Q&A – Evero Energy: From waste to carbon capture in the UK

Initially established as an investment vehicle in the UK's waste-to-energy sector, Evero Energy has grown into a comprehensive developer, operator, and manager of projects tackling waste management and carbon emissions. The UK generates approximately 4.5 million tonnes of waste wood annually, much of which cannot be recycled. Evero transforms this material into renewable energy, diverting it from landfills and reducing greenhouse gas emissions in the process. 

inspiratia speaks to Simon Hicks, the chief executive officer at Evero Energy, to explore the process of turning waste wood into energy, the challenges of scaling carbon capture, and what the future holds for waste-to-energy projects in the UK.

Can you give us an overview of Evero and its role in the renewable energy space?

Evero Energy is focused on driving the energy transition. We initially launched as an investment vehicle in waste-to-energy, and we've grown to manage, operate, and develop projects that address both waste management and carbon emissions. Our main focus is on waste wood, which includes things like old furniture, construction debris, and other types of wood that can't be recycled. Evero owns and operates three of these plants, processing 380,000 tonnes annually in the Northwest and Northern Ireland.

What sets us apart is that our Northwest plants are part of the HyNet Liverpool Bay carbon capture cluster. This allows us to implement two carbon capture projects as part of the UK's Track 1 expansion, with government funding already confirmed to support the infrastructure.

Where in the UK is your current focus, and are there any plans to expand into new regions or markets?

Right now, we're focused on the UK, with a strong emphasis on waste management and carbon capture. Waste management has been our core business, but in the past 12-18 months, carbon capture has become a key priority.

We currently benefit from a subsidy for processing wood waste, but that expires in 2038. After that, the economics of our operations will change. Carbon capture is a big part of our strategy to adapt and grow. It helps us remove CO2 from the atmosphere especially since the waste we process comes from natural sources like trees. Fitting carbon capture extends the lifespan of our assets, and generates carbon credits that other businesses can buy to offset their emissions.

As for expansion, we're staying focused on the UK for now. Our investors, including a UK pension fund and one from Tel Aviv, are aligned with this strategy, and there's still a lot of work to be done here. The UK is ahead of many other countries when it comes to carbon capture ambitions.

That said, our work has global potential. For example, our technology partners in Japan are following our progress closely. While we don't have plans to expand our operations internationally, the technology partnerships we're building could help bring our solutions to other markets.

What makes the UK an attractive market?

Several factors make the UK an attractive market for carbon capture and energy projects. Firstly, the UK government has repeatedly demonstrated its commitment to carbon capture, which provides confidence to investors and companies like ours. 

The UK is traditionally a stable country to operate in, which is important for long-term investments. It has unique geographic and geological conditions that make it ideal for carbon capture. For many years, we've been extracting oil and gas from the North Sea and the Irish Sea, particularly in Liverpool Bay. This has identified large underground aquifers and depleted reservoirs where we can store CO2. The proximity of these storage sites, along with existing infrastructure like pipelines (which can be upgraded for CO2 transport), is a significant advantage.

Could you explain how bioenergy with carbon capture and storage works? What specific technologies does Evero Energy use?

We take waste wood from various sources, including construction waste or local authority contracts and shred it into small pieces (about 20 mm thick).

The shredded wood is then burned in a furnace, which generates heat. This heat is used to turn water into steam, which then powers a turbine that generates electricity.

The combustion process produces flue gas, which contains high levels of CO2. Instead of letting this gas escape into the atmosphere, we capture it. We divert the flue gas into a cooling process, reducing its temperature.

The cooled gas is passed through an absorber, where it is sprayed with an amine solvent that specifically attracts and captures the CO2. The remaining gas, now mostly air, is released into the atmosphere.

After the CO2 is absorbed, we use steam to release it from the solvent and then compress the CO2 for transport. It is then transported via pipeline to be stored underground in an old oil field beneath the Irish Sea.

What are the key challenges and opportunities that Evero Energy has faced in the waste-to-energy space?

One of the main challenges in waste-to-energy is securing a consistent supply of waste. As more technologies and facilities emerge, there's growing competition for waste streams. To address this, we've secured long-term contracts with local suppliers, ensuring a stable and local supply chain.

