Carbon capture technology on the rise in India’s energy transition

Carbon capture, utilisation, and storage (CCUS) technologies are gaining attention as emission-reduction strategies in India and globally.

CCU, which stands for Carbon Capture and Utilisation, involves recycling captured carbon to produce economically valuable products or services. Captured carbon can also be converted into fuels such as methane, methanol, aviation, and gasoline. Image: , CC BY-SA 3.0, via Flickr.

Public sector oil and gas companies in India are actively embracing emission-reduction strategies such as Carbon Capture, Utilisation, and Storage (CCUS) as India targets net zero by 2070.

CCUS is a common strategy across India’s oil and gas majors, as revealed in an April 2023, reportThe Green Shift – The low carbon transition of India’s oil and gas sector, released by the Ministry of Petroleum and Natural Gas (MoPNG), which highlights the energy transition plans of domestic public sector oil and gas companies.

CCUS technologies capture carbon dioxide from large point sources, such as power generation or industrial facilities that use either fossil fuels or biomass for fuel. The captured COis either used onsite or compressed and transported to be used in a range of applications, or injected into geological formations which trap the CO2 for permanent storage.

India’s Oil and Natural Gas Corporation (ONGC), a government-owned oil and gas explorer and producer, recently signed a Memorandum of Understanding (MoU) with Norway-based energy company Equinor to explore opportunities in low-carbon and renewable sectors, specifically focusing on CCUS.

ONGC, in partnership with the Indian Oil Corporation (IOCL), another public sector oil producer, is also working on India’s first industrial-scale carbon capture project at the Koyali refinery. The project will capture CO2 emissions at the refinery that will be transported through pipelines to the Gandhar oil field, owned by ONGC, where, as per media reports, carbon will be stored.

As part of IOCL’s net-zero strategy, it aims at mitigating more than 40 per cent of its emissions through carbon-negative technologies such as CCUS and tree plantation. CCUS technology is also part of the transition strategies of Bharat Petroleum Corporation Limited (BPCL), which aims to implement new CCUS technology by 2026 in its refinery, and of Hindustan Petroleum Corporation Limited (HPCL), which plans to install a carbon capture unit in Visakh refinery in Andhra Pradesh by December 2023.

The Gas Authority of India Limited (GAIL) has also implemented a pilot project for fixing CO2 using microalgae, which will convert inorganic carbon into organic compounds, in an artificial pond at its Pata petrochemical complex in Uttar Pradesh.

The majority of these companies have set targets to achieve zero emissions through renewable energy, such as solar, wind, biofuel, green hydrogen as well as CCUS technologies. ONGC targetting net zero by 2050, IOCL plans to achieve it by 2046. HPCL, BPCL, and GAIL have set the deadline to achieve net zero by 2040. Oil India Limited (OIL) is yet to decide on its net zero goal.

Director General of Gujarat Energy Research and Management Institute (GERMI), Biswajit Roy, said that it is a well-understood fact that oil and coal will stay in India, but these companies are serious about their emissions and taking several measures to deal with them to cut down further emissions, he said.

CCU, which stands for Carbon Capture and Utilisation, involves recycling captured carbon to produce economically valuable products or services. Captured carbon can also be converted into fuels such as methane, methanol, aviation, and gasoline.

Additionally, it can be used to create construction materials, chemicals, plastics, and products derived from algae, such as fertilisers and animal feed. Carbon Capture and Storage (CCS) focuses on preventing the release of CO2 into the atmosphere. CCS involves capturing CO2 emitted from specific sources, transporting it to predetermined locations, and storing it securely. The stored CO2 is effectively isolated from the atmosphere, mitigating its impact on climate change.

policy brief published by the Indian Council for Research on International Economic Relations (ICRIER) provides insights into the process and importance of CCS in reducing CO2 emissions. The report talks about the global effort to use CCUS as a tool and talks about lessons India can learn from the UK and China.

These two countries have adopted a staggered, multi-pronged approach to CCUS deployment. It involves adequate R&D, conducting pilot projects, mobilising funds, and preparing regulatory policies, all of which are guided by predefined, time-bound objectives, the policy brief says.

CCUS is going to play a significant role in the mitigation

CCUS is an important solution for emissions mitigation in hard-to-abate sectors.

About the importance of CCUS, Vikram Vishal, an associate professor at Indian Institute of Technology (IIT), Bombay, says that the CCUS suite of technologies is crucial in meeting the net-zero goals, as the world continues to use fossil fuel as a primary source of energy. It will not only prove key in mitigating the CO2 emissions but also account for the reduction in historical emissions through direct air capture and bioenergy CCS.

The Indian Institute of Management (IIM) Ahmedabad and NTPC Energy Technology Research Alliance (NETRA), the research and development arm of the power utilities major NTPC, jointly released an international study, on May 15, recommending financing CCUS.

