for the captured CO2 was found, in the form of enhanced oil recovery (EOR), whereby the recovered CO2 was pumped back into the oil reservoirs in order to increase the oil extraction yield from around 40% to 60%.

The application of CCUS to industrial decarbonisation is more complex and challenging. The costs of capture, transport and storage incurred in collecting all of the CO2 emissions from a complex industrial plant and then transporting them to a suitable storage site, such as an exhausted oil field, are high.

CCUS is not a single process but a combination of steps with different service providers. Carbon dioxide can be captured both before and after the combustion of fossil fuels. Capture is accomplished mainly through the use of chemical solvents that selectively bind CO2. These chemicals are subsequently regenerated, so that they can be continuously reused (although some losses are unavoidable). The efficiency of these processes is relatively high 鈥� between 85% and 90% 鈥� and the obtained CO2 is 95% pure.

How the CO2 is transported and stored then depends on the volumes collected. Large volumes of CO2 such as those available at a carbon cluster justify investment in a collection network, whereas smaller, isolated sites might rely on tanker transport. Ultimately, CO2 will be transported, reinjected and permanently retained in a deep storage reservoir. Storage is a managed process, so there are some revenue costs associated with the service of CCUS.

Current carbon capture technologies, although efficient and proven, have their downsides. For example, the regeneration of toxic solvents is an energy-intensive process. Multiple research projects are therefore under way to improve the current technologies. One likely to be of special interest for the UK is the application of graphene membranes. This technology, being developed at the Swiss Federal Institute of Technology in Lausanne, is as efficient as existing methods and potentially cost-effective 鈥� at an estimated 拢23 per tonne of CO2 for the capture process. The UK鈥檚 National Graphene Institute could be an ideal body to get involved in scaling up this technology once its initial development is complete.

In terms of storage, CO2is stored in its supercritical (similar to liquid) form, at high pressure (typically 100 bar or more) in order to provide suitable density of the gas and allow for any pressure drops. To avoid the risk of leaks, the minimum injection depth is 800m and continuous monitoring needs to be in place.

There are three major forms of storage that are all technically mature:

• Storage through CO2 enhanced oil recovery
• Storage in saline formations
• Storage in depleted oil and gas fields.

The third option is highly attractive to countries such as the UK and the Netherlands, which have access to vast depleted oil and gas fields. Over the years the technology has been proven, and by late 2020 there were 26 CCUS units operating globally (mainly in the US and Canada), with three under construction, 13 in advanced development (reaching front鈥慹nd engineering design), and 21 in early development.

The current global capacity for CCUS is 40 million tonnes of CO2 a year, with 75% sold for EOR and the remaining 10 million tonnes used for geological storage to prevent climate change. Considering the UK鈥檚 ambition of capturing between 20 million and 30 million tonnes of CO2 a year by 2030, much needs to be still done in terms of both creating CCUS facilities and driving their efficiency.

04 / What is needed to create demand for CCUS

Traditionally, most investment in CCUS has been by oil companies motivated by the increased oil output. As the use of CCUS expands, demand will initially come from downstream oil and gas processing and petrochemicals, while gradually expanding into a 鈥渃arbon capture as a service鈥� model. Hence most initial development will continue to take place in the oil and gas sector.

For decarbonisation scenarios to be realised, the cost of the CCUS process must decrease enough so that it does not become an unsustainable burden on either industry or the energy sector. This cost point is likely to be defined by the price of carbon, although energy-intensive industries do not currently pay the full cost of their carbon credits. In November 2021 the cost of CO2 in the UK鈥檚 emissions trading scheme is just over 拢50 per tonne.  

From a process viewpoint, the main variable affecting cost is the density of CO2 in flue gases. The denser the CO2 the lower the overall cost of capture 鈥� as displayed in the table (below).

Indicative cost of capture (per tonne of CO2)

	Cost (拢)
Concentrated CO2 streams (ethanol production)	10-25
Dilute CO2 streams (power generation)	40-90
Direct air carbon capture	100-250

Clearly, carbon capture costs for many gases will have to fall by a great deal if CCUS is to become viable as a large-scale solution that does not add significant costs for industry.

Transport and storage, as well as the long-term financing costs, must be added to the initial costs of carbon capture and storage technology. However, rather like offshore wind, the initial barriers to viability are associated with innovation and scale. Public support is being offered to facilitate this scaling-up.

