Comparison of Direct Air Capture Technology to Point Source CO2

Home , Carbon Engineering, Direct air capture

DEGREE PROJECT IN CHEMICAL ENGINEERING FOR ENERGY AND ENVIRONMENT SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2020

technology to point source CO2 capture in Iceland

ANNA INGVARSDÓTTIR

KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF ENGINEERING SCIENCES IN CHEMISTRY, BIOTECHNOLOGY AND HEALTH

Abstract

It is well known that climate change due to global warming is one of the greatest crises facing the Earth. It is a huge challenge for mankind to reduce CO2 emissions, the major cause of global warming. Mitigation measures are not enough. Technologies to remove the CO2 from the atmosphere are considered necessary, so the temperature rise does not exceed 1.5°C as stated in the Paris Agreement. Direct air capture (DAC) is a new technology that can remove carbon dioxide directly from the atmosphere. Currently, this method is expensive, up to 1000 USD per ton CO2 removed. This high cost is mostly due to the relatively low concentration of CO2 in the ambient air, leading to a large unit to capture the gas and therefore high capital investment. The technology is very energy-intensive, either electrical or thermal, and to make direct air capture more efficient the plant needs to be powered with energy that has no or very low CO2 emissions. The energy in Iceland is low cost and its production has a very low carbon footprint. This thesis aims to find out if the direct air capture method will be more feasible than a point source CO2 capture in Iceland due to good access to low-cost and clean energy. The learning curve for direct air capture was studied along with scenarios for its technological development. Two different direct air capture technologies were analyzed, one that is powered by a large amount of electricity and one powered mostly by thermal energy. Three different point source cases in Iceland were studied for comparison. For the best-case scenario, where the learning rate is high and technological improvements are significant, the levelized cost of direct air capture is lower than levelized cost of point source capture. The cost of energy affects the levelized cost of direct air capture today but with technical development, the energy needed is expected to go down, and therefore the effect of energy cost will be lower. However, it is still important, concerning contribution to reducing global warming, that the energy powering the direct air capture plant has a low carbon footprint, which can be assured in Iceland. On the contrary, if the learning rate of the direct air capture technology is low and no technical improvements occur in solvents or sorbents the direct air capture technology is and will be more expensive than point source capture considering both located in Iceland. The high learning rate and development in technology are dependent on the pressure to reach the goals of the Paris Agreement. It is therefore vital for direct air capture that the demand for carbon removal measures is enhanced due to pressure to reach the Paris Agreement goals. Furthermore, direct air capture has more potential to affect climate change than point source capture as direct air capture can be a carbon-negative technology if coupled with the permanent storage of CO2.

The point source capture can only be a carbon-neutral technology if coupled with the permanent storage of CO2.

Sammanfattning

Det är välkänt att klimatförändringar på grund av global uppvärmning är en av de största kriserna som hotar jorden. Det är en enorm utmaning för mänskligheten att minska koldioxidutsläppen, den främsta orsaken till global uppvärmning. Enkelt genomförbara åtgärder är inte tillräckliga och teknik för att ta bort koldioxid från atmosfären anses nödvändig för att temperaturökningen inte ska överstiga de 1,5 °C som anges i Parisavtalet. Direkt infångning av koldioxid från luft (vanligen kallad direkt luftinfångning, (Eng. Direct air capture - DAC)) är en ny teknik som kan ta bort koldioxid direkt från atmosfären. För närvarande är denna metod dyr; upp till 1000 USD per ton avlägsnad koldioxid. Denna höga kostnad beror främst på den relativt låga koldioxidkoncentrationen i luften, vilket leder till att en stor anläggning behövs för att fånga upp gasen och därmed stora investeringar. Tekniken är mycket energiintensiv, antingen elektrisk eller termisk, och för att göra en direkt infångning effektivare, måste anläggningen drivas med energi som inte har några eller mycket låga koldioxidutsläpp. Energin på Island är billig och dess produktion innebär ett mycket lågt koldioxidavtryck. Syftet med arbetet i denna avhandling är att utforska om metoden för direkt infångning av koldioxid från luft kommer att vara en mer genomförbar metod än koldioxidinfångning från punktkällor (eng. point source - PS) på Island på grund av god tillgång till billig och ren energi. Lärandekurvan för direkt luftfångning studerades tillsammans med scenarier för metodens tekniska utveckling. Tre olika fall med punktkällor på Island studerades för jämförelse. Två olika direkta luftinfångningstekniker analyserades också, en som drivs av en stor mängd elektricitet och en som drivs mestadels av termisk energi. Det resulterade i att i bästa fall, där inlärningshastigheten är hög och tekniska förbättringar är signifikanta, så skulle produktionskostnaden för direkt luftinfångning (levelized cost of energy, LCOC) vara lägre än motsvarande för infångning från en punktkälla. Energikostnaden påverkar LCOC för DAC idag men med teknisk utveckling förväntas energibehovet minska och därför kommer energikostnadens påverkan att bli lägre. Det är dock fortfarande viktigt, med tanke på bidraget till att minska globala uppvärmningen, att energin som driver DAC-anläggningen har ett lågt koldioxidavtryck, vilket kan garanteras på Island. Tvärtom, om inlärningshastigheten för DAC-tekniken är låg och inga tekniska förbättringar sker i lösningsmedel eller sorbenter, är och kommer DAC-tekniken att bli dyrare än infångning från punktkällor om båda anläggningarna finns på Island. En hög inlärningshastighet och teknikutveckling är beroende av trycket att nå målen i Parisavtalet. Det är därför mycket viktigt för DAC att efterfrågan på koldioxidinfångning ökar. Dessutom har DAC mer potential att påverka klimatförändringarna eftersom DAC kan vara en kolnegativ teknik om den kombineras med permanent lagring av koldioxid. PS-avskiljningen kan endast vara en kolneutral teknik och detta om den kombineras med permanent lagring av koldioxid.

Acknowledgments

I would like to thank Landsvirkjun for giving me the opportunity and all the resources and help I needed to conduct my thesis at the company. I would especially like to thank my supervisors, Dr. Daði Þorsteinn Sveinbjörnsson and Sigurður H. Markússon, for their support throughout the project work. Furthermore, I would like to thank all the employees at Landsvirkjun, especially in R&D department, for warmly welcoming me during my time there. Additionally, I want to thank prof. Christiaan Petrus Richter for his assistance in the beginning and the end of the project. Finally, I would like to thank my academic supervisor at KTH, Dr. Per Alvfors for his guidance while supervising this thesis project.

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Abbreviations

BECCS Bioenergy with carbon capture and storage CAPEX Capital expenditure CCS Carbon capture and storage CDR Carbon dioxide removal

CO2eq Carbon dioxide equivalence DAC Direct air capture ESA Electric swing adsorption ETS EU’s emission trading system EUR Euros FLh Full load hour GPP Geothermal power plant HT High-temperature IPCC Intergovernmental panel on climate change LC Learning curve LCA Life cycle assessment LCOC Levelized cost of capture LT Low-temperature MSA Moisture swing adsorption OPEX Operational expenditure PS Point source PSA Pressure swing adsorption PV Solar photovoltaics TSA Temperature swing adsorption UNFCCC United nations framework convention on climate change USD United States dollars VSA Vacuum swing adsorption WACC Weighted average cost of capital

Table of Contents Abstract ...... i Sammanfattning ...... ii Acknowledgments ...... iii Abbreviations ...... iv 1 Introduction ...... 1 1.1 Background ...... 1 1.1.1 Icelandic conditions ...... 2 1.2 Problem description and research question ...... 3 1.3 Delimitations ...... 4 2 Methodology ...... 4 3 Literature review ...... 6

3.1 CO2 capture from a point source ...... 6

3.2 Direct air capture of CO2 ...... 9 4 Cases in Iceland ...... 13 4.1 Krafla geothermal power plant ...... 13 4.2 Aluminum plant ...... 16 4.3 Silicon metal industry ...... 19 4.4 Climeworks ...... 20 4.5 Carbon Engineering ...... 23 5 Technological and economic development ...... 27 5.1 Experience curves and learning rates ...... 27 5.2 Capital and operational costs ...... 29 5.3 Results: Predictions for Iceland ...... 30 6 Discussion ...... 43 7 Conclusion & Future work ...... 48 References ...... 50 Appendix ...... 56

Table of Figures

Figure 1: Three different types of systems for CO2 capture (Songolzadeh et al., 2014)...... 6

Figure 2: Technology options for CO2 separation (Songolzadeh et al., 2014)...... 7 Figure 3: Simple process flow diagram of chemical absorption with thermal regeneration (Nakao et al., 2019)...... 8 Figure 4: Sherwood plot exhibiting the relationship between the concentration of a target material in a feed stream versus the cost of its removal (Bui et al., 2018)...... 11

Figure 5: Levelized cost of CO2 direct air capture projected for the year 2050 (Breyer et al., 2019)...... 12 Figure 6: Schematic diagram of Krafla's system (Landsvirkjun, 2020) ...... 14

Figure 7: Overview of the units for capture and reinjection of CO2 at Krafla (Landsvirkjun, 2020) ...... 15 Figure 8: Schematic diagram of aluminum production (Rio Tinto, 2020) ...... 17 Figure 9: Climeworks direct air capture process (Beuttler et al., 2019)...... 21 Figure 10: Schematic diagram of the Carbfix-2 project at Hellisheiði, Iceland (Beuttler et al., 2019)...... 22 Figure 11: Carbon Engineering's direct air capture process, major unit operations (Carbon Engineering, 2020b) ...... 23 Figure 12: Two connected chemical loops (Keith et al., 2018) ...... 24 Figure 13: CE's DAC process combined with enhanced oil recovery, the closed-loop system (Carbon Engineering, 2020a) ...... 25 Figure 14: The impact of DAC FLh on net LCOE, LT LCOD and HT LCOD (Fasihi et al., 2019)...... 30 Figure 15: Development in LCOC for DAC plants in Iceland with LR at 15% and no added efficacy in solvents or sorbents...... 32 Figure 16: Comparison of DAC LCOC with LCOC for point source capture from Krafla GPP, with LR 15% ...... 33 Figure 17: Comparison of DAC LCOC with LCOC for point source capture from Aluminum plant in Iceland, with LR 15%...... 34 Figure 18: Comparison of DAC LCOC with LCOC for point source capture from Silicon metal plant in Iceland, with LR 15%...... 34 Figure 19: Comparison of DAC LCOC with LCOC for point source capture from Krafla, with LR 5%. . 35 Figure 20: Comparison of DAC LCOC with LCOC for point source capture from Aluminum plant in Iceland, with LR 5%...... 35 Figure 21: Comparison of DAC LCOC with LCOC for point source capture from Silicon metal plant in Iceland, with LR 5%...... 36 Figure 22: Comparison of DAC LCOC with LCOC for point source capture from Krafla, with LR 30%.36

Figure 23: Comparison of DAC LCOC with LCOC for point source capture from Aluminum plant in Iceland, with LR 30%...... 37 Figure 24: Comparison of DAC LCOC with LCOC for point source capture from Silicon metal plant in Iceland, with LR 30%...... 37 Figure 25: Development in LCOC for DAC plants in Iceland with LR at 15% and 5% reduction ratio of CAPEX and energy need every 10 years...... 38 Figure 26: Development in LCOC for DAC plants in Iceland with LR at 15% and 15% reduction ratio of CAPEX and energy need every 10 years...... 39 Figure 27: Development in LCOC for DAC plants in Iceland with LR at 15% and 30% reduction ratio of CAPEX and energy need every 10 years...... 39 Figure 28: Best-case scenario for the DAC technology in Iceland compared to lowest estimated cost of PS capture. LR at 30% and significant improvements in solvent and sorbent technology...... 40 Figure 29: Average case for the DAC technology in Iceland compared to the lowest estimated cost of PS capture. LR at 15% and some improvements in solvent and sorbent technology...... 41 Figure 30: Worst-case scenario for the DAC technology in Iceland compared to the lowest estimated cost of PS capture. LR at 5% and no improvements in solvent and sorbent technology...... 41 Figure 31: Best-case scenario for the DAC technology in Iceland compared to lowest estimated cost of PS capture. LR at 30% and significant improvements in solvent and sorbent technology. Energy prices doubled...... 42

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1 Introduction

In this chapter, the scope of the thesis will be introduced. The thesis was done in cooperation with Landsvirkjun (e. The National Power Company of Iceland).

