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01/17/2023 | News release | Distributed by Public on 01/17/2023 06:14

Q&A: No Beccs if biomass not considered sustainable

From working for a coal-fired power plant in India to phasing out coal at Stockholm Exergi and currently being at the forefront of the world's first large-scale project of bioenergy with carbon capture and storage (Beccs) - a key technology to deliver negative emissions - backed by the EU's Innovation Fund, the Swedish firm's vice-president for asset optimisation and energy trading Shamsher Khan has had a career path that goes parallel with the significant transformation the energy sector is undergoing to reach targets of emission reductions to limit global warming to 1.5°C. But implementation of Beccs has come with its challenges, particularly regulatory ones. There will be no Beccs if biomass is not considered sustainable, Khan explains in this Q&A that has been edited for clarity and length.

Why is Beccs important for power, energy and other sectors?

The IPCC, the UN's climate panel, has shown that simply decreasing carbon dioxide will not be enough to counteract climate change and limit climate warming to a maximum of 1.5°C. Therefore, negative emissions are crucial.

Beccs implementation has a unique and highly energy efficient solution for carbon capture and liquefaction. By recovering waste heat generated in the process to the fullest extent possible, our solution accomplishes negative emissions without any energy penalty compared with the baseline.

What stage is Stockholm Exergi's Beccs project at now? When will the Beccs unit be commissioned?

Our ambition is to have the facility up and running no later than 2026. We are currently working with the application for the environmental permit, which we intend to send to court in February.

What challenges has the project faced?

The biggest challenges concern national law and regulations. For instance, challenges with the approval of state aid for the support scheme, reaching a bilateral export agreement with Norway, changes in legislation regarding storage of carbon dioxide abroad, etc.

What kind of financial - from both private and public sector - and policy support is needed for Beccs projects?

One crucial part in order to accomplish what is needed is to secure funding. Funding can both come (initially) from state funding or through capital from the private sector. What we are currently looking into is the creation of a voluntary carbon market where Sweden can be a larger exporter of negative emissions. Private funding through the voluntary market could halve the cost for the Swedish government.

Are you or will you be looking for partners for your Beccs project?

Our project is built on taking full responsibility for the Beccs value chain. Of course, we will work with many partners to realise this responsibility. For sourcing of biomass, we will rely on already existing structures and suppliers, since the CO₂ capture will be built on top of a bio-combined heat and power (CHP) plant that has been in operation since 2016. For capture, we rely on several providers of design services, equipment and construction, but it will be Stockholm Exergi operating the capture and liquefaction unit. For transportation and storage, we will acquire these elements as services from one or more suppliers.

Are Beccs and carbon removal technology policies well-co-ordinated in Sweden and the EU?

As mentioned earlier, our biggest concern is national regulation and law. And since we are a forerunner, legislation lags with our ambition. But there are things happening within the EU as well. There is an ongoing consultation from the EU's DG Climate Action regarding certification of negative emissions. The certificate is one important step in order to set up a market for negative emissions.

Has a price signal yet been set for carbon removals from Beccs? UK utility Drax said in early 2022 that the cost of delivering Beccs was about £150 ($186) - to generate 1MWh of power and remove 1t of CO. And the US' Inflation Reduction Act (IRA) regulates state financial support for carbon removal under Beccs projects at $93.50/t*. Where in this range would you position your current project?

We approach the question a bit differently. Our assessment is that the current range of prices on the market, depending on project and technology, is very wide, probably between €200-700. We do not believe that there is yet high-volume demand throughout that price range. Thus, there is a need to combine government aid and revenues from the voluntary carbon market.

For multi-year deals beyond a few thousand symbolic tonnes, our current reading of the market is that you need to have an offering that is in the lower part of that range, or possibly below. Correspondingly, thus, the need for government aid will vary significantly. To get to the gigatonne level expected by IPCC's Sixth Assessment Report (AR6), we need to see further price reductions.

How would a recent change in the definition of primary biomass in a recent draft of the EU's renewable directive (ban on primary biomass Red III) approved by the European Parliament affect Beccs projects and plans at Stockholm Exergi or other companies if it goes through? And how does such a proposal sit with Stockholm Exergi's Beccs project being funded by the European Innovation Fund?

There is no Beccs if biomass is not considered as sustainable. Stockholm Exergi only uses twigs, tops, branches and leftovers from forests as fuel in our CHP plant. The definition of biomass will be discussed during the Swedish presidency in the EU in the first half of 2023. We expect an outcome that helps Sweden reach its climate goals.

*The US' IRA regulates financial support for Beccs projects at $93.50/mt of removed and permanently sequestered COfrom fuel combustion by any new CCS facility built within the next 10 years. But a white paper by FutureMetrics argues that support for any Beccs facility should be on a par with that offered for direct air carbon capture and storage set at about $198/t ($180/short US tonnes) in the IRA regulation.

By Erisa Senerdem