Carbon capture and storage CCS current situation and future potential

Introduction

The scientific evidence for climate change is abundant and irrefutable, as is the role that carbon capture and storage (CCS) technology can play in reducing emission levels. Despite calls to the contrary, CCS does not present insurmountable technical barriers. Only issues surrounding its commercial viability and the lack of credible policy incentives stand in the way of its wide-scale deployment.

Scope

• A critique of the regulatory and policy framework proposed by the European Commission to drive the deployment of CCS across new fossil-fuel plants.
• Analysis of the wider EU 'green' policy landscape, how it lacks credibility and provides inadequate regulatory support for CCS.
• Reasons why the green 'New Deal' is a necessary but insufficient condition to drive a mass market transition to CCS.
• An objective review of the perceived limitations of CCS and the type of adaptive regulatory framework required to secure CCS' commercial deployment.

Highlights

Despite record growth in renewables, global emission levels will rise as fossil fuel power generation continue to dominate. CCS is the only technology option currently available that could allow abundant, flexible and entrenched fossil fuels to continue to be used for electricity generation without adding to the damaging effects of climate change.

The potential for CCS is undeniable and stakeholders are competing to take the technological lead. However, the costs and risks of CCS - made more apparent by the lack of regulatory framework - stand in the way of its widespread deployment. It is unlikely that CCS will make a credible contribution without strong legislative and regulatory change.

The potential for CCS is highest in Poland, Czech Republic, Denmark and Greece, based on annual levels of coal-powered generation. The benefits of CCS outweigh the liabilities, however, to implement CCS safely and economically requires an adaptive regulatory framework encompassing safety, investment, operation and responsibility elements.

Reasons to Purchase

• Gain knowledge of the various stages of the CCS value chain and the role that the technology can play in the fight against climate change.
• Understand the reasons why the proposed regulatory framework is plagued by several key limitations which will delay the introduction of CCS.
• Benchmark the relative appeal of CCS across the 27 EU Member States based on their respective annual coal-powered generation levels.

Table of Contents :

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
SOURCES 1
ANALYSIS 2
The technologies involved in CCS are not novel, but have not yet been demonstrated together as a chain or at the scale necessary for a commercial fossil fuel power station. 2
CCS is the technical term used to refer to the process chain involved in separating out and storing carbon dioxide 2
Carbon capture can occur pre-combustion, post-combustion and in oxyfuel combustion 4
The transportation of CO2 is similar to that of natural gas and employs mature and commercially available technologies 5
There are currently three ways to store CO2, but geological formations are considered the most promising sequestration sites 7
CCS is the only technology option currently available that could allow abundant, flexible and entrenched fossil fuels to continue to be used for electricity generation without adding to the damaging effects of climate change. 8
Despite record growth in renewables, emission levels will continue to rise as fossil fuel power generation dominates in the long term 8
The challenge: reconciling the use of abundant and flexible fuel sources with the urgent need to drive long-term carbon abatement 9
The EU intends to provide the regulatory and policy framework to deploy CCS across new fossil fuel plants 9
New combustion plant construction will be regulated on a 'carbon capture ready' basis 10
The proposed regulatory framework is plagued by several key limitations which will delay the introduction of CCS 11
Technical, economic and regulatory frameworks are urgently needed to bring environmentally safe CCS to deployment 12
The wider EU 'green' policy landscape lacks credibility and provides inadequate regulatory support for CCS 14
The potential for CCS is undeniable and stakeholders are already competing to take the technological lead. However, the costs and risks of CCS made more apparent by the lack of regulatory framework stand in the way of its widespread deployment. 14
The current investment environment is unlikely to facilitate the uptake of CCS 14
The Green 'New Deal' is a necessary but insufficient condition to drive a mass market transition to CCS 15
Government action and regulation will be the best signal to invest in CCS 16
The EU Climate Package allocates funding for the building of CCS demonstration plants, yet it will fail to completely tame king coal 17
Although many CCS projects are underway across the world, most of them are in the research and small-scale pilot phase 19
Three large scale CCS demonstration plants currently stand out 20
Based on levels of coal-powered generation, the potential for CCS is highest in Poland, the Czech Republic, Denmark and Greece 21
All other things equal, it is unlikely that CCS will make a credible contribution without strong legislative and regulatory change 22
Ask the analyst 23
Datamonitor consulting 23
Disclaimer 23

List of Figures 
Figure 1: The CCS lifecycle calls on a number of technologies and processes, all at different levels of technical, commercial and political maturity 3
Figure 2: Carbon capture can occur pre-combustion, post-combustion and in fuel combustion 4
Figure 3: In this illustration, a CO2 capture plant is added to a coal power plant to remove CO2 flue emissions. In the most likely scenario, the CO2 is then transported in a pipeline to a suitable storage site deep underground. 6
Figure 4: CCS is widely recognized as the only technology able to largely de-carbonize widespread fossil fuel power generation 8
Figure 5: CCS speaks to issues such as security of supply and significant carbon abatement in a way renewable power generation cannot 9
Figure 6: The choice of new combustion plant CCR is unlikely to be left to plant operators 11
Figure 7: Perceived limitations of CCS 13
Figure 8: The wider EU 'green' policy landscape lacks credibility and provides inadequate regulatory support for CCS 14
Figure 9: The eventual economic recovery will bring about conditions that benefit the introduction of CCS coal power generation 14
Figure 10: The Stern Review - summary of climate change and global economic growth 15
Figure 11: The Green 'New Deal' is a necessary but insufficient condition to drive a mass market transition to CCS 16
Figure 12: The good, the bad and the ugly - the climate change directive fails to address 3 key areas 18
Figure 13: Although many CCS projects are underway across the world, most of them are in the research and small-scale pilot phase 19
Figure 14: Three large scale CCS demonstration plants currently stand out 20
Figure 15: Coal-powered generation output in 2006 (as a proportion of total power generation) puts Poland far ahead of other Member States 21