Carbon Capture and Storage (CCS) remains a cost-effective measure that is currently underutilised. This must change, writes Dr. Graeme Sweeney.
Dr. Graeme Sweeney is chairman of the Zero Emissions Platform.
Earlier this month, the European Parliament adopted a report on “Towards a new international climate agreement in Paris”, in which it calls on the European Commission to link the EU’s Emission Trading System (ETS) with other emission trading systems around the world.
This would certainly promote a more level playing field for European companies. But with the decisive Paris climate conference looming, we also need to make sure that the world’s largest carbon market, the EU ETS, works. This isn’t just an EU policy issue. It’s about making sure we can mitigate enough carbon emissions to keep global warming under the threshold of 2 degrees.
In order to reach our target of reducing emissions by 40% by 2030 and our 2050 objective of an 80- 95% reduction, the EU ETS must drive cost-effective emissions reductions and promote investment in low carbon technologies at the same time.
Carbon Capture and Storage (CCS) is a low carbon technology which is critical for reducing emissions cost-effectively. But its implementation has suffered from the effects of a low carbon price, which has reduced available funding and damaged the business case.
Reforming the EU ETS, as outlined in the Commission’s proposal, is therefore essential. Incentives for investing in low-carbon technologies in the power sector and in energy-intensive industries clearly need to be adjusted. Deep decarbonisation of energy intensive industries is currently only possible with CCS. A reformed EU ETS should stimulate a more predictable and meaningful carbon price and enable the commercial-scale deployment of CCS technologies.
We need to craft a dedicated funding strategy, making use of a range of funding mechanisms, including the proposed Innovation and Modernisation Funds and the bridge fund of 50 million emission allowances, to demonstrate Europe’s commitment to CCS as a key climate technology. This should be a central item in the upcoming debates in the Parliament and Council.
Access to CO2 transport and storage infrastructure remains a key barrier to commercial-scale CCS projects in the EU. Such funding mechanisms will therefore need to be sufficiently flexible to drive the development of CCS projects and the uptake of corresponding infrastructure. They should also be complementary, to enable most efficient use of the available funds.
Globally, the EU ETS has been a pioneer. There are now 38 scheduled or implemented carbon pricing schemes worldwide, together worth about $50 billion. However, the EU ETS has not delivered on the deployment of CCS.
The reform is a real chance for the EU to learn from the past and show the world how (re)industrialisation, employment and welfare growth can be reconciled with climate action. It is time for Europe to show CCS leadership.