Decarbonisation Technology May 2026 Issue

Cost-effective CO 2 sourcing for utilisation and sequestration The future of low-cost carbon dioxide sourcing and the most viable pathways to meet new demand as market dynamics evolve

Stephen B Harrison sbh4 Consulting

C O 2 is used in many commercial applications, such as beverage carbonation and food chilling. Its use cases also include pH control of wastewater and shielding gas during steel welding. Traditional sources of CO 2 are in a major transition. Ammonia plants in Europe are closing, and smaller refineries are at risk. Corn ethanol production is unlikely to scale due to land use concerns in the food versus fuel debate. On the demand side, production of e-fuels such as methanol and Fischer-Tropsch (FT) synthetic liquids is expected to create a demand for large quantities of biogenic CO 2 to react with electrolytic hydrogen. To minimise the cost of e-fuel production, the CO 2 will need to be sourced close to the hydrogen production location, which will most likely be near a cheap source of renewable electricity. Additionally, a new application for biogenic CO 2 is emerging in the voluntary carbon market (VCM) for carbon dioxide removals (CDR). In this case, the CO 2 is permanently sequestered. To optimise the business case, biogenic CO 2 must be sourced close to the sequestration site. Undoubtedly, CO 2 supply and demand will need to rebalance in accordance with these market dynamics. New supply chains will certainly emerge. The open question is which CO 2 sources will be most cost-effective to serve new demand in the locations where it is emerging? Ammonia plant closures Ammonia production has traditionally been one of the main sources of commercial CO 2 because CO 2 is captured within the ammonia synthesis process. Investment in CO 2 conditioning and

liquefaction represents only a small additional operating and capital cost. CO 2 shortages are increasingly common during the summer months. At this time of year, demand for CO 2 in chilled beverages spikes. Simultaneously, ammonia production falls after spring, and corn ethanol production eases off, awaiting the new harvest. Furthermore, ammonia plant closures by CF Fertilizers in the UK and BASF in Germany have removed some large commercial CO 2 sources. For these reasons, ammonia plants are no longer perceived as the most attractive commercial CO 2 sources. Refineries at risk In recent years, refinery steam methane reformers (SMRs) have been used to diversify commercial CO 2 sources. As an example, in 2016, BOC started up a 50,000 tonne-per-year (tpy) CO 2 capture and liquefaction plant at Refining NZ’s Marsden Point refinery in New Zealand. However, smaller local refineries are progressively closing as larger, modern regional refineries come on stream. In line with this trend, the Marsden Point refinery closed in 2022, and the required refined products were imported from Asian refineries. As this refinery consolidation trend continues worldwide, investments in CO 2 capture and liquefaction from refinery SMRs will become increasingly risky. Biomethane and CO 2 co-production Biogas-to-biomethane ensures the biomethane is of sufficient quality to be injected into the natural gas distribution and transmission pipeline network. CO2 is removed to achieve a high calorific value for the biomethane. Liquefaction of the captured biogenic CO 2 is low-cost because