1.1 Background

Over the past 200 years the concentration of the gas carbon dioxide, CO2, has been increasing in the atmosphere. Severely in the last 50 years, from 325 ppm in 1970 to 410 ppm in 2020 (Lindsey, 2020). The cause is human actions, mostly the burning of fossil fuels (coal, oil, and gas) combined with deforestation. Since the carbon dioxide remains in the atmosphere for a long period of time, it builds up and creates a blanket over the Earth’s surface. Therefore, the heat from the sun reaches the Earth but the heat radiation from the Earth is caught by the CO2 blanket and thus making the Earth warmer namely, the greenhouse effect. This is global warming and it causes climate change which can lead to numerous problems, such as severe droughts, floods, or sea-level rise, this affects human health and well-being. It is important to note that other gases than CO2 cause this effect, so-called greenhouse gases, though the focus in this report is on

CO2. Their factor to global warming varies but is commonly expressed in carbon dioxide equivalent, i.e.

CO2eq. It is estimated that global warming is increasing at 0.2°C per decade and will presumably reach 1.5°C above the pre-industrial level between 2030 and 2052 at the current rate (J., Rogelj, et al. 2018). Due to this threat, The Paris Agreement has been signed by all UNFCCC members. The agreement’s “aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5°C.” (UNFCCC, 2020) To achieve the agreements aim it is vital to reduce emissions, nonetheless, annual CO2 emissions continue to rise. Consequently, the need for carbon dioxide removal (CDR) techniques has never been higher (Beuttler et al., 2019). Four pathways to reach this goal are presented by IPCC (2018), all of them include CDR methods. The most known CDR method is afforestation, other commonly mentioned methods are agricultural practices that sequester carbon in soils, BECCS (bioenergy with carbon capture and storage), ocean fertilization, and enhanced weathering. These methods require, excluding ocean fertilization, a large area of arable land to capture a considerable amount of CO2. Recently, a new technique, able to capture a large amount of CO2 in a very small area of non-arable land has been developing. This method is called direct air capture (DAC) and involves capturing CO2 directly from the atmosphere. However, the technology requires a lot of energy, thermal and/or electrical as well as water cooling in some cases. It is therefore important that the energy used is green and sustainable

1 and water is not limited in the area. A life cycle assessment (LCA) of direct air capture performed in 2020 by Deutz and Bardow (Deutz & Bardow, 2020) suggests that direct air capture in Iceland, where the electricity is produced sustainably, gives the best results. Furthermore, the technology is in the early stages of development and is currently expensive where the largest expense is the energy cost. As energy is Iceland is low-cost compared to many other countries it could be optimal to operate the energy-intensive direct air capture technology in Iceland. Iceland has, like many other countries, signed the Paris Agreement and therefore needs to actively make efforts to and reduce greenhouse gas emissions. Iceland is in a favorable situation since conditions there are good, with clean, affordable energy and low-cost, clean, and accessible water.

1.1.1 Icelandic conditions

Electricity in Iceland is 99.99% renewable, green, and affordable energy from hydropower, geothermal power, or wind power (Samorka, 2020) the 0.01% fossil fuel resource is only used in emergencies (Hreinsson, 2008). According to The National Energy Agency (NEA) in Iceland the low-temperature geothermal heat is used for space heating in urban and rural areas and covers 89% of space heating, 10% is then heated with electricity and only 1% with oil (National Energy Authority of Iceland, 2020). Iceland is at the forefront of other countries with renewable, environmentally friendly, and sustainable energy. Besides, groundwater is accessible in almost every area of the country. The water is clean from nature's hand at a low cost in Iceland. Water is not considered a limited resource in Iceland.

The bedrock in Iceland consists of mostly basalt and is optimal for CO2 sequestrations and mineral storage which stores the CO2 in the ground permanently. If no buyer is for the CO2 gas it can therefore be injected into the ground and stored without transportation or long pipelines. Geothermal power plants (GPP) in Iceland are located in optimal areas for injection. A DAC plant could be coupled with the power plant where the power plant provides sustainable electricity and thermal energy, as waste heat is usually available at GPPs (Snæbjörnsdóttir et al., 2020). According to the yearly report of Iceland’s emissions published by the Environmental Agency of

Iceland (The Environmental Agency of Iceland, 2020), most of the CO2 emissions come from the industry sector or 42% and next is the energy sector with 39%. The largest portion of the emissions in the industry sector comes from the metal industry, including aluminum plants and silicon metal plants. In the energy sector, transportation is responsible for the largest portion but second in that sector are emissions from geothermal power plants. They have, however, been increasing vastly from the year 1990, when emissions were 62,000 tons CO2eq and peaked in 2010 at 194,000 CO2eq. After 2010 emissions from geothermal

2 power plants have been decreasing which is related to the Carbfix project1 and were around 160,000 tons

CO2eq in 2018. CO2 emissions from Iceland were 4,857,000 tons in the year 2018 (The Environmental Agency of Iceland, 2020).

The single largest point source (PS) of CO2 emissions is found in the metal industry but the total

CO2 emissions from the metal industry were 1,824,000 tons in 2018. However, the metal industry emissions are not included in Iceland’s commitment under the Paris Agreement but under the EU’s emissions trading system (ETS). Point source capture from the metal industry can therefore not assist in Iceland’s commitment towards the Paris Agreement. By signing the Paris Agreement Iceland must reduce direct CO2 emissions by at least 29% based on the year 2005 before 2030, which correlates to about 922,000 tons CO2. The largest distributed emitter is the transport sector, including road transport, coastal ships, fishing boats, and domestic air transport. The emissions from the transport sector cannot be captured with an end-of-pipe solution as possible for point sources. In Iceland, there is no natural gas combustion, coal combustion, or coal gasification plants producing energy that usually is a large emitter of CO2 (Bui et al., 2018). Possible point source capture in Iceland is, therefore, the metal industry, which will however not assist in the commitments under the Paris Agreement, and geothermal power plants. Furthermore, Iceland aims to become carbon neutral by the year 2040. That involves mitigation measures and carbon dioxide removal methods and is not defined to be a part of direct emissions from Iceland (Environmental Agency of Iceland, 2020). Ultimately, Iceland has two goals, first under the Paris Agreement to limit or reduce direct emissions from Iceland, and second to become carbon neutral by 2040 where emissions can be reduced by carbon removal methods.

1.2 Problem description and research question

Due to global warming, the need to reduce global CO2 emissions is vital. The direct air capture technology, to capture CO2 directly from the atmosphere, has just recently become available. The cost per ton of CO2 is very high compared to other CO2 capture technologies and methods (Goeppert et al., 2012). Iceland must commit to its obligation under the Paris Agreement to reduce greenhouse gas emissions. Additionally, the Government of Iceland has set the goal that Iceland becomes carbon neutral by 2040. One way to reduce

CO2 emissions is to capture CO2 from large emitters, point sources, as the metal industry or all geothermal power plants in Iceland. But point source capture leaves the CO2 emitted in the transport sector. The only option for the transport sector is to mitigate the emissions by electrifying the fleet, which can take a long

1 Carbfix is a process that captures CO2 and other acid gases in water, then injects this water into the subsurface where the gases are stored as stable minerals. It is currently operated at Hellisheiði geothermal power plant (Gutknecht et al., 2018).

3 time. The point source capture can be expensive and complicated since a customized design is needed for each plant since the composition of the exhaust gas stream can vary. In some cases, no feasible solution is available for point source capture. Now, since Iceland has affordable, green, and sustainable energy the main question this thesis seeks to answer is:

 Is it more feasible, or will it become feasible, to capture CO2 directly from the atmosphere, with a direct air capture method, than capturing it from an industrial point source, if located in Iceland? In order to answer this open and broad question, more focused questions have been projected and the thesis will aim to find out the answers to the following questions: o Will the development of the direct air capture technique catch up with point capture in relation to cost and effect on global warming? o Does the abundance of clean, affordable energy in Iceland make it an optimal place for direct air capture plant, compared to other places where energy is supplied from a non-renewable resource? It must be noted that point source capture from the metal industry will not assist Iceland in its commitment under the Paris Agreement, however, two point sources in the metal industry are viewed in this thesis for comparison.

1.3 Delimitations

This thesis is based on a literature review and therefore limited to the available literature and data. The project is only an investigation and no lab experiments or real-life implementation was conducted. The thesis focuses on the possibilities in Iceland and is therefore limited to the companies presented in the case study which are all operating in Iceland or plan to operate in Iceland. Only aspects that the author considered relevant in order to seek an answer for the research questions were investigated.

2 Methodology

The methodology of this thesis is based on the objectives to reach the goal of answering the research questions, namely: o Conduct a literature study of available literature. o Review technological development in similar fields as direct air capture.

o Present at least one direct air capture company and two different industries emitting CO2 operating in Iceland. o Review the technical and economic development of direct air capture and predict the possibilities and future in Iceland based on literature review and cases in Iceland.

This thesis is based on a study of literature available on the internet. A literature study was based on research papers, published books, and websites or official documents from companies in the relevant industry. The most recent information as possible was chosen. The data or information collected in the literature study and interviews was used to conduct case studies on two direct air capture companies, leading in the field, one of which already operating in Iceland at a small scale, two metal industry companies, and a geothermal power plant. The learning curve of similar technologies and their development in cost with mass production was viewed. Levelized cost of CO2 captured (LCOC) was calculated for DAC plants and point source capture cases in Iceland, using Equation 1, where the learning rate was used to predict the CAPEX for the next 40 years. 퐶퐴푃퐸푋 ∗ 푐푟푓 + 푂푃퐸푋 퐿퐶푂퐶 = + 푐표푠푡 ∗ 푑푒푚푎푛푑 퐶푂푐푎푝

Equation 1: Levelized cost of the capture of CO2

Where CAPEX is capital cost, OPEX operational cost, CO2cap is tons CO2 captured per year, costel is the cost of electricity in EUR/MWh and demandel is the electricity demand in MWh/ton CO2 captured and crf is calculated according to Equation 2. 푊퐴퐶퐶 ∗ (1+ 푊퐴퐶퐶) 푐푟푓 = (1+ 푊퐴퐶퐶) −1 Equation 2

Weighted average cost of capital (WACC) was assumed to be 7% for all the calculations in the study. All the calculations were done in EUR, at a fixed 2020 cost level, and where needed the average exchange rate in November 2020 based on the published exchange rate from the European Central Bank 1 EUR = 1.189 USD was used.

3 Literature review

3.1 CO2 capture from a point source

For CO2 capture from a point source, there are mainly three types of systems, post-combustion, pre- combustion, and oxyfuel combustion. The main difference between these is the place where the CO2 capture occurs in the process, as demonstrated in Figure 1. The post-combustion capture is the separation of flue gases where the CO2 is generally diluted, and the gas stream is at atmospheric pressure and high temperature. Post-combustion is a good method to limit CO2 emissions from an existing plant without having to change the plant's design and operations. The advantages of a post-combustion capture method are that it can be added to an existing plant afterwards as opposed to in the pre-combustion and oxyfuel combustion capture methods, it is necessary to make changes to the design of the plant, it cannot be added afterwards. Post-combustion carbon capture is therefore a good choice for established plants with the goal to reduce their CO2 emissions since the unit for gas scrubbing can be added to the plant afterward with limited or no interruptions to the plant’s operations. The most important factors for choosing a method are the characteristic of the gas stream, the partial pressure of CO2 in the stream, the extent of CO2 recovery required, sensitivity to impurities, and desired purity of the CO2 (Metz et al., 2005; Songolzadeh et al.,

2014). For CO2 capture there are both physical and chemical separation technologies, namely absorption, adsorption, cryogenics, and membranes. Figure 2 shows a schematic diagram of CO2 separation techniques (Songolzadeh et al., 2014).

