Heavy industry is turning to Carbon Capture, Utilization and Storage (CCUS) not only to meet steep carbon reduction targets, but also to find ways to turn captured carbon into raw material — and new revenue.
Carbon Capture vs. Carbon Removal
Carbon capture focuses on preventing CO2 emissions from entering the atmosphere by capturing them at the source — like at power plants and manufacturing facilities — while carbon dioxide removal, or CDR, aims to remove CO2 that is already in the atmosphere.
“The State of Carbon Dioxide Removal” report, co-led by University of Oxford researchers, found that governments must expand tree planting and the use of technologies to increase carbon dioxide removal (CDR) by four times annually in order to reach global climate targets.
According to the report, it’s necessary to remove somewhere between 7.72 billion and 9.92 billion tons of carbon from the atmosphere each year by 2050 to meet the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius.
While carbon dioxide removal is crucial, carbon emissions reductions will continue to be the main avenue to achieving net zero, the report said.
Many heavy industry sectors are exploring CCUS to reduce their carbon footprints, and government agencies are injecting big money into CCUS pilot projects.
In December 2024, the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations opened applications for up to $1.3 billion in funding to catalyze investments in transformative CCUS technologies and to boost the development and commercialization of carbon capture technologies.
Pulp and Paper Industry Exploring Carbon Capture Utilization and Storage
In North America alone, the pulp and paper industry represents a carbon removal opportunity of up to 130 million tons per year, according to CO280, a leading developer of large-scale carbon dioxide removal (CDR) projects. The average mill’s CO2 emissions are 80% biogenic, and biomass used by mills is residual and sourced from sustainably managed working forests. By retrofitting the mills to capture and permanently store this CO2, the operation would achieve negative emissions.
In April, CO280 announced an offtake agreement with Microsoft from a project that will capture and permanently store biogenic carbon emissions from a U.S. pulp and paper mill. Under the agreement, Microsoft will buy 3.685 million tonnes of CDR over 12 years — one of the largest engineered CDR purchases to date.
That follows on the heels of a December CDR offtake agreement that CO280 signed with Frontier Buyers — a coalition that includes Google, H&M and Stripe. Frontier will pay CO280 and its partners $48 million to deliver 224,500 tons of carbon removal before 2030 from CO280’s first carbon removal project at a pulp and paper mill in the U.S. Gulf Coast.
And there are many other pulp and paper mills exploring carbon capture technology.
- This summer, Metsä Group will study carbon dioxide captured at its Rauma pulp mill with test equipment provided by Andritz.
- In January, carbon capture and removal technology firm Svante Technologies announced that it is developing a first-of-a-kind carbon capture and storage project at Domtar’s Ashdown Pulp Mill facility in Arkansas.
- Svante also announced in April that its joint carbon capture and storage project with Mercer International is advancing to the Pre-FEED phase. The project targets biogenic CO2 emissions from Mercer's Peace River pulp mill in Alberta.
- In November, Mitsubishi Heavy Industries and Hokuetsu, one of Japan's leading paper manufacturers, launched a CO2 capture demonstration test at Niigata Mill. This marks the first case in which Mitsubishi Heavy Industries’ CO2 capture technology is being applied to the pulp and paper industry.
- International Paper is also studying CCUS at its Vicksburg Containerboard Mill in Vicksburg, Mississippi, in a project led by RTI International along with SLB and Amazon, the carbon capture pilot expects to capture at least 90% of the CO2 from the mill’s power boiler flue gas using RTI’s non-aqueous solvent (NAS) technology.
- In November, Kruger launched a C$23.75 million investment in an innovative demonstration project to test Mantel’s carbon capture technology and reuse captures carbon at its Wayagamack pulp and coated paper mill in Trois-Rivières, Quebec.
New Raw Material, New Revenue
CCUS could allow the pulp and paper sector to not only reduce its carbon emissions, but also valorize the carbon captured from its manufacturing processes. In addition to offering carbon credits, pulp and paper companies could sell captured carbon as a raw material for a wide variety of applications in other industries, from building products to biofuels, polymers to plant food.
In March, a Surrey University professor published a new study that demonstrated the environmental benefits of using captured CO2 emissions as key chemical ingredients. As part of the Flue2Chem initiative, researchers assessed the entire life cycle of converting waste gases from paper mills and steel mills into alcohol ethoxylate, a surfactant for consumer goods and low-medium distillate range liquid fuel.
According to the study, researchers found the approach could reduce global warming potential by about 82% for paper mill emissions and nearly half for the steel mill industry compared to fossil-based surfactant production.
CCUS Legislation
Many U.S. states have passed legislation to support CCUS initiatives, including Alaska, Arkansas, Colorado, Illinois, Oregon, Pennsylvania and West Virginia. These legislative efforts aim to establish regulatory frameworks, clarify ownership rights and provide financial incentives for CCUS projects. And more states are looking to regulate CCUS — some to expand its use, some to restrict it or even ban it.
- Louisiana has recently introduced several bills, including HB568 and HB696, to regulate carbon dioxide sequestration, while another bill, HB396, proposes to make carbon capture and sequestration illegal in Louisiana.
- California’s SB285 sets guidelines for using qualified carbon dioxide removal methods to help achieve the state’s net zero greenhouse gas emissions targets.
- In Illinois, SB1234 would establish a fund to support carbon capture systems at power plants.
Stay Ahead of Carbon Regulations
Executives in carbon-heavy industries, including the pulp and paper industry, must navigate shifting regulatory changes, industry innovations, and intensifying competition. Industry Intelligence is your strategic partner in mastering these challenges.
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