What the heck is carbon capture? The pollution-cutting technology that’s got Canada investing billions

Carbon capture is touted as a key climate-fighting technology by government and industry alike. Canada’s climate plan depends heavily on carbon capture to reduce greenhouse gas emissions from industrial processes, including oil and gas production, but the technology has yet to be perfected and there are concerns that relying on it will lock-in fossil fuel use.

As part of a new Canada’s National Observer series breaking down climate basics, we delved into some common questions about this contentious carbon-cutting tech. Here is everything you need to know about carbon capture.

What is carbon capture?

Carbon capture is a technology that prevents carbon dioxide released from industrial processes from reaching the atmosphere and warming the planet. When CO2 — a long-lasting greenhouse gas — is emitted by a natural gas processing facility, coal or gas-fired power plant, or fertilizer, cement, chemical or steel production facility, this technology captures it right at the source so it can be compressed into a liquid-like form. Once compressed, the captured CO2 can be transported by pipeline to be used or stored permanently. If the CO2 is stored permanently, the process is referred to as carbon capture and storage (CCS). If it’s used first, it’s called carbon capture, utilization and storage (CCUS).

Carbon capture is often confused with a technology called direct air capture, but the two are completely different. Direct air capture pulls CO2 out of the atmosphere, as opposed to capturing it directly from an industrial source.

How does carbon capture work?

One of the three most common types of carbon capture technology removes CO2 after fossil fuels are burned and is called post-combustion carbon capture. This technology can be fitted onto existing power plants and many industrial facilities.

When fossil fuels are burned, hot exhaust gas containing CO2 and other pollutants is taken directly from the smokestack and cooled down using water. The exhaust gas then rises up through a large tower as a chemical compound called amines that binds to CO2 molecules and runs downwards, taking the CO2 with it. This is said to remove up to 90 per cent of the CO2 from the exhaust gas, which vents out the top of the tower. The amine-CO2 solution that remains is heated and separates the amines from the CO2 so the former can be reused and the latter can be compressed and transported.

There are two other main approaches for carbon capture. Natural gas processing plants separate CO2 from the gas before it is burned with pre-combustion technology. Oxy-fuel combustion technology uses pure oxygen to combust fuel, which creates waste gas composed of water vapour and CO2 that can be captured.

What can carbon capture be used for?

In Canada, carbon capture technology is used for coal power, hydrogen production and throughout the oil and gas sector.

Saskatchewan is home to Boundary Dam, the only coal-fired power station in the world using carbon capture on one of its units as of February 2023. Alberta has the world’s second hydrogen production plant outfitted with carbon capture, and another planned for 2024.

The province also has a 240-kilometre pipeline that collects carbon captured from the Nutrien fertilizer plant and Sturgeon heavy oil refinery in Redwater, Alta., and transports it to central Alberta to be injected into depleted oil and gas reservoirs so companies can extract more oil.

This process — called enhanced oil recovery — is by far the most common use of captured CO2. Almost all the CO2 captured at Boundary Dam is used for enhanced oil recovery. In fact, an estimated 80 to 90 per cent of all the CO2 humans have captured in the last 50 years has been used to squeeze more oil out of old wells, according to a 2022 report by the Institute for Energy Economics and Financial Analysis (IEEFA). Selling CO2 for this purpose allows companies to recoup the high costs of deploying carbon capture technology in the first place.

As Canada strives to meet its climate goals, the federal government is counting on carbon capture technology to cut down on CO2 pollution from the production — but not the use — of oil and gas. In Budget 2022, the federal government proposed an investment tax credit program worth an estimated $8.6 billion to help companies cover up to 50 per cent of the cost of investing in CCUS equipment that will be used for storing CO2 underground or injecting it into cement.

The investment tax credit will apply retroactively from Jan. 1, 2022, onwards after the legislation receives royal assent. Finance Canada told Canada’s National Observer in a statement that “the legislation to implement the measure will be tabled in due course.”

Importantly, the investment tax credit does not count enhanced oil recovery as an eligible use of CO2 — though that will not discount some projects from receiving the credit.

When CO2 is not used but rather stored straight away, it is compressed into its liquid-like form and injected into geological formations called saline aquifers, typically more than one kilometre underground. These formations are a layer of porous rocks saturated with salty water.

By forcing extra oil out of mature wells, the enhanced oil recovery process adds more CO2 to the atmosphere than is captured.

There are a handful of less common uses for captured CO2 — for example, injecting it into concrete. CO2 can also be turned into various fuels, but this — and niche uses like carbonation for drinks — immediately puts the CO2 back in the atmosphere.

