CO2 conversion & utilization pathways: Techno-economic insights

CO2 conversion & utilization pathways: Techno-economic insights

By Emily Nishikawa

Carbon dioxide is a greenhouse gas known as one of the main contributors to climate change, but it can also be a raw material for several industrial processes. Currently, urea production and enhanced oil recovery (EOR) are the main uses for carbon dioxide. However, new pathways and technologies are being proposed and are in different stages of development. In this article, we present different CO2 conversion and utilization pathways, examples of projects and companies, and techno-economic insights including the technical readiness level (TRL) and costs involved with each pathway.

Enhanced oil recovery (TRL 9):

While not a CO2 conversion pathway, this technology utilizes the gas to extend the life of oil extraction wells by injecting CO2, taking advantage of its miscibility with crude oil, and extracting more from an active well. The high-pressure CO2 displaces the oil that is trapped in the pores of wells, bringing it to the surface. This pathway already has a high TRL given its commercial operation since the 1970s. As of 2020, 21 commercial EOR facilities and projects were reported to be operational by the Global CCS Institute, along with 3 in construction phase and 5 under development.

The capture plants can sell the CO2 and generate enough revenue to offset the capture and transportation costs, as is the case with natural gas processing plants that provide CO2 to the Terrell and Great Plains facilities and the Enid Fertilizer Plant in the United States. The sectors of companies involved in supplying CO2 to operational EOR sites also include power generation, ethanol, methanol, chemical, and hydrogen production, as well as iron and steel, mostly in the United States but also in Brazil, Canada, China, Hungary, Saudi Arabia, and United Arab Emirates. New projects in Australia, Canada, China, and the United States are underway.

In terms of the EOR site operation, since CO<sub2 is a raw material with an associated cost, operators try to optimize production to minimize the use and storage of CO2. While the price is usually not disclosed by operators, 40 $/t is the value reported in literature. However, the price an operator is willing to pay for CO2 also depends on the price of oil, which recently experienced great changes due to political events in Eastern Europe and the ongoing pandemic. In the sector, an acceptable price for 1 million ft3 of CO2 is around 2% of the price of one barrel of West Texas Intermediate oil.

Thermochemical CO2 conversion (TRL 5–9):

This pathway uses catalysts and a combination of heat and pressure to convert CO2 into valuable products. The most mature pathway for CO2 conversion, some processes are fully commercial, but many new technologies are also being developed every day. Challenges in this pathway include the reversibility and thermodynamic limitations of reactions. Processes such as Fischer-Tropsch are developed in large-scale plants to maximize the economies of scale, whereas processes such as catalytic hydrogenation for methanol production are developed to be decentralized to take advantage of point sources of CO2. The following sections provide examples of thermochemical CO2 conversion.

Reverse water gas shift for syngas production followed by Fischer-Tropsch (TRL 5–9):

Reverse water gas shift can convert carbon dioxide and hydrogen into carbon monoxide and water. It may be followed by other processes such as Fischer-Tropsch to produce liquid synthetic fuels such as e-diesel, e-gasoline, and e-kerosene. This is a common example that is well established, but the reverse water gas shift technology still has to be scaled. Therefore, the TRL attributed to this technology is in the range of 5–9.

The table below presents techno-economic results and a few key assumptions.

Production costFuelYear of studyCO2 costElectricity costLifetime (years)Fossil fuel cost
0.05 $/MJDiesel202253.1 $/t + tax credit 20.2 $/t0.05 $/kWh100.02–0.03 $/MJ
5.4–5.9 $/gal (MSP, 8% rate of return)Diesel202117.3 $/t0.07 $/kWh403.1 $/gal
2.4 $/LJet fuel2016109 $/t0.06 $/kWh250.9 $/L
10.0 $/galGasoline2020-0.07 $/kWh-1.7 $/gal