Figure 1: Three different types of systems for CO2 capture (Songolzadeh et al., 2014).

Figure 2: Technology options for CO2 separation (Songolzadeh et al., 2014).

Absorption is a process where a specific gas is separated from a gas mixture with a solvent. It is divided into two categories, chemical, and physical absorption. Chemical absorption relies on the chemical reaction between the gas and the chosen solvent. In physical absorption, it depends on the solubility of the gas in the solvent (Stewart & Maurice, 2014). The diagram in Figure 2 shows some of the most common solvents for chemical and physical absorption. Depending on the case the solvent is regenerated, and the gas species separated from the solvent, with either temperature change or pressure change. In some cases, where the solvent and capture gas species have strong bonds after reaction a chemical shift process is necessary to separate them. For CO2 capture, chemical absorption with amine-based solvent is the most common. A simple diagram for amine-based CO2 capture is shown in Figure 3. Chemical absorption is the leading CO2 separation technology with a high technology readiness level where post-combustion CO2 capture using chemical absorption has already been implemented (Nakao et al., 2019).

Figure 3: Simple process flow diagram of chemical absorption with thermal regeneration (Nakao et al., 2019).

Adsorption and absorption are both separation methods based on the same foundation. As in absorption, the specific gas can be adsorbed from a gas mixture using an adsorbent selective for the specific gas. Once the gas is stuck to the adsorbent (or sorbent) the temperature or pressure can be changed, so the gas is released and the adsorbent regenerated (Nakao et al., 2019). As in absorption, adsorption can be both chemical and physical, wherein chemical adsorption a reaction between the adsorbent and the capture element occurs on the surface of the adsorbent. In physical adsorption or physisorption, the structure of the atom or molecule to be capture is not disrupted as it sets on the surface of the sorbent (Songolzadeh et al., 2014). The adsorbents can be both liquid and solid. When using an adsorbing liquid, it is usually moved between two containers for the adsorbing and regeneration steps but with a solid adsorbent, the environment is usually changing within the same container called a fixed-bed system. In CO2 capture zeolites or activated carbon are typically used. The regeneration methods rely on the weak van der Waals forces of CO2 (Nakao et al., 2019). According to Songolzadeh et al. (2014) four basic methods for CO2 regeneration in a fixed- bed system have been researched, vacuum swing adsorption (VSA), pressure swing adsorption (PSA), temperature swing adsorption (TSA), and electric swing adsorption (ESA) where the difference is what is changed in the environment to desorb the CO2. In a pressure swing, the pressure is lower from high to atmospheric pressure, similar to a vacuum swing but there the desorption pressure is below atmospheric. In a temperature swing, the temperature is raised and in the electric swing, the system is heated by the Joule

8 effect. Some combinations of these methods have also been tested for example vacuum pressure swing and pressure temperature swing. The cryogenic method is based on low temperatures for condensation, separation, and purification of CO2 from flue gases. Compression, cooling, and expansion steps are implemented which results in the production of liquid CO2 to be stored at high pressure. This method is easy to scale up, involves no solvents as well as giving out liquid CO2. However, it required a large amount of energy to provide cooling. It has been proposed that this method is most effective when the gas stream is at a high pressure which is not the case with post-combustion capture (Songolzadeh et al., 2014).

Membrane separation for CO2 capture is a continuous, clean, and simple method. This is a pressure-driven process which is not favorable in post-combustion capture. However, the advantages of this method are several. The process is very simple and compact and easy to operate, control, and scale-up. When applying membrane separation on flue gas streams post-combustion it requires more energy than when the gas stream has higher pressure. For membrane CO2 capture the membrane must have, among other things, high CO2 permeability, high selectivity for CO2 separation from flue gases, and high thermal and chemical stability. Several types of membranes have been researched for CO2 capture such as, inorganic membranes which have too low selectivity and permeability for CO2, and polymeric membranes which have low thermal stability and therefore unsuitable for post-combustion capture (Nakao et al., 2019; Songolzadeh et al., 2014).

Adsorption and absorption are more favorable for post-combustion CO2 than the cryogenic method and membrane separation. Physical adsorption and absorption require less energy than the chemical methods as less energy is needed for regeneration. However, physical solvents and sorbents have less selectivity for the CO2 gas. It is therefore vital to evaluate the desired outcome of CO2 capture considering

CO2 recovery, purity, and cost (Songolzadeh et al., 2014).

3.2 Direct air capture of CO2

It was in the last decade of the 20th century that Klaus Lackner first researched the method of large-scale capture of CO2 from ambient air as an approach to mitigate the climate crisis. Today this method is known as direct air capture (DAC) and has proven to be an up-and-coming approach to carbon dioxide removal (CDR). The main advantage DAC has over other CDR approaches like afforestation and BECCS is the required area for capturing the same amount of CO2 is much less with DAC as well as the plant can be located on non-arable land (Beuttler et al., 2019; Keith et al., 2018). The main focus on the location for the DAC plant depends on the resources being available nearby, namely electric, thermal energy, and possibly water. In addition, being located near either an injection site or utilization for the CO2 like greenhouses or

9 fuel production (Bui et al., 2018). As opposed to collecting CO2 from a point source, according to Lackner

(2009) “air capture can compensate for any emitted CO2 by capturing an equal amount of CO2 at a different location and time”. Since the concentration of CO2 in ambient air is almost equal all over the planet, at 410 ppm and rising, (Beuttler et al., 2019) the collection and capture of CO2 do not need to run near the source of CO2 emission. It should rather be placed close to where the CO2 will be used or stored and therefore reducing transportation costs (Lackner, 2009). After the publication of Lackner’s article (Lackner, 2009) two companies focusing on direct air capture were founded, Climeworks and Carbon Engineering, their technologies are very different but are further presented in Sections 4.4 and 4.5 respectively (Carbon Engineering, 2020b; Climeworks, 2020a). More companies have been founded in the last 10 years with a focus on direct air capture with different capture methods and technologies, but that will not be further discussed in this thesis. Several techniques have been tested and some are currently running a pilot phase. Air capture with cryogenic air separation was tested in the 1930s, later utilized as life support in manned space stations. At first, the systems were not regeneratable. Since the concentration of CO2 in the atmosphere is relatively low chemical sorbents with strong binding characteristics became the most researched for air capture (Fasihi et al., 2019). Fasihi et al. (2019) compared and researched seven different DAC companies and their technology. All of them have the basic components for air capture, contacting area, solvent or sorbent, and regeneration module, then operate an absorption or an adsorption capture method with various solvents/sorbents and some regeneration method. Six of them, including Climeworks, use low-temperature (LT) solid sorbent for adsorption with a fixed-bed and TSA, PSA, or the less common moisture swing adsorption (MSA) for regeneration. One, Carbon Engineering, uses high-temperature (HT) liquid solvent for absorption, where the capture step and regeneration steps are operated simultaneously. The technologies are, as mentioned above, further described in Sections 4.4 and 4.5. Bui et al. (2018) reviewed the current status of state-of-the-art carbon capture technologies where direct air capture was reviewed. They perform a short technical assessment of the absorption and adsorption technologies. As mentioned above, solvents or sorbents with strong binding characteristics are vital due to the low CO2 concentration compared to a point source gas stream. In the case of absorption, a very strong base with fast kinetics must be chosen as a solvent. Now, as the CO2 binds faster to the stronger bases a chemical shift process is needed, instead of a thermal or pressure swing process, which requires more energy. A similar case is with absorption, since the gas stream is so diluted the pores on the solid sorbent will never be saturated but once that occurs, as is the case with a more concentrated gas stream, a driving force is added to the regeneration. But without that driving force more energy is needed to release the CO2 from the sorbent. Bui et al. (2018) estimated that for a DAC plant capturing million tons of CO2 per year at only a 50% capture rate it would require processing 80,000 m3/s of air with a typical air velocity of 2-3 m/s.

2 The surface area would therefore need to be 30,000 m , about 600 times the area used in CO2 capture from a coal power plant. This is expected to be the largest factor in the capital cost of a DAC plant (Bui et al., 2018).

A different range of costs has been reported in the reviewed literature for removal of CO2 with DAC. Goeppert et al. (Goeppert et al., 2012) stated that the cost varied from 20 USD to more than 1000

USD per ton CO2 due to many uncertainties in the technology while the cost of capturing a ton of CO2 from a point source stream with 10-15% CO2 concentration was estimated to be between 30 USD to 100 USD.

Today, the CO2 used for commercial markets is obtained from high purity source such as ammonia, ethanol, and hydrogen plants. This is due to reduced production costs with higher purity sources. The Sherwood Plot (see Figure 4) shows this relationship in an empirical correlation.

Figure 4: Sherwood plot exhibiting the relationship between the concentration of a target material in a feed stream versus the cost of its removal (Bui et al., 2018).

Deutz and Bardow (2020) performed a life cycle analysis on a low-temperature solid sorbent direct air capture plant. They concluded that the best result to limit CO2 emissions was locating a plant in Iceland where the electricity is provided with sustainable and green energy and the CO2 can be stored safely underground. Breyer et al. (2019) calculated the levelized cost of CO2 direct air capture in 2050 dependent on location. Figure 5 shows the distribution over the world where the cost in Iceland is determined to be between 50 and 55 EUR/ton CO2 captured.

Figure 5: Levelized cost of CO2 direct air capture projected for the year 2050 (Breyer et al., 2019).

Direct air capture is an innovative and relatively new technology. It is in an early stage of development but growing rapidly only in the last five years. Fasihi et al. (2019) suggest that DAC is necessary in order to reach the goals of the Paris Agreement to capture CO2 emissions that cannot be captured with point source CO2 capture and cannot be eliminated by electrification. They also predict the cost of DAC to go down in the next 30 years and therefore be competitive to the point source capture technologies. Breyer et al. (2019) summarized studies on the estimation of the growth of DAC which varies from 0.3 giga ton CO2 per year to 1 giga ton CO2 per year in 2050. The technology has many advantages in the battle against climate change but some challenges must be overcome for it to become a feasible choice, Table 1 summarizes the advantages and disadvantages of DAC.

Table 1: Summary of advantages and disadvantages of DAC.

Direct air capture Advantages Disadvantages

Located where needed or CO2 can be stored Expensive Major role in fight against climate change Energy intensive Located on non-arable land Technological challenges

Can capture CO2 from distributed source Located where resources are available

4 Cases in Iceland

In this chapter, five cases will be presented. One geothermal power plant, Krafla, operated by Landsvirkjun (4.1), one case for the aluminum industry (4.2), one case for silica industry (4.3), then two cases for direct air capture, Climeworks (4.4), and Carbon Engineering (4.5) which have different technology for direct air capture. All the cases are assumed to be operating in Iceland.

4.1 Krafla geothermal power plant

Krafla is a geothermal power plant (GPP) fully owned and operated by Landsvirkjun (e. The National Power Company of Iceland). Landsvirkjun has set a goal to become carbon neutral by the year 2025. Krafla is the

2 single largest emitter of Landsvirkjun’s operations, emitting on average 30,000 tons CO2 per year .

