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The Economics of Carbon Capture

and it is difficult for producers and manufacturers to invest in these environmental technologies when there is little or no return on investment. CCS potentially offers an opportunity for emitters to capture CO2 in order to meet the clean power plan requirements, and sell it, thereby recovering some of the cost of capturing the CO2 and purifying it to meet the end user requirement. Based on the current demand of CO2 and its market price, CCS can offer attractive investment returns on carbon capture technology.

CO2 Demand

Based on the data available from SRI Consulting (Chemical Economics Handbook 2010, March 2010), the current global demand for CO2 is estimated to be 80 million tons per year (tpy) based on SRI data. Of the 80 million tpy of CO2 supplied, 50 million tons are utilized for EOR almost exclusively in the North America, while the remaining 30 million tpy of CO2 is used in all other uses, predominantly in the mature industries of beverage carbonation and the food industry. For 2020, SRI estimates future demand will be 140 million tpy based on predicted growth in EOR, urea fertilizer, and the implementation and commercialization of demonstration projects for the remaining technologies in line with their perspective development timeframe.

Market Opportunities

The recent consolidation in the merchant CO2 business in the US shows renewed interest in this segment of the industrial gas business. For industrial gases players and distributors, the potential for growth in this very fundamental product market is strong. Also recent legislation and voluntary commitments to reduce the use of HFC-based refrigeration have opened up growth opportunities, especially for merchant CO2 producers, according to SRI Consulting. An interesting emerging use of CO2 is in algae production. Algae has been found as a key ingredient in the industry as it can be an excellent source for a variety of applications including as a fuel, in renewable oil markets, May 2016 – CryoGas International

Converting waste emissions to value products

“Converting waste emissions to value products”

Harvest COPAS™  4C  

COPAS™

Separate CO2 from Waste Emissions

G.E.T.

Gas Exchange Tank

Figure 2

chemical markets, in nutritionals, and in health sciences. Separated from flue gas emissions, CO2 can be purified, compressed, and sold to commercial interests for use in algae production. Figure 2 is a flow diagram, provided by Agcore Technologies, which demonstrates how its equipment is used to capture, separate and infuse CO2 for use in its algae farming operations. See related article “Carbon Capture for Food and More: Agcore Technologies Putting a Whole New Spin on CO2,” CryoGas International, May 2013, page 46.

CO2 Recovery from Power Plants

Some decades back in the United States, many of the sources for carbon dioxide (i.e. ethanol, and ammonia plants) were owned and operated by the same parties who owned and operated the CO2 plant near the raw gas source. Numerous US independent CO2 producers still thrive as direct sales to consumer suppliers. But since the emergence of the major gas companies through industry consolidation, most of the raw CO2 is actually sold to the gas refiner — also the marketing operation for merchant CO2. One fact supporting direct sales of CO2 by ethanol producers to a limited merchant or niche market is that there is a large margin difference between the

Algae Farm

Closed Reactors or Open Pond

Algae Powder

Source: Agcore Technologies (agcoretech.com)

price of raw gas from a producer and the price from a refiner/gas company. Raw gas prices range from $5 to $25 per ton direct from a source versus consumer market prices which usually average around $60 to $100 per ton. In some high priced markets with little regional competition or no local supply, CO2 can be $150 to $300 per ton. This same margin may apply to power producers that can efficiently capture CO2 from their processes. Given the regional nature of CO2 supply in the US, as well as the regional nature of its largest markets, it is necessary to evaluate the costs of CO2 production, distribution, and overhead from CCS schemes on a local basis. Once markets are understood, and the costs and requirements for producing CO2 for the merchant trade are known, the potential risks for direct marketing can be properly evaluated. In CCS schemes, numerous cases exist where a niche market or a specific region would make the terms of marketing the captured CO2 a true revenue opportunity. For more information on these case studies, please feel free to contact me. Dr. Sudhir R. Brahmbhatt is President of Technology Services Inc. (TSINC-US. com), located in Glencoe, Missouri. He can be reached at Sudhir.Brahmbhatt@TSInc-US.com. 35

CryoGas May 2016 Vol. 54, No. 5  
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