Technoeconomic Analysis of Decarbonization Options for California's Industrial Sector

Climate change is one of the leading problems of today with devastating consequences if left unaddressed. This project analyzes the technoeconomics of decarbonizing California’s industrial sector. The industrial sector is the 2nd largest emitting sector in the state, emitting approximately 100 Mt of CO2e in 2019. California’s industry sector can be broken down to multiple subsectors. The cement, oil and gas, and refinery and hydrogen subsectors are industrial subsectors that require intense heat to operate their production process which leads to large amounts of energy requirements and emissions in comparison to other industrial subsectors.
Carbon capture and sequestration (CCS), fuel switching options, and electrification were the main pathways for decarbonization that were considered throughout the study; however, other pathways such as energy efficiency and feedstock changes are also potential decarbonization options. Limitations of decarbonization using the pathways considered were dependent on each subsectors’ operations and processes.
The decarbonization pathways for each subsector showed economic and environmental favorable outcomes for CCS. Some subsectors had technical limitations due to the nature of their operations; however, the economic favorability was clearly due to the ability to implement incentives such as 45Q tax credit ($50 per ton of CO2e) or California’s Low Carbon Fuel Standard (LCFS) credit (assumed to be $100 per ton of CO2e). Though the study was able to identify a key technology for each of the subsector for decarbonization while maintaining the best economic outcome, the technologies that were determined to be most economically viable were not always the technologies with the largest amount of emissions abatable.