Therefore, the project of capturing and reinjecting at least 90% of the CO2 emitted at Krafla power plant was started in 2019. In a geothermal power plant that generates electricity the hot steam from the ground is led to turbines where the steam turns the turbines and generates energy. The steam is then condensed to water and pumped back into the ground but with the steam flows non-condensable gas (NCG) that builds up in the condensers. The NCG is therefore vented to the atmosphere through the cooling tower. The system can be seen in Figure 6. This gas usually consists mostly of carbon dioxide, hydrogen sulfide, and hydrogen and small amounts of other gases. At Krafla, which was built in the 1970s, the condensers are water-cooled direct contact condensers resulting in a relatively high amount of oxygen in the gas stream. In newer geothermal plants the condensers are closed so the gas never comes in contact with the atmosphere and therefore contains a very low amount of oxygen. The NCG at Krafla contains about 65% CO2, 10% H2S, and 3% oxygen, of volume (Hauksson, 2019). This is, compared to newer plants, quite a high amount of oxygen and has resulted in some problems at Krafla. When both H2S and oxygen are present in a gas stream they will, in the water phase, react and most likely form elemental sulphur following the reaction shown in Equation 3. This causes sulphur precipitation to form and cause clogging of equipment leading to malfunction. In the condenser cooling water circuit at Krafla this problem has occurred and over time sulphur precipitation builds up and maintainers are required to remove the solid sulphur. 1 1 퐻 푆 + 푂 → 푆 + 퐻 푂 2 8 Equation 3: Reaction of hydrogen sulphide and oxygen

2 CO2 emissions from an active geothermal system are complex and data from Krafla has shown that emissions reduce annually. In this thesis the average number based on emissions last 20 years will be used (Hauksson, 2019).

Figure 6: Schematic diagram of Krafla's system (Landsvirkjun, 2020)

For the capture and injection of CO2 at Krafla, a unit is needed to capture the gas and an injection well is needed for reinjection. The NCG will be captured from the cooling tower and the CO2 separated from other gases with a scrubber. A simple overview of the components of the capture system is shown in Figure 7. The physical absorption process, pressurized water scrubbing using groundwater is the primary option for the separation as for now, a final decision has not been made and due to the possible problems of sulphur precipitation, a field test is necessary. As the solubility of H2S in water is higher than that of

CO2, H2S will be captured and injected with the CO2 which will further improve air quality in the Krafla area. Other options have been considered, for example, absorption using amine solvent but that has been considered less feasible due to the possible environmental effect of the amine as well as the need for amine import to the Krafla area from abroad. With the water scrubbing, CO2 and H2S are already dissolved in water and can therefore be injected directly into the ground without a regeneration step. The CAPEX for the capture system at Krafla has been estimated at 6,227,000 EUR and OPEX at roughly 491,000 EUR/year.

Electricity need for the system is 0.35 MWh per ton CO2 and thermal energy need is 3,14 MWth. However, as the capture system would be placed at the Krafla site, the thermal energy needs could be met with the waste heat from the power plant and as Landsvirkjun would operate both the capture unit and the plant the cost of thermal energy is considered to be zero.

Figure 7: Overview of the units for capture and reinjection of CO2 at Krafla (Landsvirkjun, 2020)

One geothermal power plant in Iceland, Hellisheiði GPP owned and operated by ON Power, is currently capturing and reinjecting CO2 (along with H2S) today. Hellisheiði is a newer plant than Krafla and has the surface condensers, where heat exchangers are used for condensing, so the gas never comes in contact with the atmosphere, and therefore the content of oxygen is almost zero. In 2010, as a part of a project called Carbfix, a pilot gas capture plant was designed in the Hellisheiði power plant. The process was supposed to separate CO2 from the power plant by sequential extraction, first by washing CO2 and H2S from less soluble gases, a deaerator should remove CO2 and H2S from the water and finally, the two gases should be separated by distillation. However, after a short run, a problem occurred with the distillation step.

It was finally concluded that it was due to corrosion by H2S in the steel of the distillation column. For the Carbfix project it was eventually decided to not separate the two gases but pump them both into the ground for the mineralization and has proven to be successful (Gíslason et al., 2018). No references are available about the problem that occurred when leakage in the pipes, resulting in oxygen in the gas stream during a short time. It is however known that clogging occurred due to sulphur precipitation when this small amount of oxygen mixed with the gas stream. After the leakage was fixed no precipitation has been noticed. This proves that a high amount of oxygen content along with the hydrogen sulfur in the gas stream will cause problems. It is therefore not possible for geothermal power plants with direct contact condensers to install the same unit and apply the same technique as GPP with surface condensers.

Hellisheiði is the only place where the CO2 gas is scrubbed from the gas stream in a geothermal plant. It is therefore a quite unknown territory. However, H2S has been scrubbed from geothermal power plants in the Geysir area in California, USA. There, water scrubbers are also used in newer plants, which have closed condensers and low oxygen content. It was not considered feasible to change the older plants and there the H2S is vented to the atmosphere as before. This all supports the indication that the content of oxygen in the gas stream is a large problem for CO2 capture from geothermal power plants (Mamrosh PE et al., 2014).

Some might find it not necessary to capture CO2 from a geothermal power plant since in the bigger picture the CO2 emissions are minor compared to other energy providers. Although, GPPs’ emissions are included in Iceland’s commitment under the Paris Agreement. Additionally, it can be a large emitter of CO2 since a geothermal area is an alive system, some systems have a larger amount of CO2 in the grounds and therefore the emission from there is larger than in other areas. A geothermal power plant produces significantly less CO2 emissions than a coal, oil, or natural gas power plant. Although CO2 emissions are low, geothermal plants can produce from approximately 10 to over 800 g/kWh (EBRD, 2016; Gunnarsson,

2017). In Iceland, CO2 emissions from geothermal areas were 145,000 tons per year in 2017 (Gunnarsson,

2017). However, in geothermal areas there are some natural emissions of CO2 and a study on a geothermal area in Italy that has been in operation for more than 100 years suggests that the emissions from the power plant are just an acceleration of natural emissions. In Iceland, the total annual natural emissions were estimated and compared to the power plant emissions. The results, of 8-16% more emissions from the power plants, led to doubt in the argument that CO2 emissions from geothermal power plants in Iceland can be neglected (Ármannsson et al., 2005).

4.2 Aluminum plant

The aluminum industry is the largest metal industry in Iceland. In the process of aluminum production, there are three main steps, mining the bauxite, refining bauxite to alumina (Al2O3), and electrolysis of the alumina which leads to the end product aluminum (Bergsdal et al., 2004). The electrolysis process is commonly known as the Hall-Héroult process (see Equation 4). The electrolysis occurs in the pot and aluminum plants in Iceland have a couple of hundreds of pots in so-called pot rooms. Included in the electrolysis step are anode production and smelting (Gautam et al., 2018). A schematic diagram of the aluminum production can be seen in Figure 8. In Table 1 it can be seen that the smelting step of the production has the far most CO2 emissions, with 12.15-ton CO2 per ton of aluminum produced. This accounts for roughly 60% of the CO2 emissions in the production.

2퐴푙푂 +3퐶 ⎯⎯⎯⎯⎯⎯ 4퐴푙(푙) +3퐶푂(푔) Equation 4: The Hall-Héroult process

Figure 8: Schematic diagram of aluminum production (Rio Tinto, 2020)

Aluminum can be separated into two categories, primary aluminum, and secondary aluminum. Primary aluminum is when the aluminum is produced from bauxite as described above. Secondary aluminum is when aluminum is produced from recycled aluminum products, they are washed to remove impurities, melted at high temperatures, and finally cast to various shapes (Gautam et al., 2018). During the secondary process, the aluminum keeps its material properties and secondary aluminum has great quality compared to the primary. The secondary process requires only a tenth of the energy required for the primary process. (Bergsdal et al., 2004). According to Gautam et al. (2018), the

17 greenhouse gas emissions from secondary aluminum production are significantly less than from primary aluminum production.

Table 2: Emissions of carbon dioxide and global warming potential from varying processes of aluminum production in China, based on Gautam et al., p. 211

Process CO2 (kg/t) GWP (kg CO2 eq/t) Mining 22.9 23.5 Alumina refining 4682.4 4772.7 Anode production 506.6 512.7 Smelting 12,150.8 15,497.5 Ingot casting 821.5 755.8

Limited information is available about the composition of exhaust gas in aluminum production.

The ratio of CO2 can vary from 6000 to 14500 ppm or 0.6 vol% to 1.45 vol% (Aarhaug & Ratvik, 2019;

Jilvero et al., 2014). The concentration of CO2 is very low due to the ventilation system and the air needed for cooling. Currently, this concentration of CO2 is so low that CO2 capture from the flue gas is economically unfeasible (Jilvero et al., 2014). Generally, greenhouse gas emissions from aluminum production are mostly due to energy generation since the process requires a vast amount of energy. In the aluminum production itself, the electrolysis emits the most CO2 since the oxygen from the alumina reacts with the carbon electrode and forms CO2. The company Elysis is developing carbonless electrodes which could lead to carbon-neutral aluminum production (Samál, 2016). In Iceland, aluminum plants use hydropower as an electricity source. According to the Union of aluminum producers in Iceland (Samál,

2016) the CO2eq emission of aluminum produced in Iceland is 1.64-ton CO2eq per ton aluminum. However, the literature suggests that aluminum production with hydropower emits around 4 kg CO2eq per kg Al, or

4-ton CO2eq per ton aluminum (Jilvero et al., 2014; Lassagne et al., 2013). Three aluminum plants are in operation in Iceland but the largest aluminum plant in Iceland produces about 360.000 tons of aluminum per year, which equals 590.400 tons CO2eq emission per year from the plant assuming 1.64-ton per ton Al

(Alcoa, 2020). According to green accounting for 2019 in one of the plants, the CO2 emissions were 1.47- ton CO2 per ton Al (Norðurál, 2019).

For CO2 capture from the aluminum plant, post-combustion methods are the only option, as the

CO2 does not originate from a combustion reaction, where absorption is considered favorable since excess heat could be used for the regeneration step. Jilvero et al. (2014) studied two solvents, monoethanolamine

(MEA) and ammonia, for CO2 capture from an aluminum plant located in Norway which is similar to the plants in Iceland. They studied the effect of a higher concentration of CO2 in the gas stream on the cost. The cost of capture with ammonia was more efficient for 7% and 10% but MEA was more efficient with

3% and 4%. 3% and 4% concentration require a major retrofit of the plant and 7% and 10% a new design. It is not considered by the author of this thesis that a new design of a currently existing aluminum plant in

Iceland is likely. Lassagne et al. (Lassagne et al., 2013) performed an economic analysis on the CO2 capture from an aluminum plant with the exhaust gas containing 1.2% CO2 based on capture with chemical absorption with MEA. The total CAPEX for the capture unit was estimated at 58,912,477 EUR and OPEX

17,722,563 EUR. The energy need was determined to be 1.583 MWh per ton of CO2. It was assumed that the system would capture 90% of the CO2 emitted.

4.3 Silicon metal industry

Silicon metal industry is the second-largest metal industry in Iceland, after aluminum. Silicon metal or ferrosilicon is produced from quartz with reduction with carbon in a submerged arc furnace at high temperature (PCC Bakki Silicon, 2020c). There are two plants in Iceland, one producing over 97% pure silicon metal and one producing ferrosilicon (FeSi) which contains 75% silicon mixed with iron (Elkem Iceland, 2020; PCC Bakki Silicon, 2020b). Generally, in silicon metal production the largest part of the

CO2 emissions comes from the use of electricity, second is from process fossils, then there is some emission from transport and raw material production but that is almost negligible compared to the two bigger parts (PCC Bakki Silicon, 2020a). The composition of the furnace exhaust gas is determined by the operation conditions of the furnace and the raw material properties. The CO2 gas originates from the reductants, electrodes, and carbon paste and is emitted from the furnace. It is suggested that a higher amount of silica in the alloy results in a higher emission factor, for silicon metal containing 98.5% Si the emission factor was found to be 5 tons CO2 per ton metal produced but for 75% Si metal the factor was found to be 4 tons CO2 per ton metal (Kero et al., 2017). The silicon metal plant with >97% silicon in

Iceland is said to emit 363,000 tons of CO2 per year producing 66,000 tons of silicon, resulting in 5.45-ton

CO2 per ton metal (Kjeld, 2013). In the year 2019, the ferrosilicon plant producing 100,257 tons of 75% Si metal emitted 395,820 tons of CO2 or 3.95-ton CO2 per ton metal (Elkem Iceland, 2019). This supports the literature that higher silicon composition leads to more CO2 emissions.

