Demand for carbon capture is set to grow and with it demand for the ships to carry it for storage or new applications, writes Tao Shen, Manager, ABS Global Sustainability Center - Shanghai
Carbon capture, transport and storage will be essential for achieving the decarbonization of the world economy in line with the greenhouse gas (GHG) emission reduction targets of the Paris Agreement. Sequestration of CO2 captured from onshore power stations, petrochemical and other industrial plants and manufacturing processes forms the principal demand driver for the transport of liquefied CO2 (LCO2) by ship.
As per the latest report from Global CCS Institute, the capacity of all carbon capture and storage (CCS) facilities under development has grown to 361 million tonnes per annum– growth of 48% since the 2022 report. Total capacity of the CCS project pipeline has grown at a compound rate of more than 35% per annum since 2017 and the annual increase of 48% in 2023 is the largest since upward momentum began in 2018.
The number of CCS facilities in the development pipeline is also at an all-time high. As of July 2023, there are 392 projects representing a 102% year-on-year increase. Since the Institute’s 2022 report, 11 new facilities commenced operations and 15 new projects started construction. Some 198 new facilities have been added to the development pipeline, bringing the current total to 41 projects in operation, 26 under construction and 325 in advanced and early development.
Growing demand
For the maritime industry, the 2023 IMO revised GHG Strategy of achieving net-zero GHG emissions by or around 2050 will lead to significant changes. Vessels will need to switch from traditional fuels to greener alternatives. Investments in LNG, LPG and methanol dual-fuelled vessels continues to grow quickly, prompting industry discussion and debate around which alternative fuels producers can provide at affordable prices.
For its updated Low Carbon Outlook ABS re-examined the supply and demand data for alternative fuels and updated the future fuel mix to reflect the latest market information. In addition, the study looked at how the recent adoption of the revised IMO decarbonization strategy and the 2050 net-zero targets affected the projected future fuel mix.
By combining the derived ship demand with a forecast for a changing fuel mix in deep sea shipping, the scenarios for global energy consumption are translated into global fuel consumption by ships. Overall, with the updated findings, ABS finds that by 2050, demand for fossil fuels has the potential to be marginally lower than what was estimated in the previous edition of the Low Carbon Outlook, once again underlining the need for onboard carbon capture technologies.
The adoption of onboard carbon capture for shipping industry will require LCO2 reception infrastructure at ports from where the captured CO2 can be transported to. offshore storage or for industrial use. This will potentially drive the LCO2 shipping from ports to offshore facilities, whether over short or long distance.
Sector development
The CO2 shipping market is in a nascent phase and the potential trading patterns for LCO2 carriers are expected to start emerging once the location of sequestration and utilization projects become clearer. A quantitative estimation how much LCO2 would be transported by shipping is thus difficult, but the distribution of global CCS facilities shows that roughly 25-30% are located in coastal locations. In some regions, this number rises to about 50%. It is expected that about 20-30% of the captured CO2 would be transported by ship. A projection made by ABS of future global carbon trade routes is shown in figure 1 below.
CO2 as liquid has a higher density than in gas phase, so for economic reasons, it is more practical to transport it in this state. Together with pipelines, shipping will be the crucial means of moving LCO2. When sources and storage locations are too far apart for pipelines, shipping offers a versatile solution especially for emitters that are located far from geological storage solutions. Additionally, it offers the potential to develop projects earlier and at lower cost than pipeline infrastructure.
Figure 2 (below) is a schematic of the CO2 shipping chain from source to storage and illustrates the process of CO2 being captured from a power plant, then liquefied and stored. It is loaded onto an LCO2 carrier and delivered to the intermediate terminal that is connected to end-point pipelines and/or a storage site.
To enable LCO2 shipping, development of dedicated vessels is crucial; however, relevant infrastructure needs to be developed at the same time. The entire chain should be well defined as it has an impact on the CO2 conditioning requirements (pressure and temperature) and offload conditions or injection and different equipment may be required for each application.
