On Thursday 22 September, Glennmont Partners from Nuveen held a webinar on Carbon Capture, Utilisation & Storage and Direct Air Capture: Impact on Energy Transition and Investment Opportunities. The event was co-chaired by Glennmont CFO, Francesco Cacciabue and Co-founder of Ikigai Capital, Helena Anderson. They were joined by Tim Bertels, Senior Partner at DAREL, and Richard Merrells, VP Project Delivery at Carbon Clean. The speakers gave an overview of the technologies behind carbon capture and storage (CCS), their current utilisation, and predicted significant growth in the carbon capture market over the coming years.
Francesco Cacciabue, CFO at Glennmont, opened by welcoming the speakers and co-chair. He noted Glennmont don’t have experience in CCS technologies, as they are yet to invest in them, but as with all renewables technologies are keen to ensure they are up to date with the latest developments. He explained carbon capture technologies can either take carbon straight from the atmosphere, or be fitted to CO2 emitters.
Tim Bertels, Senior Partner at DAREL began by claiming there has never been a more positive outlook for CCS than in the last few years. He explained CCS is the process of capturing and compressing CO2 from an emissions site, transporting it to a storage location, then permanently storing it in geological formations deep underground. This is a process that can be applied to fossil fuel emitters, biomass generators, blue hydrogen processes, and direct removal of CO2 from the atmosphere, and is a means to remove large quantities of carbon from the world’s atmosphere while the world transitions to new energy systems.
He went on to forecast a rapid acceleration in CCS from the 2030s, with a view to capturing 7.6Gt a year globally by 2050. This he compared to 27 CCS facilities currently, with a total capacity of 37mtpa, and over 100 more in construction, with a total forecast capacity of 110mtpa. He set out a case study of CCS project in Rotterdam called PORTHOS, enabled by a Contracts for Difference scheme from the Dutch Government.
In terms of growth drivers, Bertels forecast increased demand for CCS in the EU as net zero targets draw nearer and emissions penalties become steeper. He also pointed to the Inflation Reduction Act in the US, RePowerEU driving demand for blue hydrogen, Carbon Take Back Obligations in the EU, and the growth of voluntary carbon offsets.
He set out delivery challenges, including the current cost gap between CCS and emitting CO2, acquiring storage permits and long-term liability and safety of storing CO2, delivering at scale, value chain integration, and gaining political and public support for CCS projects.
Richard Merrells, VP Project Delivery at Carbon Clean spoke next. He began by calling industrial decarbonisation a trillion dollar market opportunity. He spoke of Carbon Clean and its global reach, presenting case studies of a Tata Steel chemicals plant in Chennai, steel plant in Jamshedpur and a Cement production plant in Japan where CCS is currently proving effective.
In terms of the technology behind CCS, he detailed the way in which carbon capture technologies are getting smaller, so they can be operational in smaller plants. This includes modular plants which can be built to 1/10 of the size of older technologies and are now running in pilots globally. These plants also have the benefit of being scalable and low cost, with up to 50% less CapEx.
From there, Merrells set out how the Carbon Capture as a Service (CCaaS) model functions from start to finish. He commenced with financing, then the CO2 capture itself, before transportation to either reuse or storage facilities, where finally the carbon is paid for by the tonne.
He left attendees with three key takeaways: The need to deploy CCS fast with reliable technology; that manufactured, modular and scalable carbon capture solutions are about to drive down the cost curve; and the need to enable industries to fund and deploy CCS by leveraging decarbonisation incentives.
Helena Anderson, Co-founder at Ikigai Capital, hosted a Q&A after the speakers had presented. She began by concurring with both speakers that CCS is becoming increasingly commercially attractive.
She asked what it is that has led to such a large recent interest in institutional investment, with Tim Bertels pointing to a greater desire for institutional emitters to curb their emissions. Alongside this, he described the increasingly attractive returns on stable, long-term contracts.
Anderson next discussed reutilisation of CO2 with Richard Merrells, and how CCS could address issues such as the shortage of CO2 in the UK for the food and beverage industry. She concluded by talking about Direct Air Capture and Storage (DACS), querying whether it should be prioritised. Tim Bertels said that when it comes to combatting climate change, every contribution helps. He also predicted that as emissions trading scheme pricings rise, DACS will become more appealing.
Both Bertels and Merrells agreed CCS technology is financially viable now, and that by the end of the decade those who have invested now will be better place than those who are holding off.