To further understand the intricacies of sourcing CO2, the market for the gas itself must be considered. When talking about the market, it’s the market for liquid CO2 that’s delivered to customers in bulk and, most commonly, in 20 tonne deliveries. According to Carson, this is the area that he and his company are most interested in, differentiating it from other companies who provide gaseous supplies to large users such as enhanced oil recovery or the production of urea in an ammonia or methanol plant.
Emphasising the focus on bulk users, or what he calls the merchant bulk market for CO2, he spoke about the sheer size of the market, saying, “Overall, worldwide, it’s somewhere between 20 and 22 million tonnes per year. North America makes up about half of that and then the rest is split between Europe at about five to six million tonnes per year.”
In terms of CO2 emissions released into the atmosphere, he says estimates are around 42 billion tonnes, 22 million tonnes of which is captured and utilised by the market, which works out to be just point one percent of the overall CO2 that’s going up into the air, effectively creating a very small, focused, niche market.
The types of CO2 sources
When looking at CO2 in this industry, Carson stated that it’s important to understand the types of sources that are used when recovering CO2 and liquefying it to a high grade and taking it to the market. Despite the gas being everywhere, most of the sources used for this market are sources that have emission streams that are about 85 – 95% pure.
Very pure waste streams of CO2 are purified into liquid grade, food and beverage grade. Globally, these sources are ammonia plants, as ammonia production is the primary source for this raw CO2 that gets further processed for the merchant market. Carson said, “About 25% of the CO2 produced in this market comes from ammonia in North America, and that figure is about 50% in Europe.”
“So our market is highly reliant on ammonia production to provide the raw materials we need to produce high grade liquid CO2.”
Continuing, he discussed the second main source, hydrogen. Hydrogen production produces about 25% globally, primarily through refinery processes. A third source he lists as bioethanol, a newcomer which has grown from around one percent to around 20% globally overall. The remaining CO2 comes from natural sources, sources associated with natural gas and other various sources that make up 4-5%.
Due to the difficulty of making money in the CO2 market, there are challenges in making a viable economic proposition and the ability to make money. As Carson explained, “We’re looking for those pure sources and, really, the industry has already picked out all the low hanging fruit. All the good, pure sources that are in the right locations, most of them have been developed today.”
In addition to the growth in applications such as the concrete cement industry, which was spoken about in Part 1 of gasworld TV’s webinar series, there are also large opportunities presented in sectors such as the cannabis grow industry. But, as alluded to above, alternative sources must be considered, as traditional sources have already been seen by industry as economically viable and are by now fully developed.
Carbonic Solutions: How sequestration of CO2 could unbalance the market
The impacts of CCS
Carbon capture and storage/sequestration is inevitably part of the conversation when discussing CO2. Having been exposed to most aspects of the industrial CO2 sector, Carson is familiar with how relevant the question of CCS is becoming and that, in order to meet carbon emission reduction goals, CCS must play a role.
He said, “We need to be sequestering. When we talk about carbon capture and sequestration, we talk about sequestering millions and millions of tonnes per year at a site.”
“And which sources are most likely going to be used for the sequestration? They’re going to be the large, pure sources, the same ones that we rely on as an industry.”
CCS is not without its side effects though; he stated that ammonia plants are receiving tremendous political and economic pressure to reduce their emissions of atmospheric CO2, as a result they are looking at sequestering CO2 underground. This underground storage essentially removes carbon from the market and creates a potentially huge imbalance in supply and demand.
An example of this is apparent when looking at the Billingham ammonia plant in the UK. As one of the country’s “backbone” sources of supply for many years, Carson recognised that, over the last two months, the owner of that ammonia source has decided to take control of the raw CO2 that’s emitted and control it themselves.
He continued, “Over the last few years, it’s been processed by a third party into liquid CO2. And all of a sudden they have made a strategic decision to control that themselves and not contract it on a long term basis back out to a third party.”
“Although I don’t know this for sure, my gut feel is that they’re doing this so that they can have the option in the future to look at other opportunities of what they can do with that CO2 other than putting it out into the merchant market and letting it be processed into CO2.”
It’s of his opinion that Billingham, and others in the same region, is looking at CCS schemes in the future in order to relieve some of the costs that are associated with emissions. Despite the industry capturing and reusing CO2, it’s not seen as a reduction as far as emissions go because Carbonic Solutions’ customers end up reusing the gas and it gets released back into the air.
Concluding, Carson said that these large sources are going to want to look at other opportunities where they might be able to score a reduction in emissions like CCS.
Part 1 and Part 2 of the CO2: Use It, Don’t Lose it and Monitor webinar series is available on-demand at www.gasworld.tv.