Exploring new territory in reducing emissions for Australia

By  Ruth Dawkins 17 May 2023 6 min read

The Northern Territory (NT) has an ambitious goal of achieving net zero emissions by 2050, while also aiming to grow the gross state product (GSP) to $40 billion by 2030. Our research highlights a range of Carbon Dioxide (CO₂) utilisation technologies that could respond to this dual challenge.

CSIRO Futures manager Dominic Banfield is the co-author of the new Opportunities for CO₂ utilisation in the Northern Territory report. He said the challenging combination of meeting emissions targets and economic targets has prompted the NT Government to start exploring the most suitable low emissions technologies for the region.

"Our report provides important context about potential opportunities, costs, and challenges for CO₂ utilisation," Dominic said.

"The research provides evidence that will support decision making by government, industry, and community stakeholders in the region."

What is CO ₂ utilisation? 

CO₂ utilisation takes CO₂ from the atmosphere or industrial sources and then converts it into new, useful products. These can include synthetic fuels, foods and beverages, chemicals, plastics, and building materials. It is a different process to carbon capture and storage, which involves capturing and permanently storing CO₂ in suitable underground geological formations. However, both approaches can reduce the amount of CO₂ reaching the atmosphere and they are sometimes referred to collectively as Carbon Capture, Utilisation and Storage (CCUS).

According to the International Energy Agency (IEA), currently about 35 commercial CCUS facilities around the world – some of which have been operating since the 1970s – have the capacity to capture almost 45 MtCO₂ each year. However, the IEA World Energy Outlook 2022 notes that under a net zero emissions by 2050 scenario, this would have to increase significantly to 1.2 Gigatonnes per year in 2030, and 6.2 Gigatonnes per year in 2050. On average, the net zero emissions scenario requires more than 10 new CCUS-equipped facilities to be commissioned each month between now and 2030.

The Australian context

As Australia’s efforts to reduce greenhouse gas emissions intensify – to meet both national and international targets – it’s essential that we develop a range of scalable, cost-effective solutions for dealing with CO₂ emissions. With all sectors required to contribute to emissions reduction, a broad suite of tools and technologies will be needed.

Alongside measures like electrification, increased renewable energy storage, and carbon offsetting, CO₂ utilisation will have an important role to play in Australia – especially in hard to abate industries – as outlined in our CO₂ Utilisation Roadmap published in 2021.

CSIRO Futures report co-author Anthea Moisi said getting to net zero is a major challenge that will require a mix of solutions.

"What’s exciting about CO₂ utilisation is that it can be a good fit with the kind of hard-to-abate sectors that are already established in the Northern Territory. There’s already industry interest in potential developments in the region," Andrea said. 

What is the focus of the new CO2 Utilisation Report?

The Opportunities for CO ₂ Utilisation in the Northern Territory report was commissioned as part of a broader project assessing the feasibility of a Northern Territory Low Emissions Hub (NTLEH). The NTLEH would develop a blueprint for rapid emissions reduction across the NT’s gas, hydrogen, and energy generation industries.

CO₂ utilisation pairs well with several other technologies, including carbon capture and storage, renewable energy and hydrogen, to provide a potential pathway to a viable low emission hub.

The report provides analysis of region-specific opportunities in the NT including methanol, jet fuel, methane, urea and mineral carbonates. For each of these five areas, researchers used modelling to explore the potential scale and cost in the short, medium, and long term. The report also identifies barriers to deployment for the different products, and potential ways to overcome those challenges.

What are the opportunities for the Northern Territory?

The NT is well positioned to take advantage of the opportunities afforded by CO₂ utilisation technologies.

"It has a well-established liquefied natural gas (LNG) industry, abundant renewable energy resources, and strong export links with the Asia Pacific region. All three of these attributes can support the development of a CO₂ utilisation industry that will support carbon abatement and grow the region’s low-emission industry activity," Anthea said.

"You can see the different pieces of the puzzle starting to come together."

Based on current projections, demand for all five of the CO₂ derived products will increase during the next 10-15 years. However, based on our analysis, the opportunity with the nearest-term potential is methanol.

CO₂ derived methanol is valued as both a standalone fuel and a precursor to downstream products such as plastics and textiles. The diversity of downstream uses, combined with the potential for hybrid production using renewable hydrogen and methane, make it an attractive option for further consideration.

"Methanol seems like the lowest hanging fruit," Dominic said. 

"In terms of the necessary prerequisites in the NT, the maturity of the technology, the downstream applications, and the market readiness, methanol is the opportunity that’s already ticking most of the boxes."

What are the key challenges?

The biggest challenges facing the NT – and other regions keen to explore CO₂ utilisation – are the costs involved and the ability to operate at scale.

For each of the products analysed in the report, researchers calculated a levelised cost of production under base and best-case scenarios. Under the base case scenario, all CO₂ derived products would need to be sold at a significant premium to break even on production costs.

"For the chemicals and fuels we analysed in the report, cost is the biggest barrier to commercial deployment," Dominic said.

"Reducing costs is going to be critical, but we know that these are long term opportunities and there is high potential for reducing costs through technological improvements, improvements in feedstock availability and cost, and economies of scale.

"Large scale, affordable renewable electricity and hydrogen production is critical to unlocking these CO₂ utilisation opportunities. That’s why it is important to look at CO₂ utilisation in the context of a broader low emissions hub," he said. 

What comes next in the Northern Territory?

Work is continuing on the development of the business case for the Northern Territory Lower Emissions Hub. The Opportunities for CO2 Utilisation in the Northern Territory report is a key piece of research for discussion and shared understanding going forward.

Our goal is to help develop a portfolio of solutions that will help the NT achieve large cuts in emissions, while simultaneously driving economic growth and supporting the energy needs of communities and industry.

We will do that by providing reliable, actionable, evidence-based science and working collaboratively with government, industry, and community stakeholders.