Capturing carbon dioxide emissions from power plants and storing it underground is seen as a crucial technology to reduce the global warming impact of fossil fuels such as coal and gas, on which the world will continue to rely for decades.


To fight global warming, governments are looking at technological solutions to keep the release of carbon dioxide in the atmosphere under control. One of the most promising technologies is carbon capture and storage (CCS, also called 'carbon sequestration').

The technology is seen as crucial to reducing the global warming impact of fossil fuels such as coal and natural gas, on which the International Energy Agency says the world will continue to rely for decades (see Shell's quick guide to CCS).

CCS usually involves a series of steps:

  1. Separating the carbon dioxide from the gases produced by large power plants.
  2. Compressing the CO2 into liquid form.
  3. Transporting it to a given location (usually via existing pipeline networks or shipped by trucks or ships).
  4. Injecting it into geological formations deep underground or under the ocean bed (often depleted gas fields). 

Depending on the the plant's location, CO2 can sometimes be directly injected underground, without having to compress and transport the gas to a suitable location. The CO2 is pumped straight underground, where it is compressed by higher pressures and essentially becomes a liquid, which then becomes trapped in the rock.

The science and technology behind CCS is already manifest, but has not yet been implemented with the intention of reducing CO2 emissions on a large scale. Further developments regarding CO2 capture and separation processes in particular will be needed if CCS is to be accepted as a fully fledged mitigation solution for climate change. Costs will also need to be brought down if the technology is ever to be deployed on a commercial scale.

A distinction is usually made between two methods for CCS: 

  • Pre-combustion, where the CO2 is captured on location, during the extraction of natural gas or oil before it is burned. This process has already been tried and tested since 1996 by Norway at its Sleipner offshore platform in the North Sea (EurActiv 7/12/07).
  • Post-combustion, where the CO2 is captured during the process of burning coal or gas for electricity production. More research is needed into this area, which holds the most promise for climate change mitigation as it would allow countries that rely heavily on coal (China, US, Germany and Poland) to continue using this source of energy without putting the world's climate at risk. One of those capture technologies, oxy-fuel combustion, is proving to be the most advanced at the moment. Post-combustion techniques can also be applied to other energy-consuming industries, such as paper, steel, cement and refining.

A number of CCS demonstration projects are now at various stages of development all over the world. According to the IEA, CCS technology could be deployed by 2015 on a broader scale, should these demonstration projects deliver good results.

The main players in CCS are multinational oil and gas companies (ExxonMobil, Shell, Total, Statoil and others). For an overview of existing projects, see this map of existing CO2 capture projects and the European Commission's document 'European CO2 capture and storage projects'.


EU support for CCS

In March 2007, EU leaders signed up to a proposal by the European Commission to support the construction of 10-12 large-scale CCS demonstration plants by 2015. By 2020, they agreed that all new coal-fired plants should include CCS technology. Existing plants should be subsequently 'retrofitted' .

In January 2008, the Commission published an updated version of its environmental state aid rules, allowing EU countries to subsidise CCS as part of eligible environmental projects. The EU executive said it "will have a generally positive attitude towards state aid" for CCS projects, according to the revised guidelines, which entered into force on 1 April 2008.

On 7 October 2008, the European Parliament's environment committee backed a report on a proposed directive on CCS, authored by UK Liberal MEP Chris Davies (EurActiv 08/10/08). MEPs called for the establishment of limits on the CO2 performance of power stations: after 2015, power plants' emissions cannot exceed 500 Kg of CO2 per kilowatt hour (Kwh). 

The amendment, based on a similar measure introduced by California's governor Arnold Schwarzenegger, is designed to oblige power companies to install CCS equipment, particularly in their coal-fired power plants, which produce the highest amount of CO2. The report also recommended reserving 500 million allowances under the EU's cap-and-trade scheme for CO2 to support the construction of large-scale CCS demonstration plants.

