Linde turns to Singapore to expand its carbon capture and sequestration operations

INDUSTRIAL gas company Linde has been ramping up its investments in carbon capture and sequestration (CCS) in the last few years, with agreements signed with several companies to develop technology solutions and storage facilities.

These include oilfield services company SLB, Saudi Arabia’s state oil company Saudi Aramco, oil giant BP and materials company Heidelberg.

And now, the United Kingdom-headquartered company is turning to Singapore and its surrounding region to expand its CCS operations.

Its next tranche of investment would be to develop CCS capabilities at its expanded S$1.9 billion gasification facility on Jurong Island, said Sanjiv Lamba, chief executive officer of Linde. The plan is to capture and store the increased amount of emissions resulting from the plant’s production and supply of hydrogen and synthetic gas to oil and gas company ExxonMobil.

Speaking to The Business Times, Lamba said that this next tranche will be “quite significant” with “ambitious” plans, though he declined to reveal its cheque size.

He said that the company is working closely with the Economic Development Board (EDB), which has “a kind of an EOI (expression of interest) out in terms of looking at consortiums who can provide that carbon capture and sequestration capability”.

He added: “We will be part of one of those consortiums, and working with EDB to figure out how we might be able to move that forward. So I do expect investments in Singapore, either by us or by a consortium, to capture and sequester the carbon dioxide.”

Linde already captures carbon dioxide on Jurong Island and supplies them to beverage manufacturers for their use.

However, Lamba said that this is currently done at a very small scale of about 300 tonnes of carbon dioxide equivalent per day, which translates to more than 100,000 tonnes per year.

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In this upcoming investment, Linde will be looking at capturing and storing a “few million tonnes” of carbon dioxide equivalent per year, he said. “So there is that scalability. And that’s where I think the economic challenge lies for carbon capture and sequestration.”

One challenge with developing CCS in Singapore, though, is the lack of natural carbon sinks given the city-state’s small land size and lack of geological formations.

However, Lamba noted that there are opportunities in the region.

Carbon dioxide captured in Singapore could either be pressurised and then piped into the wells and subsurfaces of its neighbouring countries, or be liquefied, shipped to these other countries and then injected.

Such opportunities, however, are dependent on the outcome of government-to-government discussions.

“Obviously, we’re working on both of those options. But there are challenges. And the challenges really are, you know, a combination of economics, and the ability to work with neighbouring countries to make sure that we’re able to use their pore space to do the sequestration,” said Lamba.

Linde – and other high-emitting companies – is turning to CCS as part of its pivot to clean energy, and to meet its target of being carbon-neutral by 2050. On a shorter-term basis, it aims to reduce its absolute greenhouse gas emissions by 35 per cent by 2035, from its 2021 levels.

And its environmental, social and governance (ESG) strategies seem to be paying off, so far.

Despite being a high-emitting chemicals company, Linde has not been dropped from the Dow Jones Sustainability World Index. It has also maintained its MSCI ESG rating at “A”, though green advocacy purists might criticise this as greenwashing.

During its latest earnings call on Thursday (Apr 27), Lamba announced that the company sees potential to invest more than US$50 billion globally into clean energy over the next 10 years.

The company made a net profit of US$1.5 billion after taxes and minority interests in the first quarter of 2023, up 29.1 per cent from the same quarter a year ago.

The company also raised the top end of its 2023 earnings guidance, citing higher pricing and continued productivity initiatives across all its businesses.

The group expects its adjusted earnings per share to grow between 9 and 13 per cent this year, after previously guiding for growth of between 9 and 12 per cent.

Despite the continued market volatility, Linde’s stock price is up 16.1 per cent since the start of 2023. Recently, the group completed its delisting from the Frankfurt Stock Exchange.

Linde’s bet on CCS, in its bid to decarbonise, may run into some challenges, however. According to a recent report by the United Nations’ Intergovernmental Panel on Climate Change, CCS is potentially one of the lowest contributors to net emission reduction among the gamut of climate mitigation solutions, including solar, wind, nuclear and geothermal energies.

Kevin Milla, carbon specialist at sustainability advisory Paia Consulting, said that climate activists and scientists are sceptical about CCS because it is not yet scalable enough to meet the decarbonisation goals outlined in the Paris Agreement.

“CCS alone cannot solve the problem of carbon emissions. Instead, the chemical industry should focus on improving energy efficiency in processes that cannot be powered by green electricity sources. Broadly, this will help to reduce emissions from high-energy reactions, even in the absence of an efficient CCS solution,” said Milla.

As the best way forward, he recommended that the chemical industry implement other decarbonisation strategies alongside developing innovations in CCS technology.

These other strategies include continuous investments in energy-efficient assets, procuring renewable energy on the supply side and promoting low carbon-emitting technologies, such as hydrogen, he said.

On this front, Linde has also been increasing its investments in clean hydrogen production.

It recently inked an agreement to supply green hydrogen, which refers to hydrogen manufactured through renewable energy sources, to Evonik – another chemicals company – by building an electrolyser plant in Singapore.

Linde is looking at developing a more efficient cracking technology to derive hydrogen. This refers to the cracking of ammonia to release hydrogen molecules. As part of a joint development with Saudi Aramco, Linde has made a pilot investment in this technology in Germany, and is considering a second pilot investment in South-east Asia, said Lamba.

However, he acknowledges that the development of green hydrogen at scale in this region is still challenging at this point, and that blue hydrogen, which refers to hydrogen production through natural gas, could be a good bridge between economics and decarbonisation in the meantime.

“My view is the technology road map for that is probably four to five years out for at-scale green hydrogen production to happen on a safe, reliable and kind of consistent basis,” he said.