Argus spoke to Nils Rokke, chairman of the board at the European Energy Research Alliance and executive vice president of sustainability at Norwegian sustainable energy research institute Sintef Energy Research about the developing carbon capture and storage (CCS) and hydrogen industries in Europe.
What are the key challenges to developing CCS at scale?
Fast development of storage sites and accompanying infrastructure. CCS only makes sense if you are able to store. It is interesting to see that the Northern Lights storage project in Norway has a solid over-subscription of storage intentions from industry and also from storage of biogenic CO2, thus [leading to] CO2 removals.
What are the roles that you see governments and businesses playing in the development of CCS? Is it an industry that must be policy-driven, or is there enough private investment appetite?
It is reasonable that governments must take the bulk of that cost as CCS is about providing a common good, reducing and removing the by far most dominant global warming agent. Climate, industry and energy policies have taken huge steps over the last years as the IPCC [Intergovernmental Panel on Climate Change] reports have been become more and more accepted and inaction [has become] simply unacceptable. All analyses show CCS is needed to reach net zero and thus emission legislation is tightening and rights to emit are becoming more expensive. In the EU ETS we have seen process in the region of €100/t ($105/t). And it will not stop there. At €100/t you have viable business models emerging for CCS and I also believe CSR [corporate and social responsibility] comes into play. Viable routes for CCS are developing.
Will there be space for CCS with power plants, or should all possible emissions be avoided and the technology used only for hard-to-abate sectors?
In terms of storage capacity yes. However, power can be produced from renewables at competitive prices and it is hard to see how power plants with CCS will compete on costs when carbon prices are set to increase. Hard-to-abate sectors in industry is a different discussion, there it is absolutely needed and there are few, if any, substitutes. There are ample uncertainties on how [newly built] coal-fired power plants will fare. Some people have again launched the idea of CCS for coal in Europe. The immediate response is no, that will not happen. I subscribe to that but have some reluctance to fully discard the possibility. Renewables take up much land/area and the biodiversity and land use crisis is hitting us hard. There may be projects where it can make sense.
There are a considerable number of small CCS pilot projects that have been operating for some years. What is holding those back — policy, financing?
Pilots are there for testing technologies. There are full scale plants operating, with the best-known the Sleipner CCS project, storing 1mn t/yr of CO2 under the seabed since 1996. Projects do not materialise without a viable business model. Those operating have such a model, be it from taxes, governmental concessions or permits. We now see drivers on emission permit costs, corporate social responsibility, policies for net zero and public support for measures to reduce emissions. We are entering new and unchartered water for CCS which is very much needed.
Do you think that autothermal reforming (ATR) is the only way to make blue hydrogen, or is there a place for steam methane reforming (SMR) too?
SMR is the working horse of the hydrogen production facilities today and it will be important to use CCS on SMR as well as for ATR. There are about 900mn tonnes of CO2 generated by hydrogen production and retrofitting will be important. ATR is very attractive in new builds as this can be adapted to higher capture rates, with in excess of 95pc possible. There are variants of SMR which utilise electricity for the steam reforming, so-called eSMR. In this process the heat needed is provided by electricity instead of burning natural gas, thus eliminating some hard-to-abate process emissions.
What percentage rate of CO2 capture do you expect to see from blue hydrogen?
This varies with the process and gas feed and as for all hydrogen production processes it has to account for all emissions produced in the value chain by performing a full life cycle analysis. If you look at the reforming process in isolation the capture rate varies from 80pc to the high 90s [in pc terms].
Are fugitive emissions from natural gas extraction a problem? How will the problem be managed to ensure the hydrogen produced is truly environmentally sound?
Yes indeed, this has been the basis for a heated debate in the academic world. Leak rates in the percentage scale will render the sustainability of natural gas-based hydrogen production with CCS useless, whatever the capture rate is. Methane leakage is a serious problem as it has been pointed out in the recent working group 3 IPCC report and there are global initiatives to reduce this strong relatively short-lived global warming agent through UN, the Global Methane Pledge and the OGCI initiatives. Leaks from the extraction must be avoided by all measures. In offshore operations this is extremely well monitored and controlled simply because leaks are extremely dangerous and unacceptable. For instance, the verified leaks at the offshore operations on the Norwegian continental shelf are less than 0.03pc whereas some suggestions have been that it is more than 100 times that in specific areas of onshore gas production in the US. For Russia we simply do not know.
Do blue hydrogen projects still make sense, given high natural gas prices, and Europe's work trying to replace as much Russian natural gas as possible?
We must look at the timeline. At present there is a sense of energy supply shortage, both due to low deliveries to EU from Russia, low storage levels of gas and at the same time a post-Covid 19 economic upturn. War in Ukraine has changed policies completely by having a defined target of getting rid of import dependency from Russia in Energy and other commodities as well. Replacing 155 bcm natural gas is a tall order and thus we see sustained high prices of natural gas. [In this situation] it is difficult to produce hydrogen. The same goes for hydrogen from electrolysis, as precious metals are needed to produce the electrolysers — short in supply and power prices have skyrocketed. However, we must be able to see beyond this immediate crisis and EU has not relaxed on its environmental policies. On the contrary, it is going to boost new production of renewables and increase import of hydrogen from stable suppliers. Thus there will be a great demand for hydrogen, green and blue.
What are the priority questions that Sintef's hydrogen research centre aims to answer?
The centre, H2i, will research and innovate new and effective techs for clean hydrogen, how to store it, transport it (for example, liquefaction) and use it in industry and maritime applications in a safe manner. The "i" in H2i also points towards energy carriers based on hydrogen like ammonia which we think has a great potential for storing and transporting hydrogen. Furthermore, it will look at industry defined user cases for value chains where hydrogen plays a role as energy carrier.