In December 2008, EU leaders agreed that national governments would provide 300 million allowances from the EU's emissions trading scheme (see EurActiv LinksDossier) to subsidise the construction of the 10-12 demonstration plants (EurActiv 12/12/08). Under the deal, the allowances would be taken from a special pool of CO2 emission rights reserved for companies entering the ETS, the so-called 'New Entrants Reserve'. The Parliament signed off on the compromise a few days later (EurActiv 18/12/08).

However, the level of funding available under this scheme may vary according to the level of CO2 prices on the EU's nascent carbon market. Given the level of carbon prices at the time of the summit deal, it was foreseen that the agreement would secure around 6-7 billion euros for CCS demonstration projects. But a subsequent drop in carbon prices could reduce this amount to much less (EurActiv 9/02/09).

Getting costs down

The International Energy Agency (IEA) estimates today's cost of CCS "at between $40-90 per tonne of CO2 captured and stored depending on the power plant fuel and the technology used". The bulk of the cost is on the capture side. By 2030, costs could fall to below $25, according to the IEA. 

In addition to high costs, CCS also decreases the average efficiency of power plants by up to 20%, making its use uneconomical. Using CCS with new power plants would increase electricity production costs by 2-3 US cents/kWh, according to the IEA.

According to a study by McKinsey & Company, published in September 2008, the cost of fitting CCS technology to coal-fired power stations could be reduced by 2030 to levels where it can compete with other low-carbon technologies, including renewable energies. "Our reference cases have shown that the costs for integrated CCS projects could come down to €30-45/tonne of CO2 abated for new coal-fired power by 2030," McKinsey notes. According to the report, this price range is "in line with expected carbon prices" under the EU's carbon emissions trading scheme (EU ETS) for that period.

But in the meantime, Europe will be left with an "economic gap" that needs to be filled if CCS technology is to take off. Early demonstration projects, which according to McKinsey are not expected before 2012-2015 "at the earliest", will typically cost €60-90/tonne, representing a gap of "0.5-1.1 billion euro per project".

For Europe as a whole, this 'economic gap' is estimated at "around 10 billion euro," according to Chris Davies, a British MEP in charge of steering an EU legislative proposal on CCS through the European Parliament.

According to the study, the main costs in early demonstration plants will mainly be absorbed by the CO2 capture phase, representing roughly two thirds of total costs. The remainder is divided between the transport phase - via existing pipeline networks - and the actual injection of CO2 into underground rock formations. 

But both transport and storage costs could vary widely according to the ability to 'cherry pick' projects with favourable storage locations in order to minimise transportation distance, the study said. Long-distance transport to a suitable storage location "could increase the cost of transport significantly," it said, potentially adding 10-12 euro per tonne for distances of 200-300 kilometres.

But these costs are expected to go down as CCS technology moves from the demonstration phase to the early commercial scale (at the beginning of the 2020s "at the earliest," according to the study). Tomas Nauclér, a director at McKinsey's Stockholm office, told EurActiv: "As you go from the demonstration phase to the first commercial full-scale phase, prices will come down pretty fast. Then, you will need a number of projects over the next 5-10 years in order to get down to the 30-45 euro price range we mentioned in the report."

Research on improving the technology

In 2005, the European Commission launched a European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP). Its aim is to develop EU fossil fuel plants with zero CO2 emissions by 2020. The platform comprises 25 members from the Commission, government authorities, industry, NGOs, science and the environmental sector. In September 2006, it presented a strategic research agenda and a deployment strategy.

On 10 November 2008, ZEP presented its proposal for an EU demonstration project to bring forward the large-scale deployment of carbon capture and storage (CCS) by ten years. The plan foresees the setting-up of a total of 10 to 12 demonstration projects by 2015, using a variety of technologies, to "de-risk" CCS and make it commercially available by 2020.

