Expert takes: Implementing carbon capture utilization and storage

As net zero commitments become more prevalent, and companies plan their target implementation journeys to reduce their value chain emissions - carbon capture, utilization and sequestration, or CCUS, will become a critical decarbonization lever.  

While emissions reductions are critical and offsets have a role to play in enterprise carbon management, companies cannot offset their way to net zero without verifiable and permanent removals. 

Reaching net zero by 2050 hinges on an unprecedented clean technology push from now until 2030. Staying on a net zero pathway will require immediate and massive deployment of all available clean and efficient energy technologies. CCUS is a proven method of reducing greenhouse gas emissions from energy intensive manufacturing facilities, industrial facilities and power plants. 

ERM specialists across the globe are already working with clients to help them introduce CCUS into their operations. 

In the US, the rules of engagement changed when the Inflation Reduction Act was put into law in August of 2022.

Prior to that CCUS had been technically proven and only economical in a few applications. But because of the increased tax credits and a highly favorable geology, we are now seeing clients across the US accelerating their CCUS deployment. 

That process is accelerating our understanding of the challenges in scaling CCUS. We are seeing CO2 capture technologies advancing and CO2 pipeline deployment accelerating, but CO2 storage still carries the greatest risk to the sustainable growth of CCUS. Technical elements such as reservoir injectivity, pore space capacity, and containment are essential unnegotiable elements of success. And these things take time to get right. 

We have been partnering with players from across industries on solving the challenge of operationalizing decarbonization through strategy development and technical delivery. 

My team has been busy supporting multiple CCUS projects across the UK, North America, and Australia, with strategy and policy support. Project developers recognize that there’s an incredible need for collaboration to successfully develop these projects. They need to work together with other private companies, ranging from heavy industry to infrastructure developers and operators, as well as supply chains and workers.  

In the UK, we’re seeing public-private collaboration on CCUS development particularly at two levels: 

At the regional level, with local authorities, to develop joint cluster strategies and roadmaps, set regional targets and fast track permitting of decarbonization infrastructure. 

At the national level, companies are working together with the government to set up the right policy framework and ensure a long-term sustainable business model is in place, to reduce project risks and increase investor confidence. 

These partnerships provide a great example of best practice that could be adopted by policymakers worldwide. 

Across the Asia Pacific, the policy environment for CCUS is still nascent, with regulations and projects just starting to develop. 

We’re currently working with the natural gas sector, which is a major driver of CCUS development in the region for several reasons: CO2 is already captured during gas processing, making CCUS relatively low cost, and the gas sector has a competitive advantage in drilling wells and building pipelines, so it’s well suited to developing CO2 transport and storage infrastructure. This infrastructure can then be used by other industries for CCUS in the future. 

National policies are starting to support CCUS development. In Japan, a roadmap by the Ministry of Economy, Trade and Industry is enabling the development of large scale domestic storage hubs with 6 to 12 million tonnes per annum of capacity by 2030. Australia has made recent policy changes that incentivize the capture of reservoir CO2 in new natural gas developments, which is supportive of the development of new gas sector CCUS projects across the country. 

Against this backdrop of scaling CCUS, companies need to ensure social justice is at the heart of their plans. Some governments are already trying to ensure a just transition by adding labor or community investment requirements to public agencies and businesses or asking companies to demonstrate the socio-economic benefits of CCUS projects. In the UK, those investing in CCUS at so-called ‘clusters’ need to show how many jobs are being created. The Justice40 Initiative in the US seeks to deliver at least 40 percent of federal funding to disadvantaged communities. 

But access to economic benefits is one only one part of the story. Early research indicates that communities who are engaged in a meaningful way throughout project conception and permitting are more likely to accept CCUS facilities being built in their region.

Companies are trying to permit at pace. Some are cutting corners. Others are taking the time to ensure community support. Our social performance and stakeholder engagement teams are helping companies put social inclusion at the center of project design and permitting.