This study underlines the importance of the CCUS technology, saying that it could be an important greenhouse gas mitigation opportunity and could lead to a 50-70 per cent reduction in GHG emissions of critical industrial products like cement and methanol. The CCUS likely reduces the stranding (abandoning or declaring non-functional) of power plants and fossil reserves by more than 50 per cent.

Another report by NITI Aayog published in December 2022 explains that CCUS will play an essential role in meeting India’s global commitments of reducing CO2 emissions by 50 per cent by 2050 and achieving net zero by 2070.

“CCUS has an important and critical role to play in decarbonising the industrial sector, which is hard to electrify and hard-to-abate, due to the use of fossil fuels not only as a source of energy but within the process itself. CCUS also has an important role to play in decarbonizing the power sector, given India’s present reliance on coal for meeting over 70 per cent of its electricity needs,” the NITI Aayog report said.

It says that CCUS is the only known technology for decarbonising the hard-to-electrify and –carbon dioxide-intensive sectors such as steel, cement, oil & gas, petrochemicals & chemicals, and fertilisers – all sectors that are critical for the growth of the Indian economy.

The report also notes that CCUs implementation can help in the sustenance of existing emitters. Nearly two-thirds of India’s 144 million tonnes per annum (MTPA) crude steel capacity and 210 gigawatts (GW) of coal-based power capacity, are relatively young, with an age of less than 15 years and cannot be disregarded or abandoned to restrict emissions. Instead, they need to be transformed into sustainable entities by retrofitting with CO2 capture and disposition infrastructure. By implementing measures CCUS, significant economic costs, and damages, projected to reach around US$6 billion per year by 2050, can be avoided, says the NITI Aayog report.

In February 2022, India announced two national centres of excellence in CCUS, one at the IIT Bombay and another at Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR).

Vikram Vishal, who is also the convener of the National Centre of Excellence in Carbon Capture and Utilisation, says that amidst escalating carbon dioxide emissions and ambitious global climate change mitigation targets, carbon sequestration has emerged as a highly promising technology for removing carbon dioxide from the atmosphere. This technology holds particular significance for emerging countries like India as they strive to strike a balance between rapid economic growth and reducing emissions.

Global momentum building in favour of CCUS

Though much is happening in India, on carbon storage innovation, it is far behind compared to other countries, says an expert requesting anonymity.

In its latest report, the Global CCS Institute, a think tank working on carbon capture and storage, underlined that there are 196 (including two suspended) projects in the CCS facilities pipeline, globally, as of September 2022. “This is an impressive growth of 44 per cent in the number of CCS facilities since the Global Status of CCS 2021 report and continues the upward momentum in CCS projects in development since 2017,” it says.

Several countries have implemented policy-level interventions to support carbon capture and storage (CCS) initiatives. The Infrastructure Investment and Jobs Act has been passed in the USA, allocating over US$12 billion towards CCS and related activities. This includes significant funding for carbon storage validation and technology development by the US Department of Energy.

Canada has introduced a US$2 billion tax credit specifically targeted at CCS projects. In Europe, Denmark has announced €5 billion (equivalent to US$5.88 billion) in subsidies for CCS, while Norway has allocated US$100 million for similar initiatives. The Chinese State Council has issued multiple national policies and guidelines promoting CCS. Further, Indonesia and Malaysia have taken steps to build legislation concerning the geological storage of CO2. The Thailand government has also expressed its intention to develop legislation in this regard.

However, in India, all the initiatives are at a nascent level. Roy from GERMI says there is neither an incentive for carbon capturing nor any penalty for its emission. In contrast, other countries have developed carbon markets and regulations. As soon as India develops any tool, it will excel fast in carbon management. Reducing technology costs, increasing demand for captured CO2, and creating an enabling environment of supporting infrastructure and demonstrated business models are all critical for faster deployment of CCUS technologies.

To address the cost barrier to scaling CCUS technologies, the IIM and NETRA report recommends grant-based financing through a specialised fund by pooling public funds from the Organisation for Economic Cooperation and Development (OECD) countries and other donors. It also suggests that specialised funds should be created under the aegis of a global Multilateral Development Bank (MDB) such as the World Bank Group.

These MDB can also provide guarantees to deal with technology risks associated with CCUS demonstration projects. The report recommends bringing CCUS within the ambit of carbon markets. It makes a case for financial and policy intervention in CCUS, saying that the world can benefit to the tune of US$1-2 trillion and will help aid huge employment. “First, it would avert the job losses of close to 20 million individuals, who are engaged in the coal supply chain globally,” the report said. Experts agreed that India would benefit hugely as it has one of the largest workforces engaged in the coal sector.

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