Publication
Title
CO₂ storage or utilization? A real options analysis under market and technological uncertainty
Author
Abstract
Carbon Capture and Storage (CCS) and Carbon Capture and Utilization (CCU) are considered essential solutions to reduce greenhouse gas (GHG) emissions worldwide. A crucial difference between the two is that CCS is already a mature technology, while CCU is still in the R&D phase. Hence, firms are confronted with a dilemma, where they have to choose between either the mature CCS, the emerging CCU, or the installation of both in a Carbon Capture Utilization and Storage (CCUS) system. In this study, we analyze different strategies that the firm can pursue and determine the optimal investment timing. In doing so, we take into account both technological uncertainty, i.e. the unknown time-to-market of CCU, and market uncertainty, i.e. the CO2 price. Three different CCUS value chains in the cement industry are analyzed. We find that the anticipated arrival of profitable CCU technologies in the future does not delay investments in CCS in the current period. Investments in CCS and CCU can be accelerated by reducing the volatility of the CO2 price, or by increasing the growth rate of the CO2 price. Finally, we find that a higher fraction of CO2 emissions that can be used in CCU, results in sooner adoption of CCS today.
Language
English
Source (journal)
Journal of environmental economics and management. - New York,N.Y.
Publication
New York,N.Y. : 2023
ISSN
0095-0696
DOI
10.1016/J.JEEM.2023.102902
Volume/pages
122 (2023) , p. 1-29
Article Reference
102902
ISI
001119339800001
Full text (Publisher's DOI)
Full text (open access)
The author-created version that incorporates referee comments and is the accepted for publication version Available from 18.11.2024
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Project info
Designing the packing materials and catalysts for selective and energy efficient plasma-driven conversion (PLASMACATDESIGN).
Designing the packing materials and catalysts for selective and energy efficient plasma-driven conversion (PLASMACATDESIGN).
Designing the packing materials and catalysts for selective and energy efficient plasma-driven conversion (PLASMACATDESIGN).
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identifier
Creation 09.01.2024
Last edited 19.01.2024
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