In the end, it’s all a matter of perception really. In the groundbreaking world of developing the technology critical to reaching global climate goals and the energy transition, what some call ‘waste’ to others is opportunity. That’s how Storegga — a company that develops carbon reduction and removal for emissions-heavy industries — sees what they do with carbon dioxide.
“It doesn’t sound very glamorous but this is a waste management business — that’s what this is all about,” says Nick Cooper, Storegga’s chief executive.
Using carbon capture utilisation and storage technology (CCUS), Storegga helps companies producing CO2 emissions from steel, cement and chemical production and manufacturing safely deal with their “waste” carbon.
Globally, emissions from the industrial sector account for nearly one quarter of the world’s annual greenhouse gas emissions.
“It’s clear that CCS has to be not just a tool in the net-zero toolbox, but a big thumping sledgehammer in that toolbox.”
And Cooper believes CCUS is critical to “getting to grips with net-zero” emissions and the energy transition. It’s a view supported by the IPCC and the International Energy Agency. Without taking some carbon out of the carbon cycle, he says, we’re not going to get there.
“It’s clear that CCS has to be not just a tool in the net-zero toolbox, but a big thumping sledgehammer in that toolbox,” says Cooper.
“Frankly, without it, short of turning out the lights we’re not going to transition society.”
For Storegga, Cooper says the company is “doing what it says on the tin” — namely taking carbon dioxide out of the carbon system and storing it permanently.
So what can Australia learn from Storegga’s experience in the UK? And what role does proven low emission technology such as CCUS play in the business of storing — and using — captured carbon?
The Storegga difference
Storegga was conceived by a group of people who had worked in the energy sector, primarily in oil and gas. Their shared experience in gas value chains and energy management meant that they could explore new ways of working with carbon emissions. They turned to the subsurface — and CCUS — for their solution. Now they are working on some of the UK and Europe’s most advanced CCUS projects.
Their anchor project is the Acorn project — in partnership with Shell, Harbour Energy and North Sea Midstream Partners — in north-east Scotland. The project could be on stream in as little as four years. Acorn opens up access to some of the best known CO2 storage resources in the UK, which means it can support a whole cluster of industrial emitters to safely and permanently dispose of their CO2. Acorn’s CO2 transport and storage system will also receive CO2 from carbon removal technologies, including Europe’s first ‘at-scale’ direct air capture or DAC plant, being developed by Storegga and Carbon Engineering.
Having learned from the past, Cooper explains that Storegga’s approach is to try and twin together clusters of existing emissions with geological storage. And if that storage is not near those emissions, that’s not a problem, it just necessitates joining the dots of carbon transport to storage.
“Once you get that cluster approach moving, it builds its own momentum. It enables you to not only attract more industrial power players of large and mid-scale, but because you’ve got the storage you can tack onto that carbon reduction negative activities like direct air capture,” Cooper says.
The practicalities of Storegga’s approach make sense. First establish where you sit, as Cooper puts it, in the ‘carbon management chain’. Then, work out the gaps in that chain to build a bridge between hard-to-abate industries, carbon capture and achieving a clean energy future.
Storegga’s decision was not to focus on one part, but participate in several parts of that chain. That means identifying carbon storage sites, stimulating clusters of emitters, transportation and direct capture. The result? Carbon capture and storage as service provision.
“Our role is to be an infrastructure developer, a project developer,” says Cooper. “But we need to have an angle of customer focus, because we also provide CCS as a service.”
Storegga’s focus on integrated service means that they want to take the end-to-end process of carbon reduction completely off their client’s hands.
“It’s not just about building the kit,” says Cooper. “It’s about making it easy for them to use the kit and access the kit.”
Storegga’s customers vary from Scotland’s biggest power station, focusing on post-combustion carbon capture, to Virgin Atlantic airways, which is involved in Storegga’s direct air capture project because it can’t capture its own CO2 and needs an offset program.
The nuts and bolts of outsourcing carbon reduction
Outsourcing has been transforming industries such as transport and food, as well as financial and supply chain management. The same logic and process can apply to the reduction of carbon emissions. The solution of outsourcing carbon reduction through CCS answers several key questions for those companies and industries emitting carbon, Cooper says.
