S. ADAMS, Carbon Capture & Commercialization, Tampa, Florida (U.S.)
The refining industry plays a critical role in meeting global energy demands; however, it is also a significant contributor of greenhouse gas (GHG) emissions. As regulatory pressures mount and stakeholders demand more sustainable practices,1 direct-air carbon capture (DACC) systems are emerging as a transformative solution for refineries. However, the integration of DACC systems is not without its challenges. This article explores the key cost and infrastructure barriers to implementing DACC systems in refining operations and outlines actionable steps to overcome them.
The cost challenge: A high-barrier opportunity. Implementing DACC systems in refining operations comes with considerable capital and operational expenditures (CAPEX/OPEX). For refineries already operating on thin margins, these costs can present a significant barrier to adoption. The initial investment required to install DACC systems is often prohibitive, particularly for smaller or mid-sized refineries. Moreover, the energy-intensive nature of these systems further increases operational costs, especially in regions with high electricity prices. Refineries face an uphill battle in balancing their operational budgets with the need for sustainable solutions.
Compounding these challenges is the limited availability of tailored financing options. Traditional financing mechanisms often do not address the unique risk profiles associated with emerging carbon capture technologies. Furthermore, a lack of long-term clarity on incentives, such as carbon pricing or subsidies, complicates financial planning for refineries considering DACC integration. This uncertainty discourages investment in these potentially transformative technologies.
Infrastructure challenges: Retrofitting and beyond. Refineries operate within complex ecosystems of machinery, pipelines and facilities, making the integration of DACC systems a logistical challenge. Retrofitting existing infrastructure to support DACC systems often requires significant modifications that can disrupt operations and incur additional costs. Legacy systems may lack compatibility with newer carbon capture technologies, necessitating comprehensive upgrades to ensure seamless integration. These infrastructure-related challenges are further compounded by the need for specialized carbon dioxide (CO2) handling, transport and storage capabilities.
Captured CO2 must be efficiently transported to storage facilities or utilization sites, which requires dedicated pipelines and storage infrastructure. Regional disparities in CO2 storage capabilities create additional logistical hurdles for refineries located in underdeveloped markets. This lack of cohesive infrastructure not only delays adoption but also increases the overall cost and complexity of DACC implementation.
Overcoming infrastructure barriers. Addressing these infrastructure challenges requires strategic planning and collaboration. Digital twin technology offers a powerful tool for refineries to simulate the integration of DACC systems before physical retrofitting begins. By modeling these systems in a virtual environment, refineries can identify potential bottlenecks, optimize system designs and minimize disruptions during installation. Phased implementation strategies provide an additional layer of flexibility, allowing refineries to integrate DACC systems incrementally and mitigate the risk of operational downtime.
Collaborative solutions can further streamline infrastructure development. For instance, the establishment of regional CO2 hubs can centralize storage and transport, reducing the burden on individual refineries. These hubs create a shared ecosystem that fosters collaboration between refineries and DACC providers, enabling resource pooling and cost-sharing. By working together, industry stakeholders can accelerate the development of critical infrastructure while enhancing overall efficiency.
Addressing the cost barrier. To overcome cost-related challenges, innovative funding models are essential. Governments can play a pivotal role in supporting refineries through tax incentives like Section 45Q in the U.S., which offers credits for captured CO2. Such policies help reduce the financial burden on refineries, making DACC integration more viable. Additionally, carbon credit markets provide an avenue for refineries to monetize their captured CO2 emissions, creating a new revenue stream that offsets some of the operational costs. Public-private partnerships further distribute financial risks while accelerating deployment, fostering collaboration between government bodies and private sector stakeholders.
Technological innovations also hold significant promise in reducing costs. Advances in adsorptive materials have led to the development of low-energy systems that minimize energy requirements and operating expenses. These materials, often engineered at the molecular level, increase the selectivity and efficiency of CO2 capture, allowing for greater yields at lower operational costs. For example, cutting-edge adsorptive materials such as metal-organic frameworks and zeolites are being fine-tuned to perform efficiently under a range of environmental conditions, further broadening their applicability.
Modular designs are particularly advantageous, allowing refineries to scale DACC implementation incrementally rather than committing to a large upfront investment. These systems can be deployed in phases, enabling refineries to align investments with available budgets while testing and optimizing the technology. This modularity also supports flexibility in design and placement, allowing facilities to target specific emissions hotspots more effectively.
The integration of renewable energy sources to power DACC operations offers another avenue for cost efficiency. By leveraging solar, wind or other renewable resources, refineries can offset the energy-intensive nature of DACC systems, significantly lowering OPEX over time. For instance, coupling DACC systems with onsite renewable energy installations reduces reliance on external power grids, insulating refineries from fluctuating energy prices and enhancing energy security. This synergy between DACC and renewable energy not only aligns with broader sustainability goals but also positions refineries to meet emerging regulatory requirements and investor expectations for cleaner operations.
Steps toward adoption. Successfully integrating DACC systems into refining operations requires a multi-faceted approach. Pilot projects represent a low-risk opportunity for refineries to test DACC technologies and validate their effectiveness. By starting small, refiners can gather valuable insights and refine their strategies for larger-scale implementation. These pilots also serve as proof-of-concept demonstrations, building confidence among stakeholders and potential investors.
Collaboration across the value chain is another critical component of successful adoption. Partnering with technology providers, governments and industry peers enables refineries to leverage collective expertise and resources. Collaborative frameworks not only reduce costs but also amplify impact, creating a unified effort to tackle emissions and advance sustainability goals. Advocacy for clear and consistent regulations is equally important. Engaging in policy discussions ensures that the needs of refiners are represented, paving the way for supportive policies and incentives that drive industry-wide adoption.
The path forward: Embracing sustainability. As the hydrocarbon processing industry transitions toward a more sustainable future, refineries have a unique opportunity to lead by example. Integrating DACC systems not only reduces emissions but also aligns operations with global sustainability goals, positioning refineries for long-term success. This strategic shift demands bold action and visionary leadership, as the benefits of adopting DACC systems extend beyond environmental stewardship to include enhanced operational resilience and financial performance.
Looking ahead, the successful integration of DACC systems will require ongoing innovation and adaptation. The development of advanced materials, such as next-generation adsorptive compounds, promises to further enhance efficiency and cost-effectiveness. International collaboration on research and development could accelerate breakthroughs, enabling the global refining industry to adopt these technologies at scale. As regulatory frameworks evolve and public awareness of climate issues grows, the demand for sustainable solutions will only intensify. Refineries that embrace DACC systems today will be well-positioned to thrive in a low-carbon future, leading the way in the transition to sustainable hydrocarbon processing.
While the cost and infrastructure challenges are significant, they are not insurmountable. Innovative funding models, technological advancements and collaborative solutions offer a clear path forward. By embracing these strategies, refining companies can overcome barriers and unlock the transformative potential of DACC systems. For those ready to take the next step, the time to act is now—the future of sustainable hydrocarbon processing cannot wait. HP
LITERATURE CITED
Follette, C., et. al, ”Is your refinery ready for the low-carbon future?” BCG, November 11, 2022, online: https://www.bcg.com/publications/2022/readying-refineries-for-low-carbon-future
Samir Adams is the Managing Director at Carbon Capture & Commercialization, focusing on driving innovation in carbon capture technology. He has extensive experience in leading teams to develop sustainable energy solutions and advancing emissions reduction technologies. Adams earned an executive MBA from the University of Tampa, and a BS degree from the University of South Florida.