Production costFuelYear of studyCO2 costElectricity costLifetime (years)Fossil fuel cost
6.8 $/galDiesel202253.1 $/t + tax credit 20.2 $/t0.05 $/kWh102.7–4.1 $/gal
5.4-5.9 $/gal (MSP, 8% rate of return)Diesel202117.3 $/t0.07 $/kWh403.1 $/gal
9 .1 $/galJet fuel2016109 $/t0.06 $/kWh253.4 $/gal
10.0 $/galGasoline2020-0.07 $/kWh-1.7 $/gal

Fuels from CO2 are considerably more expensive than their fossil counterparts. The costs are dominated by hydrogen production, reaching up to 60% of total costs when it is produced by water electrolysis. It is worth mentioning that water electrolysis is believed to become cheaper in the near future due to lower capital expenditures and lower renewable electricity costs, and regulatory (e.g., carbon tax) or political (e.g., war that may increase the price of oil) events may change the economic feasibility of this pathway.

There are several projects aiming to increase the scale of production via this pathway, especially in Europe. Solarbelt owns and operates a plant in the Werlte, Emsland, region of Germany that is funded by atmosfair, a German nonprofit that offers carbon offsets in the aviation industry. The plant has a capacity of 350 tonnes per year of production and is expected to be fully operational in the first quarter of 2022. 

The Norsk e-Fuel consortium recently announced the construction of their first production plant in Mosjøen, Norway. The planned capacity at the end of 2024 will be 12.5 million liters of aviation fuel per year, and in 2026, the full capacity will be reached, at 25 million liters per year.  

The Kopernikus power-to-X project, which is sponsored by the German federal ministry of research and education, is in its second phase. It is organized in 3 research clusters with the goal of scaling up processes to convert CO2. The cluster focused on fuels (FC-B2, technologies for the production of hydrocarbons and long-chain alcohols) currently produces 10 liters of fuel per day, aiming to increase 10 to 1000 times.

 Sabatier process for methane production (TRL 8–9):

In this process, also known as “power-to-gas,” CO2 and H2 react to produce methane. The highly exothermic reaction takes place at temperatures in the range of 200–550 °C, depending on the catalyst, which can be based on nickel and ruthenium, for example. Very high conversion rates are possible, decreasing the need for product purification. The relative TRL is around 8–9, with successful producing plants and new system design projects.

The table below presents techno-economic results and a few key assumptions.

Production costYear of studyCO2 costElectricity costLifetime (years)Fossil fuel cost
0.20 $/kWh2020280 $/t0.05 $/kWh400.02–0.05 $/kWh
0.19 $/kWh 2016---0.02–0.05 $/kWh
0.11–0.16 $/kWh202153.1 $/t + 20.1 $/t tax credit0.05-0.07 $/kWh100.04 $/kWh

Methane from CO2 can be 3 to 5 times more expensive than its fossil counterpart, but it could reach 0.08 $/kWh if using surplus renewable electricity (at no cost). This is because electricity and water electrolysis are the main drivers of costs. The electricity cost is approximately 64% of the total production cost of methane from CO2, and water electrolysis is approximately 77% of the total capital expenditure of the system. Currently, the capital cost for water electrolysis systems is estimated in the range of 500–1000 $/kW, but it could fall to below 200 $/kW by 2050. Therefore, the more economically interesting water electrolysis for H2 production becomes, the more interesting methane production from CO2 is. 

Germany has many projects both planned and operational. The biggest commercial plant for methane production is owned by Audi, in Werlte. Operating since 2013, the production capacity is approximately 5 t/day from CO2 and hydrogen from water electrolysis. 

The Jupiter 1000 project, operated by GRTgaz and partners in France, started in 2018 and is planned for production in 2023 (end of testing phase). CO2 will be captured from industrial sites, and hydrogen from 100% renewable energy will be fed to the methanation unit, which will produce 25 m3/h. 

Research projects are also being deployed with the goal of designing and optimizing the production with new technologies. The Helmeth project, for example, aims at integrating high-temperature water electrolysis with methanation to increase overall efficiency.