In a recent study of a CO2 capture unit for ferrosilicon furnaces, the concentration of CO2 in the flue gas stream is 4.43vol%. There, the absorption technique using CaO in molten salts as a chemical solvent is assessed. This has been tested on a lab-scale but never in full scale. Usually, CaO is used as a solid sorbent in the adsorption technique but after several adsorption/desorption steps the sorbent loses sorption capacity due to pore closure. To avoid this problem the novel approach, carbon capture in molten salts

(CCMS), was suggested. The CO2 reacts with the CaO to form CaCO3 at 650°C, which is regenerated at a higher temperature, 900°C, with the reverse reaction, see Equation 5. For the reaction to occur a large

19 amount of heat is necessary and in the study fuel combustion using coal was suggested. The CO2 emissions from the combustion were to be captured with the FeSi emissions. A cost estimate was performed resulting in 60 EUR per ton CO2 captured, including compression of the captured CO2 to 70 bars at 20°C. The main challenge was related to the high temperature as pumps that can handle the molten salts at high temperature would be necessary and it is unsure those can be manufactured (Nygård et al., 2019). This has not been tested on a large scale and is therefore unsure that it will perform as suggested. It is however a promising option for CO2 capture. The system proposed in the study is complex and involves electricity generation from waste heat and the costs presented involve a reduction of costs due to the sale of electricity. Also, the electricity need for the system is unclear and the cost of electricity is included in the OPEX. Since the system has not been proven on a pilot scale and added compilations with the cost information another system was considered for CO2 capture from silicon metal plants in this thesis.

퐶푎푂(푠) + 퐶푂(푔) ⇌ 퐶푎퐶푂(푠) Equation 5: Calcium Looping process

Similar to aluminum plant CO2 capture only post-combustion technologies can be considered for

CO2 capture from silicon metal plants. Literature on carbon capture from the silicon metal industry was limited. However, the concentration of CO2 in the exhaust gas stream from silicon metal plants is around

4vol% which is the desired concentration of CO2 in carbon capture from aluminum plants. It is unclear whether the concentration of CO2 in off-gas from >97% silicon metal plants is higher than from ferrosilicon plants or if the total exhaust gas flow is more, but it is considered unlikely that the concentration of CO2 is lower. It is therefore expected that absorption with MEA can be used for carbon capture from a silicon metal plant as it can be done from an aluminum plant with a CO2 concentration of 4vol%. Lassagne et al.

(Lassagne et al., 2013) analyzed the capture of CO2 from an aluminum plant with exhaust gas containing

4% CO2 with absorption with MEA. There CAPEX and OPEX is lower than in the 1.2% case, 41,400,403

EUR and 14,026,578 EUR respectively. Energy need was estimated at 1.36 MWh per ton CO2. It was assumed that the system would capture 90% of the CO2 emitted.

4.4 Climeworks

Climeworks is a Swiss-based direct air capture company founded in 2009. Their first working prototype was developed in 2014 and then the world’s first commercial scaled DAC plant was established in 2017. Climeworks’ technique uses adsorption with a solid sorbent and temperature-vacuum swing (TVS) as the regeneration step in a fixed-bed system as shown in Figure 9 (Climeworks, 2020a). Their sorbent or filter is made of special cellulose fiber that is supported by amines in a solid form, it binds CO2 gas molecules and air moisture. In the regeneration step, the unit is heated to 100°C and pressure reduced. Electricity need

20 for the system is 200-300 kWh per ton CO2 but a higher amount of thermal energy or 1500-2000 kWh is needed for the regeneration step. The CO2 output stream is 99.9% pure (Fasihi et al., 2019). Climeworks states that 90% of the CO2 captured is permanently removed and so-called grey emissions are only 10%, that is for every 100 tons captured 90 tons are permanently removed (Climeworks, 2020a). As mentioned, the adsorption and desorption (regeneration) steps occur in the same unit called CO2 collectors. Six collectors fit into a standard 40-foot shipping container. Climeworks adopted the module to reduce manufacturing and operating costs and to make upscaling easier. Capacity of each collector is 50 tons CO2 but is claimed to increase with optimization of the technology. An advantage of the Climeworks technology is that a large amount of their energy needs can be met with low-temperature heat that is often available as waste heat. The company will only use sustainable and renewable energy sources in all of its plants, which is, as studied by Deutz and Bardow (2020), the main factor for DAC plants to affect climate change.

Figure 9: Climeworks direct air capture process (Beuttler et al., 2019).

The first plant Climeworks commissioned in 2017 is located in Hinwil, Switzerland capturing 900 tons of CO2 per year delivering it to a nearby greenhouse. In the same year, in co-operation with Reykjavik Energy, the first negative emissions plant was built on a pilot scale. It combined the Climeworks technology and Carbfix in a project called Carbfix-2, where the CO2 captured from the atmosphere is safely stored with mineral carbonization in the basaltic ground in Iceland, as demonstrated in Figure 10 (Beuttler et al., 2019).

The plant can capture about 50 tons of CO2 per year and has been successful to date leading to a scale-up. In August 2020 it was announced that Climeworks and Carbfix would continue and scale-up the project and capture 4000 tons CO2 per year. At the time this thesis is written constructions have begun (Carbfix, 2020; Climeworks, 2020b). Similar can be done for the Climeworks system. That system is however largely

21 based on thermal energy. The plant currently being built in the Hellisheiði area, to capture 4000 tons annually, is located very close to a geothermal power plant operated by ON Power.

Climeworks started in 2020 to offer individuals to neutralize their CO2 emissions with a monthly payment to remove a specific amount of CO2 per year. Based on information on their website three different subscriptions are available but the average price per kg CO2 is 0.99 EUR or 990 EUR per ton CO2 (Climeworks, 2020c). According to Fasihi et al. (2019), Climeworks claimed a target cost of 75 EUR per ton CO2 for a large-scale plant but that information is no longer available on their website. Information regarding the cost of the Climeworks technique is very limited and no current information on costs has been published by the Climeworks team. The capital cost was obtained from Fasihi et al. (2019) for low- temperature (LT) systems at 730 EUR per ton per year, however, that cost is based on low-temperature DAC systems in general but since no other information was available for the Climeworks system 730 EUR per ton per year was used for the CAPEX. It should be mentioned that the LT-systems the costs are based on are similar to the Climeworks technique and have similar base units. As mentioned, the energy requirement is 0.2-0.3 MWh per ton CO2 and 1.5-2 MWhth. For the calculations 0.25, MWhel/ton CO2 and

1.75 MWhth/ton CO2 were chosen. OPEX was determined 4% of CAPEX based on Fasihi et al. (2019).

Figure 10: Schematic diagram of the Carbfix-2 project at Hellisheiði, Iceland (Beuttler et al., 2019).

4.5 Carbon Engineering

Carbon Engineering (CE) is a Canadian direct air capture company that was founded in 2009. A pilot plant was commissioned in 2015. The Carbon Engineering technique is based on chemical absorption with the solvent KOH. The system has four core modules air contactor, pellet reactor, slaker, and oxyfired calciner, the connection shown in Figure 11. In the air contactor, the air enters, and the CO2 reacts with KOH as shown in Equation 6. Next, the K2CO3 moves to the pellet reactor where Equation 7 occurs, and KOH is circulated back to the air contactor. After that CaCO3 moves to the calciner where the CO2 is separated into a pure CO2 stream as shown in Equation 8. Finally, the CaO is sent to the slaker to react with water according to Equation 9. The whole system is demonstrated in Figure 12. The reactions can all happen simultaneously and the whole system can run continuously, an advance over the Climeworks system (Keith et al., 2018).

Figure 11: Carbon Engineering's direct air capture process, major unit operations (Carbon Engineering, 2020b)

퐶푂(푔) +2퐾푂퐻 (푎푞) → 퐻푂 (푙) + 퐾퐶푂(푎푞) Equation 6: Reaction in the air contactor

퐾퐶푂(푎푞) + 퐶푎(푂퐻)(푠) →2퐾푂퐻 (푎푞) + 퐶푎퐶푂(푠) Equation 7: Reaction in the pellet reactor

퐶푎퐶푂(푠) → 퐶푎푂(푠) + 퐶푂(푔) Equation 8: Reaction in the calciner

퐶푎푂(푠) + 퐻푂 (푙) → 퐶푎(푂퐻)(푠) Equation 9: Reaction in the slaker

Figure 12: Two connected chemical loops (Keith et al., 2018)

CE’s system can be powered by a flexible combination of renewable electricity and natural gas. The choice is based on availability at the location of the plant. It can be 100% based on renewable electricity which would be optimal for a plant in Iceland where natural gas is a limited resource. The company claims that in the cases where natural gas is used to power the system the emissions generated from the gas are captured and therefore no additional emissions occur in the process. The system is energy-intensive as the regeneration step requires a large amount of thermal energy which is why natural gas was considered and used in CE’s pilot plant in Canada (Carbon Engineering, 2020b). According to Keith et al. (2018), the system needs 8.81 GJ energy from natural gas or a mix of energy from gas and electricity, namely 5.25 GJ natural gas and 366 kWh electricity per ton CO2 captured. In the mixed case the 5.25 GJ in natural gas is only to supply energy to the calciner, converted to kWh the energy need is roughly 1458 kWh so a fully electrified system would need about 1825 kWh per ton CO2 captured. For a full-scale plant, capturing 1- million tons CO2 per year, this is about 208 MW per year. However, Fasihi et al. (2019) determined the energy required for an electric system similar to CE’s system, with a high temperature (HT) regeneration step and a liquid solvent, to be 1535 kWh per ton CO2 or 175 MW per year. Carbon Engineering focused on industrial scalability in their technology from the start by using known equipment and processes from the industry. The company is currently engineering the largest DAC plant in the world with the capacity to capture 1 million tons of CO2 per year. It will be located in the

Permian Basin in the U.S. where the ground is suitable for geological storage and the CO2 can therefore be permanently stored deep underground. Constructions are expected to start in 2021. CE has focused on

24 combining enhanced oil recovery3 with its DAC system. The company claims that by combining DAC and enhanced oil recovery it can become a closed-loop system with fossil fuel-driven airplane or a car, see

Figure 13. Another utilization of the CO2 has been an ultra-low carbon synthetic fuel and CE has produced liquid fuel at their pilot site in Canada (Carbon Engineering, 2020a). Keith et al. published a detailed cost analysis of CE’s process where the levelized cost for capture per ton is $94 to $124 or roughly 80 to 105 EUR, with an average capital recovery factor of 7.5% and a mixture of gas and electricity for power generation. The calculations are made for a full-scale plant, capturing 1 M tons CO2 per year. The cheapest case is where the CO2 output is at 0.1 MPa. In a baseline case where the whole plant is power with natural gas and CO2 output is at 15 MPa the levelized cost per ton CO2 would be $168 with an average capital recovery factor of 7.5%. This suggests that a fully electrified plant would be more economically favorable than a natural gas plant.

Figure 13: CE's DAC process combined with enhanced oil recovery, the closed-loop system (Carbon Engineering, 2020a)

3 Enhanced oil recovery (EOR) is where gas is injected to the reservoir to obtain the last remains of an oil field (Melzer, 2012).

