“The Main Difference Between Our Technology And Others Is The Energy Efficiency Resulting In Low Capture Costs,” Jan Kielland, Capsol Technologies CEO

"The Main Difference Between Our Technology And Others Is The Energy Efficiency Resulting In Low Capture Costs," Jan Kielland CEO Capsol Technologies - Carbon Herald
Credit: Capsol Technologies

Investing in carbon capture installations could be a more viable decarbonization pathway for many emissions-intensive large-scale industrial facilities compared to other alternatives. Capsol Technologies is a Norway-based carbon capture technology provider with a goal to accelerate the transition to a low-carbon industry.

We had a chat with Jan Kielland, CEO of Capsol Technologies, who described the company’s efficient approach to carbon capture and shed light on the cost drivers and potential future improvements in the sector, that will accelerate the deployment of the technology.

Mr Kielland, could you please tell me more about your background and how you joined Capsol Technologies?

Most of my career I spent within the oil and gas industry. I was in Norway in the early days, but then I moved over to managing the restructuring of oil companies out of London. I did that for five years.

A few years ago, I started being very interested in what’s going on with climate change. I also realized that the Paris Agreement would open a new industry with an almost unlimited growth potential. 

I was offered the job as the CEO of Capsol Technologies and to me, that was a no-brainer. It was a very challenging opportunity but being invited to grow a company in a booming market is fun. It is filled with challenges and sometimes frustration. It is much more inspiring to sit around the table discussing climate change and what we have to do to survive on this planet, than sitting there having to defend yourself as an oil company. There is a big difference.

How was the company founded?

We built our business on a company that went bankrupt after developing the technology for a period of 12 years, spending 40 million euros in a market that was not developed yet. A group of investors bought out all the IP rights and the patents but they had no one to manage or build the company. I was asked to be responsible for building it. 

What is Capsol’s technology explained in more detail?

Тo explain it in a simple way, it is based on chemical absorption – a chemical way of removing CO2 from flue gasses. The chemical process (using the solvent Hot Potassium Carbonate) has been in the industry for 70-80 years, for cleaning sour gas – so, the chemistry works. We have focused on improving the process by reducing the energy consumption in the process. 

More specifically, we have optimized the process by introducing an internal energy recirculation in the capture plant. That’s what differentiates us from amine-based carbon capture solutions. The amine process focuses on optimizing the solvent. We compete on the total use of energy in the system. 

As an example, if we have 10% CO2 in the gas, we need to compress the flue gas to seven bars to make it super efficient. The compression requires quite a bit of energy. What Capsol Technologies has done is develop a solution that recovers the energy used in the compression part of the capture process, using a combination of heat exchangers and flash boxes.

High-level overview of the Capsol EoP® Technology. Credit: Capsol Technology website

This patented solution brings down the actual energy consumption to less than 1 megajoule per tonne of CO2 captured. This is much lower than competing technologies. If we convert this to electricity, our technology uses approximately 200 kilowatt hours per tonne of CO2.

The main difference between our technology and other technologies is the energy efficiency resulting in very low capture costs.

Another advantage of our technology is that we do not need to do any modifications to the existing plant. Our solution is a stand-alone unit, which can be connected to the existing plant during a maintenance period. This of course removes a great deal of risk for the plant owner, as both modifications and downtime can be costly and cause delays. There are some additional benefits, but the most important is low capture cost, which is why we are winning contracts.

Would you say it is one of the lowest capture costs in the industry?

Capsol technologies test (16 of 61). Credit: Capsol Technologies

Yes. We believe Capsol Technologies is offering the lowest capture cost, in particular for plants with flue gas CO2 concentrations above 5%. For lower CO2 concentrations, other technologies can compete. However, for higher CO2 concentrations, e.g. waste-to-energy, biomass plants, cement, power production – this is where we are super competitive.

How much higher than 5% is the CO2 concentration in the flue gas from cement or natural gas plants?

For natural gas plants, you have CO2 concentrations around 2-3%. Capturing such low concentrations of CO2 is a challenge for the industry in general. This is why over the last one and a half years Capsol Technologies has focused on developing a modified version of our technology to efficiently capture CO2 from gas turbines. 

The flue gas from open-cycle gas turbines is often at a temperature of 500-600 degrees. This allows us to use the energy in the flue gas to drive our capture plant. Literally, you have no cost for capturing CO2 from an open cycle gas turbine, if you’re able to use the excess energy in the flue gas. We are working alongside companies like GE and Siemens, who are providers of gas turbines. 

