What are the technologies accelerating low-carbon transition?
By Shrinivas Tukedo, Research Manager and Aarthi Janakiraman, Research Manager, TechVision, Frost & Sullivan
Carbon Dioxide (CO2) is a critical greenhouse gas emitted due to anthropogenic activities mainly from industries and power plants and is one of the main causes of increase in CO2 concentration in the atmosphere, which has exceeded more than 410 ppm in 2020. Low carbon transition is one of the key action points in the GCC region in line with the COP21, the Paris Agreement and the United Nations’ Sustainability Development Goals (SDG) that emphasizes on the urgency to act on climate change with its “Goal 13: Take urgent action to combat climate change and its impacts”. Global regulatory push, coupled with investors pressure, are driving the low-carbon transition of global industries, including chemical, oil and gas, cement, etc.
Resource-intensive industries are at the forefront of developing innovative strategies to enable the low-carbon transition. Fossil fuel sources such as coal, oil and natural gas continue to dominate the energy mix of such industries, with growing support from renewable sources such as solar and wind. Hence, managing carbon emissions from fossil fuel sources enable these industries to progress on the sustainability front while adhering to regulatory frameworks in today’s competitive environment. Many market participants in the GCC region from these industries have already set up goals and objectives for low carbon transition, fueled by technological investment and diversification of energy mix. This is mainly supported through research and development efforts for identifying and implementing technologies to reduce their carbon intensity and governmental push.
“Resource-intensive industries are at the forefront of developing innovative strategies to enable the low-carbon transition.”
“Global oil and gas and chemical stakeholders are increasingly directing their efforts towards hydrogen economy and carbon capture.”
Today, a gamut of technologies is available, ranging from industry-specific to those that can be adopted across industries. Considering the breadth of the R&D landscape, certain technologies have gained significance over others due to their relevance across key emitting industries, adoption potential and ongoing stakeholder efforts, to name a few.
Key enabling technologies
Technologies that influence at least one or more aspects of the industry value chains are becoming prominent from a developmental standpoint. R&D efforts extend from specific catalysts that can increase the efficiency of hydrogen generation to a broader spectrum such as carbon capture and utilization that cuts across value chains and industries. Industrial stakeholders want to adopt a multi-faceted approach to reduce emissions, lower the carbon footprint and explore additional revenue streams. Global oil and gas and chemical stakeholders are increasingly directing their efforts towards hydrogen economy and carbon capture, utilization and storage technologies for their low-carbon transition strategies.
Carbon Capture and Utilization (CCU):
Carbon capture technologies play a vital role in reducing industrial emissions. They encompass either direct removal of carbon dioxide (CO2) from fuel gas streams through post-combustion techniques or using low-carbon-intensive pre-combustion techniques. CCU comprises industrial capture to obtain concentrated CO2 and functional utilization of the captured CO2. Industrial capture, in most instances, includes scrubbing CO2 directly from the atmosphere or CO2 point sources, such as fossil fuel-powered plants. The selection of carbon capture technology depends on the source of CO2 and the industrial processes where it’s implemented. While absorption (amine, alkaline, and ammonia) and membrane-based (polymeric) capture techniques are adopted at a commercial scale, adsorption and chemical looping methods are still in emerging stages.
One of the primary drivers for adopting CCU technologies is the opportunity to explore new, circular business models for the stakeholder apart from emission reduction. The captured CO2 is either directly used as a product, such as solvents, refrigerants, cleaning and extracting agents in enhanced oil recovery, etc., or utilized to produce low-carbon products such as chemical intermediates, fuels, polymers and building materials. CCU as a strategy enables industries such as chemical and oil and gas to reduce the impact of emissions causing climate change while offsetting the amount of carbon required to manufacture a product by re-using the captured carbon within their processes. Several governments across the globe are developing favorable policies and frameworks along with incentive programs wherein companies are provided with tax credits for every tonne of CO2 that is subjected to CCU. Such incentivization initiatives also act as driving forces for the R&D of novel technologies enabling carbon capture and utilization.
“The selection of carbon capture technology depends on the source of CO2 and the industrial processes where it’s implemented.”
“Saudi Aramco has been pioneering R&D efforts in CCU, leading to the development of Converge® technology.”
