WPC 2020: A competitive carbon price is key to tackling climate change

16:37 PM | April 14, 2020 | Sotirios Frantzanas

Carbon capture, utilization, and storage (CCUS) present profitable business opportunities that can help decrease carbon dioxide (CO2) emission rates, says Ralf Gubler, director/research and analysis at IHS Markit. “A competitive carbon price is key,” since it could turn CCUS into a profitable business, providing companies with an additional incentive to act, Gubler says.

Presenting live at the IHS Markit World Petrochemical Conference (WPC) 2020 Online, Gubler noted that “we are in a state of planetary emergency” and immediate “decarbonization of everything” is required to prevent climate change.” Increased levels of “CO2 is the dominant cause of climate change,” he said. Industrialization, fossil fuels, and other man-made activities are the main reasons atmospheric CO2 concentration has been increasing. There was an increase of 125 parts per million (ppm) in atmospheric CO2 concentration between 1850 and 2019, from 287 ppm to 412 ppm, Gubler said.

To prevent the global threat of climate change, individual as well as industry action is required. Direct air capture (DAC) “might be necessary to gain time,” but it is expensive and only few plants currently exist, said Gubler. Initiatives such as the EU Emissions Trading System (ETS), the world’s first and largest international greenhouse gas emissions trading scheme, have encouraged carbon capture and storage.

The development of more similar-type systems could encourage a larger number of companies to become involved with CCUS by increasing significantly the trading price of carbon emissions. This is of the utmost importance for CCUS to be successful because it would mitigate the costs of capturing CO2. Transportation and storage of CO2 are relatively low-cost operations, but capturing CO2 is “expensive and energy-intense,” Gubler noted.

The trading price of CO2 could go up if there is a significant increase in global demand, but the market for CO2 is currently “small and is growing slowly,” Gubler said. Most CO2-derived chemicals are high in price and low in market volumes. This is despite the many ways in which CO2 can be utilized to produce construction materials, as well as chemicals and fuels, for long-lived and short-lived uses.

Utilization of captured CO2 has “huge potential” to help decarbonize the atmosphere, Gubler said. Bio-energy with carbon capture and storage (BECCS) and other unconventional technologies are promising and make decarbonization through CO2 utilization “seem accomplishable,” he said. However, “the longer we wait, the more expensive it gets,” Gubler said.