Case Study: Carbon credit

Nitrous oxide is a powerful greenhouse gas. Although total industrial emissions are relatively low, the gas has an extremely high impact, with 310 times the ability to trap heat in the atmosphere than carbon dioxide. This makes nitrous oxide abatement projects attractive for emission reduction schemes through the potential to generate new carbon-trading revenue.

Several chemical processes produce nitrous oxide, including the manufacture of caprolactam, the major raw material for the nylon fibres used in carpets, automotive tyres and engineering plastics.

Although there is no legal compulsion for a company to reduce its greenhouse gas emissions, Hyosung Corporation (Hyosung) has a long history of environmental improvements and Hyosung Ebara Engineering Co., Ltd. (HEEC, a Hyosung joint venture) has a strong incentive to cut nitrous oxide emissions for its customers through the United Nations Framework Convention on Climate Change’s (UNFCCC) Clean Development Mechanism (CDM). These reasons are why Hyosung and HEEC proposed a nitrous oxide emissions abatement project to Capro, which is a South Korean worldclass caprolactam manufacturer and part-owned by Hyosung.

In 2009, HEEC ran pilot tests on different nitrous oxide abatement systems to assess their performance. Following a second, larger-scale pilot test in 2010, it developed tertiary abatement systems for two caprolactam plants on the chemical complex in Ulsan, work that was financed by Hyosung.

The tertiary abatement systems work by heating the tail gas to the optimum reaction temperature, passing it through CRI Catalyst Company’s (CRI) C-NAT catalyst in a Shell proprietary lateral flow reactor and releasing the cooled products to atmosphere. Nitrous oxide is destroyed to produce naturally occurring nitrogen and oxygen, and no undesirable by-products. The system uses a special ceramic material to absorb heat from the cooling process and transfer it to the incoming gas, which helps to minimise energy consumption.

The lateral flow reactor is also compact compared with other similar reactors and does not create a large pressure drop, which further enhances its energy efficiency.

C-NAT catalyst was developed and commercialised by CRI using technology licensed from the Energy Research Centre of the Netherlands. One of its major benefits is that, unlike some other systems, C-NAT does not require reducing agents such as methane or other reactants, which helps to keep operating costs low.

In 2011, the two units came online. Capro reports nitrous oxide destruction rates of about 91% for Plant 1 and 92.5% for Plant 2, which is higher than their 90% design specification. The project’s emissions reduction has been verified through the CDM, which has enabled Hyosung and Capro to sell Certified Emission Reduction, or carbon, credits to companies in Kyoto Protocol Annex I countries. The validation process is transparent, as the documents are publicly available from the UNFCCC website. These show an annual emissions reduction of over 660,000 tonnes of carbon dioxide equivalent across the two plants.

At a Certified Emission Reduction credit price of $10 per tonne of carbon dioxide equivalent, the company is set to generate additional revenue of about $6.6 million a year.

Taeki Kim, Vice President of Hyosung, says, "As leaders in environmental improvements, Hyosung, HEEC and Capro decided to develop the project with the aim of participating in global greenhouse gas emissions reduction. Because of sulphur oxides in the tail gas, we had not actively developed a nitrous oxide emission reduction project at the caprolactam plant until now. Using CRI’s catalyst, however, we anticipate stable selective nitrous oxide abatement with no by-products."

He adds, "The project’s success was based on unconditional trust in CRI’s catalyst and close technical collaboration between CRI, Hyosung, HEEC and Capro. As global warming is getting worse and the volume of environmental business expands, we are looking forward to working closer with CRI."

Guido Seng, CRI Catalyst Company’s project manager, says, "The Capro project achieved a large return for a relatively small capital investment. In addition to caprolactam plants, tertiary nitrous oxide abatement systems have applications in nitric acid and adipic acid facilities. This first large-scale installation of our system demonstrates the value it can have for countries in Kyoto Protocol Annex II countries. It can also help companies in Annex I countries to meet their emission targets. For example, our second large-scale C-NAT system has since come online in the USA for one of Rentech Energy Midwest Corporation's (REMC) nitric acid plants." 

REMC of Illinois is one of the primary nitrogen fertiliser producers in the US Corn Belt. At the C-NAT system's design conversion rate of 90% and 2010 nitrous oxide emission levels, REMC anticipates reducing its nitrous oxide emissions by 550 tonnes a year, which is an annual reduction of more than 170,000 tonnes of carbon dioxide equivalent.

This REMC project was developed under the Climate Action Reserve Nitric Acid Protocol. This was founded to ensure integrity, transparency and financial value in the North American carbon market. Like the CDM, this scheme certifies emission reduction projects by issuing carbon offset credits, which can then be purchased by companies wanting to offset their carbon footprints.

Clean development mechanism

The world must take action to cut carbon dioxide emissions. And this action needs to be reconciled with increasing energy demand from a rising population and economic growth.

The most significant response to this challenge has been the 1997 Kyoto Protocol to the UNFCCC, which came into force in 2005. By setting greenhouse gas limits, the Kyoto Protocol created an economic value for emission reductions. Market-based schemes, including the CDM, were established to help countries meet their emission targets and to encourage the private sector and developing countries to contribute to emission reduction.

The CDM aims to stimulate sustainable development and emission reductions in developing countries (those listed in Annex II of the Kyoto Protocol). It allows emission reduction projects in these countries to earn Certified Emission Reduction credits, which can be traded to generate revenue. The mechanism also gives industrialised (Annex I) countries flexibility in how they meet their obligatory Kyoto Protocol emission reduction targets by allowing them to purchase these carbon credits.

The process of turning the emission reductions that a project such as Capro's achieves into carbon credits is closely controlled. The steps include gaining national approval to ensure that the project's activity contributes to a country's sustainable development, and project design validation, monitoring and verification to ensure that the claimed emission reductions occurred.

For more information contact Guido Seng (Capro and REMC C-NAT projects) or Chris Angelides (CRI environment catalysts and systems).