Recent setbacks for carbon capture and storage (CCS) technology underline the need for realistic ambition, innovative funding and urgent regulatory action, argues Graeme Sweeney.
Graeme Sweeney is the chairman of Zero Emissions Platform pro-CCS coalition, and was formerly special advisor on CO2 to the oil and gas giant, Royal Dutch Shell.
He spoke to EURACTIV senior journalist Arthur Neslen.
How big a blow was the recent decision in Norway to end the Mongstad project. Oslo has led the way in CCS development. Is this a major setback for CCS technology in Europe?
It’s a disappointment that that project isn’t going to proceed. To understand exactly why that’s occurred you probably need to wait a bit to be clearer or to be much closer to the details which I’m not privileged to be. I was encouraged that at same time, the Norwegian government suggested that it would be looking at an alternative project at one sort or another. It is part of a pattern of things which tells us that we need a reset around how we try to progress CCS. That’s the key message. We need to think carefully about how many end-to-end projects we may reasonably have. We have to think about the role of other approaches to developing the technology and we have to be clear about what sorts of timelines there are for its development.
Are there are any more optimistic signs on the horizon for CCS in Europe at the moment?
We should continue to be strongly encouraged by the UK government’s approach. We’ve seen there the competition progress to two projects now in negotiation on their feeds. Perhaps more significantly, we’ve heard them say that the contracts for difference could apply to projects that are outside of the competition itself – and there are two or three of those, and of course White Rose is still a candidate under the NER300 – so I think that is clearly a well-progressed regime and has some clear choices around instruments which may deliver the project capacity. There’s a lesson in that which we just draw in general. There will be a need for specific transitional support and that will require – while it is clear that capital grants are valuable – more than that to make these things happen and the UK has chosen contracts for difference and those have always figured in our view of what are effective means going forward for effective transitional support.
What about at the global level?
We shouldn’t lose sight of the fact that progress continues to be made in the US and in Canada – particular with the Quest project.
Yes in Alberta, that’s correct. And I will always remind us that under construction in North West Australia we have a substantial project and while the exact amount of CO2 that may be stored will depend on the production regime that we’re looking at three or four million tonnes going into the offshore saline aquifer in the Gorgon project. It is also significant that we see action in China, that there is a clear place for CCS in the forward five-year-plan. So I think there is an opportunity and the other part of it is this.
There will be a limited set of end-to-end full chain CCS demonstration projects in Europe. In part that is because the appetite of all parts for risk of all the participants has changed due to the economic crisis and it is a reflection of where we are in terms of project development. But I think we will have some. We have Sleipner and Synervit in Norway and we may well have the ROAD project in the Netherlands. We will get some. I think. They will need to be complimented by substantial work on the storage options and so I’m pleased to see that in the Horizon 2020 programme, there is a clear emphasis on the storage and infrastructure story and as Connecting Europe progresses, you will see that there is provision there for infrastructure for CO2 and I would like in due course there to see a call for the development of CCS infrastructure.
Those are all options we need to build into our action over the next five years or so. We also need to take a view on the role that CCS will have from a European perspective in the 2030 framework and beyond. We have all made the economic case before. If you want to decarbonise the power sector, we know that it will be 40% cheaper if we include CCS, than if we exclude it. We know that it is likely that fossil fuels will be a substantial part of the energy mix going forward and we know that CCS is the technology that can decarbonise that part cost-effectively and create jobs in the industry itself and at the same time, creates the opportunity to retain jobs in the emissions-intensive industries like steel, cement and aluminium.
It sounds like a reduction in ambition
We have what we have and we need more. We need a policy reset on what we want to do in the 2020s. The first step is that CCS has to be a key component of the 2030 framework and then settle the matter through the CCS Consultative Communication of what instruments may make that happen. That is the DG Clima and Energy consultation on the future of CCS, which asked a whole range of questions in the consultation.
When is that due out?