In November 2008, ZEP published a proposal for an EU demonstration programme in response to the European leaders' commitment. It argued that 10-12 projects would be necessary to make the technology commercially available by 2020, requiring 7–12 billion euro of additional financing to cover the extra cost of CCS installations and lower plant efficiency (EurActiv 12/11/08).

The Commission is also a member of the Carbon Sequestration Leadership Forum, an international framework for cooperation in research and development of CCS.

Novel capture methods tested in Norway

In Norway, state-owned company StatoilHydro has launched a European Carbon Dioxide Test Centre (TCM) in 2008. If successful, the facility could then be deployed to full-scale in 2014 as a second step. 

The Mongstad TCM is a small gas-fired power station generating heat and electricity simultaneously, a process which is already more energy-efficient than conventional gas-fired plants. The new technology to be tested there involves separating the CO2 from the other fumes emitted when burning the gas, using a process called Chilled Ammonia. 

But while it is more promising, the technique is considered riskier than an existing method using an amine solution to capture the CO2 after the gas is burned. "The risk lies in the fact that chilled ammonia is new and untested. On the other hand, the benefit could be very substantial if we succeed," says Egil Sael, vice-president for business development at StatoilHydro. "This method has the potential to capture carbon dioxide with a considerably lower consumption of energy. That would reduce costs sharply."

The Norwegian energy ministry has invited a number of other companies to join the government and StatoilHydro in sharing the costs of the plant. Shell and Vattenfall will be among the six participants to share the facilities and intellectual property generated from the test centre.

Preventing CO2 leakage

One of the biggest questions is whether the stored CO2 can be retained over long periods of time. Current storage projects such as the StatoilHydro Sleipner project have only stored CO2 since 1996 and therefore cannot as yet deliver proof that this kind of storage is safe in the long run.

However, there are also reasons to be optimistic. Since 1996, StatoilHydro says it has already buried about 10 million tonnes of carbon dioxide in a sandstone formation 1,000 metres beneath the seabed. No leakage has happened to date and first studies show the liquid CO2 has even tended to sink deeper underground rather than go back to the surface. The company claims to add about 1 million tonnes to this volume every year, or the equivalent of CO2 emissions from 300,000 cars.

Careful site selection with optimal verification procedures and monitoring instruments will be essential. In addtiion, more research is needed on the potential environmental effects of CO2 retention and seepage on marine and land environments.

Legal certainty

Several international regimes related to marine protection and climate change (UNCLOS, London Protocol, OSPAR Convention, Kyoto and others) could pose major legal challenges for CCS. One important issue is whether stored CO2 should be considered as waste.

According to the European Commission, the amendment to the London Protocol on dumping waste at sea and the amendment of the annexes of the OSPAR Convention (on protecting the marine environment in the North-East Atlantic) were successful in resolving the treatment of CCS at international level. They are now not considered waste anymore.

But other legal problems could arise. Property rights and liability issues in particular are likely to figure among the most difficult challenges. Questions here relate to ownership of stored CO2 and responsibility in case of leakage.

Public confidence in CCS

Finally, public support for CCS will be essential if the technology is ever to be rolled out on a large scale. According to a UK study (Tyndall 2004), the public is poorly informed and therefore rather sceptical. CCS is also not favoured as much as wind, wave, tidal and solar energy, but preferred to nuclear. 

In September 2007, the results of a Commission public consultation on low-carbon technologies revealed significant public scepticism about the potential contribution of CCS and similar technologies to the fight against climate change (EurActiv 21/09/07).


The European Commission  argues that CCS is crucial given the continued importance and use of fossil fuels in the EU. "We have to continue to be able to exploit fossil fuels as a key source of energy for decades to come. But this risks ballooning global emissions by mid-century. So we need to make CCS the norm for new power plants, and to set up 12 demonstration plants by 2015. Again, significant investment will be needed, and from public and private sources," Commission President José Manuel Barroso said in a speech on 21 January 2008.