What other gasses are found in the flue gas apart from CO2?

Nitrogen, of course, some oxygen, there are small volumes of SOx and NOx but normally flue gasses are heavily treated. During the carbon capture process, you increase the level of cleaning of the flue gas in general, not just the CO2 but also other contaminants. As we strip out around 95% of the CO2, the flue gas will be mostly nitrogen.

What are Capsol’s offerings to the carbon capture market? 

One of our products is the demonstration unit called CapsolGo®. We offer CapsolGo® to clients on a rental basis, because they often want to test how carbon capture works on their own flue gas before making a final investment decision.

They also get publicity around what they’re doing for the climate. The reasons for wanting a carbon capture demonstration campaign can be for internal training purposes, or it can be in general support for the ambitious plan of full-scale capture of CO2. Our demonstration campaigns normally run for up to six months. 

We currently have two units operating in Germany on two different plants. I believe that in a year from now, we will have more units as we get many requests from other parts of the world, like the Middle East. 

Our main product – CapsolEoP® – is an end-of-pipe carbon capture solution suitable for capturing CO2 from large-scale emitters. It is the core of our offerings. We target clients with emissions of 100,000 metric tonnes to > a million metric tonnes or more CO2 per year.

Is CapsolEoP® suitable for all industries? 

CapsolEoP® can be used for all CO2 intense industries, but where we have seen the most traction so far is within the waste-to-energy industry. There are around 400 – 500 waste-to-energy plants in Europe alone. And of course, biomass plants. One example is the biomass plant in Stockholm where they decided to use our technology.

The Capsol management team – Moritz Köpcke, Jan Kielland, Philipp Staggat (left to right). Credit: Capsol Technologies

It’s important to note with regards to biomass is that if you capture and store CO2 from a biomass power plant, the CO2 will be counted as negative emissions since the CO2 is biogenic. In the case of the plant in Stockholm, Stockholm city expects to be the first carbon-neutral capital in the world as a result of removing 800,000 metric tonnes of CO2 from the atmosphere annually. 

Every city has a waste-to-energy plant, often owned by the local community. Politicians usually have promises to their voters that they will do something about the air quality and the climate, so they are pushing these kinds of projects. This was the first wave of projects we got engaged in. 

Relevant: CO2 Capsol To Install The Largest Carbon Capture Entity In Scandinavia

However, over the last six months, carbon capture from the cement industry has started to boom, driven by the carbon border adjustment mechanism (CBAM) tax. Cement producers outside the EU cannot export cement to Europe, without carbon capture, as they will be taxed to compensate for the carbon emissions, which is probably why cement producers have started to look into carbon capture, to stay competitive.

The carbon border adjustment mechanism in Europe will be implemented from 2026, which means they are already late if they want to implement carbon capture on their plants. They have to hurry, which is what they are doing. 

How long does it take for your CapsolEoP® solution to become operational in capturing emissions? What are the development stages of a carbon capture project?

Capsol technologies test (6 of 61). Credit: Capsol Technologies

From when the investment decision is made, the plant can be built in two years. Before then, the owner of the plant needs to have all the building and environmental permits and the financing in place. But when they have all of that in place, it can be done in two years.

What is your business model? 

Our core business model is to license out our technology. It is a capital-light model, with an EBITDA margin of around 50%. We also see that our demonstration units bring very interesting revenues. In addition, we are doing more and more feasibility studies or field studies. Income from these activities is growing every quarter. 

Relevant: Capsol Technologies To Conduct Carbon Capture Studies At Cement Plant

The two demonstration units and engineering studies are additional revenue streams that themselves pay for the whole organization, the DNA of the company. The licensing will be a higher-margin revenue stream for us. It is important going forward to license out to as many clients as possible. 

How do you see the development of the industry going forward? What needs to happen in terms of innovation so that carbon capture can actually scale and be widely deployed globally?

We believe that there will be improvements for our competitors in the amine space, they will improve their process and we will improve our process. I think where we will see the big change in cost in the carbon capture value chain will be transportation and storage. 

In Europe, we don’t have installed storage capacity today but there are a number of ongoing projects that will bring down the cost of storing CO2 in the ground. We will see a big impact on the whole value chain in the transportation and storage of the CO2. 

We can see from other geographies like the US, the price for storing CO2 in the ground can be offered for maybe half the cost of what we can offer in Europe today. This industry will of course learn from their operations in the US. On the capture side, most of the innovation has already happened.

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