MARCH2022CarbonManagementinNet-ZeroEnergySystemsWhitePaperPREPAREDBYGabeKwokBenHaleyRyanJonesCopyright©2022EvolvedEnergyResearchLLC.Allrightsreserved.ABOUTTHISREPORTEnvironmentalDefenseFundcommissionedEvolvedEnergyResearchtoadvanceunderstandingofhowcarbonmanagementinenergyandindustrycouldplayaroleinachievingnet-zerogreenhousegasemissionsintheU.S.by2050.TheBernardandAnneSpitzerCharitableTrustprovidedfinancialsupportforthisstudy.ABOUTEVOLVEDENERGYRESEARCHEvolvedEnergyResearch(EER)isaresearchandconsultingfirmfocusedonquestionsposedbytransformationoftheenergyeconomy.Theirconsultingworkandinsight,supportedbycomplextechnicalanalysesofenergysystems,aredesignedtosupportstrategicdecision-makingforpolicymakers,stakeholders,utilities,investors,andtechnologycompanies.CarbonManagementWhitePaperEvolvedEnergyResearchTableofContentsEXECUTIVESUMMARY................................................................................................4BACKGROUND.............................................................................................................9APPROACHANDASSUMPTIONS...............................................................................11CarbonManagementScope.................................................................................................11StudyApproachandModelingFramework.........................................................................12GHGEmissionsAccounting.................................................................................................14BaseAssumptions................................................................................................................16SensitivityAnalysisAssumptions........................................................................................18CARBONMANAGEMENT’SROLE...............................................................................25Overview.................................................................................................................................25RegionalInfrastructureImplications...................................................................................33CaseStudies..........................................................................................................................38Non-CO2Considerations.......................................................................................................41CONCLUSIONSANDKEYFINDINGS...........................................................................44REFERENCES.............................................................................................................51CarbonManagementWhitePaperEvolvedEnergyResearch4ExecutiveSummaryBackgroundRecentstudiesfromtheinternationalcommunitysuggestthatmeetingnet-zerogreenhousegas(GHG)emissionsbymid-centurywillrequiremanagingthecaptureofbillionsoftonsofcarbondioxide(CO2).Thetechnologiestodosoexisttoday,atleastattheprototypeordemonstrationstage,andmaybecrucialfordecarbonizingkeysectorsanddrawingdownatmosphericCO2.However,despiteitspotential,theroleofcarbonmanagementremainslargelynascent.Thispapersetsouttoprovideadeeperunderstandingofcarbonmanagement’sroleinenergyandindustrythroughansweringkeyquestions:howmuchCO2captureisrequired?WhichtechnologiescapturesignificantquantitiesofCO2?WhenisCO2storedorutilized?Howsensitiveareoutcomestoalternativeassumptions?Howcouldstrategiesvaryregionally?ApproachTheanalyticalapproachforthisstudyisbasedonourEnergyPATHWAYSandRegionalInvestmentandOperations(RIO)models.PairingbothmodelstosimulatetheU.S.energyandindustrialsystemisaframeworkthathasbeenappliedinrecentnet-zeroanalyses,includingCarbon-NeutralPathwaysfortheUnitedStates(Williamsetal.,2021)andPrincetonUniversity’sNet-ZeroAmericastudy(Larsonetal.,2021).Thescopeofouranalysisincludestechnologicalcarbonmanagementsolutionsintheenergyandindustrialsystem,whilenon-technicalcarbonmanagement(e.g.,nature-basedsolutions)areoutsidethescope.WemodelasuiteofcarboncapturetechnologiesandCO2applications,includingretrofitsofexistingenergyinfrastructure,negativeemissionstechnologies(NETs),CO2storageingeologicformationsandCO2utilizationforsyntheticfuels.Weidentifytheircost-optimaldeploymentacrosssixteenU.S.regionstoachievedeepemissionsreductions.WeconstructaCoreNetZero(CNZ)scenariowheretheU.S.economyachievesnet-zeroGHGemissionsby2050atleast-costusingbaselineenergytechnologycostandresourceavailabilityassumptions.Thisbaselineprovidesastartingpointtocompareagainstarangeofmodeleduncertaintiesthatcouldmateriallyaffectcarbonmanagementoutcomes.WeexploredCarbonManagementWhitePaperEvolvedEnergyResearch5alternative:fossilfuelcosts;geologicsequestrationcostandpotential;biomasscostandpotential;renewablescostandpotential;electrolysiscosts;andend-useelectrificationrates.Ourbaseassumptionforachievingnet-zeroGHGemissionsby2050is:(a)modeledenergyandindustry(E&I)CO2decreasesto0.0Gt;and(b)thecombinationofnon-CO2emissionsandthelandsinksumtozerousingcarbondioxideequivalentswithGWP100(acommonsimplificationforeconomy-widenetzeroanalyses).Sincethetrajectoriesfornon-CO2mitigationandlanksinkenhancementarebothhighlyuncertainandaffecttheneedforcarbonmanagementintheenergysystemtomaintainnet-zeroGHGemissions,wefurthermodeled2050E&ICO2targetsof-0.5Gtand0.5Gt.However,itisbecomingincreasinglyclearthatshort-livednon-CO2gases,suchasmethane,aredisproportionatelyresponsibleforglobalwarmingimpactsonshortertimeframes.Thissuggeststhatnon-CO2gasesarebothagreatliabilitytonet-zeroobjectives(becausetheycausewarming)andagreatopportunity(becausemitigationoftheirproductionandleakagepresentsanefficientpathwaytoreducewarming).ThiscaveatemphasizestheimportanceofresearchwearecurrentlyundertakingtodevelopimprovedmethodsthatcanadequatelyconsidertheclimateimpactsofallGHGsovermultipletimescales.KeyfindingsCarbonmanagementisapillarofaleast-costpathwaytonet-zeroWefindthatcarboncapturedeploymentinenergyandindustryisnecessarybymid-centuryevenassumingsuccessacrossallothermitigationstrategies,includinghighlyaggressiveenergyefficiency,electrification,electricitydecarbonization,enhancementofthelandsinkandmitigationofnon-CO2emissions.IntheCNZscenario,nearly700MtCO2iscapturedbymid-century,whichisequivalenttoabout10%oftoday’sU.S.grossGHGemissionsorallenergyCO2emissionsinTexas.Accountingforavarietyofuncertainties,totalCO2capturerangesfrom400to1,100MtCO2.Ifthecurrentlandsinkshrinksand/ornon-CO2emissionsprovemoredifficulttoabate,theimportanceofcarbonmanagementinenergyandindustryisfurtherincreased.BothCO2storageandutilizationforsyntheticfuelproductionareimportantapplications.Storagerangesfrom300to900MtCO2,whichiswellbelowestimatedgeologicsequestrationpotential,whileCO2utilizationrangesfrom100to400MtCO2acrossmostcircumstances.CapturedCO2isoverwhelminglysuppliedfromNETs(250to950MtCO2),includingbioenergywithcarboncapture,CarbonManagementWhitePaperEvolvedEnergyResearch6utilization,andstorage(BECCUS)forfuelproductionanddirectaircapture(DAC).Near-neutraltechnologies,wherefossilfuelisaninputand90%to100%ofemissionsarecaptured,provideamuchsmallershareofCO2supply.CarbonManagementMetricsin2050withModeledUncertaintiesNote:rangereflectsmodeleduncertaintiesandlinerepresentsbaselineprojection(CoreNetZeroscenario).Negativeemissionstechnologiesarewell-suitedfornet-zeroGHGemissionsAsemissionsreductionsacceleratefrom2030to2050,CO2captureshiftstowardsNETsandthesetechnologiessupplythree-quartersoftotalcarboncaptureintheCNZscenario.BECCUSforfuelproductionisgenerallythelowest-costoptionforsupplyingnegativeemissionsdueto:(1)itscarboncaptureefficiency(e.g.,approximately70-140MtCO2iscapturedper100milliontonsofbiomass);and(2)itsversatilitytodisplacefossilfuels.However,itsdeploymentisconstrainedbyanuncertainsupplyofsustainablebiomass.AlthoughDACisnotdeployedintheCNZscenario,itisanimportanttechnologytosupplynegativeemissionsunderveryplausiblecircumstancesthatmayariseonthepathtonet-zero,suchasslowerconsumeruptakeofelectricvehiclesorlowerbiomassavailability.OuranalysisconfirmsthatNETsdeploymentdoesnotdelayoravoidothermitigationstrategiessolongasastrongnet-zerotargetisinplace.CarbonManagementWhitePaperEvolvedEnergyResearch7Fossil-basedcarboncapturefaceshurdlesinanet-zerocontextCarboncaptureatfossil-basedpowergenerationandhydrogenproductionfacilitieshavecharacteristicsthatdisadvantagetheirdeployment.First,theelectricitysectorshiftstowardsveryhighlevelsofvariablerenewableenergy(>70%ofgeneration),whichencouragesinvestmentinelectrolysis,acompetitorofbluehydrogen,anddiscouragesthermalpowergeneration.Second,large-scaledeploymentrequiressignificantlyscalingupCO2storageinfrastructure.Forexample,ifthesetechnologiessuppliedone-thirdofend-useelectricityandhydrogendemand,thenapproximately1,200MtCO2ofannualstoragewouldberequired.Finally,carboncaptureinthesetwosectorscanonlyaddresstheirownemissions,whereasNETscanflexiblyaddressresidualemissionsfromanysectorintheeconomy.Achievingnet-zerowithoutcarbonmanagementhassignificanttrade-offsExcludingcarbonmanagementasastrategyis"technicallyfeasible”butentailsscalingbiomassandrenewableresourcestopotentiallyproblematiclevels(e.g.,morethanonebilliontonsofbiomass).Givenuncertaintyaboutthesupplyofsustainablebiomassandthechallengesofsitingrenewables,takingcarbonmanagementoffthetableamplifiestheriskofmissingnet-zero.Prioritizecarbonmanagement’slong-termroleToday’sresearchandfundingislargelyfocusedon:(a)deployingpoint-sourcecarboncaptureatexistingfossil-basedfacilities(e.g.,retrofitsoffossilpowerplants);and(b)usingCO2forenhancedoilrecovery(EOR),whichoftenrequireslong-distanceCO2pipelinenetworks.However,muchofthisinfrastructurethatisaretrofitcandidatefacesdecliningutilizationand/orlimitedremainingoperatinglifetimesinthecontextofnet-zero.Incontrast,ouranalysisshowscarboncapturetechnologyisalmostexclusivelyappliedtonewenergyinfrastructureandthatsignificantcapture(>100MtCO2/yr)occurs20to30yearsfromtoday.Asaresult,webelievefocusshouldbeexpandedtowardsareasthatbetteralignwithachievingnet-zerointhelong-term,including:(1)fosteringthedevelopmentofNETs;(2)placingvalueonbothCO2storageandbeneficialCO2utilizationinlow-carbonfuels;and(3)identifyinganddevelopingregionalintegratedcarbonmanagementhubswithsharedinfrastructure.CO2ismanageddifferentlyacrosstheU.S.andisprimarilyusedintra-regionallyWefindsignificantvariationsinthesourcesofcapturedCO2anditsapplicationacrossU.S.regionsduetodifferencesinbiomass,renewablesandgeologicsequestrationpotential.NearlyCarbonManagementWhitePaperEvolvedEnergyResearch8allcapturedCO2isstoredorutilizedwithinseveralhundredmilesofthepointofcaptureandnottypicallytransportedlongdistancesacrosstheU.S.Furthermore,sinceCO2utilizationtoproducesyntheticfuelcanbeaccomplishedintra-regionally,thereislittleneedtotransportCO2long-distancestooil-producingregionsforEOR.InnovationacrossthecarbonmanagementsupplychainisneededCarbonmanagement’sabilitytocontributetowardsnet-zeroGHGemissionsdependsoninnovationacrossachainofCO2capture,transportation,utilizationandstorageinfrastructure.Inouranalysis,nearlyallcapturedCO2in2050isfromtechnologiescurrentlyinthedemonstrationorprotypestage,andtechnologiesthatutilizeCO2areatasimilarstageofdevelopment.Thissuggeststhatsignificantresearch,development,anddemonstration(RD&D)isnecessarytoensurethetechnologiesmostcompatiblewithaleast-costnet-zeroenergysystem(e.g.,NETsandsyntheticfuelproduction)aredeployedinatimelymanner.Theriskofcarboncaptureextendingthelifeoffossilfuelsislowifweareonapathtonet-zeroOnekeyconcernaboutcarbonmanagementisthatitfacilitatescontinuedfossilfueluse,butournet-zeroanalysisfindslargereductionsinfossilfuelconsumption(80-90%below2005levelsby2050).However,carbonmanagementtechnologiescouldenablesomefossilfueluse,suchasheatorfeedstocksforindustrialapplicationsthatarechallengingorveryexpensivetoabate.Sincecarbonmanagementdoesnotinherentlyaddressnon-CO2pollution,suchasmethane,itwillbeimportantforpolicymakerstomonitorandaddressco-pollutantsassociatedwithcarbonmanagement,lesttheynegateitsnear-andlong-termclimatebenefits.CarbonManagementWhitePaperEvolvedEnergyResearch9BackgroundU.S.andinternationaldeepdecarbonizationstudieshaveidentifiedenergysystemstrategiesthatarenecessaryforachievingemissionsreductionsconsistentwithclimatestabilizationtargets.Energyefficiency,end-useelectrification,andelectricitydecarbonization,commonlyreferredtoasthe“threepillars”,featureconsistentlyacrossalargebodyoftechnicalworkdemonstratinglow-carbonenergysystemsalignedwith“80%by2050”targets.1Analysesconsistentwithmoreaggressivegreenhousegas(GHG)ambition,suchas“net-zeroby2050”,haveidentifiedcarbonmanagementasafourthpillarofdeepdecarbonization.2AsshowninFigure1,carbonmanagementconsistsoftwoapproaches:(1)technicalsolutionsinenergyandindustry;and(2)non-technicalornaturalsolutionsoutsideoftheenergysystem,suchasafforestation/reforestationandocean-basedcarbondioxideremoval(CDR).Inthispaper,weassesstechnicalcarbonmanagementoptions,includingcarboncaptureatfossil-basedpowerplantsandindustrialfacilities,aswellasnegativeemissionstechnologiessuchasdirectaircaptureandbio-energywithcarboncapture.Figure1CarbonManagementApproachesandTechnologies1SeeWilliamsetal.(2014)2SeeHaleyetal.(2018)andWilliamsetal.(2020).Technical(energy&industry)Non-technical(natural)DirectaircaptureBio-energywithcarboncaptureNegativeemissiontechnologies(“NETs”)orCarbondioxideremoval(“CDR”)Fossil-basedpointsourcecarboncaptureIndustrialfacilitiesPowerplantsAfforestation/ReforestationSoilcarbonsequestrationEnhancedmineralizationOcean-basedCDRCarbonManagementCarbonManagementWhitePaperEvolvedEnergyResearch10Technologicalcarbonmanagementresearchhasprimarilyfocusedonitsroletodecarbonizespecificsectors(e.g.,electricpower)orfuels(e.g.,hydrogen),aswellasindividualtechnologyassessments.IntheU.S.,recentstudieshaveconsideredtheroleofcarboncaptureretrofitsatexistingfacilities,theuseofcapturedCO2inenhancedoilrecovery(EOR)andthedevelopmentoflong-distanceCO2transportationtoaddressspatialmismatchesbetweenexistingemissionssourcesandgeologicsequestrationsites.3Net-zeroenergysystem-widestudiesshowawiderangeofresultsforthetotalquantityofCO2captured,thesourcesofcapturedCO2(e.g.,fossilfuelorbiomass)anditsapplication(e.g.,sequestrationorutilization).Thegoalofthiswhitepaperistoadvanceunderstandingofhowcarbonmanagementinenergyandindustrycouldplayaroleinachievingnet-zeroGHGemissionsintheU.S.Thetechnologies,sectors,andapplicationswherecarbonmanagementcouldbeimplementedtosupportnet-zeroisvast.Ouranalysisincorporatesawiderangeofuncertaintiestofurtherunderstandwhatdrivesalternativecarbonmanagementoutcomesandwhichtechnologiesarerobustinthelongrun.Theremainderofthispaperisorganizedasfollows.Section2providesanoverviewofthescopeofcarbonmanagementtechnologiesandapplicationsconsideredinthisworkandourmodelingapproachandassumptions.Section3presentsanalyticalresultsforcarbonmanagementinthecontextofanet-zeroGHGemissions,andSection4summarizeskeyfindingsandconclusions.3Forexample,seeEdwardsandCelia(2018)andGreatPlainsInstitute(2020).CarbonManagementWhitePaperEvolvedEnergyResearch11ApproachandAssumptionsCarbonManagementScopeTounderstandthecontributionofcarbonmanagementtomeetnet-zeroGHGemissions,weevaluatedasuiteofcarboncapturetechnologiesandapplicationsofCO2acrosstheenergyandindustrialsectors,asshowninFigure2.Werepresentretrofitsofexistingenergyinfrastructuresuchasfossilpowerplants,cornethanolfacilitiesandcementproduction,aswellasnewfuelproductionfacilitiesthatcouldplayameaningfulroleinadeeplydecarbonizedenergysystem.Wecategorizecarboncaptureatpowergeneration,bluehydrogenandindustrialfacilitiesasnear-neutralemissionstechnologiessincetheirenergyinputisfossilfuelandcaptureratesrangefrom90%to100%.ThisdesignationreferstocombustionandprocessemissionsatthefacilitiesanddoesnotaccountforpotentialupstreamordownstreamGHGemissionsleakage,animportantconsiderationthatwediscusslaterinthispaper.Intheelectricpowersector,wemodelretrofitsofexistingfossilresources,aswellasnewgas-firedresourceswithcaptureratesof90%and100%(i.e.,AllamCycle).Wemodelcarboncaptureinthecementindustrydueitshighlevelofemissionsandlackofalternativedecarbonizationoptions,andwenotethatotherindustrialsectors(e.g.,ironandsteel)couldapplycarboncapture.Directaircapture(DAC)andthecaptureofCO2intheproductionofbiofuels(alsoreferredtoasbioenergywithcarboncapture,utilization,andstorageor“BECCUS”)arecategorizedastechnicalnegativeemissionstechnologies(“techNETs”)sincetheyextractCO2directlyfromtheatmosphereorindirectlythroughtheCO2embodiedinbiomass.4Strategiesoutsideoftheenergysectorthatincreaseterrestrialcarbonsequestration(“landNETS”)arenotexplicitlymodeled,butweincludearangeofalternativelandsinkassumptionsinouranalysis,asdiscussedbelow.5Oncecaptured,CO2followstwopossibleroutes:(1)sequestrationingeologicformations;or(2)utilizationintheproductionofsyntheticfuels,suchasliquidsandmethane.6Ourmodeling4WerefertocapturedbiogenicandatmosphericCO2as“NETsCO2”.5Technicalandnaturalnegativeemissionstechnologiesarecollectivelyreferredtoas“carbondioxideremoval”(CDR)inotherwork,whilelandNETSarefrequentlydescribedas“naturalclimatesolutions.”6SeeIEA(2019)foranextensivereviewofCO2utilizationtechnologyoptions.CarbonManagementWhitePaperEvolvedEnergyResearch12approachidentifiesthecost-optimalcarboncapturetechnologydeploymentandapplicationofCO2tomeetnet-zeroemissionsaspartofthesolutionforthebroaderenergysystem.Figure2ModeledCO2SourcesandApplicationsStudyApproachandModelingFrameworkRecognizingthatcarbonmanagementoutcomestoachievenet-zeroGHGemissionsaresensitivetoalternativeassumptions,weusedthefollowingapproach.First,weconstructaCoreNetZero(CNZ)scenarioreflectingourbaseassumptionsandthisisthestartingpointtocompareallothersensitivitiesagainst.Next,weimplementmultiplesensitivitiesofftheCNZscenariothatreflectuncertaintiesaffectingthecostandviabilityofvariouscarbonmanagementoptions.Thisprocessallowsustotesttherobustnessofourresultsanddrawadditionalinsights,includinginsightsforlawmakerslookingtopasspolicytoimprovecarbonmanagementtoolsandpractices.Weexplorearangeofuncertaintiesaroundfossilfuelprices;resourcepotential;technologycosts;end-useelectrificationrates;andenergyandindustrialCO2emissionsreductiontargets.Finally,weevaluatetopic-specificcasestudiestobetterunderstandtheroleoffossil-CarbonManagementWhitePaperEvolvedEnergyResearch13basedcarboncapturetechnologiesandtheimplicationsofnotpursuingtheinnovationneededforcarbonmanagementtobetechnologicallyready.TheanalyticalapproachforthisstudyisbasedonourEnergyPATHWAYS(EP)andRegionalInvestmentandOperations(RIO)models.PairingbothmodelstosimulatetheoverallU.S.energyandindustrial(E&I)systemisaframeworkthathasbeenappliedinrecentU.S.net-zeroanalyses,includingCarbon-NeutralPathwaysfortheUnitedStatesandPrincetonUniversity’sNet-ZeroAmericastudy.7Thisframeworkincludestwosteps:(1)EPproducesabottom-upprojectionoffinalenergydemandforallend-usesacrosstheeconomybasedonuser-definedenergyefficiencyandfuelswitchinglevers;and(2)RIOdeterminesthecost-optimalenergysupplytomeetenergydemandprojectionsfromEP,whilemeetingannualemissionsandadditionalconstraints.Optimalinvestmentsacrosstheelectricityandfuelssectorsaredeterminedsimultaneously.Thisuniqueframeworkiswell-suitedtoevaluatecarbonmanagementbecausethesupplyanddemandforcapturedCO2crossesmultiplesectorsanditcapturesdynamicinteractionsthatoccuraslinesbetweentraditionallydistinctsectorsbecomeblurredovertime.Forexample,aDACfacility:(a)isamajorelectricload;(b)cansupplyCO2forsyntheticfuelproduction;and(c)cansupplyCO2forsequestrationtoaddressresidualor“legacy”emissionsinanysector.WerepresenttheU.S.E&Isystemacross16geographicregions,asdepictedinFigure3.Theseregionsarecharacterizedbyimportantdifferencesthataffecthowdeepdecarbonizationoccurs,including:(a)resourceendowmentssuchasrenewableresourcepotentialandquality,biomassfeedstocksupplyandgeologicsequestrationavailability;and(b)electrictransmissionconstraintsbetweenregions.Regionalcarbonmanagementimplicationsarestronglyinfluencedbyresourceendowments,whichwediscussindetailinsection3.2.7SeeWilliamsetal.