The capture of CO₂ offers twofold potential in the course of the transformation of the energy system: on the one hand, it can contribute to improving the emissions balance of the capturing company. On the other hand, it opens up various economic opportunities:

In addition to climate-neutrally produced hydrogen, CO₂ is one of the raw materials for the production of electricity-based energy sources such as eMethanol or synthetic kerosene. For the production of RFNBO-compliant fuels, the CO₂ used must be of biogenic origin or captured from the air. Until 2041, CO₂ from fossil sources is also an option, however, the corresponding volume of ETS certificates has to be devalued for this (2036 for electricity production).

Alternatively, long-term geologically storage of CO₂ is possible. The financial incentive here is to avoid the costs of ETS certificates (for fossil sources) or to generate voluntary negative certificates that can be traded between companies (for biogenic CO₂ or CO₂ captured from the air). In the mid term, the market for negative allowances is to be integrated into the ETS market [1].

In any case, the CO₂ must be captured and processed for further use. For an economically viable application, the resulting costs must be covered by the possible revenue potential from subsequent use. In this project, the costs and potential of different CO₂ sources and the price-dependent demand for CO₂ in different applications were analyzed and compared.

CO₂ demand

Four different options for the utilization of CO₂ were analysed: In addition to the geological storage of CO₂ (“CCS”), the use as a raw material for the production of eMethanol in the chemical industry or in shipping as well as for the production of eSAF were included. To this end, willingness to pay and demand volumes for end products (e-methanol or eSAF) were first determined in the respective sectors. The willingness to pay was estimated based on parity prices for current fossil production and biogenic alternatives and taking into account the most relevant regulatory incentives and penalties (ReFuelEU Aviation, FuelEU Maritime, ETS). For the quantities, the applicable quotas and transformation plans of the industry were blended with forecast total demand.

The resulting demand volumes and willingness to pay for the end products were then converted into demand volumes and willingness to pay for CO₂ based on techno-economic parameters and assumptions for hydrogen prices. The result is available as a demand curve for CO₂.

Significant demand for CO₂ arises primarily from air traffic. A specific eSAF sub-quota encourages the use of CO₂ for the production of synthetic fuels. However, the existing demand volume in 2030 is still comparatively low. Although there are high monetary incentives for climate-neutral fuels for shipping, these do not apply specifically to e-methanol. The use of cheaper biofuels is therefore a relevant opportunity that pushes down the willingness to pay for CO₂. For the chemical industry, there are no significant incentives that have been implemented up to this point, so no sales market for CO₂ is seen here. Capture and storage is potentially unlimited. If ETS prices rise, this option will become cheaper than the emission of fossil CO₂ and therefore relevant for the market.

CO₂ supply

The other side of the market analysis is the future supply of CO₂ in Germany. Different CO₂ sources were considered that differ in terms of the quantity of available CO₂, the CO₂ concentration, the capture costs, the regional distribution and the quality of the CO₂ (biogenic or fossil). In addition to CO₂ from direct air capture plants, CO₂ can be captured at fossil point sources or at smaller biomass-based plants. In these, biomass is either burned or fermented, whereby the CO₂ released is currently not used. Fossil sources are only relevant for the production of RFNBOs for a limited period of time, which is why a great deal of attention is being paid to biogenic sources.

A large supply of biogenic CO₂ comes from biomass cogeneration plants. Other biogenic sources are bioethanol and biomethane plants. CO₂ can be made available particularly cheaply at these two types of plant, as the CO₂ is captured during the process.

CO₂ market analysis

The comparison of CO₂ demand and CO₂ supply in Germany provides an outlook on the market potential and the future market situation for CO₂. With low hydrogen prices, the eFuel demand of the aviation sector offers a possible business case for CO₂ sales. The potential demand for CO₂ in Germany in 2030 coming from eSAF production could be covered by the cheapest biogenic sources (bioethanol and biomethane). However, this only represents a relevant revenue opportunity in the event of stronger subsidies, rising ETS prices or very low hydrogen prices. With low deployment rates (around 2% eSAF in 2030), increasing the end-user price is also an option. For example, a ticket price increase of less than 5% would enable the eSAF quota to be met economically.

Finally, there is the option of CO₂ storage. This becomes interesting if ETS prices rise more than expected. For large (especially fossil) sources, the investment may already be worthwhile in the status quo.

Literatur

[1] Commission takes stock of how key pieces of climate legislation are operating, 15.05.2024, https://climate.ec.europa.eu/news-your-voice/news/commission-takes-stock-how-key-pieces-climate-legislation-are-operating-2024-05-15_en