A report by the International Energy Agency (IEA), entitled 'Energy Technology Perspectives 2008', proposes a "virtual decarbonisation of the power sector" by 2050 and supports CCS as one of the ways of achieving this. However, it stresses that no single technology is capable of providing a final solution and highlights a mix of alternatives along CCS including renewables, nuclear energy, carbon-free transport and improved energy efficiency. The report includes a roadmap for CCS which recommends a range of measures including the incorporation of CCS into emission trading schemes and post-2012 UN climate mitigation instruments. "New power plants," it adds, should "include capture/storage readiness considerations within design by 2015".

The United Kingdom welcomed the EU's revised environmental state aid rules, which allow EU countries to subsidise CCS, as it is likely to be one of the first member states to request permission to grant state aid to a CCS facility it is planning to have operational by 2014.

The Bellona foundation, together with other NGOs and companies including VattenfallShell and Alstom, have launched an appeal for the EU institutions to support CCS by giving it double credits under the EU emissions trading scheme – once as not emitted and again in the form of tradable permits under the ETS. In a joint letter sent to EU environment and energy ministers, they write: "We jointly call for urgent decisions by the EU institutions to support a transitional project demonstration mechanism whereby industrial actors operating CCS demonstration projects would obtain allowances for the full chain of capture, transport and verified storage of CO2 that would be traded in the EU ETS."

In an interview with EurActiv, Shell Vice-President for CO2 Bill Spence said CCS will be fundamental in making fossil fuels environmentally acceptable as global demand for oil, coal and gas is set to continue surging in the coming decades. "If we look at all the energy options that are out there – renewables, nuclear and fossil fuels – fossil fuels are by far today the most abundant with a huge potential for the future," Spence said. 

According to Spence, CCS is "a bridging technology" that can address the environmental concern of fossil fuels until other, cleaner energy options reach maturity. "We need to realise that - even in 20, 25 years - to get 10% wind and solar into the economy, that is a five to six-fold growth. That is enormous. Very few industries have been able to achieve that." "So in a nutshell, CCS is a bridging technology and it will be a very significant piece of the bridging."

These comments echo statements by Shell CEO Jeroen van der Veer over the "hard truths" that he said dictate the world's energy future. Van der Veer referred in particular to China and India, where coal is expected to cover a large part of their huge and ever-growing energy needs. "In our battle against greenhouse gas emissions, taking the CO2 out of fossil fuels, especially coal, is crucial," Van der Veer wrote in an editorial  for The Times newspaper.

Lars Joseffson, CEO of Vattenfall, a Swedish energy group, said companies were "ready to invest billions" in energy projects such as CCS or offshore wind but that public support was needed in order to achieve them. Otherwise, he said, boards of private companies will reject the projects as "totally uneconomical".

Chris Davies, a liberal MEP (ALDE) who steered the CCS directive through Parliament, said time was running short to build the 10-12 demonstration plants which EU leaders committed to at the 2007 Spring summit. "As this moment, one not single one of these demonstration projects has yet been identified," he said at a CCS event in September 2008. According to Davies, "even a short delay can have a huge significance in terms of the difference it will make by 2030".

Lord Stern, author of the Stern Review on the Economics of Climate Change, said CCS "is an important measure to achieve CO2 reduction targets, given the likely widespread use of coal and gas in the coming few decades". "The facts in this report illustrate that a public investment in CCS now is more cost effective that investing later. There is an urgent need for policies that support demonstration and implementation of CCS in Europe."

Eurelectric, a trade association representing the EU's electricity industry, is broadly favourable to CCS. However, it argues that the technologty must be made cost-effective as soon as possible. "In the long term, emissions-capping and trading via the ETS must serve to provide the incentive for CCS, which will have to become competitive without subsidies."

CEPI, the Confederation of European Paper Industries, questioned the soundness of requiring industrial facilities to set aside land for CCS when the technology is not yet available. 