Methanol production (TRL 6–7):

This exothermic process converts CO2 and H2 into methanol, which is an alternative to fossil fuels and is an important building block of the chemical industry. The TRL is reported to be between 6–7, with a few commercial production plants by Carbon Recycling International and Mitsui Chemicals.

The table below presents techno-economic results and a few key assumptions.

Production costYear of studyCO2 costElectricity costLifetime (years)Fossil fuel cost
1.36–2.11 $/kg201823–138 $/t0.06-0.09 $/kWh250.27 $/kg
0.46–0.64 $/kg 201616–132 $/t0.03–0.04 $/kWh400.49 $/kg

Methanol from CO2 is currently not competitive, as with other CO2-based products. However, in 2050, methanol may be competitive due to changes in electricity prices and the expected capital expenditures, which reduces the cost of methanol production potentially to 0.50 $/kg, and also due to a potential increase in the cost of fossil methanol, which could reach around 0.68 $/kg.

Electricity costs (mainly for H2 production) represent approximately 40% of the total costs, while capital expenditures represent approximately 30% of total costs. Therefore, according to the literature, cheap H2 production is necessary and carbon pricing may also influence the feasibility of methanol production from CO2

However, Carbon Recycling International (CRI) and Mitsubishi Hitachi Power Systems believe methanol can be profitable in the current context because, as opposed to methane, fossil methanol is not cheap and is close to the cost of methanol from CO2. Furthermore, the companies comment that the production plants would be strategically placed near CO2 sources and industrial units that can be integrated with the methanol producing plant to reuse waste heat and other necessary utilities.

CRI has operated a demonstration plant in Iceland since 2012 with a capacity of 4,000 t/year and last year commissioned a full-scale plant in China with a methanol production capacity of 110,000 t/year. Another consortium led by Liquid Wind is in the initial phase of the construction of their first methanol plant, with a planned capacity of 50,000 t/year in 2024. By 2030, ten plants in Sweden are planned, with later international expansion.

Urea (TRL 9):

Urea is mainly used as a fertilizer and may already be commercially produced from CO2. The process is operated at high temperature (~200 °C) and pressure (150 bar). The TRL is already 9, and the market is likely to increase due to increased need for food. As of 2018, the global production was over 190 million t/year, and the price was ~250 $/t.

CO2 mineralization (TRL 4–8 for concrete ingredients, TRL 7–8 for concrete curing):

CO2 mineralization processes depend on the reaction between metal cations (e.g., Mg, Ca, Fe) with CO2 to form solid and stable carbonate minerals. This pathway can be divided into two larger groups: in situ and ex situ mineralization. The in situ process is related to geologic storage where the injected CO2 reacts with the alkaline minerals that are present in the injection site. Ex situ mineralization is carried out in an industrial plant, and there are different potential sources of alkalinity for the cations. Mineral rocks such as olivine and serpentine may be used, but also industrial wastes such as fly ash, cement kiln dust, and steel slag.

This ex situ process can be used to produce alternative aggregates used in concrete, as a substitute for part of the current materials. As an exothermic process, it does not need large inputs of energy being favorable at low temperatures. Costs for mineral rocks as alkalinity sources were reported in the literature ranging from 150 to 400 $/t of CO2 captured, and 105 $/t CO2 with steel slags. This difference may be related to the extra processing step needed to extract the metal cations from the mineral rocks. 

The US-based company Skyonic captures and mineralizes the CO2 from a cement plant, with costs of 25–45 $/t of CO2 captured and NaOH as an alkali solvent to produce hydrochloric acid, baking soda, and bleach.

In terms of products that can be used as concrete ingredients, companies such as Blue Planet, Carbon Free, and Carbon8 are leading commercial development. In a recent study, it was reported that CO2 mineralization to produce supplementary cementitious materials (SCM) may be economically feasible, leading to profits of 128–140 $/t of SCM from CO2 mineralization. The reported TRL of this pathway is 4–8.

Another type of CO2 mineralization is concrete curing, mixing CO2 with fresh concrete to increase its strength with the precipitation of calcium carbonate in the mix. This is the approach followed by the Canadian company Carbon Cure for masonry and ready-mixed concrete. The reported TRL is 7–8.

