MEP Davies on coal: ‘Big gains’ from CO2 storage after 2020

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By 2030, all new coal-fired power plants built in the EU should be using carbon capture and storage (CCS) technology in order to reduce their CO2 impact, UK Liberal MEP Chris Davies told EURACTIV in an interview.

Chris Davies is a UK Liberal MEP (ALDE Group) and Parliament’s rapporteur on a proposal for a legal framework governing the geological storage of CO2 produced by coal-fired power plants.

To read a shortened version of this interview, please click here.

You are rapporteur on a proposed directive to set a legal framework for the development of carbon capture and storage (CCS) in the EU. Can you give us a sense of how the dossier is progressing?

The geological storage legislation is technical rather than political, although there are some issues that need to be addressed. It comes down to two points in particular:

One is that people have got to be satisfied that the measures to be taken to safely and securely store CO2 are going to be effective in the very long term.

And secondly, we’ve got to make sure that the procedures are not over-burdensome by involving both potential delays because of the proposal for Commission oversight of competent national authority judgements.

I think there does need to be some Commission oversight, but I want to make sure that the procedures are as efficient and as rapid as possible so that the decisions can be taken quickly. 

There are aspects of that legislation where there will no doubt be debates about, but for the most part, relatively non-controversial, business-like discussion.

The most important thing about this is that what we have before us now is a directive which really puts CCS very firmly on the table as part of the climate change package. And we have to use the next few months to accelerate the development of CCS. 

Because over the next twenty and even thirty years, it can make a very dramatic difference in reducing Europe and indeed the world’s CO2 emissions.

Coal constitutes 24% of all Europe’s CO2 emissions. That’s a staggering proportion. One fossil fuel alone creates more CO2 than twice the number of cars we have on the road.

There are concerns that even if we do have CCS installed, including in China and India, it will be too late to reduce CO2 emissions to prevent serious fallout from climate change. You seem a bit more optimistic…

Well I do believe we can accelerate the process, but it’s completely true that by 2020 we’ll just be starting to kick off. 

The big gains are to be made from about 2020 onwards, so that CCS by 2030, which is hardly a long way off, CCS will be playing a very significant part.

But I do have concerns about the sheer number of coal-fired power stations – we are expecting to see some 50 new stations in the planning stages for the next five years.

Will these be CCS compatible?

These must be CCS compatible. We must ensure that the legislation requires them to be CCS compatible, and not simply capture-ready, but we’ve got to ensure that the developers know that they’ve got to make provisions for the storage of carbon dioxide and that this is coming; that, in the near future, they will be required to convert these new plants for CCS.

Do you think there is enough political will among member states to agree to such a requirement?

This is where we have to get the momentum up.

As I see it, the stages are as follows: the first is the pledge by the European Council to build up to 12 large-scale demonstration plants by 2015…a pledge that so far has not been followed up by any definite commitments. The UK is the nearest but it’s on a relatively small scale.

The upcoming French EU Presidency has made a commitment to a CCS action plan. Now it’s not clear what that action plan means. But what I think should be the minimum is for the French to get this issue sorted. 

By the end of the French EU Presidency we should know which member states are going to take lead responsibility for ensuring that they are built.

You would agree then that it should be up to governments should fund the bulk of the projects?

There is no question that public funding will be needed for these first movers. The costs of the initial development of CCS are very expensive – double or treble the price of a coal-fired power station.

From the point of view of the investor, the power generator, there’s nothing to be gained here at all. It’s not increasing the power output in any way.

There seems to be general agreement also that, since member states are reluctant to dig into their pockets, there has to be some element of European support. This may not be enough in all cases but it has to be enough to smooth the way.

But EU budget is locked down until 2013…

I think we need to explore the EU Emissions Trading Scheme (EU ETS) and I think we have to explore the possibility of some sort of double credit system.

So this is idea of giving power plants double or even triple credits for CO2 stored using CCS is not a closed option from the Commission’s standpoint?