(2021)andLarsonetal.(2020).CarbonManagementWhitePaperEvolvedEnergyResearch14Figure3ModeledRegionsGHGEmissionsAccountingInthissection,wedescribe:(1)thescopeofemissionscoveredinourmodeling;(2)ourassumptionsaboutemissionsoutsidethescopeofourmodeling;and(3)adescriptionofaccountingconventionsastheyrelatetocarbonmanagement.Allscenariosevaluatedinthisstudyareinthecontextofachievingeconomy-widenet-zeroGHGemissionsby2050intheU.S.However,thescopeofourmodelingislimitedtoE&ICO2emissions,whichincludesfourcomponents:1.Grossenergy:CO2emissionsfromfossilfuelconsumptionorfossilcarbonthatisextractedandembeddedinproducts.Itaccountsforfossilfuelusedinpowergeneration,transportation,hydrogenproductionanddirectlybyend-uses,suchasappliancesinbuildings.Emissionsareanoutputfromourmodeling.CarbonManagementWhitePaperEvolvedEnergyResearch152.Grossindustry:CO2emissionsfromindustrialprocesses,suchascementproduction.Itstrajectoryisanexogenousinputbasedonprojectedindustrialactivity.3.Productsequestration:CO2emissionssequesteredindurableproducts,suchasplastics.Itstrajectoryisanexogenousinputbasedonprojectedeconomicactivity.84.Geologicsequestration:CO2emissionssequesteredingeologicformations.Reflectsallsequestrationfrombothnear-neutralandnegativeemissionstechnologies.NetE&ICO2,thesumofthefourcomponentsabove,istheprimaryemissionsconstraintappliedinourmodelingandourbaseinputassumptionis0.0Gtby2050.Reachingnet-zeroGHGemissionsalsorequireschangestonon-CO2GHGemissionsandthelandsink,whicharecurrently~1.3GtCO2eand-0.8GtCO2e,respectively.Basedonplausiblenon-CO2mitigationandlandsinkenhancementtrajectoriesfromtheliterature,weassumethatthelandsinkandnon-CO2GHGssumtozeroby2050.9Table1illustratestheGHGaccountingconventionsdescribedaboveusinganexamplecalculationofnet-zeroGHGby2050.Table1ExampleofNet-ZeroGHGEmissionsAccountingandModelingMethodsCategorySub-CategoryModelingMethodLineItemGtCO2e(2050)E&ICO2GrossenergyOptimizedoutputfromRIO[A]0.6GrossindustryExogenousassumptionusedasinputintoRIO[B]0.2ProductsequestrationExogenousassumptionusedasinputintoRIO[C]-0.3GeologicsequestrationOptimizedoutputfromRIO[D]-0.5NetE&ICO2InputconstraintusedinRIO[E=A+B+C+D]0.0Non-CO2CH4,N20&F-gasesAssumption[F]0.9LandSinkNetLULUCFAssumption[G]-0.9GHGNetGHG[H=E+F+G]0.08TheU.S.EPAalternativelyadjustsforcarbonstoredinproductsbysubtractingfromtotalfuelconsumption,whereaswealternativelytrackunadjustedfuelconsumptionsinceweallowfuelsupplydecarbonization.ForanoverviewoftheEPA’smethodology,seeSection3.2ofU.S.EPA(2021).9SeeSection4.2fromWilliamsetal.(2020)foradetaileddiscussion.CarbonManagementWhitePaperEvolvedEnergyResearch16BaseAssumptionsTable2summarizeskeyassumptionsfromtheCNZscenariothatareappliedconsistentlyacrosstheanalysisunlessspecifiedotherwise.Allscenariosachievenet-zeroGHGemissionsbymid-century,whiledeliveringenergyservicesprojectedfromtheU.S.DepartmentofEnergy’s(DOE)AnnualEnergyOutlook2021(AEO).WeusepubliclyavailabledatafromU.S.governmentagenciesorlaboratoriestocharacterizefuelcostsandtechnologycostandperformance,andrelyonourexperiencemodelingnet-zeroU.S.energysystemstodevelopassumptionsforend-useefficiencyandelectrification.CarbonManagementWhitePaperEvolvedEnergyResearch17Table2KeyBaseAssumptionsCategoryAssumptionEmissionsTargets-NetGHG:50%below2005levelsby2030andnet-zeroby2050-NetE&ICO2:limitedto3.2GtCO2in2030and0.0GtCO2in2050End-Uses-DemandforenergyservicesareconsistentwithAEO2021-Energyefficiencyandfuelswitchingtoelectricityandhydrogen-basedfuelsisgenerallyconsistentwiththeCentralscenariofromCarbon-NeutralPathwaysfortheUnitedStates(Williamsetal.,2020)FossilFuelPrices-CostprojectionsarefromtheAEO2021ReferenceCase-Indicativefuelcostsin2050:naturalgasis$3.7/MMBtuandliquidfuelsareapproximately$20.0/MMBtu(crudeoilis~$95/barrel)GeologicSequestration-StoragepotentialisfromPrincetonUniversity’sNet-ZeroAmericaProject(NZAP)study(1.9GtCO2ofannualinjection)-CostoftransportationandstorageisderivedfromNZAPandexcludesnear-termEORbenefitsBiomass-CostandpotentialarederivedfromDOE’sBillion-TonStudy(BTS)-BTSfeedstockpotentialismodifiedtoexclude50%ofherbaceousenergycrops,resultinginapproximately750milliontonsoftotalpotentialRenewables-Cost&performancetrajectoriesarefromtheNationalRenewableEnergyLaboratory(NREL)AnnualTechnologyBaseline(ATB)2020ModerateScenario-ResourcepotentialforwindandsolarresourcesisderivedfromNREL’sRegionalEnergyDeploymentSystem(ReEDS)2020ReferenceAccesssitingregimeassumption-Weassume75%ofavailablepotentialforonshoreandoffshorewindpotential(5.9TWand3.7TW,respectively).Utility-scalesolardeploymentisfurtherconstrainedupto1.5%ofavailablelandareaineachregion(3.7TWacrossthecontiguousU.S.).Electrolysis-Assumedcapitalcostof$250/kW-eandefficiencyof72.5%by2050DirectAirCapture-Cost&performanceisderivedfromLarsenetal.(2019)mid-rangevalues-Indicativelevelizedcostofcapture(excludestransportandstorage)is$110permetrictonin2050CarbonManagementWhitePaperEvolvedEnergyResearch18SensitivityAnalysisAssumptionsWeconsideredsevensourcesofuncertaintythatcouldhaveamaterialimpactoncarbonmanagementoutcomes,including:(1)fossilfuelcosts;(2)geologicsequestrationcostandpotential;(3)biomasscostandpotential;(4)renewablescostandpotential;(5)electrolysiscost;(6)end-usefuelswitchingrates;and(7)E&ICO2targets.Somefactorsarecontrollableorpartiallycontrollablethroughpolicy,suchasacarbontaxaffectingfossilfuelcostsorR&Dfundingforenergytechnologiesthatreducetheircost,whileothersareoutsideofpolicymaker’scontrol.Therangeofuncertaintieswereselectedtoaidunderstandingofwhichfactorsdrivemoreorlesscarbonmanagementbutdonotcaptureeverypossiblescenario.Figure4illustratesinteractionsbetweentheareasofuncertaintyandcarboncapturesourcesandapplicationsmodeledinthisstudy.Someuncertaintiesdirectlyimpactspecifictechnologies,whileothersmorebroadlyaffecttheneedforcapturedcarbon.Forexample,thecostandpotentialofbiomassfeedstocksdirectlyaffectsthecompetitivenessofBECCUStechnologies,whereasfossilfuelpricesaffectbroadercarbonmanagementdecisionsintwoways:(1)theyareamajorcostcomponentofnaturalgas-firedpowergenerationandhydrogenproductionfacilitieswithcarboncapture;and(2)theyprovidetheavoidedcostoreconomicsignaltousefossilfuelsorsyntheticfuels.Ingeneral,higherfossilfuelcostsencourageCO2utilizationforfuelsproduction,whereaslowerfossilfuelcostsencourageCO2storagetooffsetfossilfuelconsumption.Belowwediscussourmodelingimplementationforeachareaofuncertainty.CarbonManagementWhitePaperEvolvedEnergyResearch19Figure4InteractionsbetweenModeledUncertaintiesandCarbonManagementFossilfuelcostsWedeveloplow-andhigh-costrangesfornaturalgasandpetroleumproductsseparatelyusingAEO2021scenarios,asshowninFigure5.Fornaturalgascostranges,weusetheHighOilandGasSupplyscenarioforlowcostsandLowOilandGasSupplyforhighcosts.Forpetroleumproducts,weusetheLowOilPriceandHighOilPricescenariosforlowandhighcosts,respectively.CarbonManagementWhitePaperEvolvedEnergyResearch20Figure5FossilFuelCostRangesGeologicsequestrationcostandpotentialOurbaseassumptionassumesgeologicsequestrationpotentialisequalto1.9GtCO2,andweconsider:(a)alowpotentialof1.2GtCO2,basedonaNETLestimate;and(b)ahighpotentialof3.0GtCO2basedontheExpandedCO2StorageCapacityCasefromtheNZAPstudy.AcomparisonofpotentialforeachmodeledregionisshowninFigure6.OurbasecombinedCO2transportandstoragecostsrangesfromalowofapproximately$25/tCO2to$70/tCO2.Weexaminetheimplicationsofvaryingcostsby+/-$20/tCO2,whichcouldreflectuncertaintyaboutthecostofsafelystoringCO2permanently,transportationcostsbasedondifferentutilizationorpotentialeconomicincentives.CarbonManagementWhitePaperEvolvedEnergyResearch21Figure6GeologicSequestrationPotentialRangesBiomasscostandpotentialWeconsiderlowandhighsensitivitiesforbiomassfeedstockavailabilityandcostsseparately.Forbiomasspotential,weuse:(a)theDOEBillionTonStudyforpotentialfromwaste,woodyandherbaceousenergycrops;and(b)Princeton’sNZAPstudyforadditionalpotentialfromlandcurrentlyusedtogrowcornforethanolandConservationReserveProgramlands.Weapplyalternativescreenstocropcategories,whichresultsinbiomasspotentialrangingfromapproximately0.3to1.3billiontons,asshowninFigure7.BiomasscostsareimplementedasasupplycurvethatmatchesresourcebinsfromtheBillionTonStudy,withcostsrangingfrom$80to$150/ton($4.7to$8.8/MMBtu)forherbaceouscrops.Ourhigh-andlow-costestimatesapply+$50and-$50/tontothesupplycurves,respectively.CarbonManagementWhitePaperEvolvedEnergyResearch22Figure7BiomassPotentialRangesRenewablescostandpotentialForwindandsolarcostandperformancetrajectories,weuseNREL’s2020ATBtodefinehigh-andlow-costprojections.Ourlow-costprojectionsuseATB’sAdvancedTechnologyInnovationScenario,whileourhigh-costprojectionsfollowtheConservativeTechnologyInnovationScenario.Figure8providescapitalcosttrajectoriesforonshorewindandutility-scalesolarthrough2050.GrossrenewablepotentialisderivedfromNREL’sReEDS2020ReferenceAccessscenario.Foronshoreandoffshorewindresources,weassume50%ofavailablepotentialforourlowpotentialsensitivityand100%forourhighpotentialsensitivity(75%forourbasepotential).Utility-scalesolarisconstrainedbythepercentageofavailablelandareaineachregionwithupto0.5%inthelowpotentialsensitivityand2.5%inthehighpotentialsensitivity(1.5%forourbasepotential).CarbonManagementWhitePaperEvolvedEnergyResearch23Figure8WindandSolarCapitalCostsElectrolysiscostSyntheticelectricfuelproductioncostsarecharacterizedbyveryhighfeedstockcosts,withH2andCO2feedstocksrepresentingapproximately60%and30%ofproductioncosts,respectively.Asaresult,electrolytichydrogenproductioncostsaffectwhetheritismoreeconomicforcapturedCO2tobe:(a)utilizedforsyntheticelectricfuelproduction;or(b)storedingeologicformations.Ourbaseassumptionforelectrolysisreflectsacapitalcostof$250/kW-eandefficiencyof72.5%by2050.Weconsiderarangeoffuturecostandperformancetrajectoriesforelectrolyzers,including:(a)alow-costsensitivitywherecapitalcostsrealize$100/kW-eanda75%efficiencyby2050;and(b)ahigh-costsensitivityof$400/kW-eanda70%efficiencyby2050.End-usefuelswitchingTherateatwhichend-usesswitchtoelectricityandhydrogen-basedfuelsisinverselyrelatedtoresidualfueldemand.LowerfuelswitchingratesincreaseresidualfueldemandanddemandforcapturedCO2.Weevaluatedalternativefuelswitchingrates,including:(a)delayedfuelswitchingsensitivitywhereconsumeradoptionisslowerby20yearsrelativetothebaseline;and(b)anacceleratedfuelswitchingsensitivitywhereuptakeis10yearsfasterthanthebaseline.Relativetothebaseline,delayedfuelswitchingincreasesliquidandgaseousfueldemandby10,600TBtuby2050.Acceleratedelectrificationhasalimitedimpacton2050fueldemand,becausetheCarbonManagementWhitePaperEvolvedEnergyResearch24electrificationintheCNZscenarioisalreadyaggressive;however,acceleratedelectrificationdoesdecreasefueldemandinyearsleadingupto2050(e.g.,2040).EnergyandindustryCO2emissionstargetInourmodeling,net-zeroGHGemissionsin2050areachievedwhenthesumofthefollowingsourcesandsinksisequaltozero:(1)netE&ICO2emissions;(2)non-CO2emissions;and(3)thelandsink.OurbaseassumptionisthatnetE&ICO2emissionsdecreaseto0.0GtCO2by2050,andnon-CO2emissionsandthelandsinksumtozero.10However,thereisconsiderableuncertaintyaboutthemitigationtrajectoriesfornon-CO2andthelandsink,whichultimatelyaffectsthetargetforE&ICO2tomaintainnet-zeroGHGemissions.Forexample,ifenhancingthelandsinkand/ornon-CO2mitigationprovesverychallenging,thennetnegative(i.e.,moreaggressive)E&ICO2emissionsarerequiredtomaintainnet-zeroGHG.Alternatively,ifmoreaggressivenon-CO2reductionsandnaturalclimatesolutionsprovefeasible,thenanetpositive(i.e.,lessburdensome)E&ICO2targetispossible.Tohighlighttheimpactofthisuncertainty,weevaluateanetnegativetargetof-0.5GtCO2by2050andanetpositivetargetof+0.5GtCO2,asillustratedinFigure9.Figure9Illustrative2050GHGEmissionsTargetbyComponent10Thisisaplausiblemitigationassumptionfornon-CO2andthelandsink.Seesection4.2ofWilliamsetal.(2020).CarbonManagementWhitePaperEvolvedEnergyResearch25CarbonManagement’sRoleInthissection,wepresentanalyticalresultsandtakeawaysspecifictotheroleofcarbonmanagementintheU.S.whenalignedwithatargetofnet-zeroGHGemissionsby2050,aswellasaninterimtargetof50%reductionsbelow2005levelsby2030.Wereportavarietyofmetrics,suchastotalcapturedcarbon,CO2suppliedbytechnologyandtheapplicationofcapturedCO2(storage;utilization).WedescriberesultsfortheCoreNet-Zero(CNZ)scenarioanduncertaintiestogether,andfirstpresentnationalresultsfollowedbyregionalresults.Finally,weexplorethebroadenergysystemimpactsforselectcasestudies.OverviewKeymetricsCarbonmanagement’simportancegrowsovertimewithannualcaptureincreasingfromapproximately60MtCO2in2030toalmost700MtCO2bymid-centuryintheCNZscenario.Thisisequivalenttoroughly10%ofcurrentgrossU.S.GHGemissions.Around75%ofcapturedCO2in2050isstoredingeologicformations,withtheremaining25%utilizedtoproducesynthetichydrocarbonfuels(Figure10).CO2isprimarilycapturedatfuelproductionfacilities(~90%)andtheremainderoccursatheavyindustryfacilities,specificallycement.PowergenerationanddirectaircapturearenotsourcesofCO2intheCNZscenario,buttheydofeaturewithalternativecircumstances,suchaswhenzero-carbonenergyresources(biomass,renewables)arelimitedormorecostly.TheimportanceofNETstomeetnet-zeroatleast-costishighlightedbythefactthatbioenergyaccountsforaround75percentofCO2captured,whilefossilfuelandindustrialprocessemissionsaccountfortheremainder.CarbonManagementWhitePaperEvolvedEnergyResearch26Figure10CarbonManagementMetricsintheCoreNetZeroscenario:2050TotalcapturedcarbonTakingintoaccountuncertaintyaroundtheavailabilityofzero-carbonenergyresources,fossilfuelcosts,technologycosts,end-usefuelswitchingratesandtheemissionstargetforE&ICO2,wefindbothcommonthemesandlargevariationsincarbonmanagementoutcomes.Theoverallvolumeofcapturedcarbonrangesfromaslowas400MtCO2to1,100MtCO2acrossalluncertainties(Figure11).UncertaintyaroundtheE&ICO2targetresultsinthebroadestrangeofcapturedcarbonrequirements,whichsuggeststhatinestablishinganet-zeroGHGemissionstargetfortheU.S.,long-runnon-CO2andlandsinkgoalsshouldbeclarifiedtoplanforthemitigationburdenplacedontheE&Isectorsandtheresultingcarboncaptureinfrastructurerequirements.Forexample,iftheE&ICO2targetisnet-negative,thenanadditional400MtCO2iscapturedrelativetotheCNZscenario.Importantly,ifadditionalprogressisrealizedinreducingnon-CO2emissionsand/orenhancingthelandsinkthroughnaturalclimatesolutions(i.e.,anet-positiveE&ICO2target),carboncaptureisstillaleast-coststrategyandisnotcompletelyavoided.Thenextlargestuncertaintyistherateoffuelswitchingtoelectricityandhydrogen-basedfuelsacrossend-uses.Slower-than-anticipatedfuelswitchingsubstantiallyincreasescapturevolume,whilefaster-than-anticipatedswitchingreducesbutdoesnoteliminatetheeconomicdeploymentCarbonManagementWhitePaperEvolvedEnergyResearch27ofcarboncapture.CapturevolumeismostsensitivetofuelswitchingratesinthetransportationsectorsinceCO2utilizationisusedforliquidfuelproduction,whereasbuildingsandindustrypredominantlyconsumegaseousfuels.Forthemostpart,carboncapturevolumesconsistentlyrangefromapproximately600to800MtCO2acrosstheotheruncertainties.Figure11RangeofCarbonCaptureacrossKeyUncertainties:2050ApplicationsOncecaptured,CO2iseithersequesteredingeologicformationsorutilizedtoproducelow-carbonfuel.WefindthatcapturedCO2isappliedtobothapplicationsacrossawiderangeofuncertainties(Figure12).Annualinjectionintogeologicformationsin2050rangesfromapproximately250to920MtCO2.ThequantityofsequesteredCO2ishighlysensitivetofossilfuelpricessincelowernaturalgasandpetroleumcostsincentivizecontinuedfossilfuelconsumptionthatisoffsetbyCCS,whilehigherfossilfuelcostsrepresentanincreasedavoidedcostandeconomicalsignalforCO2tobeutilized(CCU)foralternativefuelsinsteadofsequestered.Sequestrationisalsosensitivetochangesinthedeliveredcostofsequestration,withtheanalysissuggestingadecreaseinthedeliveredcostofsequestrationby$20/tCO2increasesannualsequestrationbyapproximately100MtCO2andviceversa.UncertaintysurroundingsequestrationpotentialhasamutedimpactsincetheU.S.haslargesalineformationsandthestoragerequirementsintheCNZscenariorepresentonlyaboutone-quarterofbasepotential.Thefactthatstoragepotentialvastlyexceedsrequirementscouldprovidedecision-makerswithflexibilitytoconsiderotherfactorswhensitingsequestration.CarbonManagementWhitePaperEvolvedEnergyResearch28CO2utilizationforfuelproductionrangesfrom20to430MtCO2duetophysicalandeconomicdrivers.PhysicaldriversofhigherCO2utilizationforfuelproductioninclude:(a)adecreaseinbiomasspotential,whichresultsinascarcityofdrop-inbiofuelsthatarereplacedbysyntheticelectricfuels;and(b)adelayinend-usefuelswitching,whichincreasesresidualfueldemandthatmustbedecarbonized.LowerelectrolysisandrenewablecostsareeconomicdriversforhigherCO2utilizationoversequestration,sincetheyreducethecostofelectrolytichydrogenthatissynthesizedwithcapturedCO2toproducelowcarbonfuels.Inallourscenarios,CO2isutilizedforliquidfuelratherthangaseousfuelproductionduetotheformer’shigheravoidedcost.Figure12CarbonCaptureApplication:2050SourcesCarboncapturetechnologyisdeployedatfivetypesoffacilities:(1)bio-refineriesproducinghydrogen,methane,liquidhydrocarbonsandheavyhydrocarbons(“BECCUS”);(2)directaircapture(“DAC”)plants;(3)heavyindustrialfacilities;(4)autothermalandsteamreformingplantsCarbonManagementWhitePaperEvolvedEnergyResearch29producingbluehydrogen;and(5)powerplants.Wefindthatnegativeemissionstechnologies(BECCUSandDAC)arethepredominantsourceofcapturedCO2,andtheirlong-runannualcapturerateis2.0-5.0xthecapturefromnear-neutraltechnologies(Figure13).BECCUSconsistentlysupplies400