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A Fast Track to Carbon Neutral Using Environmental Commodities

Updated: Jan 13

“What’s the use of a fine house if you haven’t got a tolerable planet to put it on.”

—Henry David Thoreau

This excerpt is taken from "A Fast Track to Carbon Neutral: Using Environmental Commodities to Rapid Launch Commercial Sustainability Programs" by James Scott

Our planet has evolved to heal itself through a natural process of photosynthesis and carbon sequestration. But earth’s natural mechanisms for self-healing are no match for man’s hyper-toxic industrial emissions that accelerate anthropogenic climate change. The Paris Climate Agreement and the recent COP27 Climate Conference have set ambitious goals for the reduction of anthropogenic greenhouse gas (GHG) emissions with the ultimate goal of reaching net-zero emissions by 2050 and limiting the global increase in temperatures to 1.5oC. To reach these goals, immediate and coordinated action is required. While new technologies are being developed to help reach these goals using renewable energy, carbon sequestration from the atmosphere, etc. there are technologies and solutions that can be deployed immediately to reduce GHG emissions. The most effective solutions are market-based solutions that can be implemented without a large permanent public investment. However, these solutions will probably need public-private partnerships to accelerate their adoption to meet the GHG emissions reduction goals.

It has been well established that climate change is primarily driven by anthropogenic greenhouse gas emissions – human activity is causing long-term detrimental climate trends that will be very difficult or impossible to reverse. Therefore, for the past few decades, there has been a concerted international effort to reduce global greenhouse gas emissions. However, these efforts have been largely ineffective. The concentration of atmospheric CO2 reached 414.7 ppm at the end of 2021, even though the reduction of CO2 emission in 2020 slowed down the rate of increase of the atmospheric CO2 concentration by about 0.18 ppm (Global Carbon Budget, 2021). The atmospheric CO2 growth amounted to around 47% of total CO2 emissions during the last decade with the rest absorbed by CO2 sinks (land absorbs around 28% and ocean around 25% of total emissions).

After a decrease of around 5.4% in global greenhouse gas emissions in 2020, induced by lockdowns and interruptions in global trade and travel caused by the COVID-19 pandemic, the emissions have bounced back in 2021 to values close to pre-pandemic levels (Global Carbon Budget, 2021). The decrease in 2020 was 1.9 GtCO2/yr, for around 34.8 GtCO2/yr, comparable to the 2012 emissions level; however, the total emissions in 2021 were around 36.4 GtCO2/yr, compared to 36.7 GtCO2/yr in 2019. This can be attributed mostly to the increased demand for energy, with emissions from coal and gas increasing above 2019 levels (mainly caused by electricity production), while emissions from oil remained below their 2019 level due to lower demand for global transport and travel.

On the national level, the increase is driven by the developing countries: emissions in China were higher by 5.5% compared to 2019 levels, reaching 11.1 GtCO2/yr; India exhibited 4.4% higher emissions, reaching 2.7 GtCO2/yr (Global Carbon Budget, 2021). On the other hand, the 2021 emissions in the United States (5.1 GtCO2/yr), the European Union (2.8 GtCO2/yr), and the rest of the world (14.8 GtCO2/yr in total) remain 3.7%, 4.2%, and 4.2% lower than respective 2019 levels.

The carbon budget is an estimated total amount of global emissions that has a 50% likelihood to limit global warming to a particular level – levels usually considered are 1.5°C, 1.7°C, and 2°C increase in average global temperatures. At the start of 2022, the estimated remaining carbon budget has shrunk to 420, 770, and 1270 GtCO2, for a global temperature increase of 1.5°C, 1.7°C, and 2°C, respectively (Global Carbon Budget, 2021). This is equivalent to 11, 20, and 32 years of emissions at the 2021 level, respectively. Total anthropogenic emissions were 38.0 GtCO2/yr in 2020, and 39.4 GtCO2/yr in 2021. To reach net zero emissions by 2050, we must cut about 1.4 GtCO2 per year on average, which is the difference between 2020 and 2021 emissions. This highlights the magnitude of the task at hand and the urgency of immediate action.

There is a complementary market mechanism that can be used to accelerate the adoption of methods for the reduction of GHG emissions – carbon markets. This is a market framework where carbon savings and negative emissions can be traded by entities that employ carbon sequestration methods to allow other companies to compensate for their emissions while providing a financial stimulus for carbon sequestration and GHG emissions reduction. This also drives innovation because the development of better GHG emissions reduction methods can bring immediate economic benefits. These carbon markets have already been shown to provide an effective market-based mechanism for emissions reduction, and the main issue has been to expand them geographically, increase the supply of carbon credits, and provide a uniform framework for their operation.

Under the Kyoto Protocol, 192 countries committed to the reduction of greenhouse emissions. Signed in 1997, the Protocol came into force in 2005, although Canada withdrew in 2012, and the United States never ratified it. During the first commitment period 2008-2012, 36 countries participated to reduce their greenhouse gas emissions, with mixed success, while 37 countries (34 ratified) entered the second commitment period (2012-2020) with additional targets.

In 2015, the Paris Agreement was agreed upon by 196 countries, to keep the overall global temperature change below 2°C and preferably to 1.5°C. The emissions are to be reduced as quickly as possible and net-zero emissions should be achieved by 2050. However, the current national targets set under the Paris Agreement would be insufficient to reach these stated goals, while enforcement mechanisms are weak or non-existent.