The timeline is that their review of everyone’s input should be done by December. It all should form part of the input to the Energy Council in December and the Environment Council at the same time. Within that they ask for views on whether or not feed-in tariffs (FITs) are applicable and useful and the ZEP view is that premium FITs which limit the exposure of all parties are a very effective way of delivering volumes of CCS. They also asked about an innovation fund and ZEP supports that too. You could think of that as a larger-scale version of the NER300 funded by EU aid but it also makes the point that you will need operational support and you will need to dispatch the plants if they get built, so here is a range of things. There is also a conversation on whether the CCS certification scheme could be useful.
We believe that carefully designed and for a defined volume, such a scheme could produce incremental CCS in the 2020s. We need to settle what we intend to do there. The other opportunity we have is the own initiative report in the parliament. We have to have an ambitious milestone in 2030 because that is what persuades us to have an instrument in the 2020s, so that the ETS recovers to be the main deliverer of decarbonisation thereafter. What gets included in the 2030 energy targets and becomes part of the White Paper will set the direction for the success of Commission and Parliament. It is also clear that there is an aspiration from the Commission and you heard that from President Barroso himself to have at least some sort of legislative proposal in place before the end of the year. So we are all working hard to understand where that may take us.
You have said before that the EU’s decarbonisation won’t be possible unless we have CCS for gas. What about CCS for coal and for oil, is that an equally important priority?
Certainly for coal – and we would argue for both lignite and hard coal – they would be part of the preferred energy mix if you like. Yes, important for all three but certainly, for gas as well.
Well what about the criticism then that you are encouraging money being diverted away from renewables that could reduce emissions today, to build lock-ins of fossil fuels from the past, for a technology that may never even be developed in time to allow any real CO2 savings benefits at all in the future?
Indeed, I do hear those storylines. The first thing is that we do not position ourselves as competing with renewables. We believe that the forward energy generation mix will contain a very high proportion of renewables and you can have a long conversation about what you mean by ‘very high’ but that is not the point. We understand, recognise and believe that it is part of the preferred solution. But in addition to that, to have a secure, reliable and affordable total energy system, you need the CCS and we know the work that’s been done by the IEA has confirmed this over again. They have their seven points which all need to be done, and CCS is clearly one. So we are in favour of a balanced generation system which includes renewables but we believe that the lowest cost route to decarbonisation for the power sector will undoubtedly be for the significant deployment for perhaps a fifth of emissions, from CCS.
For the emissions intensive industries, particularly where the emissions are associated with the industrial process itself, CCS will be equally essential for meeting the decarbonisation targets. So it is clear that we should invest the time to make this work, and we welcome the time that has been spent to make sure that the renewables systems work.
How do you get around public acceptance issues?
I think it is clear that onshore storage is unlikely to be available in the short run given the concerns that have been expressed. We need to do two things. One, we need to take advantage of the offshore to build expertise and confidence and we need to position some significant but smaller-than-small-scale projects in onshore to drive confidence. We believe we can do that, that you need to show people that it works.
What is the latest that you are hearing about the next round of the NER300 awards?
We are not privileged to be part of the evaluation process so you probably know as much as I do. We know that there is one candidate project in the CCS space and all the folks involved are doing their level best to make sure that it gets through the qualification, but I don’t have anything beyond that.
Is more attention needed from the Commission to addressing issues like a legal framework for allowing the cross-border transport and storage of CO2?
We have just written to Commissioner Hedegaard on the matter of transposition of the [CCS] directive which is important, particularly in terms of liabilities. We also have a clearly articulated position that we need to resolve the issues around the London Protocol because those indeed inhibit the cross-border distribution of materials. There are a number of things of that kind that have to be resolved to make the industry as a whole work satisfactorily and I agree that that is work that needs to be done.
And in terms of those countries which are yet to transpose and implement the CCS Directive, some of which are even hosting international climate talks, would you like to see the EU getting a bit tougher with them?
Yes, we believe that the directive should be appropriately transposed by all member states and from a pragmatic perspective, we recognise that for those member states where we are likely to see any significant action over the next one or two years, that transposition has occurred. But I agree that we need to see the directive transposed.