Carbon Dioxide Price Impacts
Visualize the impacts of carbon dioxide (CO2) price on the economics of various reductive CO2 utilization technologies today and in the future.
For many industries, feedstock costs sharply influence the minimum selling price (MSP) of their products. The same is true of chemical intermediates made with captured CO2. The purity and concentration of a CO2 stream—whether pulled from the air or siphoned from a power plant—shape how cost-effective CO2 utilization technologies are at producing a product.
The exact impacts of CO2 price on product MSP depends on a set of factors:
- The source and concentration of a CO2 stream
- The efficiency of a CO2 conversion pathway
- The scale (production capacity) of a facility and capital expenses
- Scenario assumptions (e.g., current, future, and theoretical scenarios in this study)
- The type of product or material being produced
- Low-carbon policies and incentives.
Note that the final value of a credit or incentive varies based on the life cycle analysis of a process and feedstock. This study uses -$35/tonne as a bookend for the analysis based on the 45Q tax credit from the U.S. Federal CO2 Storage Incentive program to illustrate the impact of negative CO2 pricing. However, it does not necessarily indicate the actual price that would be paid for the CO2 through off-take agreements.
Calculated and Relative Impacts
Spanning the utilization technologies explored in this study, the calculated impact of CO2 price on the MSP of the final product ranged from -31% to +88% in the current case and -60% to +251% in the future case across the studied capture costs/point sources.
The relative impact of CO2 capture cost is less significant in the current cases as other factors dominate product MSP, such as electricity costs and higher capital costs of immature CO2 conversion pathways. However, as the reductive CO2 utilization technologies improve in the future case and overall efficiencies rise, CO2 price becomes a more prominent cost driver.
State of Technology and Future Impact
Click on State of Technology or Future to choose the data type. To view the data for a CO2 source, hover or click on its respective bar in the chart.
|Category||U.S. Federal Tax Credit 45Q (-$35/tonne)||Integrated Gasification Combined Cycle ($25/tonne)||Cement ($29/tonne)||Iron/Steel ($37/tonne)||Pulverized Coal Combustion ($53/tonne)||Natural Gas Combined Cycle Combustion ($63/tonne)||Direct Air Capture ($250/tonne)|
|Hydrocarbons (Direct Fischer-Tropsch)||-0.368||-0.073||-0.054||-0.104||0.064||0.113||1.032|
|Low-Temperature Electrolysis||Oxalic acid||-0.083||-0.016||-0.012||-0.003||0.014||0.025||0.231|
The CO₂ capture costs for different point sources used in this plot were obtained from Cost Analysis of Carbon Capture and Sequestration of Process Emissions from the U.S. Industrial Sector, Environmental Science and Technology (2020).
Mid-line for the State of Technology case represents a CO2 cost of $40/tonne; mid-line for the Future case represents a CO2 cost of $20/tonne.