There should be little doubt that the US has a significant opportunity to decarbonize through CCS and if the US has a carbon value close to the level in Europe today we would be seeing investments announced almost weekly. While permitting would cause some significant lead time between announcement and construction/operation, the other uncertainty might be how best to capture the CO2. In its earnings release yesterday, CF talked about purifying CO2 streams at its two large Urea plants on the Gulf Coast, such that the CO2 would be ready to sequester, but the Urea process creates a relatively concentrated stream of CO2 and that makes separation much easier. For others, the better route might be hydrogen investments – driven by the relative ease of capturing the CO2, especially if it is part of the process design. If this route is more economic, the net new investment would be substantial, not just for the SMR, ATR, or fuel cell hydrogen generators, but also for the infrastructure and oxygen capacity for any ATR investment. This seems like a no-brainer bi-partisan opportunity for the US as there is broad support for CCS but incentives need to be higher. For more on this topic see our ESG and Climate research.
