gasworld’s inaugural CO2 Summit on the Slopes has drawn to a close here in Innsbruck, Austria, after exploring key trends and dynamics in today’s carbon dioxide (CO2) market.
Over 100 delegates gathered at the stunning Interalpen-Hotel Tyrol in the heart of the Austrian slopes to investigate and discuss critical topics in the CO2 supply chain.
No less than nine industry experts delivered engaging keynote presentations, covering a vast array of subjects from CO2 sourcing trends, market overviews and rising applications.
The Global CCS Institute’s John Scowcroft set the scene in his opening speech, detailing the importance of one particular application that is on the rise – carbon capture and storage (CCS). He identified, “CO2 is a stock issue and once it’s in the atmosphere it will remain there for a significant period. So, to stabilise global temperatures there is a point when you reach 2°C and you can’t emit any more; CCS becomes an important player in that particular regime.”
“We will be a fossil fuel-using society for quite some time to come,” he continued. “With the CCS solutions that we have in place at the moment, the world is currently on a track for a 3°C environment which will make the planet a rather uncomfortable place to live. The Paris (COP21) commitments aren’t going to take us all the way there – it is but a start. If we are going to close the gap, CCS becomes necessary.”
There are 38 large-scale CCS facilities currently under construction or in operation across the globe with a combined capture potential of approximately 70 million tonnes per annum if they all come on-stream – but that isn’t enough. Sowcroft explained that we have to capture and store 4,000 million tonnes of CO2 by 2040 if we are to meet stringent climate goals.
“Why then, do we have a problem getting CCS off the ground?” he questioned. Sowcroft said that the answer lies in funding and acceptability. “The technology has been around for 45 years, and in that time, $2.5 trillion has been invested in clean energy but only $20bn has been invested in CCS. We need the same incentive acceptance as other technologies – it is indispensable as a least-cost approach to global decarbonisation.”
Environmental issues continued to emerge as a key trend in the future of CO2 supply, with the event’s first session also diving into this issue in today’s CO2 industry – sourcing.
Uwe Kikillus of Pentair explained the benefits of sourcing CO2 from biogas upgrading. Using the UK market as a reference point, he said “The capacity is currently smaller than the market demand. It’s focused on a few sites on the East coast and a significant amount of CO2 needs to be imported.”
Pentair, which recently acquired CO2 recovery specialist Union Engineering, currently operates nine anaerobic digestion and biogas plants which produce a combined capacity of around 65,000 tonnes per annum of CO2. Kikilus explained the benefits of such a process, highlighting, “CO2 companies can potentially reduce imports, reduce road transportation and achieve a higher flexibility. So, turning biogas into green CO2 becomes an attractive solution when you have a regional demand for CO2 but long distances over which to transport industrial sources.”
Eryk Remiezowicz of dedicated CO2 company ACP was next to take to the stage. As the fifth primary producer of CO2 in Europe, ACP’s Remiezowicz was well placed to discuss current sourcing trends in Europe. He highlighted, “Western Europe is a difficult market as there is an overcapacity and sourcing problems; in winter everybody has CO2 to sell and in the summer, nobody has CO2 to sell.” He also highlighted that the pressure on European ammonia sources has become smaller and is in a much safer position that it was five years ago.
“What we currently have in Europe is enough capacity that is fully sufficient for the CO2 consumption today – but the problem is in distribution,” he continued. “Most of the production is concentrated in the northern hemisphere but it’s there to tap.” He also cautioned that, whilst unexpected, a huge spike in CO2 usage would upset the European supply chain as there are no new sources of CO2 scheduled to come on-stream.
The second session examined current CO2 markets, with two specialist consultants taking to the stage to deliver in-depth analysis of both the US and European CO2 markets.
John Raquet, founder and Publisher of gasworld, gave an overview of the $1.25bn US market first. Producing circa 10 million tonnes per year, it’s the world’s largest CO2 market – but demand is set to outpace capacity according to consulting firm Intelligas’ market projections.
Raquet suggested that demand will be around 2.5-3% higher per year in 2020, meaning new capacity of at least 3,000-4,000 tonnes per day will need to be added just to meet market demands. “There is a great opportunity there to invest in that market,” he highlighted.
Consultant Pierre Donck then explored the “price-sensitive” European side of the market, stating, “The European CO2 market value is around €1.45bn ($1.54bn), but the market will only grow by 1-2% at best in the coming years.”
“We have crawled out of the recession and we are in a mode of mild recovery – a slow growth environment,” he continued. “60% of European CO2 demand stems from the food and beverage market. If we compare that with other industrial gases, CO2 has suffered less from the impact of the recession thanks to its dependency in this stable and resilient market compared to other traditional markets.”
However due to the slow growth in Western Europe, Donck revealed that the high availability of product means that the market has seen some price erosions, with one of the main challenges lying in the balance between regional supply and demand situation. In this respect, Donck suggested that industrial gas companies will need to continue to invest in CO2 as part of their portfolios to leverage their sourcing positions.
Whilst both the US and the European CO2 markets are the largest in terms of value, both Raquet and Donck pointed to South East Asia and Eastern Europe as the markets with the most growth potential. “We would expect growth rates in these regions, especially South East Asia, to be around 5-10% because it is still underdeveloped,” added Raquet.
Applications and new technologies
Following a delicious lunch, dedicated exhibition time and valuable networking opportunity sponsored by leading machine-to-machine (M2M) solutions provider DataOnline, delegates reassembled for the day’s final session which focused on the applications drivers and new technologies within the CO2 sector.
Gary Robson, Head of Sales, Beverage, of Unisensor, was first to take to the stage in the afternoon session, highlighting the process of end-to-end quality of in beverage CO2 transportation methods. “One thing for sure is that quality requirements are getting more stringent. More CO2 sources are being developed which each have source-specific impurities that need to be characterised and managed, so greater analytical capabilities are needed,” he revealed.
Michael Koch of Linde Gas, then presented on the effects of a CO2-enriched environment in greenhouses, stating that the yield of a greenhouse is typically increased by more than 20% in such an environment. Linde’s pipeline supply scheme in the Netherlands provides around 580 greenhouses with approximately 450 kilo tonnes of CO2 per year – approximately 10% of the merchant market for this application, according to Koch.
“What we currently have in Europe is enough capacity that is fully sufficient for the CO2 consumption today – but the problem is in distribution”
Eryk Remiezowicz, ACP
Cold Jet’s Bjarne Nielsen then presented on trends in the field of dry ice, highlighting that the technology is now moving from simply being used as a cleaning application into becoming a standard part of manufacturing and production process lines, before Dr. Christoph Gebald of Climeworks closed the show, presenting on the company’s innovative CO2 capture technology.
Described as the ‘missing part of the cake’ in terms of connecting a new and emerging application with an established market, Climework’s technology captures CO2 purely from ambient air based on a cyclic adsorption-desorption process. “It was questioned earlier today as to what the most reliable source of CO2 is. It’s air – it’s always around you and it always contains CO2,” Gebald suggested.
Raquet offered the concluding thoughts, signifying that it was important for our industry to “keep our minds open” to alternative sourcing such as biomass that could fill potential supply gaps, as well as initiating further debate and discussion with CCS institutes to bring mutual benefits to both sides of the CO2 industry.
A full review of the Summit will be published in the upcoming April edition of gasworld magazine.