More supportive and equitable government policy, especially in Europe, is absolutely essential for a positive business case to be made for carbon capture and storage (CCS), says Global CCS Institute CEO Brad Page.
Page was speaking at the 7th Annual European CCS Conference in London last month (January), where he provided an update to the Global Status of CCS: 2012 report published last October (2012).
During the past three months, he explained, the number of large–scale integrated CCS projects worldwide has decreased from 75 to 72, with two Dutch projects (Pegasus Rotterdam and Eemshaven CCS) put on hold, and one in the US cancelled.
“Globally, we have seen steady progress of CCS projects moving through the development lifecycle – two projects in North America recently made positive final investment decisions [FID] – but this has not been the case in Europe for some time now,” Page said.
“While the net number of projects in Europe has remained relatively stable throughout the past three years, eight European projects have been cancelled or put on hold and seven new projects announced. None have made a positive FID.”
“This reflects the ongoing difficulty for European project proponents to assemble a viable business case for a CCS project and make a positive FID to move into construction,” he added.
Page said he was disappointed by the significant setback to CCS demonstration targets in Europe as a result of no CCS projects receiving funding in the first round of the NER300 competition, despite 11 projects having passed extensive technical and financial due diligence assessments. “However, I do welcome the European Commission and Member States’ commitment to review the outcomes and process of the first round before launching the second, allowing any issues that are identified to be resolved,” he said.
Around the world, eight operational CCS projects are preventing 23 million tonnes of carbon dioxide (CO2) per year from reaching the atmosphere. This is expected to increase to 37 million tonnes of CO2 a year by 2015, by which time a further nine projects under construction will be operating – up from the eight reported in the October 2012 Status Report.
But by 2020, the International Energy Agency’s projections for CCS deployment will require about 130 projects to store more than 258 million tonnes of CO2 per year.
“Clearly we will be well short of this,” Page said. “We have noted that large CCS projects are being replaced by smaller projects with lower upfront capital costs, making them more feasible, but we still need to see more incentives around the world, including in Europe, to help accelerate plans for new projects.”
Page commended the UK Government for its equitable approach to climate change policy, which treats CCS equally to other low-carbon technologies in the operational phase. However, he cautioned that the finalisation of the very important CCS competition must be concluded as soon as possible and result in viable large–scale CCS projects.
“To achieve emission reductions in the most efficient and effective way, governments should ensure that CCS is not disadvantaged,” he said. “The Institute will follow the progress of the UK’s approach closely to determine its impact and the potential for application elsewhere.”