Recently, the company Carbon Iceland (CI) was founded. They plan to commission a large-scale DAC plant using CE’s fully electrified technology in Iceland. Currently, CI is still in the development phase but a possible location for the plant has been suggested in the Northern-East region of Iceland where geothermal power is available and the ground is favorable for injection of CO2 (Ólafsson, 2020). The system is expected to need 1,825 MWh per ton of CO2 captured. By using the CAPEX cost of 815 EUR per ton per year as determined by Fasihi et al. (2019) for HT-systems in a full-scale plant (1,000,000 tons CO2 captured per year) as CI’s system is. It should be noted that the cost of 815 EUR is obtained based on the Carbon Engineering system. OPEX was determined 3.7% of CAPEX based on Fasihi et al. (2019).

5 Technological and economic development

5.1 Experience curves and learning rates

All new technology has a learning curve (LC) or an experience curve, representing the time or cost reduction with mass production. Anzanello & Fogliatto performed a literature review on the learning curve and its models and applications (2011). They describe the learning curve as a mathematical description of workers’ performance in repetitive tasks. Once the workers become familiar with the operation and tools with repetitions, they demand less time to perform the tasks. This was first presented by Wright in his article about the cost of airplanes where he discovered that costs went down as repetitions in assembling were performed (Wright, 1936). He presented the first model of the learning curve, also known as the log-linear model, as the following Equation 10: 푦 = 퐶푥 Equation 10: Log-linear model or Wright's model (Anzanello & Fogliatto, 2011).

Where y is the average time (or cost) per unit demanded to produce x units, C1 is the time (cost) to produce the first unit, and b is the slope of the LC (Anzanello & Fogliatto, 2011). Many modifications have been done to Wright’s model after 1936. Several other models of the learning curve were presented in Anzanello’s & Fogliatto’s article but those will not be further explained in this thesis. Learning rate (LR) can be derived from the LC by finding the process ratio (PR) with the following Equation 11. 푃푅 = (2) Equation 11: Process ratio

Then LR can be obtained by Equation 12. 퐿푅 =1 − 푃푅 Equation 12: Learning rate

Learning curves are commonly used to evaluate production cost reductions and have been developed for many technologies and processes. To estimate the LC for DAC, similar technologies must be viewed. DAC is in a group with so-called environmental technologies that aim to conserve the natural environment in some way. Post-combustion CO2 capture technology is often considered to be similar to

SO2 capture which has a history since the 1970s and can therefore be useful to predict the next 30 to 50 years of CO2 capture technologies (Bui et al., 2018; Rubin, Taylor, et al., 2004). Learning rates for point source CO2 capture can also be useful to predict the learning rate of DAC even though they do not have a

27 long history as with SO2 capture and most references for learning rates and experience curves for CO2 capture are a prediction. However, this prediction can be considered to be similar to the prediction for DAC technologies (Rubin et al., 2007). It is vital to consider the driving force of the climate crisis and further limitations and penalties on CO2 emissions from governments that have signed the Paris Agreement (Fasihi et al., 2019). The European Commission has many policies that aim to fulfill the larger goal to help Europe to become the world’s first carbon-neutral continent by the year 2050. It can be expected in the following years some regulations or laws regarding CO2 emissions will be implemented in Europe. Even though Iceland is not part of the European Union it has many examples of implementing laws and regulations from the precedent of the EU.

Rubin, Taylor, et al (2004) analyzed the SO2 and NOX capture from coal-fired power plants, with flue gas desulphurization (FGD) and selective catalytic reduction (SCR) systems respectively. They developed an experience curve for those processes based on data from 1970, so 30 years in 2004. In the

1970s the first regulation was set on limiting SO2 and NOX emissions in the air. More regulations followed and with that an increase in installed SCR and FGD systems all over the world. The learning curves resulted in learning rates of 11% for FGD systems and 12% for SCR systems, for the capital costs and operational and maintenance cost, 22% for FGD systems, and 28% for SCR systems. Based on this the learning rate for point source CO2 capture has been estimated at 11.5% and 25% for CAPEX and OPEX respectively.

Studies that estimate the learning rate for point source CO2 capture were reviewed but as the history of CO2 capture is not long many were based on the study from Rubin, Taylor et al. (2004). To determine how fast the learning rate can affect the cost doublings in units for every ten years must be determined. The literature was very limited in this case there for an educated estimation was done based on the history of doubling units in chemical absorption (Rubin, Taylor, et al., 2004). The case will be different for the type of point source. There are much fewer geothermal plants than aluminum plants in the world. As in the case of Krafla, it is estimated that there are around 200 plants that could use a similar technique as proposed for Krafla (Phair, 2016). The doubling factors are therefore considered to be only 2 for every ten years, taking into consideration that GPPs do not emit large amounts of CO2 and therefore it is less vital to focus on the development of CO2 capture from GPPs. It is assumed that the aluminum industry and silicon metal industry can use similar technology for CO2 capture, so the same doublings will be assumed for both. The numbers of aluminum and silicon metal plants are much higher than GPPs and CO2 emissions are higher. It is considered that IEA states that CO2 emissions from aluminum production must be reduced by 1.5% by the year 2030, however, if the company Elysis succeeds in their work of developing carbon less anodes the need for carbon capture units might go down fast. Doublings are therefore estimated to be 4, 2, and 0.5 for 2020 to 2030, 2030 to 2040, and 2040 to 2050 respectively.

Fasihi et al. (2019) developed the learning curve of DAC for a conservative scenario and a base case scenario. For the conservative scenario, the learning rate was estimated at 10% as there the demand for DAC units was lower as the implementation of the Paris Agreement was delayed. In the base case, the goals of the Paris Agreement are met in time and therefore demand for DAC units was more, leading to a 15% learning rate. The latter is considered to be more in line with the technological characteristics of DAC systems. A learning curve was developed for both low-temperature technologies and high-temperature technologies. To use Wright’s model to develop the learning curve, the capital cost and number of units at a given time is needed. Global annual emissions were determined for the power, transport, and industry sectors and from that determined how much emissions DAC would need to remove to meet the goal of the Paris Agreement and from that number of DAC units or plants. This led to 8.3 doublings in units from the year 2020 to 2030 and 3.4 from 2030 to 2040 and 1.7 to 2040 to 2050. This is based on the Paris Agreement’s goal being reached which will be assumed in this thesis. There is high uncertainty in the CAPEX cost of DAC for the year 2020 since many different numbers have been reported and information regarding cost numbers is limited. It is pointed out that the costs of DAC that have been reported by the companies in the field have in underestimated. However, the rapid technological development over the past years is expected to continue with an additional decrease in costs.

5.2 Capital and operational costs

Several have predicted that the cost of DAC will go down in the next years due to economics of scale and learning by doing, some even say it will rapidly decrease (Brandt, 2012; Broehm et al., 2015). The sorbent or solvent is reportedly the most expensive part of the DAC technology. Development and improvements of them could increase the uptake capacity leading to a reduction in volume and therefore lower CAPEX. Additionally, the electric and heat demand of the LT systems and electricity demand of HT systems is expected to decrease which will lower the OPEX. Furthermore, due to the high CAPEX cost of the equipment in DAC plants, it is considered important to run them on a high capacity factor (load factor) which requires high availability of electricity. Fasihi et al. (2019) compared the effect of the capacity factor of the electricity or full load hours (FLh) on the levelized cost of CO2 direct air capture (LCOD) and levelized cost of electricity (LCOE) for cases in Morocco where electricity is provided with a solar photovoltaic system (2400 FLh) and wind power (3500 FLh). In these cases, batteries are needed to provide higher FLh and to increase availability. Figure 14 shows the effect on the cost per ton CO2 with higher FLh in DAC plants, 1 million-ton CO2 captured per year for HT systems, and 360,000 tons CO2 captured per year in LT systems. This led to the conclusion that both LT and HT DAC systems must have good access

29 to very low-cost, clean, and secure electricity to bring down the cost per ton. Moreover, optimal for the LT systems would be access to low-priced or free waste heat.

Figure 14: The impact of DAC FLh on net LCOE, LT LCOD and HT LCOD (Fasihi et al., 2019)

5.3 Results: Predictions for Iceland

In Iceland, the electricity is provided by geothermal energy and hydropower. In the North-Eastern region of Iceland, a new geothermal power plant (GPP), Þeistareykir, is operated with a full generation capacity of 738 GWh per year and an installed capacity of 90 MW. This results in an 8200 FLh or 94% load factor, which is significantly higher than the case in Morocco. Thus, it would be optimal to operate a DAC plant on electricity provided by GPP. Þeistareykir is owned and operated by Landsvirkjun. It is important to note that Þeistareykir GPP emits far less CO2 (around 6500 tons per year) than Krafla GPP according to monitoring. According to Landsvirkjun’s annual report (2019) industry or large electric users paid in total 332,563,000 USD in the year 2019 for 14.1 TWh. The average cost for electricity to large users is therefore about 24 USD per MWh. The price of electricity can vary based on how secure the supply needs to be and the status of supply and demand. The transportation of the electricity is in the hands of another company, Landsnet (The Transmission system operator of Iceland), and is not connected to electricity price but the amount of electricity to be transported. Prices can be lower for the user if Landsvirkjun can limit the power to the plant in times where the electricity production is lower, for example when reservoir levels are low.

As suggested by Fasihi et al. (2019) DAC plants need a secure supply of electricity and higher FLh are more economically feasible. It is therefore expected that the price for DAC plants would be higher than the average price so the price per MWh is determined to be 35 USD/MWh, excluding transportation cost. According to Landsnet the transportation costs for a large amount of electricity as in CI’s case are on average 5 USD per MWh (Landsnet, 2020). However, the transportation costs are higher for the Climeworks system on average, or 20 USD per MWh (Landsnet, 2020). This is because the amount of electricity they need to be transported is so low that the average price is higher. The price of thermal energy is harder to determine. It is known that the plant will use waste heat from the GPP in Hellisheiði. No information is available regarding price, but it is assumed to be lower than residential heating as it is waste heat and the DAC plant is located close to the power plant. Based on the price of residential heating the price was determined at 15 EUR/MWhth. The CAPEX of DAC plants is expected to be lowered in the future. In this thesis, a learning rate of 15% was assumed based on the history of the learning rate of other gas capture technologies and the vitality of recusing CO2 emissions in the atmosphere. The learning rate is a prediction and unsure how the vital effect of necessary actions against global warming will have on the development of DAC technology. Therefore, variations of the DAC learning rate will be viewed. Besides, advancement in sorbents and solvents with increased selectivity to CO2, higher CO2 capacity, more easy regeneration step, and longer lifetime could reduce both the OPEX cost and the energy need of the system and further lower the costs (Fasihi et al., 2019). The improved efficiency of sorbents is therefore assumed to affect the energy need and OPEX in the year 2030 and later. Variations of the efficiency will be viewed. Additionally, the lifetime of the DAC plants is expected to increase from 25 years to 30 years in the years 2040 and 2050 which will be assumed for calculations in this thesis. It can also be expected that the cost of renewable and green electricity is lowered in Iceland due to more competition in the field. This is based on IRENA’s report on renewable power generation costs in 2019 (Renewable Energy Agency, 2020) where it is stated that costs have fallen sharply over the past decade due to improved technologies and economics of scale. However, in this thesis, a fixed cost for electricity has been assumed at 35 USD/MWh but transportation costs vary based on the amount of electricity transported. As mentioned above the transportation costs for CI are 5 USD/MWh but 20

USD/MWh for Climeworks. The transportation cost of electricity for Aluminum plant CO2 capture and silicon metal CO2 capture is 5 USD/MWh but for the Krafla case, the transportation cost is zero as the electricity will not need to enter the transportation system since the capture unit will be placed next to a power plant and the capture unit is operated by Landsvirkjun. With the information collected and presented in Table 3, LCOC can be calculated for the year 2020, and by implementing the learning rate of 15% with doublings in units presented in Section 5.1 the LCOC

can be calculated for the years 2030, 2040, and 2050. Here, no cost reductions are assumed due to possible solvent or sorbent improvements. The results are presented in Figure 15.

