Figure 1: GCC Natural Gas Reserves

Source: GPCA Report: “The Rise of Hydrogen: Fuelling a Green Revolution” (2023)

Although agri-nutrient production only contributes to <2% of global emissions, making it a very low-emitting industry, the integration of CCUS technology could aid in the future of exports. For example, if the eventual implementation of the European CBAM (Carbon Border Adjustment Mechanism) taxes GCC agri-nutrient exports, integration of CCUS technology could either aid in lowering tax, as the manner of production is more sustainable, or entirely help in avoiding tax, depending on the regulations decided.

The GCC, being one of the most abundant and cheapest producers of natural gas, already possesses the natural comparative advantages to be able to pioneer CCUS implementation:

The region is also home to abundant potential CO₂ storage sites, particularly in depleted oil and gas reservoirs. This can, in turn, facilitate the implementation of CCUS projects in the region.

Presently, the GCC accounts for 10% of total global carbon capture, where its three existing CCUS facilities capture 3.7 Mtpa CO₂ annually. For comparison, Europe’s total annual carbon capture accounts for 4%. This notable statistic not only highlights the GCC’s commitment to harnessing CCUS but also shows the potential the region has to become a CCUS leader.

CCUS circularity – Emissions to urea production

CCUS activity in the GCC is projected to increase significantly between now and 2030, with all six GCC countries having decarbonization targets for 2030.

GCC producers are already carbon-capturing and re-utilizing captured CO₂ for various operations. For example, plants such as Uthmaniyah and QatarGas capture CO₂ from operations and reinject it into oilfields for further use. However, for the agri-nutrient sector specifically, only the Jubail (SABIC) plant presently captures carbon to reutilize urea production.

Figure 2: Commercial models for CCUS in the GCC agri-nutrient industry

Source: GPCA Research (2023); Zahra (2022)

There are two commercial manners in which CCUS can be integrated into agri-nutrient operations. The potential structure of these models is shown in Figure 2.

Agri-nutrient producers could either buy CO₂ from existing capture sites or they can integrate a carbon capture mechanism for urea production into their operations. Both integration of CCUS mechanisms and buying CO₂ from existing plants present advantages (and disadvantages).  For example, in integrating CCUS directly into agri-nutrient production operations, there is a guarantee that all carbon captured will go to producers’ own urea production, resulting in a more optimized CCUS operation and a greater quantity of sustainably produced agri-nutrients. As for buying CO₂ from existing plants, there is the advantage that there are no CAPEX or OPEX costs required to build and maintain the plant.

A full description of the advantages and disadvantages of each of these commercial models can be found in the upcoming GPCA paper titled ‘A Comparative Cost Analysis of CCUS in the GCC Agri-nutrient Industry’. The paper, due to be released in 2023, provides a cost analysis of the profitability of CCUS in the agri-nutrient industry and analyzes whether or not regional agri-nutrient producers would economically benefit more from integrating CCUS into their operations or buying CO₂ from existing plants.

Successful agri-nutrient CCUS implementation – SABIC/United

An example of a successful implementation of CCUS in the agri-nutrient industry is the SABIC/United CCUS mega-sized plant that opened in 2015 in Jubail, Saudi Arabia.

The plant captures a remarkable annual volume of 500,000 metric tons of CO₂ from the ethylene glycol production process. Following a meticulous purification process, this captured CO₂ undergoes a transformative conversion into valuable feedstock, serving various industrial applications, including urea production.

Figure 3: SABIC/United plant CO₂ value chain

Source: GPCA Research (2023), SABIC Media (2023)

Figure 4: SABIC/United plant CO₂ capture capacity

Source: GPCA Research (2023), SABIC Media (2023)

The scale of carbon captured by this plant is truly impressive, as demonstrated in Figure 4. To provide a quantitative perspective, this amount of CO₂ emissions is equivalent to the energy consumption required to power approximately 130,000 homes for an entire year. Moreover, it corresponds to the quantity of CO₂ that would typically be sequestered through the cultivation and growth of 11 million trees.

Since its establishment, the plant has aided in all of the below (Figure 5):

As such, this case study highlights that not only is there a value chain to be made from CO₂ emissions, but that these plants can also accelerate national decarbonization targets.

The future of CCUS in the GCC holds tremendous promise, both in the agri-nutrient sector and in the chemical industry as a whole. However, to fully harness the power of CCUS technologies, it is imperative for GCC producers to prioritize the key areas shown in Figure 6.

GCC governments should continue investments in CCUS projects. Saudi Arabia, UAE, Qatar, and Bahrain have also pledged towards economic diversification through CCUS projects during COP21.

Furthermore, government policies and regulations should aim toward subsidizing CCUS and carbon pricing to incentivize producers. An example would be a policy that charges some (or all) carbon emissions of relevant sectors to incentivize decarbonization.

Figure 5: SABIC/United plant CO₂ value chain

Source: SABIC (2018), GPCA Research (2023)

Figure 6: GCC strategies to harness CCUS potential

Source: GPCA Research (2023)

Collaboration with academia and research institutes to motivate the R&D development of CCUS is also crucial to combine knowledge and accelerate the future of CCUS technologies. The implementation of CCUS technologies is presently still expensive due to the costs associated with expanding the CO₂ pipeline and storage infrastructure. In collaborating with R&D specialists, the exchange of ideas between technical expertise and academia will facilitate both the development and deployment of CCUS technologies in the region.

Conclusion

CCUS is gaining substantial attention as a key solution for GCC industries to hit their decarbonization targets. In the agri-nutrient sector specifically, producers are already succeeding in creating a value chain out of CO₂ emissions. As can be seen with the Sabic/United case study, the possibility of creating not only a CO₂ value chain but an entirely circular agri-nutrient process- where CO₂ emitted from ammonia production can be reused in urea production- already exists. However, to accelerate regional deployment of this technology and advance it to the point of widescale commercialization, collaboration between all industry experts, government bodies, and academia is of the utmost importance.

References:

[1] “Creating the World’s Largest Carbon Capture and Utilization Plant “, SABIC (2023).

[2] “Current Status of CCUS in the Middle East and North Africa (MENA) Region”, Zahra (2022).

[3]  “Germany’s Linde to build big Saudi carbon capture-and-use plant”, Reuters (2013).

[4] “The Rise of Hydrogen: Fuelling a Green Revolution”, GPCA (2023).