Abstract
Carbon capture, utilization, and storage (CCUS) is a combination of technologies capable of achieving large-scale reductions in carbon dioxide emissions across a variety of industries. Its application to date has however been mostly limited to the power sector, despite emissions from other industrial sectors accounting for around 30% of global anthropogenic CO2 emissions. This paper explores the challenges of and requirements for implementing CCUS in non-power industrial sectors in general, and in the steel sector in particular, to identify drivers for the technology’s commercialization. To do so we first conducted a comprehensive literature review of business models of existing large-scale CCUS projects. We then collected primary qualitative data through a survey questionnaire and semi-structured interviews with global CCUS experts from industry, academia, government, and consultancies. Our results reveal that the revenue model is the most critical element to building successful CCUS business models, around which the following elements are structured: funding sources, capital & ownership structure, and risk management/allocation. One promising mechanism to subsidize the additional costs associated with the introduction of CCUS to industry is the creation of a ‘low-carbon product market’, while the creation of clear risk-allocation systems along the full CCUS chain is particularly highlighted. The application of CCUS as an enabling emission reduction technology is further shown to be a factor of consumer and shareholder pressures, pressing environmental standards, ethical resourcing, resource efficiency, and first-mover advantages in an emerging market. This paper addresses the knowledge gap which exists in identifying viable CCUS business models in the industrial sector which, with the exception of a few industry reports, remains poorly explored in the academic literature.
Highlights
IntroductionDriven by anthropogenic greenhouse gas (GHG) emissions, remains one of the most pressing global challenges
Climate change, driven by anthropogenic greenhouse gas (GHG) emissions, remains one of the most pressing global challenges
Efforts to reduce CO2 emissions from the steel sector have been made in two principal directions: some aim to accelerate the uptake of already-existing energy efficiency measures, i.e., what is dubbed
Summary
Driven by anthropogenic greenhouse gas (GHG) emissions, remains one of the most pressing global challenges. The 2015 Paris Agreement set out a global action plan to limit global warming to well below 2 ◦ C above pre-industrial levels, and to pursue best efforts to limit this increase to 1.5 ◦ C [1] To achieve this target, the agreement emphasized the need for global GHG emissions to peak as soon as possible and to seek rapid reductions thereafter so as to achieve a balance between emissions and removals by the second half of the century [2]. The IEA [25] estimated that, in 2012, the steel industry contributed approximately 22% of total industrial energy use and 31% of industrial direct emissions, making it the second-largest industrial sector globally (after cement) in terms of CO2 emissions.
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