The Greens  in the Parliament, and notably German MEP Rebecca Harms, argue that cost calculations aside, CCS promotes the continued use fossil fuels while it "eats up" advances in "clean" coal technologies and diverts funds from other technologies such as renewables. Many environmental groups are concerned that the safety of CO2 storage sites connected to CCS facilities cannot be assured, and are sceptical about the use of public funds in support of fossil fuel-based energy production.

But the European Environment Bureau (EEB) in April 2007 said that the CCS 'option' should not be excluded, given "the possibility that even in Europe in 2050 coal will not have vanished from the energy production mix for several reasons, including international energy supply complications and delays in energy efficiency results". The EEB does, however, argue that strict environmental safeguards must be in place to ensure the safety of storage sites.

Most environmental NGOs are sceptical about CCS. They fear that it will merely serve to prolong the world's dependence on fossil fuels and will drag money away from crucial investments in renewable energy projects such as wind and solar. Greenpeace in particular said it "has serious concerns about the Commission's position on carbon capture and storage (CCS), a still largely unproven, expensive and potentially dangerous technology that would serve as an excuse to continue building coal plants under the promise that they are 'capture-ready'". Moreover, Greenpeace has labelled some projects as illegal. It argues that CO2 is waste and thus the existing rules on burying waste at sea should apply for CCS.

Friends of the Earth wants the EU to reduce demand for energy first and then to develop a legal, regulatory and liability regime. It also asks for the adoption of international standards for site-selection and monitoring.

Tony Long, director  of WWF's EU office, admitted that CCS was "controversial in the NGO community," with organisations such as Greenpeace rejecting the technology as it distracts from renewable energies. But WWF supports it as "absolutely essential" to tackle global warming, as coal will continue to be a major part of the energy mix in Europe, the US and China. "The climate systems will not be able to stand it and neither will we have any chance of meeting our EU climate target. So timing is essential and the race is on now."

Paal Frisvold, chairman of the Brussels office of the Bellona Foundation, a Norwegian environmental NGO, said CCS, although "not a silver bullet", is an essential bridging technology that needs to be deployed fast if Europe and the rest of the world are serious about tackling climate change. In an interview with EurActiv, he said it was particularly urgent to deploy the technology in the developing world. "Some of the demonstration plants should be in emerging economies like China and India – precisely to minimise their lock-in of CO2-intensive power generation while allowing them to continue using their most abundant and accessible energy source. That is why we are in a hurry - we need to get the cost down for this technology."


  • 10 Jan. 2007: Commission energy package makes new proposals on CCS:
    • By 2015: 10-12 large-scale demonstration projects to be launched for coal and gas-fired power plants.
    • By 2020:  all new coal-fired plants should include CCS technology. Existing plants to be 'retrofitted' subsequently.
  • 22 Nov. 2007: Commission Strategic Energy Technology plan (SET-Plan) highlights CCS as one of the key future energy technologies.
  • 23  Jan. 2008: Commission issues a Communication on CCS demonstration projects (prepared by DG TREN) and a proposal for a Directive on the legal framework (prepared by DG ENVI) as part of a larger package on energy and climate change.
  • 1 April 2008: Revised environmental state aid guidelines enter into force, allowing EU countries to subsidise CCS (EurActiv 28/01/08).
  • 24 Sept. 2008:  McKinsey study concludes that CCS can be competitive by 2030 (EurActiv 24/09/08)
  • 7 Oct. 2008: Parliament Environment Committee backs Davis report for a directive on CCS (EurActiv 08/10/08).
  • 12 Dec. 2008: EU summit agrees to provide 300 million allowances from the Emissions Trading Scheme (ETS) to subsidise the construction of CCS demonstration plants (EurActiv 12/12/08).
  • 17 Dec. 2008: Adoption of CCS directive in Parliament (EurActiv 18/12/08).
  • By end 2009: Commission to adopt rules for using up to 300M ETS allowances to aid demonstration of CCS.
  • 2013: Revised Emissions Trading Scheme comes into force. Stored CO2 will be considered as "not emitted" as from that date.