CO2-To-Fuel: A pathway to Decarbonisation

Carbon Capture and Utilisation (CCU) has emerged as a transformative approach to tackling climate change while unlocking economic potential. Instead of treating CO2 solely as waste, it transformed into a valuable product for various applications including synthetic fuels, building materials and chemicals production. This paper will focus on significance of carbon dioxide (CO2) role in synthetic fuels, particularly production of methanol and methane including the challenges and drivers based on literature review and internal study. The approach consists of three main steps. The initial phase, referred to as study initiation phase, involves defining the scope and basis of the study. For instance, study assumptions, identification of feed gas specification and other relevant data are important to conduct the technical and economic analysis. Second step is the Technical Analysis, performed to screen and identify potential CO2 utilisation opportunities by thoroughly assessing the potential technologies, benefits, key considerations, and challenges. The drivers and objectives of each project will influence the option selection. Finally, Techno-economic Analysis alongside a Greenhouse Gas (GHG) emission assessment is critical for evaluating the viability and sustainability of CO2-to-fuel projects. CO2-to-Methanol technologies are widely available, and the options were technically comparable. The difference could be in the form of catalyst used, energy used and efficiency but in essence almost all the technology options require purification of CO2 to a purity level of 99.9%. Synthetic methane is commercially available but currently produced at a limited scale. Its production involves combining renewable hydrogen (H2) with captured CO2, resulting in a fuel that is chemically identical to fossil-derived methane. This compatibility allows synthetic methane to be utilized within existing natural gas infrastructure, making it a promising option for decarbonizing sectors such as heating, power generation, and transportation. The cost of producing fossil fuel-based methanol is in the range of USD100-250 per ton [1]. The cost of e-methanol (renewable methanol) depends primarily on the cost of H2 and CO2. The current production cost of e-methanol is estimated to be in the range of USD 800-1,600/t [1]. CO2 price varies due to several factors i.e. plant location, specification and method of capture. From the study, at base case, renewable methanol (e-methanol) production cost is 5 times more than grey e-methanol. The levelized cost of e-methane currently ranges between $50–200 per MMBtu, significantly higher than traditional natural gas prices. The price is highly dependent on the cost of hydrogen production and achieving cost parity will require technological advancements and economies of scale [10]. CCU through the synthetic fuel route is technically feasible, though cost optimization is required. Furthermore, the success of synthetic fuel deployment is driven by market demand, availability of renewable energy to optimise hydrogen cost as well as financial incentives for adopting green products. This paper examines the feasibility of CCU through synthetic fuels, addressing its associated challenges and identifying the essential drivers for adoption within the oil and gas industry.