The price agreement will be a complex equation, which accounts for the unique combination of capital and operation expenditure associated with a 10-year or 15-year CCUS contract.

How will this work? For capital investment, the public sector proposes to provide no more than 50% support on expenditure, provided on a 鈥渓ast spend basis鈥� 鈥� in other words, once all other funding avenues have been exhausted. On the operational costs side, the arrangements are also complex. They involve a forward forecast of the UK ETS carbon price and the forfeiture of existing free carbon allowances.

The government鈥檚 expectation is that this model will attract enough emitter and investor interest to progress early projects to front-end engineering design during 2022, and result in the first two CCUS clusters being operational by the mid-2020s and a further two clusters by 2030. With the business model being developed to facilitate the provision of carbon capture as a service, the opportunities for more emitters to engage with the CCUS process will expand.

While progress is being made, there are still gaps in the development of the finance model for CCUS. The present focus is very much on industrial emissions. CO2 from energy generation is only permitted for power plants that are dedicated to an industrial process. Expanding the scope of the business model to include emissions from CHP plants and energy-from-waste plants is likely to be the next stage in the evolution of the technology.

While the financial model is crucial to progress CCUS, these complex projects also need to get through the planning process. Revised national energy policy statements will include new provisions for CCUS, highlighting these new requirements. At present there is a lack of specialist capacity on both the developer and the inspector side of the planning process. Planning clearly sits on the critical path for meeting the 2030 target, and planning reforms proposed as part of Project Speed will play a key role in accelerating this process.

05 / What does CCUS mean for construction?

CCUS will create opportunities for construction, both in terms of improving the environmental credentials of the sector and in the sense of providing a new source of work. Wide employment of CCUS technologies will eventually help the sector to limit its carbon footprint in relation to raw materials. However, much construction materials production takes place outside the main carbon clusters, such as in decentralised cement plants. This means the application of CCUS will depend on the successful rollout of either small-scale carbon capture at source or else technologies for direct capture from air.

In the immediate future, CCUS will be the source of new construction projects. The UK government has recently confirmed two CCUS clusters: the East Coast Cluster, centred around Hull and Middlesbrough, and the HyNet in Liverpool Bay. This is part of a bigger initiative aimed at creating industrial clusters called 鈥渟uperplaces鈥�, which will co-locate related industries, especially those requiring energy-intensive manufacturing processes. Such solution will not only help to focus carbon emitters on reduction and capture a big part of industrial emissions, but it will also assist in levelling up regions as these superplaces will create new local jobs.

But superplaces are just the beginning of the investment needed. Both piping and shipping capacity needs to be enhanced if CCUS facilities are to be used by emitters further away from the coast. As transporting CO2 requires similar infrastructure to that used for liquefied natural gas (LNG) and liquefied petroleum gas (LPG), the hope is that scaling up shipping operations will be relatively straightforward. The extension of the piping infrastructure will require careful planning, and the superplaces鈥� design needs to take into consideration future-proofing the installations so that they can increase their throughput over time.

There are also opportunities for upgrading the current EOR facilities, such as the Captain field in the Outer Moray Firth. While this infrastructure is currently used primarily to extract oil, it contains all the elements required for pumping CO2 underground, and it would seem unwise not to use it to enhance CCUS capacity while also making best use of existing fossil-fuel resources.

Lastly, construction and the built environment also have a role to play in a much broader carbon capture context, through the inclusion of long-term carbon sinks in projects. The use of natural materials such as timber or hemp locks in CO2 and, unlike biomass-based energy, does not require further carbon capture. While the limitation is often that natural materials are not sufficiently durable for construction at a large scale, we need to search proactively for suitable opportunities. One example of a suitable such practice is the use of bio鈥慶omposites in building bridges in the Netherlands.

Carbon will also be captured through innovation in traditional construction materials such as concrete (CarbonCure Technologies in Canada is an example of this) or asphalt (like the lignin-based bitumen developed by Wageningen Food & Biobased Research). Further to this, more waste materials can be employed, such as the Carbon8 CO2tainer which transforms CO2 and waste residue into industrial materials.

These technologies are at an early stage of development, and they will not immediately bring dramatic industry-wide improvements. But they can create a path for more substantial change, such as a transition to regenerative design.

Moreover, we need to look at innovation not only through a carbon lens but also as a way to create more sustainable assets that deliver improved outcomes for people and nature, bringing future generations closer to a world that does not depend quite so much on carbon capture.