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September 26, 2023
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Bioenergy with carbon capture and storage (BECCS) not only addresses global climate change, it also holds the potential to benefit local communities.
With the world sweating through potentially the hottest year on record, the need to develop a variety of low- and zero-carbon energy sources grows more urgent each day.1
While solar, wind and nuclear get the lion’s share of the headlines when it comes to climate-friendly energy solutions, another energy-generating technology — bioenergy with carbon capture and storage (“BECCS”) — is garnering renewed attention.
Interest in BECCS has surged largely because of its potential to create a reliable baseload source of carbon-neutral or even carbon-negative energy.2 But another, often overlooked, reason for interest is the technology’s benefits to local communities that are unmatched by other clean-energy technologies.
What Is BECCS?
BECCS involves burning biogenic fuels like wood or other plant products for electricity production, then capturing and permanently storing the carbon dioxide (“CO2”) created by the process.3 BECCS has the advantage of being able to produce electricity when it is needed, meaning it can help electricity grids meet demand even when the wind isn’t blowing and the sun isn’t shining.4
And unlike many low-carbon technologies, BECCS’s supply chains are more likely to be local. That distinguishes it from energy storage solutions like batteries, which rely on international sources for crucial elements.5
Where BECCS Stands Now
All these qualities make BECCS an enticing energy solution for a planet that is both warming rapidly and consuming ever-larger amounts of energy.
Since January 2022 various companies have announced plans to collectively build approximately 20 new facilities incorporating BECCS, with a total proposed biogenic capture capacity of around 15 metric tons (“Mt”) of CO2 per year.6
Despite these big plans, the International Energy Agency (“IEA”) forecasts that BECCS will likely store only 50 Mt of CO2 annually by 2030. This falls far short of the 190 Mt CO2 per year by 2030 called for in the IEA’s Net-Zero Emissions Scenario.7
So, what needs to happen to make BECCS a bigger part of the energy mix?
Unlocking the Hidden Benefits of BECCS
An important step in encouraging more development is legislation that allows the benefits of BECCS projects to accrue to developers and operators.
Many of these benefits, while currently difficult to monetize, have a strong positive impact on local economies and communities. For example, because BECCS often utilizes downed wood or marginal timber products as fuel sources, projects can serve as profit-making methods to thin forests and reduce the risk of severe wildfires. And in communities that once relied on struggling industries such as paper manufacturing, BECCS creates new markets for wood and wood pulp.
The technology also holds promise for regions that traditionally relied on coal-fired power plants to produce both electricity and jobs. Because BECCS, like coal, uses combustion to create energy, project developers can refurbish existing or mothballed coal plants into an eco-friendly energy option.8
Meeting the Not-So-Hidden Challenges
Of course, all these benefits are predicated on meeting several challenges that face every BECCS project. The most notable of these challenges is the cost.
The Inflation Reduction Act supports BECCS by providing tax credits now valued at USD$60 per tonne of CO2 used and USD$85 per tonne of CO2 stored.9
Various types of carbon capture technology currently exist, but all can be expensive, and questions remain about how they will operate at scale. These outstanding issues put added pressure on developers to get the scale of BECCS projects right to ensure profitability.
Every BECCS project also needs a place to store the carbon it captures during the process of creating power. Because this carbon is usually housed underground, any BECCS project needs to have access to features conducive to safely and permanently storing carbon. It also means BECCS developers must plan for costs associated with carbon storage.
Finally, BECCS project developers will need to access some form of public subsidy. A good example of this type of support is section 45Q of the United States’ Inflation Reduction Act, which recently upgraded tax credits for BECCS projects within the US. But it also matters whether the local market explicitly values the CO2 benefits provided by BECCS or has specific targets for carbon removal technologies, like the one that exists in California.10
But these aren’t the only types of nonmonetary government support that are important. Clearer standards regarding carbon accounting for biomass removals and biomass regeneration will help support growing demand for energy created via BECCS. As carbon accounting matures to include more precise rules around energy associated with carbon capture and sequestration, BECCS will likely become a more valuable source of energy for companies trying to reduce their scope 2 emissions.
Who Wins With BECCS?
The biggest winners from BECCS currently are still the communities where the projects will be located. BECCS can help flagging industries, provide consumers with 24/7 renewable power and boost local supply chains.
With the right planning, developers and operators of BECCS facilities will also reap significant rewards, doing good while also doing well.
Footnotes:
1: “NASA Announces Summer 2023 Hottest on Record.” PHYS.ORG news, (September 14, 2023) https://phys.org/news/2023-09-nasa-summer-hottest.html
2: Zetterberg, Lars, Filip Johnson and Kenneth Möllersten. “Incentivizing BECCS—A Swedish Case Study. Frontiers in Climate, (August 30, 2021) https://www.frontiersin.org/articles/10.3389/fclim.2021.685227/full
3: “What is Bioenergy with Carbon Capture and Storage (BECCS)? Drax Group, (May 18, 2021) https://www.drax.com/carbon-capture/what-is-bioenergy-with-carbon-capture-and-storage-beccs/
4: Id.
5: “Complexities of Battery Supply Chain May Slow EV Adoption.” Economist Intelligence Unit, (August 2, 2023) https://www.eiu.com/n/complexities-of-battery-supply-chain-may-slow-ev-adoption/
6: Id.
7: Id.
8: “Applying potential BECCS Solutions to the US Coal Sector: New Coal Boom or Bust?” Engineering Conferences International: ECI Digital Archives, (May 22-26, 2017) https://dc.engconfintl.org/co2_summit3/5/
9: “Credits and Deductions Under the Inflation Reduction Act of 2022.” Internal Revenue Service, (Accessed September 15, 2023) https://www.irs.gov/credits-and-deductions-under-the-inflation-reduction-act-of-2022
10: “California Releases World’s First Plan to Achieve Net Zero Carbon Pollution.” Office of Governor Gavin Newsom, (November 16, 2022) https://www.gov.ca.gov/2022/11/16/california-releases-worlds-first-plan-to-achieve-net-zero-carbon-pollution/
© Copyright 2023. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
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September 26, 2023
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