Carbon capture is set to become a new reality in the energy sector, especially as fossil fuels are here to stay and the transition to alternative fuel sources is expected to take at least two decades.

There are fears that a massive increase in carbon capture, particularly in the offshore drilling industry, could slow the transition from fossil fuels to more sustainable solutions by locking in infrastructure. On the other hand, it is considered as a necessary bridge to compensate the emissions in the interval.

While various studies are gaining traction, even those focusing on mounting carbon capture systems on board ships, one key element to accelerating these efforts seems to be missing: finance.

Carbon taxes and tax credit incentives are key missing pieces for greater adoption of carbon capture, use and storage (CCUS) technology in the global energy transition puzzle, according to Jeff AllisonPresident at Delta CleanTech Inc.

Canadian company Delta CleanTech is an industry leader in CO2 capture technology; solvent and glycol recovery and hydrogen refueling infrastructure. The company is committed to reducing emissions from existing hydrogen production units such as steam methane reformers by capturing CO2 and transforming gray hydrogen into blue hydrogen.

Speaking to Offshore Energy, Allison said carbon taxes and subsidies are making CO2 capture more attractive, adding that with the introduction of new ways to commercialize the use of CO2, such as carbon nanotubes carbon/ethanol methanol/bio-plastics, etc. the cost of capture can be significantly reduced.

Carbon-free fossil fuels are the answer in the meantime. Delta can capture CO2 from any type of fuel, gas (coal, natural gas, steel mills, refineries, etc.). We see what happens when a large part of your base load infrastructure is based on renewable energy (wind and solar): we face “voltage blackouts” because these energy sources cannot be scaled and there is an increased demand (excessive heat or cold),” he said.

Delta’s technology is currently fully commercial, we have good success in the oil and gas sector due to ESG pressures as well as carbon taxes and incentives in Canada. With the recent death of Inflation Reduction Act and 45Q Increase, the United States will be a more important market for Delta in the future.

As Allison explained, the company’s modular CO2 capture system would work if mounted on a ship. However, it would be an additional addition to reduce a vessel’s GHG emissions.

The planned CCUS global capacity pipeline reached 905 million tonnes per annum (mtpa), with more than 50 new projects announced this quarter, according to data from Wood Mackenzie.

Lucy Kingsenior research analyst at Woodmac, believes the pipeline is close to aligning with Wood Mackenzie’s 1.5-degree trajectory through 2030, but will need to increase sevenfold by 2050 to reach the capacity required for net zero.

“The biggest challenge is the lack of integrated policy and regulation for CCUS projects. For most countries, the growth rate and demand for CCUS exceeds the ability of the respective government to legislate. Despite this, we expect 2022 to be a pivotal year for CCUS, with many countries formulating strategies, policies and regulations to support its deployment.” said the king.

The United States is a global leader in CCUS, backed by its 45Q carbon sequestration tax credit incentive launched in 2008. Currently, its capacity pipeline stands at nearly 250 Mtpy. The Inflation Reduction Act (IRA), signed into law earlier this month, is expected to strengthen and expand the 45Q tax incentive.

According to King, the law will encourage smaller-scale capture projects, attract more industry and encourage investment in technologies such as direct air capture.

As for the outlook for the maritime sector, Dutch marine technology company Value Maritime says the future of carbon capture is bright.

The company has developed an on-board CO₂ capture and storage solution, which has been installed on board Nordica, a 1,040 TEU container ship built in 2011 owned by Dutch shipping company Visser Shipping and operated by X-Press Feeders from Singapore.

The module captures CO2 from the ship’s exhaust gases and uses the CO2 to charge a CO2 battery which serves as a carbon dioxide storage facility onto which CO2 can be charged and discharged.

Nevertheless, the company believes that regulators need to provide more support to clean technology providers to accelerate the decarbonisation of the maritime sector.