These questions include: “‘How do we economically capture from our own site?’, ‘How do we move [captured carbon] from our site to an aggregation point?’, ‘How do we cater for it to then be moved to the store and then stored and/or used by industry?’ and ‘How do we meet our net-zero responsibilities?’”
“Industries don’t have the luxury of time to figure all that out, they just want it made easy,’’ says Cooper.
“There is a need to provide CCS as an integrated service to emitters over time, because of the complexity of the task, weighed against the need to move quickly.”
Taking the analogy back to waste management, Cooper makes the comparison that we as consumers don’t think about who provides the wheelie bin or rubbish truck or the recycling centre — we just pay one bill.
“And you complain about it, but you pay one bill because it’s integrated.”
Creating cohesion between industries
For Australia, there are similarities with the state of CCUS in Europe – many types of emitters in different locations with a shared need to reduce emissions on the path to meeting climate commitments. Cooper says bringing these clusters together is crucial in the success of carbon storage projects.
Part of the reason two previous UK projects were unsuccessful was due to their reliance on single emitters to get started, so bringing clusters together is crucial – whether that is government-driven or project-driven. And what that provides is a group of anchor customers to underpin projects.
These clusters or hubs don’t have to be on each other’s doorsteps. Storegga’s project, Cooper explains, has 2 million tonnes of CO2 nearby, and another 3 or 4 million at the end of a pipeline 150 kilometres away.
“Having projects that are not reliant on just one type of industry, or one particular emissions point is really helpful,” he says. “It builds strength and resilience in numbers, and you get closer to the too-big-to-fail-type of momentum.”
Building this type of momentum has begun already in Australia, with Glencore’s CTSCo Project currently underway in Queensland’s Surat Basin. The project, partly funded by LETA, has the potential to store 3 billion tonnes of CO2.. CTSCo is also a key building block in opening up the region — which has coal and gas-fired stations operating alongside other significant industries — as a hub for CCUS and attracting new carbon-based industries.
Pricing carbon on the road to net zero
One factor in the European model — not present in Australia — is a price on carbon. Alongside policy certainty, in Cooper’s view, it’s not just having a price on carbon that’s increasing the ‘economic rationality’ of projects but the fact that price is increasing.
“Increased clarity on policy has given everybody confidence that we really are going to see the projects this time,” he says. “But secondly — and perhaps even more importantly — we’ve seen an increase in the carbon price.”
Carbon pricing allows emitters to financially understand the impact of NOT using the reduction systems effectively and is a great tool in inspiring change.
“With the carbon price now rising to 78 Euros a tonne — and 65 to 100 being the range at which it becomes economically rational — a large majority of emitters now are plotting scenarios where — in most cases — they expect it to be more cost-effective to use these systems than continue to emit,” Cooper says.
In Cooper’s view, not having a price on carbon, for whatever reasons, is holding back those who are looking to sell into international markets. And if they are looking to sell into Europe, North Asia or North America then they are going to need to pay attention to the price of carbon.
“Even if a producer isn’t experiencing a carbon price at home, mechanisms like the EU carbon border tax is going to push a need to do something on those products to access those markets” Cooper says.
Once a government sees value in the sector through pricing, the development of technologies and storage methods will be boosted, Cooper says. But he doesn’t believe not pricing carbon means the end of Australia’s foray into international carbon markets — a journey that could become a future necessity.
The situation in Europe went from being quite bleak and feeling very difficult, Cooper recounts, to one that suddenly feels like it’s “game on, very, very quickly”.
“So regardless of how individual countries work . . . they’re going to have to take heed of what’s happening elsewhere. And I think that’s quite encouraging for CCS projects and for CCS globally,” he says.
On the curve
With UK CCS projects being partially supported by government through revenue and CAPEX support mechanisms, Cooper suggests the key ingredients for project success are bravery and government support — from both parties.
And when he looks at the development of CCUS in Australia from afar, Cooper sees parallels with where the UK was 3 to 5 years ago. Globally the light has gone from red to green on CCUS.
“It took the UK three years to really figure it out and get on with it – I think other countries are going to move much quicker,” Cooper says.
“And I can see in the conversations we have that corporate Australia is in many cases keen to move.”