The industrial sector accounts for nearly one quarter of the world’s annual greenhouse gas emissions. Despite a common belief that renewables could simply “electrify everything” as a way of cutting emissions, that’s just not practical for some heavy industrial processes.
Decarbonising hard-to-abate sectors such as chemicals, steel and cement manufacturing remains a challenge. But a range of low-emission technologies could put these industries on the road to net zero.
Momentum is growing for carbon capture, utilisation and storage (CCUS) technologies, which prevent CO2 emissions from power plants and industrial processes reaching the atmosphere. According to data from the International Energy Agency (IEA) and the Global CCS Institute, there are 21 commercial CCUS projects operating around the world, and over 30 more at various stages of development, mostly in the United States and Europe.
Alongside this, there is growing consensus that hydrogen offers a clean alternative to fossil fuels for heavy industrial processes.
While most heavy-industry operators recognise the need to cut emissions, being among the first individual producers to adopt new low-emission technology is a bold step.
But Brad Page, CEO of the Global CCS Institute, notes: “If we want to be in business in as short a term as 10 or 20 years, we’ve got to invest in something totally different from here.”
Cleaner steel
CCUS can help industry meet rising demand for products like steel, which is being driven in part by the rapidly growing economies of India, China and emerging nations in Asia.
“If you take CCS off the table, you’ve actually put one arm well behind your back, and we may never make the sorts of targets that are necessary to address climate change,” Page says.
Steel is a core component in the construction of homes, office buildings, cars, trucks and myriad other applications, and its production is highly reliant on coal to generate the intense heat needed to process materials and for iron reduction. Combined with iron, steel production directly accounts for 2.6 gigatonnes of carbon dioxide emissions annually – around 7% of the global total from the energy system and more than the emissions from all road freight.
With carbon capture, the high temperatures required to produce steel can be reached, while eliminating most emissions. Several steel industry applications of these technologies are already at the early stages of development: including in the Netherlands, Sweden and the UAE.
The Al Reyadah facility in Abu Dhabi, UAE, is currently the world’s only operating commercial steel plant using CCUS, with annual capacity to capture 800,000 tonnes of CO2 from the site’s flue gases. Its success has prompted parent company ADNOC to expand its own CCUS capacity by 500% to cover all of its natural gas plants. This could capture 5 million tonnes of CO2 each year by 2030 – equivalent to the annual carbon capture capacity of more than 5 million acres of forest.
Sweden and Austria are also developing processes for replacing fossil fuels with hydrogen in steel production. The Swedish Energy Agency recently awarded Vattenfall €2 million (about AUD$3.8 million) to scale up the hydrogen-fuelled Hybrit development, with the aim of producing the world’s first carbon-free steel by 2024.
Chemical reaction
The same low emission technologies are helping to transform the chemicals sector. In Australia, carbon capture technology has been applied to one existing fertiliser plant, with a further two projects planned for fertiliser production and hydrogen production respectively.
In the US, plans have been announced for a number of chemical-industry CCUS projects to produce low-emission ethanol, methanol and hydrogen from its abundant natural gas resources. All of these can be used as low-emission synthetic fuels to decarbonise hard-to-abate heavy transport such as shipping, aviation and road haulage.
Electrifying long-haul transport sectors like aviation isn’t easy, as current batteries provide limited range and are too heavy to overcome an aircraft’s weight-to-power ratio, for example. However, CO2-derived biofuels can provide an emissions-free solution that facilitates long-haul flights.
And it’s not just captured CO2 that can decarbonise heavy transport: clean hydrogen is already making trucks, trains and buses around the world emissions-free. In Germany, the world’s first hydrogen-fuelled trains went into operation in 2018. Meanwhile, in Australia, iron ore producer Fortescue Metals recently announced it will soon transport its workers in the Pilbara region of Western Australia with hydrogen-powered buses.
Hydrogen is also a key element in the production of many chemical products and producing it either using CCUS or through electrolysis powered by renewable electricity can help create “green” chemical products. For example, Sweden’s Liquid Wind project uses wind-powered electrolysis to generate clean hydrogen, which reacts with captured CO2 to produce green methanol. Projects like this show how low-emission technologies are complementary rather than competing technologies for heavy industries.
Cementing the future
If there is any industry that needs the power of both CCUS and hydrogen, then it is the cement industry: its process emissions are more than those of the steel and chemicals industries combined.
The typical lifespan of a cement manufacturing plant often exceeds 40 years, so investment decisions are not taken lightly. Add the fact that steel, cement, chemicals and other price-sensitive heavy industry commodities are traded on the global market, and it’s not hard to see why some might be nervous about backing new low-emission technologies.
But the long-term benefits to both the planet and producers outweigh any first-mover risks. CCUS can be directly applied to industrial plants, either by retrofitting or with new builds, allowing output to meet growing demand for commodities.
CCUS applications in the cement industry are both operational and in development, mainly in China and Europe.
For example, the Northern Lights project in Norway aims to capture carbon from cement production at Norcem’s facility near Oslo, as well as from other industrial sites, then transport it for storage in the North Sea.
Projects are also underway in Austria and the UK to develop processes using hydrogen to replace fossil fuels in cement production. The Mineral Product Association recently received UK government backing to demonstrate how hydrogen and plasma technology can reduce emissions in cement and lime production. The trials include replacing fossil fuels with a combination of hydrogen and biomass.
The cost of transition
So how can industries that compete on global price be encouraged to adopt initially more costly, low-emission technologies?
In the same way that scaling up solar and wind energy saw costs tumble, technologies like hydrogen and CCUS look set to benefit from falling costs brought about by operating at scale.
But industry will need support to get there.
Greater public awareness of the need to cut emissions also means that an increasing number of producers, investors and customers may be prepared to initially pay a premium for more sustainably produced cement, steel, plastics and other products.
“We shouldn’t underestimate the desire of consumers and the broader community to see responsible sustainable activity in business,” Page says.
Looking beyond short-term production costs, the economic price of failing to adopt low-emission technologies at scale makes a powerful argument in favour of these innovations.
“To get to even two degrees, the cost to mitigate goes up 138% without CCS. So it may seem expensive, but in the long run, it is the cheapest option,” Beth Valiaho, Vice President, Strategy & Stakeholder Relations at the International CCS Knowledge Center, says, citing IPCC figures.
While there’s no one-size-fits-all approach to scaling up low-emission technologies, policymakers have an important role to play in creating a framework for these innovations to thrive.
The Australian government has announced a roadmap of priorities to make low-emission technologies price competitive. These include boosting CCUS projects, cutting costs associated with carbon storage and hydrogen production.
Chevron’s Gorgon facility is one of the largest CO2-capture sites in the world, and now a supportive policy framework could provide certainty and encourage private sector investors to move forward with low-emission technology initiatives.
The pilot phase of Australia’s Hydrogen Energy Supply Chain (HESC) project in Victoria’s Latrobe Valley, is due for completion in 2021, potentially opening the gateway to a thriving hydrogen export industry, producing, storing and delivering liquified hydrogen to Japan.
“We’ve got the beginnings of the right package here,” Page says. “I’m actually quite confident that, at its heart, we need to see the legislative process proceed at pace, and then we can let private sector investment move on this important task.”
If this can be done, the role of low-emission technologies in accelerating heavy industry towards net zero could be transformative.