In some sectors — like steel and cement manufacturing — it is very difficult to reduce emissions and carbon capture is one of the best options to decarbonize, according to the International Energy Agency. We can replace coal, oil and gas with clean energy, but steel and cement are both very energy-intensive to produce and are integral materials for vehicles, buildings and most infrastructure. For the most part, this is not being done at scale, yet: Abu Dhabi is home to the world’s only operational steel sector carbon capture project, and the first cement plant using carbon capture is expected to be operational in 2024.

How effective is carbon capture?

Carbon capture technology is frequently heralded as being able to capture up to 90 or 95 per cent of CO2 that passes through it. The catch is these target capture rates are aspirational and most projects fail to deliver consistently.

A recent analysis of 13 carbon capture projects, accounting for more than half of capture capacity from operating projects worldwide, found that 10 of these facilities underperformed and several failed entirely.

While the Quest CCS facility in Alberta has been close to hitting its capture goals, a 2022 report by Global Witness found the hydrogen plant has emitted more CO2 than the technology captures and has an average capture rate of less than 50 per cent.

Boundary Dam Unit 3 in Saskatchewan was designed to be able to capture 90 per cent of the emissions from one of its turbines, or approximately one million tonnes of CO2 per year. But in reality, it has been capturing just over 615,000 tonnes per year, according to IEEFA analysis based on SaskPower’s data.

Some common reasons carbon capture technology underperforms and allows CO2-laden exhaust gas into the atmosphere include maintenance shutdowns, mechanical problems and other outages due to the high volume of power needed to run the technology.

In many cases, CO2 stored through enhanced oil recovery is thought to be permanent, if sealed properly, according to the most recent IPCC report. However, unlike dedicated underground storage sites, enhanced oil recovery operations typically don’t assess the area to make sure it's suitable to store CO2 or monitor the site for leaks after the fact.

Between 78 and 98 per cent of CO2 stored in geological formations is estimated to remain safely stored for 10,000 years, according to a 2018 study published in the science journal Nature.

Still, big questions remain about who will be responsible for monitoring CO2 injection sites in the long term to ensure CO2 doesn’t leak into the atmosphere. There are concerns the burden will fall to taxpayers, as has happened with Canada’s abandoned oil and gas wells.

Fossil fuel companies and lobby groups laud carbon capture as the answer to the industry’s outsized impact on climate change, insisting the technology will keep Canadian oil relevant and competitive in international markets despite the global energy transition.

But the technology does nothing to address the vast majority of the oil and gas sector’s CO2 emissions, which occur when we burn fossil fuels to drive cars and heat buildings, for example.

Carbon capture technology is also very expensive. The federal government’s investment tax credit aims to help alleviate those costs and other federal programs have doled out hundreds of millions for projects. Alberta and Saskatchewan have also helped foot the bill with generous subsidies for CCUS projects in their jurisdictions.

Is carbon capture a viable climate solution?

The answer to this question depends on who you ask.

Canada's fossil fuel sector and most levels of government say carbon capture is an important part of the national and international climate toolkit, while its critics warn it is a costly distraction from solutions like wind and solar, and risks locking in fossil fuel use for decades to come.

The world’s leading climate authority — the Intergovernmental Panel on Climate Change — says there is a role for carbon capture as governments try to slash emissions and limit global warming to the Paris Agreement target of no more than 2 C. But its latest report also found CCUS and CCS technology is one of the most costly and least effective options to address climate change.

The world’s currently operating carbon capture projects are capable of capturing just over 40 million tonnes of CO2 per year, or roughly 0.1 per cent of global emissions, if they all perform as advertised. Domestically, these expensive projects only capture about 0.05 per cent of Canada’s greenhouse gas emissions.

Canada’s oil and gas sector made up 27 per cent of the country’s total emissions in 2020, according to the federal government. This sector is responsible for more planet-warming pollution than any other, but industry groups and companies maintain that carbon capture technology can slash emissions and allow oil and gas production to continue decades into the future.

The Pathways Alliance has a plan to outfit as many as 20 oilsands production facilities with carbon capture technology and construct a 400-kilometre pipeline to transport captured CO2 to a proposed storage hub near Cold Lake, Alta. This massive carbon storage hub would require an estimated $16.5 billion of investment by 2030, according to the alliance, which represents Canada’s largest oilsands producers.

But carbon capture projects that aim to increase or prolong fossil fuel production and use are not a climate solution and result in far more emissions than they capture, climate advocates and some scientists and experts argue. Government support for carbon capture to address emissions from fossil fuel production essentially amounts to a fossil fuel subsidy, many say.

In a scenario where the world achieves net-zero emissions by 2050, 34 times more carbon capture infrastructure needs to be built by the end of this decade, based on figures from the International Energy Agency’s 2022 World Energy Outlook.