Understand the limits of carbon capture in the energy transition

Seen as a solution by fossil fuel producers, carbon capture will not be sufficient to address global climate challenges. More than managing emissions, the world needs a transition to renewable resources

2023 was the hottest year ever recorded, and 2024 is trending in the same direction. Scientists from the United Nations Intergovernmental Panel on Climate Change (IPCC) indicate that the world is likely to exceed a 2.8° C temperature increase by the end of the century under current policies, and they are calling for increased efforts to limit warming to 1.5 °C.

Fossil fuels are at the heart of the problem. Burning oil, gas, and coal releases tons of greenhouse gasses into the atmosphere, and the more we consume these fuels,  the greater the emission intensity.

To respond urgently to the climate crisis, producers are investing in decarbonization solutions such as carbon capture and storage (CCS). However, this will not be sufficient to curb emissions and global warming. We must change to cleaner, renewable sources of energy.

Why is there a limit on carbon capture?

CCS technology has been adopted by oil, gas, and coal operating companies to reduce emissions. Some industries such as cement and steel, which need to burn a lot of fuel in their furnaces to generate energy, are also considering the adoption of CCS as a way to mitigate their climate impact and provide products with a lower carbon footprint.

However, according to the International Energy Agency (IEA), the pace of CCS project implementation has virtually stagnated—the total capacity remains at about 40 million tons for the past three years.

In the agency’s perfect scenario for the world to achieve net-zero emissions and limit warming to 1.5° C, the capture capacity should reach about 400 million tons of CO2 by 2030; that is, it needs to be 10 times greater within the next six years. 

Besides not being on track, there is another problem: CCS targets emissions from the production of fossil fuels and consumption only from large industries.

But it is precisely consumption that has the greatest environmental impact, and it is dispersed: in industries and in cars, planes, ships, and trucks, and in the electricity that powers homes, businesses, and agricultural production.

For context, the world emits about 55 billion tons of greenhouse gases per year. Carbon capture can address only a small fraction of these emissions.

 It’s expensive and consumes more energy

Adopting CCS also means high investment and energy consumption. This is one of the main reasons for delays in projects around the world.

In the United States, for example, to facilitate the integration of carbon capture into fossil fuel plants, President Joe Biden’s Inflation Reduction Act (IRA) had to boost the tax credit in July 2023 to $60/ton of CO2 used in enhanced oil recovery or other industrial operations and to $85/t for permanently stored CO2, up from $35/t and $50/t respectively, according to S&P Global.

The costs of carbon capture vary greatly depending on the type of activity and the amount of energy needed in the process: the lower the concentration of CO2, in gas, the higher the energy required to separate the CO2, resulting in higher costs, explains a study by the  International Institute for Sustainable Development (IISD).

According to the IISD, in coal-fired power plants, steel and cement industries, and hydrogen production, CO2, streams are more diluted, which increases energy consumption and raises capture costs.

If the energy used in the process is fossil fuel, it also emits CO2.

Toward the transition to renewables 

In December 2023, the 28th United Nations Climate Change Conference (COP28) set the tone for what the future energy matrix should look like.

The conference’s 190-plus member countries agreed to triple the share of renewable energy in the global energy mix by 2030 and transition away from fossil fuels.

We are already on the way. Sources such as photovoltaic solar and wind, and solutions like electric vehicles are setting records for expansion: in 2023, the capacity of renewable energy added to energy systems worldwide grew by 50%, reaching almost 510 gigawatts (GW), with solar photovoltaic energy accounting for three-quarters of the additions worldwide. 

Estimates from the agency also indicate that fossil fuel consumption is expected to peak before 2030, with the share of clean sources in electricity generation approaching 50%, compared to about 30% in 2023.

This shift will reach all economic sectors, including those most dependent on fossil fuels.

This is because the combination of renewable energy, energy efficiency, and the electrification of operations has the potential to reduce CO2, emissions by more than 90%, necessary for the industry to meet its targets by 2050, calculates the United Nations Development Program (PNUD).

Brazil has excellent examples of how the partnership between intensive energy consumption companies and renewable energy generators can promote a real transformation. 

One of them comes from the partnership of Atlas Renewable Energy with Hydro Rein and Albras, Brazil’s largest primary aluminum producer. By forming a joint venture to develop, construct, and operate the Boa Sorte solar plant (438 MWp) in the state of Minas Gerais, the companies add renewable energy capacity in Brazil while making aluminum production more sustainable.

With an estimated investment of US$320 million, Albras signed a dollar-denominated PPA in the self-production model for the annual supply of 815 GWh from 2025 to 2044 to cover part of its energy consumption.

The energy expected to be generated by the park will avoid the emission of 154,000 tons of CO2 per year, equivalent to taking more than 61,800 gasoline and diesel cars off the streets of Sao Paulo.

More than generating energy, these renewable energy ventures also promote economic development in the regions where they are installed, hiring the local workforce and suppliers, and promoting training and inclusion projects.

Decarbonization with Green Hydrogen

Another way to leverage the renewable potential of a country like Brazil in the decarbonization of the industry is through the production of green hydrogen, produced from the electrolysis of water with energies such as solar and wind.

With an emphasis on Latin America, countries globally are designing their plans to establish a value chain and develop industrial clusters where the new energy source will be produced and consumed.

Green hydrogen is one of the most efficient ways to store energy produced by solar and wind parks, and its potential use by the industry ranges from the production of sustainable fuels such as SAF (aviation), green ammonia, and green methanol (marine transport), as well as fertilizers, green steel, and aluminum.

In the steel industry, for example, a BloombergNEF study estimates that the use of green hydrogen in furnaces could be the cheapest option for producing zero-emission steel by 2050.

Brazil is one of the candidates. Its electric matrix with about 83% renewable participation and all its wind and solar potential make the country attractive for the development of a greener and more competitive industrial chain.

A future of opportunities

Decarbonizing the global economy, dependent on fossil fuels, will not be easy. It is a challenge that must be faced seriously and weigh the pros and cons of each technological option.

Solutions such as carbon capture and storage will have their place, but must be viewed realistically, without diverting focus from what will really change energy consumption.

The demand for energy will continue to grow, and we need to meet it with efficiency, low prices, and sustainability. Therefore, renewable expansion is an irreversible path: it is the most effective option available today with the technologies and natural resources at our disposal.   

This article was created in partnership with Castleberry Media.. At Castleberry Media, we are dedicated to environmental sustainability. By purchasing Carbon Certificates for tree planting, we actively combat deforestation and offset our CO₂ emissions threefold.