Abstract
Carbon capture, utilization, and storage (CCUS) is an attractive technology for the decarbonization of global energy systems. However, its early development stage makes impact assessment difficult. Moreover, rising popularity in carbon pricing necessitates the development of a methodology for deriving carbon abatement costs that are harmonized with the price of carbon. We develop, using a combined bottom-up analysis and top-down learning curve approach, a levelized cost of carbon abatement (LCCA) model for assessing the true cost of emissions mitigation in CCUS technology under carbon pricing mechanisms. We demonstrate our methodology by adapting three policy scenarios in Canada to explore how the implementation of CO2-to-diesel technologies could economically decarbonize Canada’s transportation sector. With continued policy development, Canada can avoid 932 MtCO2eq by 2075 at an LCCA of CA$209/tCO2eq. Technological learning, low emission hydroelectricity generation, and cost-effective electricity prices make Quebec and Manitoba uniquely positioned to support CO2-to-diesel technology. The additional policy supports beyond 2030, including an escalating carbon price, CO2-derived fuel blending requirements, or investment in low-cost renewable electricity, which can accelerate market diffusion of CO2-to-diesel technology in Canada. This methodology is applicable to different jurisdictions and disruptive technologies, providing ample foci for future work to leverage this combined technology learning + LCCA approach.
Highlights
Anthropogenic emissions of carbon dioxide (CO2 ) and other greenhouse gases (GHGs) have led to rising global temperatures, leading to concern over the effects of global climate change
Prior to evaluating different policy scenarios in Canada, we looked at the pure learning effects of the CO2 -to-diesel process on the levelized cost of carbon abatement (LCCA) up to 2050
To isolate the impact of technology learning on the LCCA, Canada average 2026 Canada Energy Regulator (CER) projections are used for each year (Table S6)
Summary
Anthropogenic emissions of carbon dioxide (CO2 ) and other greenhouse gases (GHGs) have led to rising global temperatures, leading to concern over the effects of global climate change. One technology with high potential for emissions reduction is the synthesis of fuels through carbon capture, utilization, and storage (CCUS). Energy Agency’s (IEA) Sustainable Development Scenario, the production of synthetic fuels through CCUS is projected to begin in 2025 [2]. CCUS has the advantage of being able to provide a value-added product to offset CO2 capture costs [3]. CCUS offers an attractive option for drop-in substitution with fossil fuel feedstock when the product can be produced at a lower cost and with reduced emissions [4]. While current cost estimates for products generated through CCUS pathways are high [5], policy mechanisms such as carbon pricing [5,6] can help stimulate technology diffusion by gradually incentivizing low-emission technologies
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