Electrochemical CO2 conversion (TRL 4–8 for C1 products, TRL 1–3 for C2+ products):

In this pathway, electricity is applied to induce a non-spontaneous reaction of CO2 reduction. Similar to water electrolysis, which has become very popular for green hydrogen production (when the electricity is from a renewable source).

Electrolysis may be carried out at low and high temperatures, with the low temperature being more flexible but less energy efficient. High-temperature electrolysis is performed in devices called “solid oxide electrolyzer cells” and is used to reduce CO2 into C1 products such as pure carbon monoxide (technologically mature) or its mixture with hydrogen (syngas). Low-temperature reduction of CO2 is less mature than carbon dioxide production via high-temperature electrolysis but can synthesize C2+ products such as ethanol, ethylene, and propylene. Higher carbonated products have economic challenges, due to selectivity issues.  

Electrochemical processes are modular, or directly proportional to the active area of the electrolyzers, and relatively easy to scale up. However, this could be a disadvantage to economies of scale. The following sections provide examples of electrochemical CO2 conversion.

High-temperature CO2 electrolysis for carbon monoxide production (TRL 8):

In this process, CO2 is split into CO and O2. It is carried out in gaseous phase with high temperatures (typically 600–800 °C) and can be operated in a thermoneutral mode, where the heat generated by the Joule effect is enough to drive the reaction and no additional heat is necessary. In addition, the materials employed in these devices are not particularly expensive or rare as with the low-temperature devices. The reported TRL for carbon monoxide production is 8.

Carbon monoxide production via electrochemical CO2 reduction is at commercial scale, with companies such as Sunfire (syngas via co-electrolysis) and Haldor Topsoe (dry CO2 electrolysis) in the market. Unlike most electrochemical CO2 reduction processes, carbon monoxide production is currently economically competitive, with an estimated cost of 0.55 $/kg, below the 0.7 $/kg for CO on the market.

Low-temperature electrolysis:

In low-temperature electrolysis, two main designs are available — aqueous electrolyte and membrane electrode assembly — and several carbonated substances can be produced, including alcohols, alkanes, and alkenes, for example. The challenge is to achieve a feasible production process, due to low selectivity and high electricity demand. Therefore, C1 (e.g., methane, formic acid) and C2 (e.g., ethylene) products tend to be more promising than higher carbonated products.

The most researched products are formic acid, ethanol, and ethylene. Of these, ethanol is still far from being commercially feasible, with selectivity in the range of 60%-70% as optimistic or aspirational, and with a cost of ~55 $/GGE in the current context, while commercial ethanol is ~2.10–2.55 $/GGE. A two-step conversion was found to be slightly more efficient, where the CO2 is first converted to CO, such as in the high temperature CO2 electrolysis as mentioned previously, and the CO is then further reduced to ethanol. Still, this arrangement resulted in ~50 $/GGe.

Formic acid production is more likely to be competitive, but the current TRL is still in the range of 3–5. A recent project at the University of Delaware funded by the US Department of Energy aims to develop the system for a 5-liter reactor. In terms of the technology, selectivity of ~94%–100% was reported. This substance may be used as hydrogen storage and as a commodity chemical. A previous techno-economic assessment estimated the production cost of electrochemical formic acid to be approximately 1.16 $/kg but being able to achieve 0.46 $/kg with optimal performance. Conventional formic acid is commercialized at 0.4–0.6 $/kg. In another study, US-based Dioxide Materials reported that the electricity cost is critical and values below 0.02 $/kWh are needed to allow production costs ~0.2 $/kg.

Ethylene can also be produced directly from electrochemical CO2 reduction, but the TRL is still low (2–3). Electricity cost and selectivity are critical parameters for the production cost, which values can vary in the literature from 0.65 to 4.92 $/kg, while fossil-based ethylene costs 0.58 $/kg. The eEthylen project is led by Siemens with a consortium of experienced partners such as Evonik and is funded by the German government. The goals include the development of a stable catalyst but also understanding the reaction mechanism, highlighting the low TRL.

