The Green Plains Institute analysis below draws heavily on the EPA emissions data by facility, but correctly, in our view, identifies where CCS makes the most sense in the US. We still struggle with the pipeline distances associated with some of these ideas as CO2 disposal is still a cost for emitters and in any attempt to reduce costs, pipeline distances will be key. We have discussed the opportunity recently for massive blue hydrogen investment (including CCS) to replace industrial heating fuel and this would apply in all of the regions below. Note our conclusions in today’s ESG and Climate report that we expect renewable power installation goals to fall short – requiring more use of natural gas (for power generation or hydrogen production) with accompanying CCS.
Source: Green Plains Institute, February 2022
The highlighted headlines below are interesting as they focus on start-up technology for direct air capture (DAC) of CO2. DAC is the only 100% ton for ton carbon offset process today that stands up to full audit scrutiny (assuming the power used is renewable – more demand for renewable power!). Other offsets, especially agricultural-based, are under fire for their validity, given that the credit is likely based on an assumption around the duration of the initiative – i.e. a new tree might be equivalent to 1 ton of carbon offset, but only if it lives and thrives or 40 years. With DAC, if you have captured and securely stored a ton of CO2, there is little to debate – but the constraint is how expensive it is. Consequently, any new DAC technology that meaningfully lowers costs will likely have a significant role to play. Later in the ESG report we talk about emission plans and targets from some of the chemical majors, and all of those with a 2050 net-zero target, as well ExxonMobil in its recent announcement, will need to buy carbon offsets – such as those generated from DAC units, to achieve net-zero.