Given the broad application potential, the innovation ecosystem is well established with a mix of players, from Tier 1 global companies to startups. It is an R&D-intensive domain. CCU technologies have been a priority for oil and gas and chemical companies in the past 2-3 years as companies continue to explore various ways to capture, sequester and utilize CO2. Saudi Aramco has been pioneering R&D efforts in CCU, leading to the development of Converge® technology that can efficiently utilize industrial emissions in the synthesis of polyols that can be used in a range of applications – coatings, adhesives, automotive and medical applications, food packaging, and so on. Also, Saudi Aramco, along with oil and gas leaders, invested in Solidia Technologies, a company that manufactures sustainable cement and polymer using CO2 captured from industrial sources, through the Oil and Gas Climate Initiative (OGCI) Climate Investments.
“Hydrogen Economy” involves the use of hydrogen as a source of low-carbon fuel, wherein hydrogen can be used for a range of applications including power generation, heating, fuel, energy storage and so on. Owing to its intrinsic versatility, hydrogen economy has been witnessing enormous political support across the globe, with many developed nations forming favorable policies paving the way for a significant share of hydrogen in the global energy mix in the coming years.
The advent of the fracking boom caused natural-gas prices to reduce drastically. This helped several industrial sectors to rapidly shift from a coal-based economy to a comparatively cleaner natural-gas based economy. Several industries have already benefitted from switching to natural gas for their power and heat requirements to lower their overall carbon footprint. Though natural gas has a lower carbon footprint compared to other fossil fuels, it continues to contribute to carbon emissions. With continuously evolving policies and framework, industries are already on their pursuit of switching to carbon-neutral sources such as hydrogen owing to its versatility and the ability to be used in existing natural gas pipelines. Also, as a measure of low-carbon transition, global utilities such as National Grid, UK and Scottish Gas Network have already begun blending hydrogen into existing natural gas pipelines (about 20%) for power plants, industrial processes, commercial as well as residential applications.
“Though natural gas has a lower carbon footprint compared to other fossil fuels, it continues to contribute to carbon emissions.”
“Green hydrogen is the ultimate goal for the hydrogen economy as it is the cleanest possible source of hydrogen produced.”
Four types of hydrogen exist based on the source. Brown hydrogen is generated from coal, and grey hydrogen is generated from oil and natural gas. Today, more than 95% of hydrogen produced is grey hydrogen using an energy intensive and emission intensive process called steam reforming of natural gas. Hence, there has been a gradual shift towards newer forms of hydrogen – blue and green hydrogen. Blue hydrogen is similar to grey hydrogen, but it is integrated with CCU systems to reduce the overall emissions from blue hydrogen production. Green hydrogen is the ultimate goal for the hydrogen economy as it is the cleanest possible source of hydrogen produced using water splitting process in electrolyzers powered by renewable energy sources such as solar, wind, etc. However, today green hydrogen is about six times expensive than grey hydrogen owing to the high capital requirement in the form of electrolyzers.
Hence, blue hydrogen is increasingly getting traction among industries for its potential to accelerate low-carbon transition while providing additional revenue streams. Adoption of blue hydrogen can be considered a short-term, intermediate solution to narrow the gap between highly polluting grey hydrogen and cleaner green hydrogen technologies.
The GCC is not far behind the rest of the world in terms of the adoption of hydrogen. NEOM, the $500 billion mega-city planned near Saudi Arabia’s borders with Egypt and Jordan, strives to set an example for establishing clean energy efforts, including green hydrogen, obtained from renewable electricity. According to Air Products, USA, the company is establishing a facility in partnership with Saudi Arabia’s ACWA Power and NEOM to produce about 650 tons of green hydrogen daily. The facility will be powered by 4GW of electricity produced using wind and solar projects that will be installed across the desert. Once the project is completed, NEOM will potentially cut down about 3 million tons of CO2 annually, which is the equivalent of emissions from 700,000 cars. Also, Abu Dhabi National Oil Company (ADNOC) recently highlighted the importance of hydrogen as a low-carbon technology. It announced that the company is actively pursuing hydrogen and other clean sources of fuel to realize 25% reduction in its carbon intensity by 2030.
“NEOM strives to set an example for establishing clean energy efforts, including green hydrogen, obtained from renewable electricity.”
Role of technologies in accelerating low-carbon transition
Numerous other technologies play a role in facilitating low-carbon transition, including recycling technologies, material advances enabling effective utilization of inputs, advanced material chemistries that can increase product longevity, and technologies that enable process and efficiency improvements.
While the role of technologies as a key enabler in facilitating a low-carbon world is undisputable, low-carbon transition can realistically be achieved in a sustained manner when it can foster economic growth and improve societal well-being. Well-rounded economic plans, technology adoption and implementation roadmaps developed as part of vision strategies of various countries, changes in policies and regulations, and continued focus on holistic investments are promoting R&D efforts. They further help foster a continuous innovation culture that can help achieve energy efficiency, reduce emissions and drive carbon neutrality.