Cost-optimal CO2 capture and transport infrastructure—A case study of Sweden

Abstract

This work applies a mixed integer cost-minimisation model to identify cost-optimal carbon capture and storage (CCS) infrastructure systems. The modelling applies two types of incentives for CCS implementation: carbon pricing, and binding emissions budgets. Both incentive schemes are applied with and without accounting for CO2 capture from biogenic emissions sources. In the case of CO2 pricing, biogenic CO2 capture is implemented by letting each ton of biogenic CO2 captured generate value for the model equivalent to the cost of emitting one ton of fossil CO2. In the case of emissions budgets, biogenic CO2 capture is included by allowing the model to use both biogenic and fossil CO2 capture to stay within the budget. The main fossil and biogenic emissions sources in Swedish industry are used as a case study.The results show that incentivising carbon removal has a significant impact on the design and development of the cost optimal system for CCS if there are suitable biogenic emission sources available for implementing biogenic CO2 capture. The timing for investments in carbon capture is highly dependent on the discount rate - increasing the discount rate in the modelling from 5 % to 15 % delays the first investments in CO2 capture by three years. To facilitate technology development and timely implementation of CCS on biogenic and fossil sources, it is important to consider that inclusion of carbon dioxide removal into the policy regime controlling fossil fuel emissions, might result in that the cost optimal strategy will be a delay in fossil fuel mitigation.