On the technology side, converting waste into electricity uses well-established systems. While the UK has had difficulties with building such plants in the past, we've learned from those challenges, and construction is now much more streamlined.

Right now, our biggest concern is revenue certainty for the carbon removals. Government price and volume support, like the Contract for Difference (CfD) model, is crucial for first-of-a-kind projects. We've applied for support through the Track 1 expansion for greenhouse gas removal and are also exploring the voluntary carbon market, where companies buy carbon credits. We're actively engaging with potential buyers to secure these agreements. 

Looking ahead, we expect to lock in revenue certainty through the voluntary carbon markets with price underpinned by a government CfDs. While the technology itself poses minimal risk, securing the necessary skills for plant construction in the UK remains a challenge. By securing waste supply, ensuring financial stability, leveraging proven technology, and addressing skills shortages, we can confidently move to the next stage: convincing banks to invest. We're making good progress on all these fronts.

What's holding banks and investors back from investing in waste-to-energy projects?

Over time, we've successfully built investor confidence in the technologies we use and partnered with skilled construction teams to ensure smooth project execution. However, the main challenge now is securing revenue certainty. 

The voluntary carbon market is still in its early stages, and it isn't yet reliable enough to support projects without government price support. That's why we're closely watching for further government commitments. Earlier this year, the government announced £21.7 billion for infrastructure and pipelines, which was a strong start. The next step is finalising the support mechanisms for companies removing greenhouse gases and feeding CO2 into these systems. 

It could take another 5 to 10 years for the voluntary carbon market to mature to the point where it can fully fund projects independently. But just like with offshore wind, we expect costs to decrease as more projects are built and the market develops. Since we operate three assets, we can leverage repetition to reduce costs even further.  For banks, revenue certainty is key.

What are the typical CapEx and OpEx costs for carbon capture projects?

Carbon capture is costly. Building a waste asset of our size would be £100 -£120 million. The carbon capture retrofit will be approximately £150-£180m of capital. In addition, operating expenses for the carbon capture plant are a significant burden on the existing asset.

Over time, these costs will certainly decrease as we scale and standardise the technology. This is still the first wave of carbon capture projects, and the equipment, such as heat exchangers, absorber vessels, and vent stacks, is not yet optimised for mass production. However, as the supply chain improves and projects become more repetitive, costs will drop significantly. We saw this with offshore wind, where costs fell from £150 to £40 per MWh in just a few years. Carbon capture can follow a similar path if governments support the investment in infrastructure like pipelines and provide stable policy support that then drives a roll-out of multiple projects. At Evero, we have the potential to deploy three projects.

As for the lifespan of waste-to-energy plants, they can operate for 25-30 years with proper maintenance and investment, meaning there's potential for extended asset life without needing to build new infrastructure.

How do you see hydrogen evolving in waste-to-energy and fuel production?

Hydrogen is progressing but slower than expected, similar to carbon capture. Projects like Essar's blue hydrogen initiative in the northwest are encouraging, but the industry still faces big questions, like whether to jump straight to green hydrogen. The main challenge is securing enough renewable electricity for green hydrogen production. 

This ties into the bigger issue of skyrocketing demand for green electricity. For example, data centres in Ireland already consume 21% of the country's electricity, and demand will only grow with advancements like AI and digital infrastructure. Meeting this demand requires scaling up renewables, and hydrogen can fill this gap by converting surplus electricity into green hydrogen for storage and later use in low-carbon fuels when blended with CO2.

How do you see the waste-to-energy market evolving in the next few years?

The focus will likely shift to managing refuse-derived fuel, or black-bin waste, and its integration into emissions trading schemes. Facilities equipped with carbon capture will thrive, while those without may struggle, potentially leading to centralized waste processing near coastal storage pipelines. This could create inefficiencies, like transporting waste from inland to the coasts. 

To avoid this, decentralised solutions are needed, including non-pipeline carbon capture options for smaller facilities. Carbon capture should also boost recycling rates, but local authorities must standardize their approaches. Recycling systems vary greatly between towns, leading to confusion and inefficiency.

As the sector adapts, balancing waste management with decarbonisation will be critical.