No. I think the Commission is divided on this at the moment, but I think open to persuasion.

I’ve spoken to a number of key stakeholders recently, including industry and NGOs like Vattenfall and WWF, and frankly nobody had an alternative to this. All the other options that are put forward just don’t hang together, but this one potentially does.

A potential double-credit system out of the EU ETS, which would be time-limited, linked solely to funding CO2 taken out of the atmosphere or not-emitted and stored deep underground, and up to a certain quantity.

So, very limited and designed to kick-start the system.

You are hoping to get your file pushed through in a first reading agreement by December?

Well this depends very much on the Council, and it’s not so much a legislative issue, it’s just the Council living up to its own words. 

It’s a very serious issue. I am concerned that we will not meet the targets being set in other fields. I don’t see how we’re going to live up to meet the biofuels targets, with the political and environmental pressure to change that growing all the time. 

I doubt whether every member state will meet its renewable energy targets, and therefore accelerating CCS development is one way to compensate for weaknesses elsewhere. 

Would you say that reaching the 20% CO2 target is impossible without CCS?

I would never say impossible, but I would say we need to look more towards 2030 than 2020, because once CCS is going, it will develop very fast. And then I think we can place mandatory requirements on every coal-fired power station being built from now on to be CCS-converted by 2030. I think that’s a perfectly reasonable gesture.

And I’ve got support from some reasonably powerful voices within the industry who say that the targets I’m setting are achievable. 

I think by 2020, we’ll be looking at quite a transformed world. We won’t be preventing a huge release of CO2 emissions but we’ll be on our way to bringing about the change necessary.

Every one of the new power plants we intend to build as of next year onwards should be CCS converted by 2030, and therefore they should have ceased emitting all but 10% of their emissions by that date.

The potential has to be realised, and we have to bite the bullet on financing. The Commission estimates that by 2020, a CCS power-plant should only cost 10% more than a conventional plant taking into account a good carbon price. We’ve just got to get over these early years while the costs are very high and there is lots of experimentation going on.

Concerning the EU’s coal regime more generally, there are growing public concerns about building new coal plants given their impact on climate change. Do you think the use of coal is really necessary? 

There is no doubt about at this at all. If you look at the scenarios of the International Energy Agency, they are forecasting, on top of all energy savings and development in renewables, a 70% increase in the use of coal over the next 30 years.

So there is no chance for a moratorium on coal, even in the EU?

No. The lights would go off. Or you have to buy nothing but gas, and the energy security issue makes that unacceptable. 

Concerning the current subsidy regime – is it hampering renewables development and distorting competition?

I think the current subsidy regime is ridiculous. We are still looking at €10 billion of expenditure until 2010. This has to come to an end. It’s an historic distortion.

Are you concerned about the safety of CO2 storage sites and public apprehension towards having such sites in their ‘backyard’?

I’m concerned about artificial fears being created. I’m also aware of organisations like Greenpeace that are going out of their way to split the environmental movement on this, campaigning against CCS without any foundation for what they are saying.

You believe CO2 storage can be safe? 

Well yes, CO2 is stored naturally. Where does sparkling water come from? And everyone in the oil industry says they often drill down and find what they think is a gas reserve, but it’s not a methane gas reserve but a CO2 reserve. 

CO2 is a naturally-occurring gas within the Earth’s geology. 

So you are more concerned about finding sufficient funds and avoiding public misconceptions?

Yes. And the biggest delaying factor is simply getting planning permission, the institutional barriers we’ve created in each member state to getting permission for transport and pipeline infrastructure.  

The obvious answer is that you simply start turning the lights off when the wind stops blowing and people suddenly start to realise that however much we want to move to a renewable and zero carbon economy, we are a long way off from achieving it and we need to find some interim measures. 

CCS is by no means a long-term solution. We’ve got to move towards zero carbon power generation, but it does bridge the gap and it buys us time. 

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