America is leading the CO2 reduction game

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Europe needs to incentivise carbon capture and storage technology if it to keep up with the Americans on CO2 emissions reduction, argues Chris Davies.

Chris Davies is a British Liberal Democrat politician and a former MEP.

When you are doing as well as the European Union is in curbing CO2 emissions, it’s easy to mock the Americans. EU negotiators representing 500 million people will go to December’s UN climate change conference in Paris knowing that annual European CO2 emissions stand at 3.7 billion tonnes, and are being reduced at a significant rate thanks to a range of specific policy measures.

By contrast, the US, with its 320 million people emits 5.3 billion tonnes of CO2 each year and the reductions recently achieved mostly stem from a transfer of electricity production from coal to cheap shale gas, a development easily dismissed as a fluke of geography and geology. Still, appearing smug is not an appealing characteristic and Europeans can’t pretend that they are getting everything right.

The Intergovernmental Panel on Climate Change, the world’s most authoritative scientific body on the subject, has said that carbon capture and storage (CCS) technology must be applied if the adverse impacts of a warming planet are to be avoided. The International Energy Agency claims that CCS will be needed to contribute to one sixth of the CO2 reductions required by 2050, and that the costs of climate change mitigation will be by much higher without its use. So, back in 2007, it was farsighted of Europe’s leaders to call for up to 12 CCS demonstration projects to be in operation by 2015. 

Unfortunately, not one tonne of CO2 from these schemes has yet been injected into rocks deep underground. The reason is that not one of the promised installations has yet been built. In fact, construction of not one has even been authorised.

Members of the Zero Emissions Platform, the European Commission’s official advisory body on CCS, will tell you that the declared wish of reducing EU emissions of CO2 by 80-95% by 2050 cannot possibly be met without the technology’s deployment.  Even leaving aside the issue of fossil fuel power generation, they will ask how else they can deal with the CO2 produced by the manufacturing process in the iron and steel industry, or at cement and chemicals plants. 

They will suggest that within a decade the core of a future European network of pipelines could be in place, transporting CO2 from a cluster of industrial sites around, say, Rotterdam and Antwerp for permanent storage below the North Sea in rocks from which oil and gas has been extracted.  The basis might be two projects in the UK and one in the Netherlands that are almost ready to go and await final investment decisions that may be taken next year.

Europe waits, and while it waits, the US is getting on with it. The country now has more than 4,000km of CO2 pipeline in operation, transporting some 40 million tonnes annually of the gas derived from natural sources and another 20 million tonnes from industrial sources that would otherwise have been emitted into the atmosphere. The object is to make money by injecting the CO2 into depleted oil and gas fields to push up some of the hydrocarbons that remain. The intent may have nothing to do with fighting climate change, but the consequence is just the same; the CO2 stays underground.

Enhanced oil recovery (EOR) is practiced extensively in the US, and will develop more if and when oil prices increase. It provides a financial incentive for CO2 capture that is missing elsewhere, and means that the CCS option will be given serious consideration, as states try to determine how best to comply with the CO2 emission reduction requirements now introduced through Obama’s Clean Power Plan. Without setting a price on carbon, they may find it difficult to make the figures add up even with the benefits of EOR. But if they succeed, American companies supplying the equipment are sure to gain a technological advantage over their European rivals.

To tackle climate change we will need to deploy every instrument at our disposal. CCS will be one of these, but whether Europe catches up with the US will depend upon public money and political will. A decade ago it was assumed that a high price for CO2 allowances within the EU emissions trading system would drive forward private sector investment in low carbon technologies such as renewable electricity generation and CCS. In the absence of such a carbon price, EU governments have used financial subsidies to promote renewables. If Europe is to concede the match, but win the game in its competition with the US, then carbon capture technology will require a dose of the same.

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