In the March issue of The Chemical Engineer, Helen Tunnicliffe speaks to partners of the new Teesside Collective about their plans to make industrial CCS a reality in the northeast of England.
OUT of the ashes of a failed bid for UK government funding for CCS commercialisation, a phoenix has risen. The Teesside Low Carbon project was set to be the focus of a CCS hub to help decarbonise local industry, so failing to win funding in 2013 was a bitter blow. However, the region’s industry still wanted and needed CCS so it regrouped to try again, and in January 2015 introduced the Teesside Collective.
This industry-led partnership involves four of the region’s biggest companies – BOC, Lotte Chemical, GrowHow and SSI – who will each host a so-called ‘anchor project’ for industrial CCS. The steering group is being coordinated by the local enterprise partnership Tees Valley Unlimited, and also includes National Grid, the North East Process Industry Cluster (NEPIC) and consultancy firm Pale Blue Dot. Major banking group Société Générale is looking into the economic case for the CCS cluster.
By 2025, the Teesside Collective hopes to have begun sequestering carbon dioxide from industrial process plants in the region in aquifers under the North Sea. The UK government is already interested in the scheme and right now the Collective is using a £1m (US$1.5m) grant from the Department of Energy and Climate Change (DECC) to develop the business case.
Teesside is an important base for UK industry. 58% of the country’s chemical industry is based on Teesside in the North East of England. The process industries in the region contribute £26bn (US$39bn) to the UK economy annually. Teesside processes 20% of the UK’s gas, and produces 50% of the UK’s hydrogen. Enough PET is produced there to make 15bn drinks bottles per year. These are big numbers.
All this, however, comes at a cost. Teesside is home to five of the UK’s top 25 CO2-emitting plants and is responsible for 5.6% of the UK’s industrial emissions. Emissions per head of population is three times the UK average.
Sarah Tennison is from Tees Valley Unlimited, which has been instrumental in setting up the business case for CCS on Teesside.
“Teesside is unique in a sense because it’s so geographically clustered and compact, with easy access to a storage site. This is a really good opportunity. We can’t let it go and if we’re going to do it anywhere in the UK, we need to do it on Teesside,” she says.
If successful, the Teesside CCS project will cut CO2 emissions by 3–5m t/y, but that is just the start. Initial project plans include capacity to sequester up to 15m t/y as more companies and industries join the scheme.
Part of the reason for the current interest in CCS around the world is that initial scepticism is turning into an increasing realisation by policy makers that it is going to be necessary if we are to meet our emissions targets and prevent dangerous levels of climate change. The UN believes that CCS could account for a fifth of the world’s carbon cuts by 2050, and many experts are calling for binding CCS targets.
So, we need CCS for the sake of our grandchildren, but perhaps surprisingly, the arguments in favour are not solely altruistic. There is a major threat to the competitiveness of industry in the EU due to carbon permits. At the moment, carbon permits are not very expensive as the carbon market is not yet working as expected. However, as industry continues to recover from the global recession and output increases, the price will begin to rise. The cost of a carbon permit is expected to quadruple by 2030.
“If we fail to do this, then emitting carbon will make our products less cost-competitive. We could lose out in the market. We sell products all around the world. If our products become more expensive because of a CO2 tax, then we’re less competitive. If we have CCS on Teesside, we make ourselves competitive,” says BOC’s regional manager Jay Brooks.
This will ensure that companies continue to purchase materials and products from plants on Teesside, keeping trade in the region and in the UK. It’s not just individual companies that will benefit, but the region as a whole as carbon reduction targets are increasingly rolled out globally.
“If you’ve got a level playing field and carbon targets apply to the rest of the world, then this would give us a great competitive advantage to attract investment to the region,” says GrowHow’s Richard Tweddle.
Tennison agrees. “If we have CCS on Teesside, we have a massive piece of infrastructure that we can market to the rest of the world and draw in investment,” she says.
Perhaps surprisingly, Lotte’s involvement is partially down to commercial interest. It is a major PET producer for plastic bottles and packaging, and decarbonisation is what its customers, such as Coca-Cola, Pepsi and Britvic, want.
“They’ve got very strong consumer groups who are very interested in sustainability,” explains Lotte site senior technologist John Baker. “One aspect of improving sustainability is in biobased plastics. Another is reducing energy usage, which is ongoing anyway. Another aspect is decarbonising the product. It’s certainly on the agenda. There’s some discussion around “what are you doing to improve your sustainability?” If you put your hand up and say ‘nothing’, you might not be invited back to the table to bid for the supply contract next year.”
The Teesside CCS cluster could help further with decarbonisation. For example, Baker suggests that one day, rather than being powered by natural gas, the Lotte plant could run on decarbonised hydrogen provided by BOC.
How will it work?
The four anchor projects are all carbon-heavy and are already looking to produce detailed design studies for how CCS could work on their sites. BOC produces industrial gases, particularly hydrogen. Lotte Chemical is a major PET producer. GrowHow makes ammonia and fertiliser, while SSI produces steel from Europe’s second-largest blast furnace.