Bioelectrochemical processes (TRL 1–3 for one-step, TRL 4–7 for two-step):

CO2 can be converted with the support of microorganisms directly in one step or with a separate production of H2 in a two-step process. The one-step process is less developed, while the two-step process is near commercialization for methane.

In the first step, hydrogen is produced, then in a second step, hydrogen and CO2 are fed to a bioreactor containing anaerobic methanogenic species for methane production. This process is in early commercial deployment, with MicrobEnergy providing this biological power-to-gas methane to the German grid since 2015 and Electrochaea participating in research and demonstration projects in Denmark, Switzerland, and the United States. The TRL is reported to be in the range of 4–7. Currently, biological methanation is more expensive than thermochemical methanation, but it is believed that in the near future both costs should become comparable. Furthermore, methane, acetate and isopropanol can also be produced, although methane seems to be the dominating product.

Regarding the one-step process, it is similar to electrochemical conversion, with the difference that the cathode is inoculated with microorganisms. As a biological process, the advantages are the relatively mild operation conditions, high selectivity (up to 99%), and catalysts that do not need to be regenerated. In this pathway, acetate is the most studied product, but methane, ethanol, and isopropanol are also possible. This one-step process is still in R&D, with a reported TRL of 1–3.

Novel CO2 conversion approaches – Photocatalysis and plasma (TRL 1–3):

New technologies for CO2 conversion such as photocatalysis and using plasma are being researched. They are still in R&D, with TRL levels of 1–3.

Photocatalytic conversion is driven by solar energy. In this pathway, CO2 and water are fed to a reactor that also contains a photocatalyst that can be heterogeneous (more common) or homogeneous. The sunlight induces changes in the electronic state of the photocatalyst orbitals, which can then interact with the molecular orbitals of CO2 and water, leading to a reduction reaction. Photocatalysts are semiconductor materials that can be impregnated with metal co-catalysts such as platinum or palladium. It is also possible to include a sensitizing agent. In an example from a Solar2Fuel project in Germany, in addition to the ferric oxide hematite catalyst, the suspension included dye-sensitized TiO2 nanoparticles (a semiconductor) with absorbed dye (perylenes group), and a mediator for electron transport (sodium iodide).

The plasma pathway is another novel approach that has interesting properties and advantages. It creates a weak ionized plasma (also called “gas discharges”) by inputting electricity. This plasma is an ionized gas that contains molecules, excited atoms, radicals, ions, and electrons, being a very reactive medium. The CO2 conversion can be activated by electrons that are heated by the electric field, which is conducted in mild conditions of temperature and pressure. Besides the mild conditions for operation, other advantages include the fact that this process is easily switched on/off by controlling the electricity input (no start-up time issues), the reaction occurs in the entire volume of the reactor as opposed to the electrochemical conversion that needs surface area, and plasma conversion does not require expensive materials. However, the physical phenomenon is very complex and still requires more research to be fully understood. 

Products that can be synthesized include carbon monoxide, methanol, ethylene, ethanol, and some other C3 products. But, due to the R&D stage, the TRL is in the range of 1–3.

Perspectives and challenges:

As we saw above, CO2 can be utilized via several technologies at varying TRLs. Mature options such as EOR and thermochemical urea production are economically feasible and a reality in the market, whereas technologies such as mineralization and carbon monoxide production from electrolysis are in the early stages of commercialization but are already economically feasible, too. That is a reflection of the increased attention that CO2 utilization has gained lately, with two mineralization start-ups winning the prestigious Carbon XPrize competition

For the future, technologies at lower TRLs may also deliver efficient solutions, but much more investment for scale-up, R&D, and assessments of carbon footprint and energy balance are still needed. In common to almost all the CO2 conversion technologies is the need for low-carbon energy (lots of it!) to power this potential solution for carbon circularity. But that seems to be the near future, so it may be worth keeping an eye on CO2 conversion and utilization.

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