A Techno-Economic Analysis on Biogas Carbon Capture for Implementation at Water Resource Recovery Facilities

OBJECTIVE: Especially with arising policies and markets for biogenic or green carbon dioxide (CO2), there are greater incentives for water resource recovery facilities (WRRFs) to implement carbon capture utilization (CCU) and carbon capture sequestration (CCS) strategies. In efforts to mitigate climate change, an increasing number of WRRFs are beneficially utilizing biogas for cogeneration or upgrading to renewable natural gas (RNG). Biogas upgrading to RNG produces a waste gas, or tail gas, that is primary CO2 and is typically vented to atmosphere or disposed of in a thermal oxidizer. While WRRFs have historically treated tail gas as a waste product, this paper will explore the emerging opportunities for CCU and CCS project implementation. The manuscript and presentation will include a market assessment for biogenic CO2 end-uses, funding mechanisms and economic incentives, regulations and policies, technological solutions, and a techno-economic analysis of a case study for carbon capture at a WRRF. BACKGROUND: Biogenic CO2 is associated with the natural carbon cycle and comes from the degradation, combustion, or mineralization of organic matter. Biogenic CO2 is sequestered through new terrestrial growth in a 1:1 ratio, making it effectively carbon neutral and a highly valuable commodity for different industries. Biogenic CO2 is a natural byproduct of both anaerobic digestion and from the combustion of biogas in cogeneration. This paper will focus on the capturing biogas from upgrading programs where CO2 must be removed to produce RNG. WRRFs can utilize two pathways for biogenic CO2: CCS or CCU. CCS is the process in which captured CO2 is compressed and injected in underground geologic formations for permanent storage or sequestration. Geologic formations suitable for sequestration include depleted oil and gas fields, deep coal seams, and saline formations. CCS can be used to offset emissions, meet climate goals, or sold as carbon credits. CCU would sell biogenic CO2 as a commodity to manufacturers to produce electrofuels (e-fuels), bioplastics, cement, dry ice, etc. TECHNOLOGICAL SOLUTIONS: Biogas upgrading includes cleaning and separation to remove CO2, H2S, siloxanes, VOCs, and moisture, resulting in RNG and a CO2 rich tail gas containing 0.1 to 7 percent methane. Industrial plants are utilizing the same technologies for CO2 capture as WRRFs are employing for biogas upgrading such as amine solvents, membranes, and pressure swing adsorption. Historically, the tail gas is a waste product that is vented to atmosphere or combusted in a thermal oxidizer. Participating in CCS and CCU market requires further processing of the CO2 gas, which may include further purification, compression, distillation, and cryogenic storage. Table 3-1 presents a summary of the gas upgrading technologies' compatibility for CO2 capture and processing requirements for end use. FUNDING MECHANISMS The Inflation Reduction Act (IRA) of 2022 includes provisions for CCU and CCS tax credits in the form of a direct payment as part of Section 45Q. Section 45Q provides a production tax credit (PTC) per metric ton of qualified CO2 captured up to $85 (Table 4-1). The captured CO2 can be used in enhanced oil and gas recovery, injected in geological sequestration, or for other qualified uses. Qualified uses include photosynthesis or chemosynthesis, chemical conversion to a material or chemical compound, or commercial markets. The Section 45Q PTC is up to $85 per metric ton of captured CO2 depending on utilization and other requirements in Table 4-1. MARKET ASSESSMENT Several economic incentive programs are available to support the market for biogenic and direct air capture (DAC) CO2. Such programs include the IRA for end-users including sustainable aviation fuel manufacturers, and the Carbon Utilization Procurement Grants Program which offset 50% of the costs to states, local governments, and public utilities or agencies to procure and use products developed through the conversion of CO2. Current market prices for biogenic CO2 range from $100 to 300 per MT while DAC CO2 demands a higher price due to the cost (final submission to include pricing data surveyed from various suppliers and end-users). The other avenue to generate revenues from CCS is to sell the offset as carbon credits through the compliance or voluntary market. Carbon market prices have been highly variable in the voluntary market and for CCS to generate more stable revenues the compliance market would need to be accessed (The techno-economic analysis will include an evaluation of CCS vs CCU in the final submission). TECHNO-ECONOMIC ANALYSIS An initial evaluation of funding opportunities and economic incentives for RNG coupled with CCU is provided based on interpretations of the IRA 2022 and values for RINs, biogenic CO2, and commodity RNG (Figure 6-1). Based on a conservative value for biogenic CO2 ($100/MT) and an IRA tax credit of $65/MT, it is estimated that CCU can provide a 20% increase in revenues from an RNG program that accesses the RFS program. The manuscript and presentation will include a techno-economic analysis for a medium sized WRRF to implement a CCU or CCS project that will support climate change mitigation.