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The example of Holcim's cement plant in Florence, Colorado

Holcim (until recently called LafargeHolcim) is a giant, international cement and construction materials company, with maybe 8% market share in cement outside of China. Cement is one of the most difficult to decarbonize sectors of the economy because the basic process of cement making emits carbon in two ways: First from the energy used to run the heat-intensive process, and secondly from the chemistry of cement making itself, which converts calcium carbonate into calcium oxide by baking CO2 out of its chemical structure. Cement is used everywhere - roads, bridges, buildings, homes - and is a fairly large contributor to global warming as result, accounting for up to 7% of total GHG emissions (depending on how you ask, of course).

Being a large, multinational company Holcim has a roadmap for reducing its carbon footprint, and this includes all of the usual nods to incorporation of renewable electricity, improvement in process, and even using less material to perform the same jobs. But the cement plants still have the same basic problem as before: calcium carbonate breathes out CO2 when heated. Moving to renewables doesn't change this. So if Holcim wants to abate its cement operations, it has to capture carbon.

One of Holcim's largest US plants is in Florence, Colorado, just southwest of Colorado Springs. The plant puts out 1.2 million tons of CO2 per year, which means an abatement plant that captures 90% of its output would be larger than 1 million tpa on its own. Holcim partnered with capture technology company Svante, as well as project manager Electricore, Kiewit Corporation, Oxy Low Carbon Ventures, and Total Energies. The team recently completed a $1.5 million DOE grant to study the potential here. This being a DOE grant, they had to publish interim and final results, which are worth looking at at least briefly to understand how a project this size and complexity would operate.

The first item to focus on is the sexy part, Svante's innovative adsorbent materials and capture process. Svante likes to advertise that their cost of capital is only half that of amine sorbent towers, and this is a great thing. They don't necessarily advertise that their opex is higher than existing sorbents, $26/MT for Svante vs $23/MT for sorbents. This comparison is for first generation sorbents as well - newer generations of sorbents are designed to hold less water, and therefore be less expensive to thermally cycle. Svante's advantage in capex brings them down to only $50/ton, which is above current price targets for sorbent chemistry. Here is a graph from Svante's 2021 interim report.

Svante is also in the first generation, of course, so its cost should continue to decline as well. This race won't be over for a bit. But it's worth highlighting that the new guys on the block who are getting all the media attention still have a lot of work to do before they win more than DOE grants.

A second point about carbon capture is that the total direct costs of Svante's system are just 20% of the full plant capital costs. When the full overnight costs are tallied (including commissioning, cost of capital, etc.), Svante's system is just 12.5% of the total. Again, these projects get reported as new technology projects, but that's just 1/8th of the story. There is no technology that can get around the need for placing a lot of ducting in a very small footprint to match an existing plant. That metal and labor is where most of the money goes. Here is Svante's 2021 analysis of costs.

The final report included $114M in equipment costs, slightly less than this early estimates. The total overnight cost was $411M. The project will require 54 miles of new pipeline at a cost of $100M to tie in to existing nearby CO2 infrastructure, with the captured CO2 either sent for EOR or stored down a class VI well.

If the all-in costs of pipeline are included, this project will be profitable against an $85/ton tax credit for storage, but only if interest rates cool off a bit. Even using the latest, sexiest capture technology from Svante, Holcim will not be rolling in cash. The cost of handling this volume of CO2 is large, and even relatively geographically favorable conditions are not enough to make a project successful. A lot more engineering will be required at all phases of such projects to accelerate their adoption worldwide.

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