BHP Leads Consortium for Large-Scale CCUS Hubs in Asia

The Essential Role of CCUS Hubs in Industrial Decarbonization

Carbon Capture, Utilization, and Storage (CCUS) technology has emerged as a critical component in the global effort to reduce industrial carbon emissions. As industries worldwide face increasing pressure to decarbonize, CCUS offers a practical pathway for hard-to-abate sectors, particularly steelmaking, to significantly reduce their carbon footprint while maintaining operational viability.

Understanding Carbon Capture, Utilization, and Storage Technology

CCUS encompasses a suite of technologies designed to prevent carbon dioxide emissions from entering the atmosphere by capturing CO₂ from industrial processes, transporting it to a storage location, and either utilizing it in various applications or storing it permanently underground. This technological approach represents one of the most promising solutions for addressing emissions from energy-intensive industries where complete electrification powering mines isn't immediately feasible.

The Three Pillars of CCUS Technology

The CCUS process involves three distinct stages, each requiring specialized technology and infrastructure:

1. Capture: This initial stage involves separating CO₂ from other gases produced during industrial processes. Different capture technologies exist, including:

   • Post-combustion capture (removing CO₂ from flue gases)
   • Pre-combustion capture (converting fuel into CO₂ and hydrogen before combustion)
   • Oxy-fuel combustion (using pure oxygen for combustion to produce concentrated CO₂)

2. Transport: Once captured, CO₂ must be compressed and transported to utilization or storage sites. Transportation methods include:

   • Pipeline networks (most cost-effective for large volumes)
   • Ship transport (flexible option for offshore storage locations)
   • Road transport via specialized trucks (for smaller volumes over shorter distances)

3. Utilization/Storage: The final stage involves either using the captured CO₂ in industrial applications or injecting it into geological formations for permanent storage:

   • Storage options include depleted oil and gas reservoirs, deep saline formations, and unminable coal seams
   • Utilization pathways include enhanced oil recovery, concrete curing, chemical production, and synthetic fuel manufacturing

While individual components of this technology chain have been demonstrated at commercial scale, the integration of capture, transport, and storage at industrial scale remains a significant challenge that requires strategic coordination across multiple stakeholders.

Why CCUS Hubs Are Essential for Industrial Decarbonization

The Decarbonization Challenge for Hard-to-Abate Industries

Industries like steel, cement, chemicals, and aluminum face unique challenges in their decarbonisation transformation journey that make CCUS particularly valuable:

• Process-inherent emissions: Many industrial processes release CO₂ not just from energy use but as a direct result of chemical reactions. In steelmaking, for example, the reduction of iron ore using carbon-based fuels inherently produces CO₂.

• High temperature requirements: Many industrial processes require extremely high temperatures that are difficult to achieve with renewable electricity. Blast furnaces in steelmaking operate at temperatures exceeding 1,500°C.

• Long-lived capital assets: Industrial facilities like steel plants represent massive capital investments designed to operate for decades. As noted by BHP's Ben Ellis, "More than one billion tonnes of production a year in Asia coming from blast furnace capacity that is relatively early in its production life."

• Economic competitiveness concerns: Adding decarbonization technologies without regional coordination can place early adopters at a competitive disadvantage due to increased costs.

"With more than one billion tonnes of production a year in Asia coming from blast furnace capacity that is relatively early in its production life, it's important for industry to progress technologies to decarbonise existing steelmaking assets while new commercial pathways to decarbonise steelmaking are developed over time." – Ben Ellis, BHP vice president marketing sustainability

The Strategic Advantages of CCUS Hubs

CCUS hubs—centralized infrastructure serving multiple industrial emitters—offer several critical advantages over standalone capture projects:

• Economies of scale: By aggregating CO₂ from multiple sources, hubs can achieve significantly lower unit costs for transport and storage infrastructure. This shared approach can reduce the cost per tonne of CO₂ stored by 30-40% compared to individual projects.

• Risk distribution: Developing CCUS infrastructure requires significant upfront investment with long-term operational commitments. Hubs distribute these risks across multiple participants, making projects more financially viable.

• Enabling regional decarbonization: A hub approach allows entire industrial clusters to reduce emissions simultaneously, preventing carbon leakage (where production shifts to regions with less stringent climate policies).

