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Putting CO2 to Use: Creating Value from Emissions Technical analysis Transport of CO2 to the end-user can also be a significant cost, depending on the distance and transport mode (pipeline, ship, truck). One of the appeals of DAC is that it could potentially be situated anywhere, provided there is an available energy source, thus avoiding the need for CO2 transport. In general, carbon capture from high concentration CO2 streams in close proximity to CO2 use sites offers the cheapest supply of CO2. Local conditions may, however, require the use of CO2 from more dilute sources, due to the absence of low-cost sources or transport infrastructure. The price for CO2 is not only affected by the cost of its capture and transport, but also by local market conditions and climate policies. For example, local CO2 supply shortages could drive up prices and increase costs for users of CO2, while a carbon tax could prompt producers of CO2 to sell their CO2 for a lower price than the costs for capture and transport if it can relieve their regulatory responsibility for their CO2 emissions (see section, “Implications for Policies”). Climate benefits As outlined above, the climate benefits associated with a CO2-derived product or service primarily arise from displacing an equivalent product or service with higher life-cycle CO2 emissions. To determine the climate benefits, a robust life-cycle approach is required that compares the life-cycle CO2 emissions of a CO2-derived product or service with those of a system that provides a product or service with a similar function (reference system). In principle, a cradle-to-grave analysis is required, covering all stages of the value chain, including upstream emissions (fuel extraction, capture, purification and transport of CO2), emissions related to the conversion step, and downstream emissions (further processing of CO2-derived product, final product consumption and waste processing) (Figure 18).7 The current knowledge base on the potential climate benefits of CO2 use is limited. Life-cycle assessments (LCA) show considerable variations in their findings and conclusions, meaning that policy makers and consumers face uncertainty when trying to validate CO2 use as a viable climate mitigation tool. Part of the variation is inherent to CO2 use, as climate benefits can vary significantly depending on the specific circumstances, such as the carbon intensity of the input energy, conversion technology and the source of the carbon. But there are also other factors contributing to this variability, in particular methodological issues related to carrying out LCAs as well as limited availability of reliable data on the large-scale performance of CO2 conversion technologies. Several initiatives are seeking to address these methodological issues (Box 4). The factors with the largest impact on the climate benefits of CO2-derived products or services are described in the remainder of this section below. 7 However, in some cases, common elements within the reference system can be excluded from the assessment, resulting in a so- called cradle-to-gate analysis. For instance, when comparing the lifecycle emissions of a CO2-derived fuel with those of a chemically- equivalent fossil fuel, the downstream emissions related to the distribution and end-use of the fuel can be excluded since these are similar for both systems. PAGE | 32 IEA. All rights reserved.PDF Image | Putting CO2 to Use Creating value from emissions
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