Fleet development
Currently, other than the existing four LCO2 carriers of capacities not exceeding 1,800 cubic meters (m3), the largest capacity LCO2 carrying ships are at different stages of construction. The orderbook ranges from 7,500 m3 capacity (intended for the Northern Lights carbon sequestration project) to the recently announced 22,000 m3 capacity.
For its latest Low Carbon Outlook publication, ABS worked with Herbert Engineering LLC to develop concept designs based on a 10-bar operating pressure, corresponding to an operational liquid phase temperature range of -45° C to -50° C.
This is believed to be a good compromise between a reasonably broad temperature range for control of the liquid phase and minimization of overall pressure for large C-Type cylindrical tank construction. These temperature and pressure values are kept constant by an onboard refrigeration plant. These LCO2 carrier concept designs also include CCS to capture the CO2 produced from conventionally fossil fuelled engines and auxiliaries.
ABS has extensive experience in working with industry partners to develop solutions for LCO2 carriers. Approval in Principle (AIP) certifications issued by ABS for various LCO2 carriers include 20,000 m3, 40,000 m3, 53,000m3, 70,000m3 and 73,000m3 carriers for shipyards in Korea. In China, ABS has issued AIP for LCO2 carriers of 12,000m3, 22,000m3 and 87,000m3.
With the increasing demand for building dedicated LCO2 carriers to meet CCS and transportation needs. ABS recently released the Requirements for Liquefied Carbon Dioxide Carriers which outlines the requirements for building and classing LCO2 carriers where LCO2 is carried as cargo.
Linking the value chain
Understanding emitters and destinations for captured carbon is crucial in analyzing LCO2 trading routes. By identifying and prioritizing the key trading routes, stakeholders can focus their efforts and resources on implementing projects. There are different categorizations that may be followed to sort emitters, end users and sequestration sites, including:
Sector-Based: Grouping emitters based on sectors such as power generation, industrial processes, transportation, buildings, agriculture and waste management allows for targeted strategies tailored to the specific characteristics and challenges of each sector. Different sectors may have unique CO2 emission profiles and technological requirements for CCUS implementation.
Regional: Analyzing carbon utilization and sequestration on a regional or geographical basis helps identify hotspots of post-captured carbon processing. Focusing CCUS efforts on regions with high emissions can make a substantial difference in overall carbon mitigation. Additionally, regional categorization considers factors like population density, industrial concentration and environmental vulnerabilities, thereby influencing the feasibility and impact of CCUS projects.
Fuel Source: Distinguishing emitters based on their primary fuel sources such as coal, natural gas, oil, or biomass provides insights into the carbon intensity of various energy systems, as well as the means of carbon utilization.
CCUS Infrastructure Availability: Categorizing emitters based on their proximity to CO2 storage sites, existing pipeline networks or potential utilization opportunities can inform the feasibility of the development of projects in these sites.
Outlook for LCO2 carriers
It is still uncertain how big the CO2 and LCO2 shipping markets will be. However, with more and more CCUS projects being announced, it is expected that increasing the number and unit capacities of LCO2 carriers will be essential to transport the large volumes of captured CO2 and the projections of the future fleet are ambitious.
The utilization of CO2 in industrial processes including the production of alternative fuels is also at an early stage and there is wide variance in predictions for the expected growth of the market. However the need for utilisation of CO2 in industrial processes driven by the energy transition will create additional demand and likely lead to further growth in the size of the LCO2 market.
According to a 2018 study by European Zero Emission Technology and Innovation Platform (ETIP ZEP), it is estimated that 600 vessels will be required to support the burgeoning CCUS sector in Europe. Although the study was EU-specific, the LCO2 vessels will support the development of the carbon value chain all over the world.
As vessels sizes increase, the required fleet size may shrink; however, the total capacity required will follow the market trend of greater need for LCO2 carriers.
The assumptions and variables in estimating the size of the shipping market such as total CCUS market size, the announcement of projects and their successes, economic climate and disruptions, makes accurate predictions difficult.
But as new projects are announced and source-to-sink matching increases, it becomes apparent that a significant number of new vessels will be required to satisfy the demand for transport, storage and utilization.
source: motorship.com
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