• Unlocking utilization opportunities: Many CO₂ utilization applications require minimum volumes to be economically viable. By aggregating captured CO₂, hubs can reach these thresholds and enable commercial utilization pathways.

These benefits make the hub model particularly attractive for regions with concentrated industrial activity, such as steel-producing centers across Asia.

BHP and large-scale CCUS hubs in Asia

A Groundbreaking Industry Consortium

BHP has assembled a powerful consortium of industry partners to explore CCUS opportunities specifically tailored to Asian industrial needs. This initiative represents "Asia's first independent, industry-led pre-feasibility study (PFS) into large-scale CCUS hubs."

The consortium brings together key stakeholders from across the value chain:

• Steel industry partners: ArcelorMittal Nippon Steel India, JSW Steel, and Hyundai Steel
• Energy sector partners: Chevron and Mitsui & Co.
• Technical advisors: Hatch (serving as project management officer), Global CCS Institute, McDaniel, and Pace CCS

This diverse partnership ensures the study benefits from both operational expertise and technical knowledge across the entire CCUS value chain.

Strategic Focus on Steelmaking Decarbonization

The initiative specifically targets steelmaking decarbonization for several compelling reasons:

• Massive existing capacity: Asia is home to over one billion tonnes of annual production capacity from blast furnaces, representing a significant portion of global steel production.

• Relatively young assets: Many of these facilities are early in their operational life, with decades of production ahead. Retrofitting with CCUS technology represents a pragmatic approach to emissions reduction.

• Limited immediate alternatives: While technologies like hydrogen-based direct reduction of iron are promising, they remain years away from commercial-scale implementation for existing assets.

As explained by BHP's Ben Ellis: "BHP is committed to supporting our steelmaking customers on their journey to decarbonise the industry. By leveraging shared knowledge and resources with our partners, we are investing in support for innovative solutions like the potential of CCUS that we see as an essential part of decarbonising hard-to-abate sectors such as steelmaking."

Addressing Key Technical and Commercial Challenges

Comprehensive Technical Feasibility Assessment

The pre-feasibility study will examine multiple technical dimensions to determine viable pathways for CCUS implementation:

• Capture technology selection: Evaluating which capture technologies are most suitable for the specific flue gas compositions and operating conditions of steel plants and other industrial facilities.

• Transportation infrastructure requirements: Mapping potential pipeline routes, evaluating ship transport options, and determining compression needs for efficient CO₂ transport.

• Storage site characterization: Assessing geological formations for secure, permanent CO₂ sequestration, including capacity estimation, injection rates, and monitoring strategies.

• Utilization pathway evaluation: Identifying viable commercial applications for captured CO₂ that could generate revenue streams to offset capture costs.

According to the global steelmakers group study, the initiative will "explore technical, commercial and regulatory pathways for capturing and either repurposing or storing carbon dioxide from hard-to-abate sectors such as steelmaking."

Navigating Commercial and Regulatory Frameworks

Beyond technical considerations, successful CCUS implementation depends on viable commercial structures and supportive regulatory environments:

• Cost-sharing models: Developing frameworks for equitably distributing capital and operating costs among consortium members based on emissions volumes and storage utilization.

• Risk allocation frameworks: Establishing clear responsibility for long-term storage monitoring and potential liability, typically one of the most challenging aspects of CCUS projects.

• Regulatory pathway development: Working with policymakers to establish clear permitting processes, monitoring requirements, and where necessary, frameworks for cross-border CO₂ transport.

• Financial incentive assessment: Evaluating carbon pricing mechanisms, tax incentives, and other policy supports that could improve project economics.

The consortium approach is specifically designed to address these challenges by "aggregating captured CO₂ into large enough volumes to optimise costs, unlock utilisation solutions and share risks across multiple industries."

The Distinctive Nature of BHP's CCUS Initiative

A New Model for Industry-Led Collaboration

The BHP and large-scale CCUS hubs initiative represents an innovative approach to CCUS development that sets it apart from previous initiatives:

• Cross-industry participation: By bringing together steel producers, energy companies, and technical experts, the consortium creates a complete value chain perspective.

• Multi-national collaboration: The partnership spans multiple Asian countries, addressing regional decarbonization needs rather than focusing on a single national context.

• Independent assessment: As an industry-led initiative, the study offers an assessment that is not tied to specific technology providers or influenced by particular policy agendas.