“The Teesside Collective will come up with a costed solution on how we can capture CO2 from a range of industries across Teesside, pass it to an offshore distribution network and then see if we can sequester it,” says Jay Brooks, BOC’s regional manager.
What might surprise you is that none of the schemes will experiment with new, untested processes or engineering solutions.
“We’ll use proven technology to capture the CO2. We’ll distribute it using established technology, both onshore and offshore. Each process, whether a chemical process, steelmaking, hydrogen production, ammonia production, will apply techniques that are all available today,” says Brooks.
GrowHow has something of a head start on the other companies as CO2 is already captured at its plant as part of the production process with the Benfield method, which uses potassium carbonate. At present, the compression used for the gas is not sufficient for CCS, but the company is developing a plan for a new compression and dehydration plant.
SSI is considering two options for reducing emissions from its blast furnace: either post-combustion capture on the flue gas using standard amine processes or pre-combustion capture on the entire blast furnace gas stream. The final selection will depend on the final cost and business objectives.
BOC and Lotte both intend to use conventional MEA amine capture techniques on their flue gas.
Building a pipeline to take the CO2 out to sea will be more of a challenge, but not an insurmountable one. The pipelines and CO2 compression and booster stations will use the same sorts of technology as is used for gas all over the world. The challenges will also be the same: determining the best route to avoid power and communication cables, other pipelines (there are lots, of course, because of all the process industries) and environmentally sensitive areas.
The project partners will also have to decide whether to use the Captain aquifer in the Goldeneye field north of Teesside, which is very well understood but quite far away, or the Bunter aquifer in block NGC 5/42, south of Teesside, which is closer but not yet as well-understood.
Consultancy firm Pale Blue Dot will be responsible for bringing together all this information on feasibility, costings and the business case into a coherent report for government. Steve Murphy from the firm explains that once this is complete, the Teesside Collective will be ready for front end engineering and design (FEED) work and detailed engineering.
This project is not just pie-in-the-sky theory but possible tomorrow if the green light is given. Brooks doesn’t believe it would even need a pilot. It’s also environmentally and commercially favourable. So what’s the hold-up?
Money, money, money
“The delay is around the funding structure, not the technology. If it was my project to install a decarbonised system on my hydrogen plant, I could do it in five years. Each company could do that, and we could install the onshore and offshore network within that same time period,” says Brooks.
Money, the eternal problem.
“It’s technically feasible and operationally feasible, that’s the key thing,” says Tweddle. “If we were a power station, with our economics, it would be a no-brainer. You could get you and I to pay for it through our energy bills. But who is going to pay for it? Coca-Cola isn’t going to pay for it with its plastic bottles. We can’t pass the costs on because they will just buy it cheaper from elsewhere.”
Clearly, the government is going to have to get behind the project. Baker likens it to the UK motorway network, for which the government has paid billions in building and maintaining. Those roads have enabled people to get around more easily, which has built demand for cars, benefitting the car industry, and ultimately benefitted the entire economy. He admits it is a slightly tenuous link but the simple comparison remains that the government paid for a big infrastructure project which ultimately benefits everyone.
“We really need clarity from the government and the Treasury about what support mechanism they will countenance,” says Murphy. “There’s no point in spending money on engineering and design until it’s clear that there’s going to be a return for that investment. There’s no commercial rationale at all for industrial CCS at the moment.”
Nobody is entirely sure what will work best in terms of funding the Teesside CCS cluster and supporting the companies capturing their carbon, but possible mechanisms are likely to be more clear once the initial report is complete in June and passed to DECC. Motivation to support the Teesside Collective should, at least in part, come from the UK’s legally-binding climate targets.
“We’ve got Société Générale looking at this. They’ve worked on SSI’s steelworks, they’ve worked on the nearby White Rose CCS project. If there’s a credible answer of how this can be funded, they’ll find it,” says Tennison.
The Teesside Collective is focussed, motivated and determined to see the vision come to fruition.
“We’re all giving our time completely free of charge to this. One of the key differences between this project and some others is that it’s led by industry because we are genuinely hungry to make it happen,” says Brooks.
“There’s a lot of momentum here, both with the Collective and the collaborative effort that it represents. It’s industry-led and globally unique,” he says. “Tees Valley Unlimited have been excellent at pulling it all together, creating that momentum and building awareness publicly and within government circles about what’s going on.”
It will be interesting to see how DECC responds to the report but Tennison is confident of the plan’s value and benefits.
“What we’re presenting here is a solution to a problem,” she says. “We’re going to the government and saying, you’ve got carbon targets, we need to do something about the economy, about supporting our manufacturing base and growing our export markets. Teesside is the place to do it. It’s not just a benefit for Teesside, it’s a benefit for the whole of the UK.”
© The Chemical Engineer
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