-500MtCO2acrosstherangeofuncertaintiessincetheirvaluetoanet-zeroenergysystemistwofold:(1)theydirectlyprovidedrop-in,carbon-neutralfuel;and(2)capturedCO2canbesequesteredorutilized.AlthoughDACisnotdeployedintheCoreNetZeroscenario,itisanimportanttechnologicalbackstopasasourceofnegativeemissions.Incircumstanceswherebiomassavailabilityislow,end-usefuelswitchingisdelayedortheE&Isectorsfaceamorestringentemissionstarget,DACisdeployedatscale(annualcaptureof100to400MtCO2).11DACisalsomoderatelydeployed(~100MtCO2)whenpetroleumcostsdeviatesignificantlyfromtheirbaselinetrajectoryduetogeographicdifferencesbetweenwhereNETsareavailableandwhereutilizationisneeded.Forexample,higherpetroleumproductcostsincentivizeutilizationofCO2toproducesyntheticelectricfuelsandfurtherdisplaceliquidfossilfuels.However,someregionsthatareidealcandidatesforCO2utilizationduetohighrenewablequalityandlow-costelectrolytichydrogendonothavesufficientincrementalNETSCO2tocapturefrombiomassanditischeapertodeployDACthantoimportbiomass-derivedNETSCO2fromotherregions.Ontheotherhand,lowerpetroleumproductcostsencouragecontinuedfossilfuelconsumptionthatisoffsetviastorageofnegativeemissions,butsomeregionswithincremental,low-coststoragepotentiallacksufficientincrementalbiomassanddeployDACasanalternativeCO2source.Near-neutraltechnologiesgenerallycapturebetween100to200MtCO2by2050,andthisisprimarilyfrom:(1)cementfacilitieswherecarboncaptureisusedtoabateprocessandfuelcombustionemissions;and(2)bluehydrogenproductionfacilitieswherenaturalgasandgeologicsequestrationisplentiful(i.e.,GulfCoast).Carboncaptureatexistingandnewpowerplantsisaminimalsourceprimarilyduetothechallengeofmaintaininghighcapacityfactorstojustifycapital-intensiveinvestmentswhentheelectricitygridshiftstoveryhighlevelsofvariablerenewables.Carboncaptureonpowergenerationandhydrogenproductionfacilitiessharetwocharacteristicsthatdisadvantagetheirdeployment:(1)theycanonlycounteracttheirownemissions,whereasNETScanaddressemissionsfromanyhard-to-abatesector;and(2)11Haleyetal.(2018)andLarsenetal.(2019)identifyDACdeploymentundersimilarcircumstances.CarbonManagementWhitePaperEvolvedEnergyResearch30alternativetechnologiesareavailable,includingrenewablesandnuclearforpowergenerationandelectrolysisforhydrogen.Onthecontrary,carboncaptureatcementproductionfacilitiesiscriticalduetoalackofalternativeproductionmethodstoday.Figure13CarbonCapturebyTechnology:2050ThesourcesofcapturedCO2outlinedabovechallengetheargumentthatCCUSfacilitatesthecontinuationofhighlevelsoffossilfuelCO2emissions,atleastasatechnicalmatterinthecontextofeconomy-widenet-zeroGHGs.Tofurtherillustratethispoint,wecomparehistoricalfossilfuelconsumptionagainstprojecteddemandthrough2050whenallmodeledscenariosarenet-zerocompliant(Figure14).Despitethewiderangeofuncertaintiesconsidered,fossilfuelconsumptionis80-90%below2005levelsby2050and88%belowintheCNZscenario.Mostoftheremainingfossilfueluseisinindustry,wherefeedstocksareexpensivetosubstitute,ratherthaninthepowersector.CarbonManagementWhitePaperEvolvedEnergyResearch31Figure14UncertaintyRangeinAnnualFossilFuelPrimaryEnergyConsumption12SummaryofUncertaintiesTable3summarizeshowcarbonmanagementisaffectedbyalternativeassumptionsinourmodeleduncertainties.122005fossilfuelconsumptionisfromTable1.3ofEIA’sAnnualEnergyReview(EIA,2020).CarbonManagementWhitePaperEvolvedEnergyResearch32Table3SummaryofUncertaintiesUncertaintyImpactFossilFuelsNaturalgascosts•PrimarilyaffectCCSlevelswhileCCUlevelsarelessimpacted.•Highernaturalgascostsreducecapturefrombluehydrogenandcementplants(steamisamajorcostofcapture),andstoragevolumesfall,andviceversaPetroleumproductcosts•PetroleumproductcostshaveastrongimpactonhowCO2isappliedandthecapturefromBECCUS.•HigherpetroleumproductcostsincentivizehigherCO2utilization,whichdisplacesadditionalfossilfuelsandreducesstoragevolumes,whilelowercostsnearlyeliminateCO2utilizationandincreasestorageSequestrationCO2deliveryandstoragecosts•Storagevolumesandcapturefromfossil-basedfacilitiesissensitivetothecostofdeliveringandstoringCO2Geologicsequestrationpotential•Changestosequestrationpotentialhaveaminimalimpactsincepotentialfarexceedsnet-zerorequirements.BiomassBiomasscost•PrimaryimpactiscompetitionforCO2capturefromBECCUSfacilitiesandothertechnologies,whilenetvolumeissimilarBiomasspotential•Oneofthemostimportantcarbonmanagementdeterminants.•LowbiomasspotentialcreatesademandforDAC.RenewablesRenewablecosts•Costofwindandsolarresourceshasdynamicimpacts:highercostsincreaseCO2capturefrombluehydrogen(sinceelectrolysisislesseconomic),reduceCO2utilization(sincehydrogenismoreexpensive)andnearlyallcapturedCO2isstored;lowercostsdirectCO2previouslyallocatedtostoragetowardsutilizationRenewablepotential•Lowrenewablepotentialhasasimilarimpactashigherrenewablecost,whilehigherpotentialhasaminimalimpactElectrolysisElectrolysiscost•PrimaryimpactistheapplicationofcapturedCO2:lowerelectrolysiscostsdirectCO2towardsCCU,andviceversa.FuelSwitchingEnd-userateofadoption•Slowerfuelswitchingresultsinhigherresidualfueldemandandcapturedcarbon,andviceversa.•TherateoffuelswitchinginthetransportationsectoraffectsoutcomesthemostduetotheuseofliquidfuelsEmissionsEnergy&industryCO2target•Netnegativetargetincreasescapturedcarbonbeyond1GtCO2andnecessitatesDAC,whileanetpositivetargetreducesbutdoesnoteliminatecapturedCO2CarbonManagementWhitePaperEvolvedEnergyResearch33RegionalInfrastructureImplicationsCarbonmanagementstrategiesvarywidelyacrossU.S.regions,includingthecapturetechnologiesdeployedanditsuse(Figure15).Regionalcarbonmanagementdifferencesareprimarilydrivenbythepotentialandcostofthreeresources:(1)geologicsequestration;(2)biomass;and(3)renewables.IntheCNZscenario,halfofallcapturedcarbonintheU.S.ismanagedinregionsalongtheGulfCoast(LouisianaandOzarks,Southeast,Florida,Texas).Thisareahaslow-costsalineformationsthatstoremorethanhalfofallsequesteredCO2.Carbonissuppliedfromfacilitieslocatedwithintheregion,includingBECCUSfuelproductionfacilities(duetoamplebiomassresources),bluehydrogenplantsandcementfacilities.CO2utilizationisconcentratedinregionsacrosstheGreatPlains(Texas,LowerMidwest)sincethearea’shigh-qualityonshorewindresourcesenablelow-costelectrolytichydrogenthatispairedwithcapturedcarbonforfuelsynthesis.AlthoughmostregionsdirectnearlyallcapturedCO2towardseitherstorageorutilization,Texasisuniqueinthatitsplitsalargevolumebetweenbothapplications,becauseitiswell-endowedinsequestration,biomassandrenewableresources(mostregionsonlycontaintwoofeachresourceatscale).RegionsacrosstheMidwest(GreatLakesandUpperMidwest),whichcurrentlylocatemostoftheU.S.fuelethanolproductioncapacity,becomeanimportantsourceofnegativeemissions.TheareatransitionsawayfromethanoltowardsadvancedbiofuelsandthecapturedCO2frombio-refineriesissequesteredinthelimitedgeologicsequestrationacrossthearea.CarbonmanagementintheNortheastandWestislimited(~10%oftotalCO2capture)duetoasmallshareofnationalbiomasssupplyandlimitedheavyindustry.TheNortheastisfurtherchallengedbyzerosequestrationpotentialandrelativelyexpensiverenewables(i.e.,offshorewind)thatresultsinhigh-costCO2utilization.AcrosstheWest,themajorityofCalifornia’scapturedcarbonissequestered,whilestatesintheNorthwestandDesertSouthwesttakeadvantageofhigh-qualityrenewablestoproducesyntheticfuels.CarbonManagementWhitePaperEvolvedEnergyResearch34Figure15RegionalCarbonManagementMetrics:CoreNetZeroScenario(2050)CarbonManagementWhitePaperEvolvedEnergyResearch35Regionalcarbonmanagementstrategiesaregenerallyconsistentacrosstherangeofuncertainties,buttheexceptionoccurswhenthesupplyofnegativeemissionsdecreasesoroveralldemandfornegativeemissionsincreases.Underbothcircumstances,DACisdeployedatscaleinregionsacrosstheGreatPlains,includingtheLowerMidwest,Texas,RockyMountainsandDesertSouthwest(Figure16).LowerbiomasspotentialtranslatesintoadeclineinnegativeemissionsfromBECCUSfacilitiesacrossthecountry,butthisimpactisprimarilyinregionswithhighfeedstockconcentrations(e.g.,Southeast).Inresponse,DACisdeployedinthefourwind-richregionsthatfacilitateadditionalCO2utilizationandsequestration.Similardeploymentpatternsoccurinthecircumstancewhereend-usefuelswitchingisslower-than-anticipated.HigherresidualfueldemandincreasesoveralldemandforCO2todecarbonizefuel(utilization)oroffsetadditionalemissions(storage),andDACisthemarginaleconomicresourcetosupplyNETSCO2(thereisasmallincreaseincapturefromBECCUS,butthisislimitedbyincrementalbiomassfeedstockavailability).Figure16ChangeinCarbonManagementMetrics(RelativetoCNZScenario,2050)CO2capturedeployedatstationarysourcesdistributedacrossthecountrywillrequiredeliveryinfrastructuretoconnectCO2sourceswithgeologicformationsand/orfuelsynthesisfacilities.Deliveryrequirementsareexpectedtovarysignificantlydependingonwherecarboncaptureisdeployed.Illustrativeexamplesofwheredeliveryinfrastructureisminimizedinclude:(a)abio-refineryinLouisianawherebiomassisgasifiedandcapturedCO2issequesteredinanearbyCarbonManagementWhitePaperEvolvedEnergyResearch36salineformation;or(b)anenergycomplexinKansaswhereCO2capture(DAC),electricitygeneration(wind)andhydrogenproduction(electrolysis)areco-locatedtoproducesyntheticelectricfuels.Incontrast,illustrativeexamplesoflong-distanceCO2transportcouldbeneededat:(a)carboncaptureretrofitsonexistingcoal-firedpowerplantsintheUpperMidwest,wherecapturedemissionscouldexceedstoragepotential;and(b)carboncaptureintheNortheastandPacificNorthwest,whichbothlackCO2storagepotential.Wefindminimalinter-regionalCO2transportationinfrastructureinourCNZscenarioandacrossmostuncertainties.Onequalificationtothisresultisthatsomeofthemodeledregionsarelargeandcouldstillrequireintra-regionalinfrastructuretoconnectsourcesandsinks.Forexample,intheSoutheastregion,long-distancepipelinesmaybeneededconnectCO2capturedintheCarolinastotheGulfCoast.Otherworkhaspositedthatinter-regionalCO2pipelineswillbeneededtosupportcarbonmanagement.Thedifferencebetweenourworkandothers’isdrivenbythreefactors.First,wefindthatcarboncapturetechnologyisbestdeployedatnewfuelproductionfacilities,specificallybio-refineries(BECCUS),whereaspriorresearchhasfocusedonretrofittingexistingCO2-intensivefacilitiessuchascoal-firedpowerplantsandethanolfacilities.ManyofthesesourcesareconcentratedintheMidwestandcontinuinghistoricalutilizationoftheseresourceswithcarboncaptureresultsinanimbalancebetweenCO2volumesandlocalstoragepotential,thusdrivingthecaseforalong-distanceCO2transportationnetwork.Inthisanalysis,asignificantportionofexistingfossilinfrastructureretiresoroperatesatlowerutilizationratesovertime,andthesefactorsdonotjustifycapital-intensivecarboncaptureretrofitcosts.Forexample,on-roadtransportationelectrificationdecreasesbothgasolinefueldemandaswellasethanoldemand,whileexistinggas-firedpowerplantsoperateinfrequentlyasthegenerationmixshiftsprimarilytowardsrenewableresources.Thesecondreasonthatsignificantinter-regionalCO2transportationisnotpervasiveisthatweallowcapturedCO2tobeeconomicallyutilized,whichisnotconsideredinotheranalyses.ThisrouteallowsforCO2tobetransportedshorterdistancesorco-locatedatthesamefacility.ItisgenerallylowercosttoutilizeCO2thantotransportvialong-distancepipelineandsequester.Finally,weexcludeanyrevenuesassociatedwithenhancedoilrecovery(EOR)fromtheanalysis.ThevalueofstoringCO2geologicallyviaEORisoftentoutedasasignificanteconomicdrivertopursuecarboncaptureonexistingfossilfacilitiesanddevelopCarbonManagementWhitePaperEvolvedEnergyResearch37long-distanceCO2transportation.13However,thatvaluedeclinesovertimewithabindingnet-zerocommitmentduetodecliningliquidfossilfueldemand.Inaddition,eveniftheoilpriceremainshigh,thentheeconomicsignalistoutilizeCO2toproducelow-carbonsyntheticfueltodisplaceliquidfossilfuel.Thisoftencanbeaccomplishedintra-regionallyandcomplementsarenewable-heavyelectricitysystem.SincethereistypicallyenoughsequestrationpotentialoreconomicutilizationopportunitiestomanagecapturedCO2intra-regionally,CO2transmissioncapacitybetweenregionsissmall(Figure17).IntheCNZscenario,asmall(~2MtCO2/yr)corridorisdevelopedbetweenNewYorkandtheMid-Atlanticby2050totransportcapturedCO2fromNewYorkthatcannotbesequesteredandisexpensivetoutilize.Generally,additionalinter-regionalCO2transmissionisdevelopedwhenlocalpotentialisdepleted.Forexample,anetnegativeE&ICO2targetresultsin~6MtCO2/yrtransportfromtheSoutheasttoFloridasincetheSoutheast’ssequestrationpotentialisdepleted.Higher-than-anticipatedrenewablecostsresultinadditionalCO2transportationcapacity,becausethecostofutilizingCO2increasesandcapturedCO2isalternativelytransferredtoneighboringregionswithavailablestorage.TheprimarytakeawayisthatthequantityofCO2transportedinter-regionallyisverysmallrelativetototalcapturedcarbon(lessthan1%),andnearlyallcapturedcarbonismanagedintra-regionally.Oneareaforfutureresearchisontherepurposingofexistingfossilfuelpipeline(gasoroil)tocarryCO2toconnectsourceswithsinks.Thisanalysisdidnotanalyzethoseopportunities,whichwouldbelowercostthangreenfielddevelopmentofCO2pipelinesanalyzedhere.Undersuchscenarios,inter-regionaltransportmaytakeongreaterimportance.13See,forexample,EdwardsandCelia(2018).CarbonManagementWhitePaperEvolvedEnergyResearch38Figure17Inter-RegionalCO2TransmissionCorridorCapacity:2050CaseStudiesInadditiontotheCNZscenarioanduncertaintiesconsideredabove,weexaminetwocasestudiestobetterunderstandtheroleoffossil-basedcarboncapturetechnologiesandtheimportanceofcarbonmanagementtoachievenet-zero.Thesecasestudiesinclude:(1)ascenariowherethefixedcostofgas-firedpowerandhydrogenproductionfacilitieswithcarboncaptureisequaltotheirunabatedtechnologyequivalents;and(2)ascenariowherecarboncapturetechnologydeploymentisprohibitedentirely(e.g.,appliestobothfossil-basedandnegativeemissionstechnologies).ZeroincrementalCO2capturecostforfossil-basedtechnologiesAsexplainedabove,oneoftheprimaryfindingsfromtheanalysisisthelimitedroleofcarboncaptureatfossil-basedtechnologiesrelativetoNETs.Carboncaptureisrarelydeployedinpowergeneration,whilebluehydrogenisfrequentlydeployedbutinalimitedrole(i.e.,itisnevertheprincipalsourceofhydrogenproduction).Lower-costnaturalgasandgeologicsequestrationincreasecapturefrombothsources,butthechangesfromthebaselinearenotprolific.Tounderstandifthecostofcarboncapturetechnologyistheprimarybarrier,weexaminateanalternativeZeroIncrementalCarbonCaptureCost(ZICCC)scenariowherethecapitalandfixedO&Mcostsofgascombinedcycleandsteammethanereformationwithcarboncaptureisequaltotheirunabatedtechnologyequivalents.CarbonManagementWhitePaperEvolvedEnergyResearch39Wefindthatevenundersignificantfixedcostreductions,fossil-basedcarboncapturestillmaintainsalimitedrole(Figure18).Capturedcarbonfrompowergenerationandhydrogenproductionincreasesbyapproximately150MtCO2by2050andonlydisplacesabout50MtCO2fromBECCUS,andthereisaminorimpactonCO2utilization.Bluehydrogen’sshareoftotalhydrogenproductionincreasesfrom15%to25%,whilegas-firedplantswithcarboncapturemakeuplessthan5%oftotalelectricitygeneration.Figure18CarbonCaptureMetricsfortheCNZandZICCCScenarios:2050Thelimitedroleoffossil-basedpowergenerationandhydrogenproductionincarbonmanagement,evenconsideringlowertechnology,naturalgasandgeologicsequestrationcosts,isaresultofthreefactors.First,anet-zeroeconomynecessitatesadecarbonizedelectricitysupply,anddeploymentofvariablewindandsolarresourcesistheleast-coststrategy.Thiselectricitysystem:(a)encouragesdeploymentofelectrolysissincethetechnologycanaddressseasonalenergyimbalancesbetweenloadandrenewablegeneration;and(b)discouragesutilizationoftechnologieswithhighvariablecosts(e.g.,gas-firedpowerplantswithcarboncapture)sincezero-marginalcostelectricityisavailableformostoftheyear.Second,asCarbonManagementWhitePaperEvolvedEnergyResearch40discussedinSection3.1,theprimarydisadvantageoffossil-basedcarboncapturetechnologiesisthattheycanonlyoffsettheirownemissions,whereasNETscanoffsetemissionsfromhard-to-abatesectors.Finally,large-scaledeploymentoffossil-basedcarboncapturetechnologiesrequiressignificantlyscalingupCO2storageinfrastructure.Forexample,ifone-thirdofend-useelectricityconsumptionandhydrogendemandby2050wasmetbygaspowerplantswithcarboncaptureandbluehydrogen,respectively,thenthiswouldrequireapproximately1,200MtCO2ofannualstorage.Althoughthisiswithintechnicalstoragepotential,itwouldintroduceadditionalinfrastructureandsitingchallenges(totalCO2captureintheCNZscenarioislessthan700MtCO2).Evenunderthemostaccommodatingassumptions,carbonmanagementremainslargelyinserviceofaddressingemissionsfromlong-distancetransportationandindustry,ratherthanfossil-basedpowergenerationandhydrogenproduction.Whatifcarbonmanagementisnotastrategy?DespiteCCUSfeaturingprominentlyinnet-zeroanalyses,skepticismremainsacrossareasofitssupplychain,including:(a)theprojectedcostofCO2capture;(b)theimpactsoftransportationinfrastructure;and(c)thepotentialforcarboncaptureonfossil-basedfacilitiestoobscureupstreamemissionsimpacts(e.g.,fugitivemethaneleakage).ToinformtheimplicationsofnotpursuingtheinnovationneededforCCUStobetechnologicallyready,weevaluatedaNoCarbonCapture(NCC)scenariothatachievesnet-zerowithoutcarboncapturetechnologies.Figure19compareskeyenergysystemmetricsagainsttheCNZscenarioin2050.Wefindthatachievingnet-zeroE&ICO2emissionswithoutCCUSistechnicallyfeasible,butthereisatrade-offwithsignificantlyhigherbiomassconsumptionandrenewableresourcedeployment.14Underthisscenario,theentireU.S.biomasspotential(onebilliontons)isusedtoproducelow-carbonfuelsby2050–asteepincreasefrom600milliontonsintheCNZscenario.Thisquantityofbiofuelsproductionisneededsinceallthecarbonstoredinthebiomassisinefficientlyre-releasedintotheatmosphereratherthanbeingcaptured.Morerenewables(+600GW,anincreaseofroughly20percent)arealsoneededashydrogenproductionshiftsexclusivelytowardselectrolysissinceBECCUSandbluehydrogenareprohibitedandadditionalprocessessuchassteamproductionareelectrified.Overallhydrogendemandfallsbyapproximatelyone-halfsinceCO2cannotbecombinedwithH2feedstocksforsyntheticfuelproduction.The14Modeledfeasibilityrequiredincreasingbothbiomassandrenewablestotheirhighpotentialsensitivities.CarbonManagementWhitePaperEvolvedEnergyResearch41economicimpactofthistrade-offisanadditional$200billionperyearinenergyspendingby2050.Figure19EnergySystemMetricsfortheCoreNetZero(CNZ)andNoCarbonCapture(NCC)Scenarios:2050TheCNZscenariofeaturesunparalleledratesofrenewabledeploymentandbiomassconsumption,andscalingbothresourcesfacesimplementationchallenges.Renewablesalreadyfacingsitingchallengestodayandbiomassusedforenergyproductioncouldintroducelanduseconflicts.Excludingcarbonmanagementasastrategyincreasestheriskofnotrealizingnet-zerobyoverlyingonrenewablesandbiomass,andthisriskisexacerbatedifotherimplementationchallengesarise,suchasslower-than-anticipatedelectrificationrates.Thediversificationbenefitfromcarbonmanagementismostvaluabletoindustryandlong-distancetransportation,whichrelyonNETsandsynthetic-basedfuelstodecarbonizeoroffsetemissions.Non-CO2ConsiderationsAsdiscussedinSection2,weassumetheU.S.achievesnet-zeroGHGemissionsby2050throughacombinationof:(a)endogenous(i.e.,modeled)E&ICO2reductions;and(b)exogenousnon-CO2mitigationandlandsinkenhancementassumptions.Methaneemissionsassociatedwiththeoilandnaturalgassupplychainareasignificantcontributortoexistingnon-CO2emissions.AlthoughourmodelingexplicitlyaccountsforCO2emissionsfromfuelcombustionatfossil-basedtechnologieswithcarboncapture(aswellasallothertechnologies)whendeterminingcost-optimalinvestments,itdoesnotaccountforupstreamordownstreamnon-CO2emissions,suchCarbonManagementWhitePaperEvolvedEnergyResearch42asmethaneleaksfrompipelinessupplyingbluehydrogenproduction.AstheU.S.andothercountriesconsidercarbonmanagementstrategies,itisimportanttoconsidertheirnon-CO2emissionsimpactsaswell,particularlyduetoconcernsaboutavoidingnear-termwarmingeffectsfromhighlypotentGHGs.Tounderstandthescaleofpotentialimpact,weconductedex-postcalculationsofmethaneleakage.Weconsideredalternativeleakageratesandglobalwarmingpotential(GWP)assumptionsforprojectedoilandgasdemandfromourmodeling.Applyingaleakagerateof2.3%andGWP100values,wefindmethaneleakageofapproximately340MtCO2ein2020(~7%ofcurrentCO2emissions),reducedto80MtCO2eby2050asfossilfuelconsumptionisdeeplyreduced(Figure20).15EmployingaGWP20valueaccountingfornear-termwarmingincreasesthiseffectto950MtCO2ein2020(~20%ofcurrentCO2emissions),reducedto230MtCO2ein2050.Bymid-century,approximatelyone-quarterofthisleakageisattributedtobluehydrogenproduction,emphasizingtheimportanceofaddressingfugitiveemissionsinadvanceofdeployingcarbonmanagementinfrastructure.Figure20EstimatedCH4EmissionsfromOilandGasSystems:CoreNetZeroScenario15BaseleakagerateisfromAlvarezetal.(2018)CarbonManagementWhitePaperEvolvedEnergyResearch43Theseestimateshighlightimplicationsfordecision-makersconsideringcarbonmanagementasanet-zeroGHGstrategy.Non-CO2emissions,andevenfugitivemethaneemissionsalone,areamaterialrisktoachievingclimatetargets.Sincecarboncapturetechnologiesdonotdirectlyaddressandcouldexacerbatetheseemissions,itisimperativetoaddressleakage.Althoughouranalysisabovedemonstratesthepotentialscaleofmethaneleakagerisk,energysystemmodelsdonotincorporatenon-CO2emissionsornear-termwarmingpotentialsintotheirdecision-making.Futureanalysisincorporatingtheseeffectscouldrenderalternativetechnologychoicesandapplicationsbasedonleakageandnear-termwarming.CarbonManagementWhitePaperEvolvedEnergyResearch44ConclusionsandKeyFindingsCarbonmanagementisakeystrategyforputtingtheU.S.onapathtowardsachievingnet-zeroGHGemissions.WemodeledasuiteofCCUStechnologiesacrossabroadrangeofuncertaintiestoidentifytheirlong-termrole.Basedonouranalysis,weidentifythefollowingkeyfindings.Carbonmanagementisapillarofaleast-costpathwaytonet-zeroReachingnet-zeroGHGemissionsrequirespursuingadiverserangeofstrategiesacrosstheeconomy.Evenassumingsuccessacrossallotherstrategies(highlyaggressiveenergyefficiency,electrification,electricitydecarbonization,enhancementofthelandsinkandmitigationofnon-CO2emissions),carboncapturedeploymentinenergyandindustrywillstillbenecessaryby2050.Toreachnet-zero,ouranalysisidentifiesthattheU.S.willneedtocapturebetween400and1,100MtCO2annuallybymid-centurywhenconsideringarangeofuncertainties.IntheCNZscenario,nearly700MtCO2iscaptured,whichisequivalenttoabout10%oftoday’sU.S.grossGHGemissionsorallenergy-relatedCO2emissionsinTexas,thehighest-emittingstate.Ifthecurrentlandsinkshrinksand/ornon-CO2emissionsprovemoredifficulttoabate,theimportanceofcarbonmanagementintheenergysystemisfurtherincreased.However,theupperboundofcapturedcarbon(1,100MtCO2)islessthanone-quarterofcurrentemissions,meaningthateventhemostoptimisticvisionofcarbonmanagementisnotasubstituteforotheremissionsreductionsstrategies.Whennet-zeroemissionsarereachedin2050,morethan500MtCO2issequesteredingeologicformationsintheCNZscenario.Annualinjectionrangesfromapproximately300to900MtCO2,whichiswellbelowestimatesofU.S.geologicsequestrationpotential.UtilizationofcapturedCO2isanotherbeneficialpathwayforcapturedcarbon,andapproximately150MtCO2isutilizedforsyntheticliquidfuelproductionintheCNZscenario.ThisamountofCO2utilizationsupportslow-carbonfuelsthatcouldsupplyroughly80%oftoday’saviationfueldemand.Negativeemissionstechnologiesarewell-suitedfornet-zeroThecarbonmanagementsupplychainevolvessubstantiallyovertime.Inthenear-term(2030),totalcapturedcarbonisapproximately60MtCO2andissuppliedfromanequalmixoffossil-andbiomass-basedtechnologieswithcarboncapture.Inthelong-term(2030to2050),thefocusofCarbonManagementWhitePaperEvolvedEnergyResearch45CO2captureshiftstowardsNETs,includingBECCUSforfuelproductionandDAC.Bymid-century,totalcarboncaptureincreasestonearly700MtCO2andNETssupplythree-quartersofthetotal.ThislongrunshifttowardsNETsreflectsboththeappealofCO2utilizationforfuelstoaddressremaininggrossemissionsinsectorslikeaviation,andtheneedtodrawdownadditionalatmosphericCO2toachievenet-zero.BesidesNETs,carboncaptureinthecementindustryisanotherimportanttechnologyduetothesector’slimiteddecarbonizationoptions,whilecarboncaptureinhydrogenproductionandpowergenerationislimited(lessthan100MtCO2).Wediscusstheadvantagesanddisadvantagesoftechnologyoptionsbelow.NegativeemissionstechnologiesWefindthatNETsarethepredominantlong-runsourceofcapturedCO2acrossarangeofuncertainties.BECCUSisgenerallytheleast-costtechnologyoptionforprovidingnegativeemissionsandconsistentlycaptures400to500MtCO2.Thisisdueto:(1)itscarboncaptureefficiency(e.g.,approximately70to140MtCO2iscapturedper100milliontonsofbiomassusedinfuelproduction);and(2)itsversalitytodisplacefossilfuelsasadrop-infuel.However,deploymentisconstrainedbyanuncertainsupplyofsustainablebiomassandtheneedforbio-refineriestobelocatednearfeedstocksgivenbiomasstransportcosts.AlthoughDACisnotdeployedintheCNZscenario,itisanimportanttechnologicalbackstoptosupplynegativeemissions.First,DAC’simportanceiscontingentonveryplausiblecircumstancesthatmayariseonthepathtonet-zero,includingalimitedsupplyofbiomassandslowerconsumeruptakeofelectricvehiclesandappliances.Second,DAChelpsmanagetheriskofimplementationfailuresoutsideoftheenergysector,includingalackofprogresstoreducenon-CO2emissionsorenhancementofthelandsink.UnlikeBECCUS,DACcanbelocatednearlyanywherewithopenland,withcostsdrivenbyenergyavailabilityandgeologicsequestrationpotential.Itshighcostbutflexibilitymeansthatitcouldbenefitfromdirectinnovation,aswellasinnovationfortechnologiesthatrepresentalargeshareofproductioncosts(e.g.,renewablestopowerDACfacilities)oruses(e.g.,geologicsequestration).Finally,theanalysisimposesaneconomy-wideemissionsconstraintthatstartstodayandcontinuesuntil2050,butourabilitytoimplementsuchpolicyisfarfromcertainandfailuretomeetthattrajectorymayincreasetheneedfornegativeemissionsinlateryears.CarbonManagementWhitePaperEvolvedEnergyResearch46Itisimportanttonotethattheideaofanegativeemissionstechnology“backstop”isassociatedwithmoralhazardrisk,theideathattheirexistencemightdelayeffortstodirectlyreduceemissions.OuranalysisconfirmsthatNETsdonotserveasasubstitutefordirectemissionsreductionstodayandaremostimportantinthelongrun.Near-neutralemissionstechnologiesFortechnologieswherefossilfuelistheinputand90%-100%ofemissionsarecaptured(“near-neutraltechnologies”),carboncapturedeploymentandprioritizationvary.Inthecementindustry,carboncaptureisconsistentlydeployedasasolutiontoaddressitsemissionssinceothermitigationsolutionsdonotexist.Thisisoneofthefewsectorswherecarboncaptureisappliedtoexistinginfrastructure,andtheamountcapturedisconstrainedbythesizeofthecementindustry(approximately130MtCO2).WefindthatbluehydrogenproductionfacilitiesareaconsistentbutlimitedsourceofcapturedCO2(approximatelythesamecapturevolumeasheavyindustry,~100MtCO2),whilecarboncaptureisrarelydeployedatexistingornewpowerplants.Althoughbothsectorscanutilizerelativelylow-costnaturalgas,theysharecharacteristicsthatdisadvantagetheirdeployment.First,inanet-zeroenergysystem,theelectricitysectorcontainsveryhighlevelsofvariablerenewableenergy(>70%ofgeneration)whichencouragesinvestmentinelectrolysis,acompetitorofbluehydrogen,anddiscouragesthermalpowergeneration.Second,large-scaledeploymentrequiressignificantlyscalingupCO2storageinfrastructure.Forexample,ifthesetechnologiessuppliedone-thirdofend-useelectricityandhydrogendemand,thenapproximately1,200MtCO2ofannualstoragewouldberequired.Finally,carboncaptureinthesetwosectorscanonlyaddresstheirownemissions,whereasNETsareflexiblebyaddressingresidualemissionsfromanysectorintheeconomy.InnovationacrossthecarbonmanagementsupplychainisneededCarbonmanagement’sabilitytocontributetowardsnet-zeroGHGemissionsdependsoninnovationacrossachainofCO2capture,transportation,utilizationandstorageinfrastructure.Inouranalysis,nearlyallcapturedCO2in2050isfromtechnologiescurrentlyinthedemonstrationorprotypestageonly,andtechnologiesthatutilizeCO2areatasimilarstageofdevelopment.Thissuggeststhatsignificantresearch,development,anddemonstration(RD&D)isnecessarytoensurethetechnologiesmostcompatiblewithaleast-costnet-zeroenergysystemaredeployedCarbonManagementWhitePaperEvolvedEnergyResearch47intime.Specifically,innovationisneededtodemonstratelarge-scaledeploymentofBECCUS,DACandsyntheticfuels.InnovationislesscriticalfortransportgiventhatCO2pipelinesarealreadyusedextensively;however,storageingeologicformationswouldbenefitfromgreaterclarityoncostandannualinjectionpotential.Overall,investingininnovationfornegativeemissionstechnologiescanmanagerisksassociatedwiththepathtonet-zero.TechnologyReadinessLevelAcrossCarbonManagementCategorySub-categoryTRLCapturePowergenerationDemonstrationHydrogenproductionEarlyadoptionHeavyindustry:cementLargeprototypeFuelproduction:bioenergyDemonstrationDirectaircaptureLargeprototypeTransportPipelineMatureUtilizationSyntheticmethaneDemonstrationSynthetichydrocarbonsLargeprototypeStorageSalineformationsEarlyadoptionWefindthatfailingtopursuetheinnovationneededforCCUStechnologiestobetechnologicallyreadycreatessignificanttrade-offsandchallengesforachievingnet-zero.Wemodeledascenariowithoutcarbonmanagementasastrategyandfoundthatwhilerealizingnet-zeroE&ICO2emissionsis‘technicallyfeasible’,thetrade-offentailsscalingbiomassandrenewablestopotentiallyproblematiclevels.ComparedtotheCNZscenario,forgoingcarbonmanagementincreasesbiomassconsumptionfrom600milliontonstomorethanonebilliontonsandrenewabledeploymentfrom3.2to3.8TW.Thesedeploymentlevelsmaybeplausiblebutgiventheuncertaintyaboutthesupplyofsustainablebiomassandthechallengesofsitingrenewables,takingcarbonmanagementoffthetableamplifiestheriskofmissingthenet-zerotarget.Inaddition,itisworthnotingthatthisscenariohingesonallothermitigationstrategiesintheenergyandnon-energysectorsbeingmetandleaveslittleroomforerror.CarbonManagementWhitePaperEvolvedEnergyResearch48Prioritizecarbonmanagement’slong-termroleToday’scarbonmanagementresearchandfundingisprimarilyfocusedon:(a)deployingpoint-sourcecarboncaptureatexistingfossil-basedfacilities;and(b)usingCO2forEOR,whichoftenrequireslong-distanceCO2pipelinenetworkstoconnectexistingemissionssourcesandoil-producingregions.Onthepathtoachievingnet-zeroby2050,muchoftheenergyinfrastructurethatisanear-termcandidateforcarboncaptureretrofitswilllikelyberetiredoroperatelessfrequently.Gasolinefueldemandismodeledtodecreaseby25%by2030relativetotodayand55%by2035duetoimprovedfueleconomyandtransportationelectrification,whileethanolproductionwouldlikelydecreasecommensurately.Mostcoal-firedresourcesretireduringthistimeframeinaleast-costpathway,whilegas-firedresourcesoperateatlowercapacityfactors.Incontrast,ouranalysisshows:(1)significantcarboncapture(>100MtCO2/yr)occurs20to30yearsfromtoday;and(2)carboncapturetechnologyisalmostexclusivelyappliedtonewenergyinfrastructure,withretrofitsinheavyindustrybeingtheexception.Asaresult,webelievefocusshouldbeexpandedtowardsareasthatalignwithachievingnet-zerointhelong-term,including:(1)fosteringthedevelopmentofNETs;(2)placingvalueonbothCO2storageandbeneficialutilization;and(3)identifyinganddevelopingregionalintegratedcarbonmanagementhubswithsharedinfrastructure.Theseeffortslaythegroundworkforfuturecarbonmanagementwithoutconflictingwithimplementingknownnear-termdecarbonizationstrategies(e.g.,scalingrenewableelectricity;increasinglight-dutyelectricvehiclesalestoatleast50%by2030,etc.).CO2ismanageddifferentlyacrosstheU.S.andisprimarilyusedintra-regionallyTheU.S.energysystemalreadydemonstratessignificantregionalvariationsintermsofenergyconsumptionandproduction,andwefindthatregionalcarbonmanagementstrategiesinthefuturecouldhavesimilaroutcomes.DifferencesinthesourcesofcapturedCO2anditsapplicationareprimarilyexplainedbyregionalresourceendowments,includingbiomassfeedstocksupply,renewableresourcequalityandgeologicsequestrationpotential.RegionsalongtheGulfCoast,whichareendowedwithplentifulsalineformations,areresponsibleforcapturinghalfofallCO2andsequesteringanevengreatershare.AcrosstheGreatPlains,CO2tendstobeutilizedduetothearea’shigh-qualityonshorewindresources,whichenableslow-costelectrolytichydrogenthatispairedwithcapturedCO2.TheMidwesttransitionsawayfromitsexistingcornethanolindustrytowardsadvancedbiofuelsandthecapturedCO2frombio-CarbonManagementWhitePaperEvolvedEnergyResearch49refineriesissequesteredintheregion.CarbonmanagementintheNortheastandWestislimited(~10%oftotalCO2capture)duetoarelativelysmallshareofnationalbiomasssupplyandheavyindustry.WefindthatnearlyallcapturedCO2isstoredorutilizedintra-regionally(e.g.,withinseveralhundredmilesofthepointofcaptureandnottypicallytransportedlongdistancesacrosstheU.S.).ThefocusofapplyingcarboncaptureonnewbiofuelsproductionfacilitiesratherthanabroadswathofexistingCO2-intensiveinfrastructuresuggestsmoreofaneedforhub-and-spokeinfrastructureinsteadoflong-distanceCO2transmissiontoconnectregions.Furthermore,sinceCO2utilizationtoproducesyntheticfuelcanbeaccomplishedintra-regionally,thereislittleneedtotransportCO2longdistancestooil-producingregionssuchasWyomingorthePermianBasin.AcaveattothisfindingonCO2transportisthattheanalysisisbasedonminimizingthetotalcostofachievingnet-zeroatthenationallevel.Inpractice,climatepolicyprimarilydrivenbystateswithoutimprovedcoordinationacrosstheU.S.couldresultinalternativeoutcomesincludingmoremismatchbetweenCO2sourcesandtheiruses.Afurthercaveatisthatrepurposingoflong-distanceinfrastructurecurrentlyusedforfossilfueltransportmayprovideanalternativeavenueforCO2transport.Theriskofcarboncaptureextendingthelifeoffossilfuelsislowifweareonapathtonet-zeroOnekeyconcernaboutcarbonmanagementisthatitfacilitatescontinuedfossilfueluse,butournet-zeroanalysisfindslargereductionsinfossilfuelconsumption(80-90%below2005levelsby2050).However,carbonmanagementtechnologiescouldenablesomefossilfueluse,suchasheatorfeedstocksforindustrialapplicationsthatarechallengingorveryexpensivetoabate.SuchsteepdeclinesinfossilfuelconsumptionarenecessaryfortheU.S.economytoreachnet-zero,becausescalingnegativeemissionstechnologiestolevelsneartoday’senergysectoremissions(~5,000MtCO2)anddeployingfossil-basedcarboncapturetechnologiestosupplyasignificantshareofenergyneedsarebothuneconomicandexceedscurrentestimatesofannualCO2injectionpotential.Sincecarbonmanagementdoesnotinherentlyaddressnon-CO2pollution,suchasmethane,itwillbeimportantforpolicymakerstomonitorandaddressco-pollutantsassociatedwithcarbonmanagement,lesttheynegateitsnear-andlong-termclimatebenefits.CertaincarboncaptureCarbonManagementWhitePaperEvolvedEnergyResearch50technologiescouldincreasenon-CO2emissionsduetotheirinteractionswiththeoilandgassupplychain(e.g.,bluehydrogenproduction),wheremethaneleakageisasignificantcontributortonear-termwarming.Addressingleakageisahigh-prioritymitigationstrategyforachievingclimatetargetsingeneral,anditwouldhelpaddresspotentialunintendedconsequencesfromcarbonmanagementthatwerenotexplicitlymodeledinthispaper.CarbonManagementWhitePaperEvolvedEnergyResearch51ReferencesAlvarez,RamónA.,DanielZavala-Araiza,DavidR.Lyon,DavidT.Allen,ZacharyR.Barkley,AdamR.Brandt,KennethJ.Davisetal."AssessmentofmethaneemissionsfromtheUSoilandgassupplychain."Science361,no.6398(2018):186-188.Edwards,R.W.JandMichaelA.Celia(2018).Infrastructuretoenabledeploymentofcarboncapture,utilization,andstorageintheUnitedStates.Availableat:https://www.pnas.org/content/115/38/E8815GreatPlainsInstitute(2020).TransportInfrastructureforCarbonCaptureandStorage:WhitepaperonRegionalInfrastructureforMidcenturyDecarbonization.Availableat:https://www.betterenergy.org/wp-content/uploads/2020/06/GPI_RegionalCO2Whitepaper.pdfHaley,B.,Jones,R.,Kwok,G.,Hargreaves,J.,Farbes,J.,&Williams,J.H.(2018).350ppmpathwaysfortheUnitedStates.InternationalEnergyAgency(2020).SpecialReportonCarbonCaptureUtilisationandStorage:CCUSincleanenergytransitions.Availableat:https://www.iea.org/reports/ccus-in-clean-energy-transitionsInternationalEnergyAgency(2019).PuttingCO2toUse:Creatingvaluefromemissions.Availableat:https://www.iea.org/reports/putting-CO2-to-useJ.Larsen,W.Herndon,M.Grant,andP.Marsters(2019).CapturingLeadership:PoliciesfortheUStoAdvanceDirectAirCaptureTechnology.Availableat:https://rhg.com/research/capturing-leadership-policies-for-the-us-to-advance-direct-air-capture-technology/E.Larson,C.Greig,J.Jenkins,E.Mayfield,A.Pascale,C.Zhang,J.Drossman,R.Williams,S.Pacala,R.Socolow,EJBaik,R.Birdsey,R.Duke,R.Jones,B.Haley,E.Leslie,K.Paustian,andA.Swan(2021).Net-ZeroAmerica:PotentialPathways,Infrastructure,andImpacts.Availableat:https://acee.princeton.edu/rapidswitch/projects/net-zero-america-project/NationalRenewableEnergyLaboratory(2020).2020AnnualTechnologyBaseline.Availableat:https://atb-archive.nrel.gov/electricity/2020/about.phpU.S.DepartmentofEnergy(2016).2016Billion-TonReport:AdvancingDomesticResourcesforaThrivingBioeconomy.Availableat:https://www.energy.gov/eere/bioenergy/2016-billion-ton-reportU.S.EnergyInformationAdministration(2021).AnnualEnergyOutlook2021.Availableat:https://www.eia.gov/outlooks/aeo/CarbonManagementWhitePaperEvolvedEnergyResearch52U.S.EnergyInformationAdministration(2020).AnnualEnergyReview.Availableat:https://www.eia.gov/totalenergy/data/annual/U.S.EnvironmentalProtectionAgency(2021).InventoryofU.S.GreenhouseGasEmissionsandSinks:1990-2019.Availableat:https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2019Williams,J.H.,Jones,R.A.,Haley,B.,Kwok,G.,Hargreaves,J.,Farbes,J.,&Torn,M.S.(2021).Carbon‐neutralpathwaysfortheUnitedStates.AGUAdvances,2,e2020AV000284.https://doi.org/10.1029/2020AV000284CarbonManagementWhitePaperEvolvedEnergyResearch532443FillmoreSt#380-5304SanFrancisco,CA,94115info@evolved.energyTel:844-566-136©EvolvedEnergyResearch2021