Value Chain: Onboard Carbon Capture is Advancing Rapidly

 

In the past decade, carbon capture and storage (CCS) technologies have significantly matured, leading to the rise of a carbon value chain. This has opened up shipping to new opportunities in CO2 transport and storage as well as offering a decarbonization pathway for the sector.

With over 620 projects identified globally as of last year, CCS deployment is primed for massive growth in coming years, according to data from the Global CCS Institute.

But how is the shipping sector contributing to the maturity of carbon capture technology?

NEEDED: LARGE-SCALE SOLUTIONS

In its 2024 report, the Global Carbon Project revealed that carbon emissions from fossil fuels had reached a record high of 41.6 billion tons, up from 40.6 billion tons the previous year. "No sign that the world has reached a peak in fossil CO2 emissions," the report concluded.

Indeed, the continued rise of carbon emissions over the last decade points to significant gaps in existing energy-efficiency technologies. Although there's a push to use clean fuels, it must be complemented by scaling carbon-recycling techniques.

One such large-scale solution is CCS, whereby CO2 is first separated from the flue gas by capture processes and then later stored underground, mainly in depleted offshore oil and gas reservoirs. However, recent environmental concerns over the stored CO2 escaping into the atmosphere have spurred reevaluation of CCS.

Therefore, rather than storing the CO2, it's transformed into a valuable industrial chemical through a process known as carbon capture and utilization (CCU). Production of shipping's synthetic fuels, which are needed for decarbonization, is anchored in utilization of the captured CO2.

While CCS has been in use for several decades, it's still considered an emerging field. The current climate action initiatives have seen demand for the technology soar, especially in the energy sector.

Most importantly, the growth of CCS has led to creation of a new CO2 value chain. The shipping sector, for one, is poised to benefit, with demand for liquefied CO2 (LCO2) carriers expected to rise. The DNV 2023 Energy Transition Outlook report estimated that the global fleet of LCO2 carriers is likely to grow to 41 ships by 2030, 124 ships by 2040 and 270 by 2050.

The number could even go higher assuming governments around the world follow up on their net-zero climate goals by 2050. In such a scenario, the International Energy Agency (IEA) projects that potential demand for LCO2 carriers could be in the range of 2,500 ships by 2050. But massive investment is needed to build these vessels.

PATHWAY TO DECARBONIZATION?

CCS is seen as a mid-term measure in the long and costly path of decarbonizing the shipping sector.

With almost 90 percent of the current global fleet running on conventional fossil fuels, onboard carbon capture and storage (OCCS) could help deliver emissions reductions. Retrofitting the existing fleet with OCCS is more viable in instances where conversion to zero-carbon fuels is cost-prohibitive.

DNV estimates that OCCS retrofits could cost between $1-15 million per installation, depending on the type and size of vessel. The CO2 reduction potential is in the range of 10-40 percent, with installation taking 12 months after order.

But there are several barriers that OCCS must overcome to achieve impactful scale in shipping. First, there is regulation uncertainty, a major concern for shipowners willing to invest in the technology.

"A key regulatory gap is the lack of a clear framework for crediting captured CO2, which is necessary to incentivize shipowners and operators to adopt OCCS systems," states Mathias Sørhaug, Business Development Director, CO2 Shipping, at DNV. "Additionally, policies must support the development of the broader CCS value chain, ensuring that CO2 from OCCS can be efficiently transported, stored or utilized after leaving the ship. Without a robust infrastructure and regulatory framework, the scalability of OCCS as a viable decarbonization pathway remains limited."

The International Maritime Organization (IMO) has said an OCCS working plan could be ready by 2028.

PILOT PROJECTS

There's been an uptick of trials for OCCS in the last year, providing further opportunities for technology advancement and filling critical data gaps.

Recently, the Singaporean shipbuilding group Seatrium completed a turnkey CCS retrofit on a LPG tanker, Clipper Eris. The retrofit marked the start of a one-year pilot study involving Wärtsilä, MAN Energy Solutions, the research institute SINTEF and the tanker owner, the Norwegian shipping company Solvang. The capture plant comprises a 7 MW Wärtsilä CCS system, which is expected to capture 70 percent of CO2 emissions from the tanker's main engine.

The full-scale retrofit includes the entire chain for handling CO2 – the liquefaction and storage onboard the vessel. Depending on the success of the pilot project, Solvang has said it could install the technology on more of its vessels, including newbuilds scheduled for delivery by 2026-2027.

Another positive development is the launch of the world's first FPSO with post-combustion carbon capture technology. In February, Malaysia's energy giant Yinson held a naming ceremony for the FPSO Agogo, marking the end of its construction at Cosco Shipyard in Shanghai.

The FPSO has a production capacity of 120,000 barrels of oil per day. It will be deployed in the Agogo oil field, roughly 110 miles off the coast of Angola.

Using an absorbent carbon capture system to clean the flue gas, Yinson said the FPSO could achieve a 27 percent reduction in carbon emissions. This equates to a reduction of about 230,000 tons of CO2 per year.

Other operators have also made significant progress in commercial viability of carbon capture systems in FPSOs.

Brazil's energy giant Petrobas has expressed interest in a modular carbon capture solution developed by SBM Offshore. In February, Petrobas tasked SBM Offshore with studying the potential of installing capture systems on its FPSO units. The modular solution by SBM Offshore also features proprietary carbon capture technology from Mitsubishi Heavy Industries with DNV providing class approval.

With the world trending toward a clean energy future, these are remarkable steps in averting stranded assets in the oil and gas industry.

PORT READINESS

Meanwhile, carbon capture systems are incomplete without offloading infrastructure, essentially portside terminals.

Currently, liquefied CO2 (LCO2) offloading as an industry is in its infancy. Few existing ports have the capacity to handle CO2 as a product. But this is gradually changing as there is potential for modifying and upgrading existing port facilities as manifested by the recently completed Northern Lights project for the construction of a CO2 storage terminal in Øygarden, near Bergen in Norway.

From the terminal, the LCO2 will be transported by pipeline to an offshore storage location below the seabed in the North Sea. By 2030, five other ports are also readying CO2 transport and storage facilities. These include Bremerhaven, Gdansk, Gothenburg, Rotterdam and Zhoushan. The U.K. is also likely to see more of its ports focusing on storage terminals. Last year, the U.K. government committed over $28 billion to a funding package for CCS over the next 25 years.

"The shipping industry must actively engage with relevant CCU development initiatives near major shipping hubs," says Dr. Hamid Etemad, Global Gas Technology Specialist at Lloyd's Register. "The success of CCS ultimately hinges on the availability of CO2 reception infrastructure at ports and terminals. Through feasibility studies, pilot projects and AiP (Approval in Principle) processes, Lloyd's Register helps de-risk investment decisions, paving way for the scalable deployment of CCUs across various segments in maritime."

Entrepreneur/maritime writer Brian Gicheru is based in Kenya. This is his first appearance in the magazine.