By Tariq Siddiqui (UEPA)
1-Cutting Gulf Coast Emissions: Focusing on CO2 Capture Technologies
In this article, we explore emission intensive industries and CO2 capture technologies that can help industrial operators in Texas Gulf Coast reduce their CO2 emissions (see Fig-1).
Fig-1: Industrial clusters of CO2 emitters near Houston Shipping Channel
The emergence of CCS hubs along the Texas Gulf coast (see Fig-2) makes it easier for the industrial operators in Houston shipping channel to embrace CCS and focus only on Capture of CO2 and shift the responsibility of building pipelines and drilling Class VI wells to the ‘Transport & Storage’ operators for a fee (see business models). Leveraging U.S. federal tax incentives 45Q, the operators can offset their cost of capture technologies. This approach allows them meeting their emission reduction targets, without having to navigate the complexities of transport and storage infrastructure (T&S).
Fig-2: Eleven CCS hub projects on Texas Gulf-coast, with Class VI Injection well permits
2-The Rise of CCS Clusters: Unlocking Gulf Coast Potential with Shared Solutions
Federal incentives and the Transport & Storage model offer industrial emitters a strong financial incentive to capture CO2. The development of hubs and clusters (Fig-3) makes it easier to scale up Carbon Capture and Storage (CCS) efforts, as multiple emitters can share the same infrastructure, reducing costs, risks, and the weighted average cost of capital (WACC). ExxonMobil’s Houston Shipping Channel CCS, CDP II CCS, Chevron’s Bayou Bend CCS, BK verde CCS, Pineywood CCS And BP Carbon Soltion CCS. are example of leveraging these opportunities.
Fig-3: The 'Hub & cluster' development & Transport &Storgae model to reduce costs & risk
3-Future-Ready: Choosing the Proven Capture Solutions
The key CO2 capture technologies for industrial emitters are presented in the title slides (Fig-4), including liquid solvent, solid adsorbent, membranes, solid looping, and inherent CO2 capture. For industrial emitters aiming to become operational in the near future (within five years), it’s crucial to focus on Capture technologies with a Technology Readiness Level (TRL) of 7-9 (demonstration stage – Small risk/No risk) or at least 4-6 (development stage – Less risk). Technologies in the TRL 1-3 (high risk) range are still in the research and development phase. The example of CCS projects that use these capture technologies along with vendors are also listed.
Fig-4: Key CO2 Capture technologies & their maturity (TRL), vendors and project application
4-Low Hanging Fruit: Low-Cost Capture Industries
The cost of CO2 capture varies with the industry (Fig-5); low-cost capture industries where capture cost ($/ton) < $85/ton for storage in saline aquifer are better positioned for US Federal 45Q tax credit, these are:
Natural Gas Processing
Ethanol Production
Ammonia Production
Blue Hydrogen
Gas-fired Plants (retrofit)
Coal-fired Plants
Petrochemicals
Key Factors Supporting These Industries:
High-purity CO2 Streams: Low-cost capture from ethanol, natural gas, ammonia, and hydrogen.
Existing Capture Integration: Many processes already separate CO2 as part of normal operations.
Infrastructure Availability: Proximity to CO2 pipelines or storage sites, particularly in the Gulf Coast and Midwest.
Co-benefits from EOR: In oil-producing regions, EOR provides additional revenue, lowering net costs.
Fig-5: CO2 Capture cost per Industry (Low-Cost Industries vs. HTA Industries)
5-The Moby-Dick: High-Cost Capture Industries (Hard-To-Abate)
The high-cost capture industries (Fig-5) where capture cost ($/ton) > $85/ton for storage in a saline aquifer often find less feasible to take advantage of US Federal 45Q tax credit (see title slide and list below):
Cement Production
Iron & Steel Production
Petroleum Refining
Chemical manufacturing
Glass production
Aluminum Production
Key Reasons They May Not Benefit from 45Q (Yet):
45Q Credit Rate vs. Capture Cost Gap:45Q provides $85/ton for storage and $60/ton for utilization/EOR, but many of these industries have capture costs exceeding $100/ton.
Lack of Infrastructure: These sectors often lack nearby pipelines or storage sites, increasing transportation costs.
Technical Complexity: CO2 streams are dilute, making post-combustion capture less efficient.
Hard-To-Abate (HTA): CO2 is not only produced from combustion but also generated from process (Examples: Refining, Cement, Steel etc.)
Smaller Emission Sources: Unlike power plants, these industries often have distributed, smaller (volume) emitters, making capture less scalable.
Mitigation: Due to hard-to-reduce risks (e.g., revenue, coordination, and liability risks) in HTA industries, commercial banks may not provide full debt funding, creating a 'funding gap' that the government must address by sharing some risk upfront. Project and other HTR risks for the T&S model will be discussed in a separate article.
6-Key Takeaways
Mature capture technologies offer a a potential opportunity to reduce emissions in industrial sectors, particularly along the Texas Gulf Coast.
By leveraging CCS hubs, operators can focus on capturing CO2 while outsourcing transportation and storage to specialized companies, aided by U.S. federal incentives like the 45Q tax credit.
Low-cost capture industries (e.g., natural gas, ethanol, petrochemicals) are well-positioned to benefit, while high-cost sectors (e.g., cement, steel) face challenges and may require government support.
Shared infrastructure models and scaling up CCS efforts offer a promising pathway for reducing emissions and meeting environmental targets.
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