Table 3: Main parameters for DAC plants in 2020 in Iceland

Parameter Carbon Iceland Climeworks CAPEX [EUR/ton per year] 815 730 OPEX [% of CAPEX] 3,7 4 Electricity need [MWh/ton] 1,825 0,25 Thermal energy need [MWh/ton] 0 1,75 Electricity cost, with transport 34 46 [EUR/MWh) Thermal energy cost [EUR/MWh] 0 15

CO2 captured per year [tons] 1,000,000 4,000 Lifetime of the plant [years] 25 25

Figure 15: Development in LCOC for DAC plants in Iceland with LR at 15% and no added efficacy in solvents or sorbents.

To estimate the LCOC for point source cases presented in Chapter 4 information collected and presented in Table 4 was used for the year 2020. That was considered the highest LCOC for each case. Now

learning rate for CAPEX and OPEX was used with doublings presented in Section 5.1. With that estimated LCOC for the year, 2050 was obtained. That was considered to be the lowest LCOC. The results are presented in Figure 16, Figure 17, and Figure 18 for Krafla, Aluminum plant, and Silicon metal plant respectively.

Table 4: Main parameters for point source CO2 capture units in Iceland in 2020, 90% capture of CO2 emitted is assumed in all cases.

Parameter Krafla GPP Aluminum plant Silicon metal plant CAPEX [EUR] 6,227,000 58,912,477 41,400,403 OPEX [EUR per year] 491,065 17,722,563 14,026,578 Electricity need [MWh/ton] 0,35 1,58 1,36 Thermal energy need [MWh] 3,14 0 0 Electricity cost, with transport 30 34 34 [EUR/MWh) Thermal energy cost 0 x x [EUR/MWh] CO2 captured per year [tons] 27,000 531,360 356,238 Lifetime of the plant [years] 25 25 25

Figure 16: Comparison of DAC LCOC with LCOC for point source capture from Krafla GPP, with LR 15%

Figure 17: Comparison of DAC LCOC with LCOC for point source capture from Aluminum plant in Iceland, with LR 15%.

Figure 18: Comparison of DAC LCOC with LCOC for point source capture from Silicon metal plant in Iceland, with LR 15%.

Due to uncertainty in the learning rate, the learning rate was changed for the DAC technologies but the learning rate for the PS capture was kept constant. Both lower LR, at only 5% (see Figure 19, Figure 20, and Figure 21), and higher LR at 30% (see Figure 22, Figure 23 and Figure 24) were viewed. Again, the cost reduction possibilities due to improved solvents or sorbents are disregarded.

Figure 19: Comparison of DAC LCOC with LCOC for point source capture from Krafla, with LR 5%.

Figure 20: Comparison of DAC LCOC with LCOC for point source capture from Aluminum plant in Iceland, with LR 5%.

Figure 21: Comparison of DAC LCOC with LCOC for point source capture from Silicon metal plant in Iceland, with LR 5%.

Figure 22: Comparison of DAC LCOC with LCOC for point source capture from Krafla, with LR 30%.

Figure 23: Comparison of DAC LCOC with LCOC for point source capture from Aluminum plant in Iceland, with LR 30%.

Figure 24: Comparison of DAC LCOC with LCOC for point source capture from Silicon metal plant in Iceland, with LR 30%.

Now, reductions in cost due to improvement in solvents and sorbents are viewed with the learning rate kept constant at 15%. Improvements could lead to lower energy need and a longer lifetime of solvents

and sorbents, for simplification the same reduction ratio will be assumed for both the OPEX and energy need. A reduction ratio of 5%, 15%, and 30% every ten years was viewed and the results are presented in Figure 25, Figure 26, and Figure 27 respectively. The improvement in solvents used in PS capture was disregarded in this thesis for simplifications. The reasoning is mainly, for the Krafla case, water is proposed as the solvent in the primary solution and as a back-up solvent MEA is suggested, the same as in PS capture from aluminum and silicon metal plants. MEA is a widely used solvent and more experience in the use of MEA than in the solvent and sorbent for DAC capture.

Figure 25: Development in LCOC for DAC plants in Iceland with LR at 15% and 5% reduction ratio of CAPEX and energy need every 10 years.

Figure 26: Development in LCOC for DAC plants in Iceland with LR at 15% and 15% reduction ratio of CAPEX and energy need every 10 years.

Figure 27: Development in LCOC for DAC plants in Iceland with LR at 15% and 30% reduction ratio of CAPEX and energy need every 10 years.

Finally, a best-case, an average case, and worst-case scenario for DAC technology in Iceland were calculated and compared to the lowest estimated cost of the point source capture. Where the best-case is if the learning rate is 30% or higher and high improvement in solvents and sorbents leading to OPEX reduction and energy need reduction of 30% every ten years, presented in Figure 28. The average case is if learning rate is 15% and average or normal improvements in solvent and sorbent technology, presented in Figure 29. And the worst-case is if the learning rate is 5% or lower and no improvement in solvents and sorbents leading to no reduction in OPEX and energy need, presented in Figure 30.

Figure 28: Best-case scenario for the DAC technology in Iceland compared to lowest estimated cost of PS capture. LR at 30% and significant improvements in solvent and sorbent technology.

Figure 29: Average case for the DAC technology in Iceland compared to the lowest estimated cost of PS capture. LR at 15% and some improvements in solvent and sorbent technology.

Figure 30: Worst-case scenario for the DAC technology in Iceland compared to the lowest estimated cost of PS capture. LR at 5% and no improvements in solvent and sorbent technology.

In order to see the effect of the electricity cost the best-case scenario was calculated and plotted again only with all energy costs doubled, e.g. 68 EUR/MWh for CI, 92 EUR/MWh for Climeworks and 30 EUR/MWh for thermal energy. The energy price for the point source capture was kept the same as the sources are located in Iceland and the capture would always need to rely on energy source from Iceland.

Figure 31: Best-case scenario for the DAC technology in Iceland compared to lowest estimated cost of PS capture. LR at 30% and significant improvements in solvent and sorbent technology. Energy prices doubled.

6 Discussion

The capture methods presented in Section 3.1 can work to limit CO2 emissions from a point source and therefore help tackle the climate crisis. However, other sources emitting CO2 are smaller and more distributed all over the world, namely cars, airplanes, and ships. It is therefore impossible to use an end-of- pipe capture unit alone to capture the CO2 emitted. CO2 reduction methods are a possibility, e.g. by electrification of the transport sector or with changes in the metal industries technologies. Even so, the

IPCC has stated that to reach the goal of the Paris Agreement mitigation measures and limiting future CO2 emissions will not be enough. Additional CDR measures are needed (IPCC, 2020). Moreover, the point source capture is not always a feasible and easy solution. Direct air capture is a promising CDR technology as it does not require a large area of arable land and combined with sequestration it can be an effective negative emissions technology. Considering the result of a life cycle analysis on direct air capture where

Iceland proved to be the optimal place for a DAC plant using Climeworks’ technology with overall CO2 emissions considered. Iceland has signed the Paris Agreement and by that, the Icelandic Government needs to reduce direct CO2 emissions by roughly 900,000 tons before 2030. In order to reduce direct CO2 emissions, the emissions must be captured at the source of the emissions or limited somehow. Furthermore, the Government has set the goal that Iceland becomes carbon neutral by the year 2040. Therefore, it would be optimal that the direct emissions are mostly reduced by limiting or avoiding the emissions in the first place then CO2 capture can be used as a backup for the possibility to reach carbon neutrality. Point source capture from the metal industry does not assist with Iceland’s commitment under the Paris Agreement as those emissions are counted in the ETS. However, point source capture from Krafla or GPPs does contribute to that commitment. Direct air capture or any point source capture can assist is Iceland’s goal to become carbon neutral by 2040 but it does not limit or reduce direct emissions from Iceland as stated in the Paris Agreement.

The question remains if the CO2 should be captured from all possible point sources in Iceland or should the focus and the resources be put towards one solution to all the cases instead of a different solution for each case since, as mentioned, the PS capture is not always a simple solution. Moreover, the emissions from the largest point sources, the metal industry, are not included in the emissions of Iceland’s climate accounting but do in the ETS. Firstly, if the case at Krafla is considered. Problems with clogging due to sulphur precipitations may occur. At this point, the problem has not been solved. Secondly, point source capture from aluminum plants is not considered economically feasible at this point since the concentration of CO2 in the exhaust gas from aluminum plants is only around 1%. A change in the system is deemed to be necessary to increase the concentration of CO2 to 4% although the cost of the change has not been analyzed. The case for silicon metal plants seems to be the simplest one as the concentration of CO2 in the

43 exhaust gas is at 4%, which is considered optimal for capture from aluminum plants. It seems that instead of putting time and resources to solve the problems for each point source it would be ideal to find one solution that can give the same result, i.e. capture the CO2 emissions. The solution might be a direct air capture plant, located in Iceland. Due to the vital importance of tackling the climate crisis everywhere in the world, the need for technologies like DAC is growing. This is assumed to lead to more demand and therefore price reduction due to the economy of scale. In Figure 15 the reduction in cost per ton CO2 until the year 2050 can be seen where the learning rate of 15% is assumed. The LCOC of DAC with LR 5%, 15%, and 30% is compared to an estimated LCOC of different PS capture for the next 40 years, to study if the LCOC for DAC will reach the LCOC of PS. First, in the case of the PS Krafla, with the lowest LR for DAC, the DAC technology is far from reaching the same LCOC as the PS capture (Figure 19). Now with the LR at 15% for DAC, the Climeworks technique appears to just match the highest estimated cost of point source capture in the year 2050 while CI’s technology is still far off (Figure 16). Finally, where the LR for DAC is at 30% the Climeworks technique reaches the highest estimated cost of PS capture in the year 2030 while the CI’s technology is closer yet not within the cost gap (Figure 22). Either DAC technology is therefore expected to reach or match the lowest estimated cost of PS capture from Krafla when only the LR is considered. It is considered, by the author, very unlikely that the LR will be higher than 30% based on LR for similar technology. Here it is important to note that the CO2 concentration in the off-gas from Krafla is 65 vol% and as shown in Figure 4 the cost of capture depends on the concentration of the gas to be captured. In this case, it is also considered that the problems due to the risk of sulphur precipitation, at Krafla, can be solved. Now for the case of an aluminum plant in Iceland, the Climeworks technique is expected to match the highest estimated cost of aluminum PS capture in 2030 for 5% DAC LR (Figure 20) and then be cheaper than the lowest estimated cost of PS capture in 2030 for both 15% and 30% LR (Figure 17 and Figure 23). CI’s technology does however not match the lowest cost unless at LR 30% in the year 2040 though at LR 15% it is expected to reach the highest cost.

As the CO2 concentration in the exhaust gas of an aluminum, plant is only around 1 vol% the cost of PS capture is higher. Nevertheless, DAC captures CO2 from the atmosphere where the concentration is only

0.04% CO2 but, in this thesis, it is considered to be likely that high demand for solutions to tackle the climate crisis will lead to a high learning rate of the DAC technology. It is also important to consider that the DAC technology can be used for all CO2 emissions but the point source capture technology from aluminum plants is specific to the metal industry, in the best case. Lastly, for the silicon metal plant, the LCOC is expected to drop more so the gap is bigger between the highest and lowest cost. At only 5% LR (Figure 21) for Climeworks technique the LCOC is expected to be lower than the highest PS capture LCOC in 2040 and for both 15% and 30% LR (Figure 18 and Figure 24) the cost is expected to be lower than the highest cost in 2030. The same goes for CI’s technology at 15% and 30% learning rate but it does not reach

44 the highest cost at 5% LR. As, in this thesis, the same PS capture method is assumed for capture from silicon metal plant and aluminum plant since it is considered optimal to capture CO2 from aluminum plants with CO2 concentration at 4%, which is the case with silicon metal plants. The results are therefore similar for the metal industry cases but the PS capture for the silicon metal is a bit cheaper due to higher concentration of CO2 in the off gas. For clarity, the discussion in this paragraph has been summarized in two tables, Table 5 and Table 6, for the Climeworks case and the Carbon Iceland case respectively. All of this is dependent on that the goals of the Paris Agreement are met, and the demand for DAC is large not only in Iceland but globally. Except for the case of LR 5% for DAC where effect of low pressure to reach the Paris Agreement can be seen. It must also be considered that the calculations are done for 10- year intervals and the curved line between the data points are only a rough estimation. In some of the graphs, especially where the LR is 30%, the line between 2030 and 2040 is curved down and looks like the cost reaches a minimum around 2035. This is only due to limitations of the software used for plotting the graphs and should be neglected. For a better estimate, more data points would be needed.

