Blow for carbon storage as UN committee recommends CDM delay
The prospect of carbon capture and storage projects being included in the Clean Development Mechanism created by the Kyoto Protocol took a knock this week when a UN committee recommended that such a decision should be delayed. Further delay would put into question ambitious targets put forward by the International Energy Agency for how many plants should be operational by 2020.
The “draft conclusions” text released by the UNFCCC’s Subsidiary Body for Scientific and Technological Advice highlighted a number of unresolved issues. It says: ‘Long-term liability for the storage site, including liability for any seepage during and beyond the crediting period of the project, must be clearly assigned and the project boundary must be clearly defined.’
However, like most of the texts that are being worked on in the COP 15 climate talks in Copenhagen this week, the committee’s draft contains a number of square brackets indicating passages that have yet to be resolved. This puts the onus on the politicians to make a final decision. With the current status of negotiations, which are supposed to be concluded today, CCS may not get looked at again until next year – at the earliest.
This is a follow up on our story of Wednesday 16 December:
"Policy not technology" the big barrier to carbon storage
The outcome of the United Nations climate talks will be of immense significance for the future of carbon capture and storage (CCS), says Dr. Jeff Chapman, who heads the industry’s trade association. We have the technology, he insists; now we need policy to make CCS economic. EER caught up with him in Copenhagen to ask what he believes needs to be agreed for that to happen.
Dr Jeff Chapman, chief executive of the Carbon Capture and Storage Association
Chapman is one of the 45,000 people attending the climate change conference, a number which at times has overwhelmed the organisers and the conference infrastructure. One of the thousands of people who had to queue for up to ten hours on Monday to get registered, he is here to lobby for CCS to be included in the climate change talks, ‘whatever deal is struck’. So what would he like to see happen?
Pointing, literally, to the CCS ‘road map’ recently published by the IEA, he notes that it suggests that 100 CCS projects will be needed by 2020, half of which will be in developing countries. Even Chapman describes the target as extremely ambitious, because effective crediting mechanisms have yet to be put in place that would enable deployment in developing countries. ‘Over 150 developing countries have no incentive mechanisms for developing CCS,’ he says, ‘yet the burden of increasing fossil fuel demand is in these countries.’
‘CCS is particularly important in those big developing countries such as India and China that produce huge volumes of emissions. China now is the biggest emitter in the world and that is largely due to coal-fired power stations, as we all know. The only real way to deal with that is to capture and store the CO2. CCS can be retro-fitted to those plants. Better still, it should be fitted to new plants as they’re built, as well. So it’s essential to include CCS in the Clean Development Mechanism (CDM) – and beyond.’
The ‘beyond’ is significant because the CCSA believes it will be critical to have CCS as part of a global agreement on emissions reductions. This may not be resolved in Copenhagen, says Chapman, and may need addtitional negotiations.
I put it to him that CCS is a new technology that has not yet been commercially applied on a wide level and that many people – myself amongst them – are sceptical about the technlogy challenges involved and whether it can be economic. ‘First, the technology,’ he says, pointing out that all the technologies in the CCS chain have been proved in other applications, some of them over many decades. ‘Every part of the process is perfectly well-proven,’ he insists. ‘If you speak to anyone in the business of engineering CCS, they will say it’s only a matter of engineering. It can be done.’
So what about the economics? ‘Yes, sure, the cost is going to be high for the initial projects because putting these projects together is a new experience, and is more costly because of that. But once we start building these plants, then like shelling peas – dare I say that – the cost will be driven down.’
Chapman quotes figures from one of the big consultancies that has looked into the economics of CCS. These put the cost of initial projects at €60-90/tonne of CO2 abated. ‘Later on, as the price falls they would expect that to go down to €25-50/tonne,’ he adds. ‘That’s quite reasonable. It’s consistent with other large-scale technologies in the power sector, such as flue gas desulphurisation. When combined-cycle gas turbine power stations were introduced, the prices fell in a similar fashion.’
Level of confidence
So for the projects to be economic over the long term, some kind of carbon price would need to be in place, with a level at least that of the lower end of the range. How well does Chapman believe carbon pricing is developing? ‘Carbon pricing is not developing quickly enough. But it’s more than just the price. In the European Emissions Trading Scheme (ETS) the price has crashed twice. In the first phase of the scheme it crashed to virtually zero. In the second phase, in response to the global downturn, the price fell by about half. So it’s not just the level of price that we’re talking about, but also the level of confidence associated with the price. But I will say that this technology compares very favourably with most other mitigation technologies that are being put in place. It is actually very good value for money. Other mitigation technologies, such as wind power, also need additional assistance through the EU ETS. People tend to forget that.’
Governments around the world have been making funding available for CCS demonstration plants, or talking about doing so, including at the European level, specifically in the UK, and in the US, Canada, Australia, Abu Dhabi and China. So, taking an optimistic view, how many CCS plants might we see up and running by, say, 2015? ‘By about 2015, we could have at least a dozen projects operating in the world. It’s a tight order but we might just make that. By 2020 the IEA wants us to have 100. That’s very, very ambitious. But I think we will see an acceleration in this technology – especially if there is a good global agreement at the end of this week in Copenhagen. Once there is a good global agreement, people will have to bend their minds as to how the agreement is going to be delivered. And then CCS is really going to be on the agenda. What is holding up investment in CCS is purely to do with policy. As soon as we get the policy in place we will start getting the show on the road.’
Editor’s note: watch out for our special report on Carbon Capture & Storage in the EU, which will be published on our website on Monday!
Related article: Capturing that Carbon, by Chris Cragg