Achieving Carbon Emissions Goals by 2030/2050

Most of the research and development efforts in the field of carbon capture have been focused on efficiency improvements of the CO2 separation process, which is the most complex and costly component. These technologies are generally referred to as carbon capture utilization and storage technologies. Capture processes are grouped based on at what stage of carbon use they are deployed. The suitability of a particular CCUS technology to a particular industrial process depends on the process or the type of power plant.

Post-combustion: CO2 is removed from the flue gas resulting from the combustion of fossil fuel. Post-combustion separation involves the use of a solvent to capture the CO2. Common applications: pulverized coal (PC) plants, and natural gas combined cycle plants (NGCC). This technology is most commonly used and can be retrofitted to existing applications (Parliamentary Office of Science & Technology, 2009).

Pre-combustion: The primary fuel in the process is converted to a mix of carbon monoxide and hydrogen (syngas) through a reaction with steam and air. The carbon monoxide is subsequently converted to CO2 in a ‘shift reactor’. The CO2 can then be separated, and the hydrogen is used to generate power and/or heat. Common application includes integrated gasification combined cycle (IGCC) power plants (IPCC, 2005).

Oxy-fuel combustion: The primary fuel is combusted in oxygen instead of air, which produces a flue gas containing mainly water vapor and a high concentration of CO2 (80%). The flue gas is then cooled to condense the water vapor, which leaves an almost pure stream of CO2. Additional equipment is required for the in situ production of oxygen from the air (Mckinsey & Company, 2008).

Industrial processes: The separation technologies can also be used in various industries, such as natural gas processing, and steel, cement, and ammonia production (IPCC, 2005). Carbon capture and storage (CCS) could capture between 85-95% of all CO2 produced (IPCC, 2005), but net emission reductions are in the order of 72 to 90% due to the energy it costs to separate the CO2 and the upstream emissions (Viebahn et al., 2007). Once CO2 has been effectively ‘captured’ from a process, it will be required to transport to a suitable storage location. CO2 is most efficiently transported when it is compressed to a pressure above 7.4 MPa, and a temperature above approximately 31˚C. Suitable CO2 storage locations include abandoned oil and gas fields or deep saline formations, with an expected minimum depth of 800 m, where the ambient temperature and pressures are sufficiently high to keep the CO2 in a liquid or supercritical state. The CO2 is prevented from migrating from the storage reservoir through a combination of physical and geophysical trapping mechanisms (IPCC, 2005). The technologies used to inject CO2 are similar to those used in the oil and gas industry.

The application of technologies elsewhere suggests that CCS is technically feasible in most large, stationary CO2 point sources. Natural gas processing (NGP) already removes CO2 from natural gas to improve its heating value or meet pipeline specifications. CO2 storage, combined with NGP, has been successfully demonstrated at the Sleipner gas field in Norway, and in the In Salah gas fields in Algeria. There are a number of planned CCS plants globally:

  • the Quest CCS Project in Alberta, Canada (1.2 MtCO2 per annum); operational since late 2015

  • the Kemper County IGCC Project, in Mississippi (600 MW integrated gasification combined cycle power station, 3.5 MtCO2 per annum)

The Global CCS Institute identified 12 CCS projects currently in operation, with 8 projects undergoing construction (Global CCS Institute, 2013).

Carbon capture and storage (CCS) has the potential to significantly reduce CO2 emissions from power generation and industrial installations. The greatest risk associated with CCS is possible leakage from pipeline systems and storage sites. While the risks of CO2 leaking from a pipeline are no different from the transportation of natural gas, CO2 is not flammable, so the risk of major environmental damage is significantly lower. However, any leakage of CO2 would reverse the effects of the CCS process by releasing CO2 into the atmosphere, making it an important operational issue. Regulatory frameworks and standards for the transport and permanent storage of CO2 are common in many countries, ensuring that CCS projects pose no threat to humans and the environment.

Additional negative environmental impacts of CCS include increased fossil fuel or energy consumption, due to the energy needed for the process, and the potential environmental impact of the solvents used to chemically trap the CO2 (Zapp, 2012). Therefore, there is a trade-off between the GHG emissions abatement and the environmental impacts of reduced energy efficiency and potential environmental damage.

Currently, most applications of CCS are not economically feasible. The additional equipment used to capture and compress CO2 also requires significant amounts of energy, which increases the fuel needs of a coal-fired power plant by between 25-40% and also drives up the costs (IPCC, 2005). CCS demonstration projects in the power sector are expected to cost $90-130/tCO2 avoided, with the cost possibly dropping to $50-75/tCO2 for full-scale commercial activities taking place after 2020 (Mckinsey & Company, 2008). These costs take into account the energy penalty of CO2 capture, but not the upstream emissions, so they assume an emission reduction of 80 to 90% compared to a conventional plant.

Recently, there has been a focus on assessing the potential and costs of CCS in the industrial sector (UNIDO/IEA, 2011; ZEP, 2013). Many industrial processes, for example, primary steel production, cement production, and oil refining are operating at the limits of energy efficiency, and CO2 capture is the only technology able to reduce emissions further. The United States already offers companies a tax credit of $50 for each ton of CO2 they capture and store underground. And recently, a bill that provides $3.5 billion for carbon capture projects passed in Congress.

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A Fast Track to Carbon Neutral: Using Environmental Commodities to Rapid Launch Commercial Sustainability Programs


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