• Practical implementation focus: The emphasis is on identifying actionable pathways rather than theoretical potential, with each consortium member involved in at least one proposed hub.

Potential for Transformative Regional Impact

If successful, the initiative could deliver significant emissions reductions across Asia's industrial sector:

• Aggregated emissions reduction: By targeting multiple large industrial sources, CCUS hubs could capture millions of tonnes of CO₂ annually.

• Infrastructure optimization: Shared pipelines and storage facilities would maximize utilization rates and minimize unit costs.

• Industrial competitiveness preservation: Enabling decarbonization without requiring facility closure protects jobs and economic activity.

• Replicable model development: Successful implementation would create templates for other industrial clusters across Asia and globally.

CCUS as a Critical Transition Technology

Bridging the Gap for Existing Industrial Assets

CCUS serves a vital role in climate transition strategies by providing a decarbonization pathway for existing industrial infrastructure:

• Asset life extension: Adding CCUS to existing facilities allows continued operation with dramatically reduced emissions, avoiding premature write-offs of valuable industrial assets.

• Development runway: The technology provides time for alternative production methods like hydrogen-based steelmaking to mature technically and economically.

• Economic continuity: Maintaining production while reducing emissions preserves jobs, supply chains, and regional economic activity.

• Complementary strategy: CCUS works alongside other energy transition trends like energy efficiency improvements, electrification where possible, and renewable energy integration.

Long-Term Carbon Management Solutions

Beyond the transition period, CCUS offers enduring benefits for industrial decarbonization:

• Permanent storage capacity: Geological formations can safely store billions of tonnes of CO₂, providing a long-term solution for unavoidable industrial emissions.

• Negative emissions potential: When combined with bioenergy or direct air capture, CCUS can deliver negative emissions—actively removing CO₂ from the atmosphere.

• Circular carbon economy: CO₂ utilization pathways can transform waste carbon into valuable products, creating new industrial opportunities while reducing emissions.

Frequently Asked Questions About CCUS Hubs

How do CCUS hubs differ from individual capture projects?

CCUS hubs aggregate CO₂ from multiple industrial sources, sharing transportation and storage infrastructure. This approach significantly reduces unit costs through economies of scale, distributes project risks among multiple stakeholders, and enables the development of infrastructure that would be prohibitively expensive for a single facility.

What challenges must be overcome for successful CCUS implementation?

Key challenges include:

• High upfront capital costs for capture equipment
• Developing extensive transport infrastructure like pipelines
• Characterizing and permitting suitable geological storage sites
• Creating regulatory frameworks for long-term CO₂ storage liability
• Establishing commercial models that fairly distribute costs and risks
• Securing public acceptance for CO₂ transport and storage activities

Why is CCUS particularly important for steelmaking?

Conventional blast furnace steelmaking inherently produces CO₂ as coal serves both as a heat source and chemical reducing agent. With over one billion tonnes of relatively young blast furnace capacity in Asia, CCUS represents a critical pathway to reduce emissions while alternative technologies mature. Unlike some other industries, steelmaking's process emissions cannot be eliminated through simple fuel switching or electrification.

What timeline is expected for CCUS hub development?

While specific timelines for the BHP-led initiative have not been disclosed, CCUS hubs typically require 5-10 years from concept to operation. This includes:

• 1-2 years for pre-feasibility and feasibility studies
• 2-3 years for front-end engineering design and regulatory approvals
• 2-5 years for construction and commissioning

This timeline highlights the importance of beginning development now to enable significant emissions reductions in the 2030s.

Looking Ahead: The Future of Industrial Decarbonization

The BHP and large-scale CCUS hubs initiative represents an important step toward practical decarbonization of hard-to-abate industrial sectors. By bringing together key stakeholders across the value chain, the consortium is addressing both technical and commercial challenges that have historically limited CCUS deployment.

For the steel industry in particular, CCUS hubs offer a vital pathway to reduce emissions from existing assets while next-generation technologies continue to develop. This balanced approach recognizes both the urgent need for climate action and the practical realities of mining industry evolution and sustainability transformation.

Disclaimer: This article contains forward-looking statements and analysis regarding the potential implementation and impact of CCUS technology. The actual outcomes of the described initiatives may differ from these projections due to technical, economic, regulatory, or other factors.

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