Table 5: Summary of when the LCOC of the Climeworks technique reaches the LCOC for PS capture in different LRs.

Learning rate of DAC Krafla PS capture Aluminum plant PS Silicon metal plant PS capture capture 5% Does not reach or Matches highest cost in Lower than highest cost match 2030 in 2040 15% Matches highest cost Lower than lowest cost in Lower than highest cost in 2050 2030 in 2030 30% Below highest cost Lower than lowest cost in Lower than highest cost 2030 in 2030

Table 6: Summary of when the LCOC of the CI’s technique reaches the LCOC for PS capture in different LRs.

Learning rate of DAC Krafla PS capture Aluminum plant PS Silicon metal plant PS capture capture 5% Does not reach or Does not reach or match Does not reach or match match 15% Does not reach or Lower than highest cost Lower than highest cost match in 2030 in 2030 30% Does not reach or Matches lowest cost in Lower than highest cost match 2040 in 2030

Since, according to literature, advancement in solvents and sorbent are expected to lower the electricity need and OPEX the LR was kept constant at 15% and the reduction ratio of 5%, 15% and 30% every ten years on the electricity need and OPEX was calculated to view the effect on the LCOC. From Figure 25, Figure 26, and Figure 27 it can be seen that the LCOC for the CI technology gets closer to the Climeworks technology with a higher reduction ratio. This is because the electric demand for the CI case

45 is higher and therefore more costs are saved when the electricity needs drops. It could therefore be expected that the LCOC for CI’s technology will reach the LCOC for Climeworks sometime after 2050 if the technological developments continue. Finally, a best-case scenario, an average case and a worst-case scenario were calculated and compared to the lowest cost of the PS capture case, presented in Figure 28, Figure 29 and Figure 30. In the best-case, the LCOC for both DAC technologies will be lower than the lowest estimated LCOC for all PS capture technologies in the year 2050. In this case the learning rate is high due to pressure to reach the goal of the Paris Agreement in addition to significant technological development in solvents and sorbents. In the worst-case neither will reach the lowest cost for any PS case. This is considered an unlikely case, by the author as this will occur if very limited focus is put on tackling climate change. The average case is considered by the author, the most likely case. As some pressure and resources are put into tackling the global warming issue, some laws and regulations will push actions towards technological developments and drive authorities to put more money towards the issue. The results, that Climeworks’ technique is cheaper than Carbon Engineering’s technique is counter to what is generally expect among experts. However, in this thesis the price for Climeworks was estimated based on available literature as no confirmed cost numbers have been published by the Climeworks team. Also, Carbon Engineering has recently published cost numbers that are lower than cost numbers presented by Climeworks almost ten years ago. Those numbers are however not available anymore. Furthermore, Climeworks might lack data to predict costs and might publish cost information after the plant is commissioned in Hellisheiði, Iceland. Lastly, Climeworks technology is mostly based on thermal energy and in Iceland the cost of thermal energy is very low, which leads to lower OPEX for Climeworks. The price of thermal energy could even be lower than assumed in this report. The cost is not the only factor that should be considered in choosing a location for DAC plants.

The electricity provided in Iceland is not only low cost, but it is also emitting almost no CO2 in production.

Therefore, CO2 captured in a DAC plant that is powered with electricity that generates a limited amount of

CO2 emissions can affect global warming faster than the same DAC plant powered with electricity that emitted a large amount of CO2 in production. In Figure 31 the effect of the low-priced electricity can be seen. With higher electricity price the LCOC for DAC in 2020 is significantly higher than with the lower price however the difference reduces in the following 40 years. It could be determined that after around 20 years the difference in cost is not that large so the location should not matter. Although this may be true, the production of electricity is a vital factor in the efficacy of the DAC plant and its contribution to climate change. An LCA was performed on the Climeworks technique confirming that Iceland was the optimal place for a DAC plant. It has also been suggested that a similar result would be for the Carbon Engineering technology though a complete analysis has not been done yet. The analysis also showed that DAC plants

46 in countries where the electricity is provided with an unsustainable source emits more CO2 then captured by the plant.

In a PS capture, the CO2 available for capture is dependent on the source, e.g. the plant. It cannot be scaled up if the need for more CO2 removal occurs. With a DAC plant, however, it can be scaled up or more plants added as necessary. DAC can also remove CO2 beyond the current emissions and is, therefore, a carbon-negative solution if coupled with permanent storage of CO2. The basaltic soil in Iceland has proven to be optimal for the injection of CO2 and mineral storage. Equally important, is that if a capture unit is built next to a PS to only capture the CO2 gas emitted from that PS it is vital that it is confirmed that this

PS will be emitting CO2 during the lifetime of the capture unit. If the CO2 emissions stop, in particular, a metal industry plant goes out of business, production is changed so CO2 emissions are lower significantly, e.g. carbon less anode in aluminum production or CO2 emissions naturally reduce as could be the case at Krafla (though was not assumed for this thesis calculations), the capture unit is out of business. The building stands there with no purpose and no use, potentially harming the environment not to mention the wasted cost. A DAC plant will never lose the source of CO2 unless CO2 is reduced so much that capture becomes impossible, which is considered a very unlikely case with the growing humanity and the habits of the people today. Finally, it is vital for the DAC plants that if a high learning rate is achieved that with the expansion of an existing plant or a new plant is commissioned that new employees are carefully selected. Additionally, employees need to have a good background to tackle the work and then enter a training program to obtain the skills necessary to keep the costs down. If this is not considered the learning curve might reach a minimum point and then go upwards again when the new employees start working. Furthermore, low turnover of workers is essential. In this case, salaries must be competitive for the employees to stay at the job and commit to the work. Therefore, money should be spent on selecting, hiring, and training new staff.

7 Conclusion & Future work

It is clear, that active measures are vital to tackle the issue of global warming and climate change. It has also been determined by the Intergovernmental panel on climate change that carbon dioxide removal measures are needed along with mitigation measures to limit and reduce CO2 emissions that are the main cause of global warming. Direct air capture is promising and up and coming carbon dioxide removal technology. After an life cycle analysis, Iceland has been suggested to be the optimal location for direct air capture plants to operate. In the first chapter of this thesis, a research question was proposed, the main purpose of the project was to answer that question. As the question was broad, two more focused questions were projected: o Will the development of the direct air capture technique catch up with point capture in relation to cost and effect on global warming? a. In the best-case scenario, yes, the development of direct air capture will catch up with point source capture in relation to cost. Average case, the most likely one, gives the same result. b. A direct air capture plant has more potential on limiting global warming than a point source capture plant. o Does the abundance of clean affordable energy in Iceland make it an optimal place for direct air capture plants, compared to other places where energy is supplied from a non-renewable resource? a. When the direct air capture plant is powered with renewable and clean energy that emits a

limited amount of CO2 the efficiency of the plant is higher. Also, the low price of electricity in Iceland can make the direct air capture plant more feasible today. With this conclusion the main question can be answered:

capture CO2 with direct air capture then capturing it from a point source if both are located in Iceland. The answers must be considered with the reservation of uncertainty in the available literature and data as the technologies, both direct air capture and point source capture are relatively new. This is, however, an interesting start to further research. Debate about the feasibility of direct air capture technology will continue until full scale and real examples can prove the efficacy and profitability. As this thesis was only based on available literature and calculations in excel it would be interesting for future work to set the cases up in more advanced calculation software to be able to implement more variables leading to a more detailed result. Additionally, no point

48 source capture plant has been set up for the metal industry so the numbers in those cases are based on predictions. It would be interesting the view this case again if or when some experience has formed on PS capture from the metal industry. Furthermore, if a solution to the problems at Krafla is not found or the cost of solving those increases rapidly, and the case should be revised. Lastly, after the Climeworks plant is commissioned in Iceland real data could be used to revise the case for Climeworks in Iceland. To conclude, the direct air capture technology has great potential for operation in Iceland and the possibility of it to catch up or even overtake point source capture in Iceland is considerable. If technological development follows the path of similar technology direct air capture has a strong chance to limit and decrease CO2 emissions and therefore increasing the possibility for humankind to reach the goals of the Paris Agreement. However, for Iceland direct air capture will not assist with its commitments under the Paris Agreement to reduce direct emissions but it can contribute to the goal of becoming carbon neutral by 2040 and could possibly be a feasible solution to help Iceland reach further and become carbon negative and therefore, in the long run, reduce global warming.

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Appendix

Appendix table 1: Data for calculation of LCOC for PS in 2020

Silicon metal 2020 Krafla Aluminum plant plant WACC weighted average cost of capital, 7% 0,07 0,07 0,07 N lifetime 25,00 25,00 25,00 D Doublings every ten years 0,00 0,00 0,00 Capex EUR 6.227.000,00 58.912.477,00 41.400.403,00 Opex EUR 491.065,00 17.722.563,00 14.026.578,00 electricity demand of DAC plant elinput MWh/ton 0,35 1,58 1,36 elinput electricity demand of DAC plant MW 1,09 thinput heat demand of DAC plant MW 3,14 0,00 LCOH EUR/MWh_th LCOE EUR/MWh 30,00 34,00 34,00 crf (WACC*(1+WACC)^N)/((1+WACC)^N)-1 0,09 0,09 0,09 Emissions annual emissions [ton] 30.000,00 590.400,00 395.820,00 Efficiency ratio captured of emitted CO2 0,90 0,90 0,90 Capture annual capture [ton] 27.000,00 531.360,00 356.238,00

Appendix table 2: Data for calculation of LCOC for PS in 2050

Silicon metal 2050 Krafla Aluminium plant plant WACC weighted average cost of capital, 7% 0,07 0,07 0,07 N lifetime 25,00 25,00 25,00 D Doublings every ten years 2,00 0,50 0,50 Capex EUR 2.991.840,87 26.627.999,66 18.712.672,99 Opex EUR 87.399,02 2.731.648,03 2.161.971,39 electricity demand of DAC plant elinput MWh/ton 0,35 1,58 1,36 elinput electricity demand of DAC plant MW 1,09 thinput heat demand of DAC plant MW 3,14 0,00 LCOH EUR/MWh_th LCOE EUR/MWh 30,00 34,00 34,00 crf (WACC*(1+WACC)^N)/((1+WACC)^N)-1 0,09 0,09 0,09 Emissions annual emissions [ton] 30.000,00 590.400,00 395.820,00 Efficiency ratio captured of emitted CO2 0,90 0,90 0,90 Capture annual capture [ton] 27.000,00 531.360,00 356.238,00

Appendix table 3: Data for calculation of LCOC for DAC in 2020

2020 CI CW WACC weighted average cost of capital, 7% 0,07 0,07 N lifetime 25 25 D Doublings every ten years 0 0 Capex EUR 815000000 2920000 Capex EUR/ton per year 815 730 Opex EUR 30155000 116800 Opex fixed % of capex 0,037 0,04 DACelinput electricity demand of DAC plant MWh/ton 1,825 0,25 DACthinput heat demand of DAC plant MWh/ton 0 1,75 LCOH EUR/MWh_th x 15 LCOE EUR/MWh 34 46 crf (WACC*(1+WACC)^N)/((1+WACC)^N)-1 0,085810517 0,085810517 Output co2 annual production of DAC plant [ton] 1000000 4000

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