According to a new report by CEDIGAZ, CCUS is coming back into the limelight, especially in the US and in Europe, in the wake of the Paris agreement, boosted by a growing interest in hydrogen, rising carbon prices, new supporting policies and new business models.
There are currently 20 new, large-scale, CCUS projects planned around the world, nine of them in Europe. While projects developed in the middle of the 2000s mainly targeted coal-fired power plants and stored the captured carbon, the focus of the new projects is different as they tend to concentrate on industrial and manufacturing processes and on carbon utilization rather than just storage. Several projects involve production of clean hydrogen from natural gas, a cheaper option than hydrolysis using renewable power. New business models aim at reducing costs by dis-integrating the CCUS value chain into its three components of capture, transport and storage, and by addressing clusters of industrial facilities to achieve economies of scale.
Changes to the IMO emissions standards will see the global sulphur limit in marine fuel reduced from 3.5% to 0.5% from 2020.
Marine fuel is a huge energy market which is currently dominated by oil products. However, tighter environmental regulations, particularly MARPOL Annex VI, are driving changes in fuel requirements, especially with regards to sulphur emissions, both in the Emission Control Areas (ECAs) around the coasts of North-West Europe and North America, but also globally, particularly as the 0.5% sulphur limit applies globally from January 2020 . LNG has opportunities in this sector as a low-sulphur fuel, although it also faces strong competition from low-sulphur oil products, sulphur scrubbing technology, and potentially from electric vessels. Currently there are known to be around 139 merchant vessels using LNG as a fuel, with a similar number on order. Whilst LNG-fuelled shipping has been slow to take off, it is now growing rapidly, particularly as supply infrastructure coverage has improved significantly in recent years. LNG is likely to become a fuel of choice for newbuilds in many sectors, whilst there may also be some LNG conversions.
2017 was a key and challenging year for the Chinese gas sector. All indicators point to an acceleration of natural gas penetration in the energy mix and an intensification of gas market reforms to facilitate this expansion.
Boosted by the recovery of Chinese economic growth, the acceleration of coal-to-gas switching policies, and the rebound in the competitiveness of natural gas relative to competing fuels, China’s natural gas consumption reached a record high level. According to the National Development and Reform Commission (NDRC), natural gas consumption rose by 15.3% to 237.3 bcm in 2017. China was the world’s fastest growing gas market: the country alone accounted for a quarter of global growth in gas consumption.