The Intergovernmental Panel on Climate Change (IPCC) (2018) has recognised carbon capture and storage (CCS) to be a technological necessity in keeping down global temperatures. Climate change is one of the most pressing issues the world is currently faced with. Greenhouse gas (GHG) emissions from human activity have led to global warming of approximately 1°C above pre-industrial levels (IPCC, 2018). On this trajectory, global temperatures are predicted to increase at a rate which will result in a 1.5°C increase between 2030 and 2052. This could cause irreversible damage to the world as it is known today (IPCC, 2018). To prevent global warming of above 1.5°C, GHG emissions must be reduced by 40-50% on a global scale by 2030, and must be net zero by 2050 (Prosess21, 2021).
The Norwegian Government is currently dedicating vast amounts of resources towards reaching international climate targets, such as the Paris Agreement, and CCS has become a central point of interest. Likewise, the Norwegian process industry is taking note of the measures that need to be implemented in order to stay relevant in a low-carbon society. This has resulted in increased interest in CCS solutions through debates, research and investments (Prosess21, 2021). Although CCS has been utilised for several decades, there are still challenges connected to the feasibility and scalability of CCS. This is mainly a consequence of technical, commercial and economic challenges (Bui, et al., 2018), which need to be resolved for CCS to be fully successful. These challenges are a central part of this thesis. To explore the phenomenon of CCS and the issues related to its development in a case-specific study, two research questions will be answered. The first research question is:
To what extent does the economic and political environment support the implementation of CCS in the Norwegian iron and steel sector?
This research question allows for a broad analysis of the Norwegian CCS macroenvironment through the identification of barriers and opportunities in the iron and steel sector. These findings will then be used as a foundation to answer the second research question:
To what extent are government policies necessary in order to accelerate the development and deployment of CCS in the Norwegian iron and steel sector?
Findings from the analysis will be supplemented by theory to develop policies that aim to accelerate CCS development and deployment, as a measure to meet the required goals to prevent global warming of more than 1.5°C.
1.1. MOTIVATION FOR TOPIC
In a press release on September 21st 2020, the Norwegian Government proclaimed its commitment towards CCS research and deployment, through a project named Longship. The Government will assist the development of full-scale infrastructure required for CCS; capture technology, transport methods and storage facilities. The goal is to provide cost-effective solutions for full-scale CCS in Norway, with the assumption of technological dissemination onto international markets (Government, 2020). This project focuses on capture of CO2 from two facilities only: Fortum Oslo’s waste management plant and Norcem’s cement plant. As such, the preliminary studies conducted for this project have largely been on cement and waste management. This has produced a gap in research towards other CO2-emitting industries in Norway, who may also benefit from the Longship project in terms of technological advancements or transport and storage.
All industries need to reduce CO2 emissions to reach climate goals (Størset, Tangen, Wolfgang, &
Sand, 2018; Prosess21, 2021). It is therefore important to study sectors beyond cement and waste management in order to conclude whether deployment of CCS is feasible, and how policies must be developed to support CCS deployment. This study’s aim is therefore to provide empirical evidence for the Norwegian iron and steel sector in order to evaluate CCS implementation through broad data collection and analysis. This is important for the iron and steel industry as it provides an analysis of different macroeconomic factors that can impact future investment decisions in CCS abatement technology. Likewise, it may provide guidance for policymakers on how to formulate future policies regarding CCS.
1.2. CONSTRAINTS AND ASSUMPTIONS
Due to time and resource constraints, as well as achieving an appropriate balance between depth and breadth, the authors chose to limit the scope of the thesis. The analysis and discussion will focus on CCS within the iron and steel sector in the Norwegian process industry to enable more case-specific and applicable analysis and conclusions. This entails focusing exclusively on CCS as a viable solution for the iron and steel sector to comply with environmental goals. Additionally, this study focuses on emission sites in the iron and steel sector that exceed emissions of 100,000 tonnes of CO2 per annum, in order to provide insight into the largest emitters within this sector.
This study assumes Norwegian iron and steel to be an important and relevant sector to analyse in connection with CCS related abetment technology. The justification for this is that although the Norwegian iron and steel sector is small compared to international players, it remains an essential market by which demand is predicted to increase (Norsk Industri, 2016). Likewise, all industry sectors will need to reduce emissions, independent of size, to meet climate change mitigation targets.
1.3. THESIS STRUCTURE
Thus far, the thesis has introduced the research questions and motivation for this topic. Chapter 2 proceeds by presenting relevant background information and literature review. This is followed by an overview of the theoretical frameworks selected for this study in Chapter 3. Chapter 4 elaborates on the utilised methodology. A macroeconomic analysis of CCS in Norwegian iron and steel is then conducted in Chapter 5, where opportunities and barriers linked to CCS are uncovered. Based on Chapter5,Chapter 6analysestowhatextentgovernmentpoliciescanencourage the acceleration of CCS in Norwegian iron and steel. With this, Chapter 7 discusses these results and provides a detailed evaluation of possible policies. Chapter 8 concludes by emphasising the main findings from this study. Finally, Chapter 9 considers limitations to this study and areas for further research.