EU will face severe consequences if it does not support carbon capture and storage

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Five years ago the EU was the world leader in championing carbon capture and storage (CCS) but it has since slipped from the top spot due to a lack of investment in this essential part of the EU's objective to reduce carbon emissions, writes Graeme Sweeney.

Dr. Graeme Sweeney, is the chairman of the European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP) .

It was rightly considered an essential part of the portfolio of technologies required for Europe to meet its objective of reducing greenhouse gas emissions by 80-95% below 1990 levels by 2050. The deployment of CCS was a matter of when, not if, due to it being the only proven technology which can cost-effectively reduce the EU’s CO2 emissions in line with its objectives.

Since then however, from the 12 large scale CCS demonstration projects that have been proposed, a final investment decision has not been reached on a single one, and the EU has slipped from its global leadership position. We need an urgent and fundamental re-set to the CCS programme in Europe.

Central to this year’s EU Sustainable Energy Week is boosting investment in clean technology solutions to help meet climate and energy goals – so it’s an appropriate time to assess what the barriers to CCS deployment are in Europe, and how we can break them down.

Large scale CCS demonstration projects have been impeded by a low carbon price and lack of consensus on funding between EU institutions and national governments. In addition, a proportion of the public remains sceptical about the benefits of CCS – translating to less political impetus for the demonstration projects, which are needed to raise awareness of the benefits of CCS.

This is a serious mistake. Without immediate political action to enable CCS, Europe will face severe environmental, economic and social consequences.

Global energy demand is predicted to rise by 40% by 2035. Whilst renewables will play an increasing role, the majority of our energy will continue to be sourced from fossil fuels. CCS is the only technology that can capture approximately 90% of CO2 emissions from the world’s largest emitters.

Unless the rise in average global temperature is kept below 2°C, devastating and irreversible climate change will occur. Our energy system will need a balanced portfolio of technologies and solutions – including energy efficiency, renewable energy and CCS – to face this challenge.

Economically, according to the International Energy Agency, a delay in CCS deployment would increase the cost of power sector decarbonisation by $1 trillion, swell the investment required in electricity generation by a minimum of 40%, and place greater demands on other emissions reductions options.

And socially, CCS has the potential to save jobs in key manufacturing industries, in addition to creating thousands of new jobs in Europe. Up to 100,000 jobs could be supported in the UK alone through CCS roll out, according to research by the UK Department of Energy & Climate.

So, in concrete terms, how can CCS deployment be funded in Europe? In the immediate future, funding from the second phase of the NER300 programme, as well as recycling existing funds under the European Economic Programme for Recovery (EEPR), are essential to achieving the roll out of the first CCS demonstration projects in Europe.

Ultimately, however, what will be needed to drive investment in low carbon technology, including CCS, is a robust and efficient EU emissions trading system (EU ETS). As a temporary measure, that means supporting backloading to tackle the current oversupply of EU ETS allowances. In the long-run though, it will involve strengthening the EU ETS with structural measures, such as a strong cap in the context the EU 2030 climate milestone.

Positive market support, together with long term visibility and predictability of expected revenues, will be needed in the interim period to incentivise the commercialisation of CCS. The EU must ensure funding remains available for example through an ‘innovation fund’.  

At national level,  Contracts for Difference and feed-in tariffs would be very welcome.  A carefully designed, tradable CCS certificates scheme which would drive the investment needed to deliver defined volumes of CCS could also be an option.  

Such creative funding measures  have already proved highly successful for wind and solar – now a level playing field is crucial for CCS to complement these technologies and create a favourable EU CCS market.

When it comes to assessing the importance of CCS roll out in Europe, I encourage policymakers to look across the EU’s borders –  China, Canada, Australia and the US are all gaining ground in developing CCS. To avoid conceding leadership to overseas competitors and playing a costly game of catch-up in years to come, the immediate deployment of CCS must be facilitated through EU policy.

Whilst individual elements of the CCS value chain are proven, it is still at the start of the learning curve, with huge capacity to reduce costs from technology refinements and economies of scale.

It will be financially and environmentally catastrophic if the EU does not move ahead with CCS. It’s our duty today to make sure the EU achieves its CCS potential.

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