Laurence Matthews of Feasta The Foundation for the Economics of Sustainability
The initials ‘CCS’ usually stand for Carbon Capture and Storage, which was discussed in a post here recently. However, I was with the team in Paris during COP21 promoting the Cap Global Carbon proposal (as described in John Jopling’s blog post here last year); the mechanism embodied in Cap Global Carbon is Cap & Share, and it occurred to us that the name ‘Carbon Cap & Share’ has the same initials, CCS. We wondered, are these two types of CCS complementary or antagonistic? Are they friends or enemies?
Let’s take a look.
The Paris Agreement was hugely symbolic. But if it remains only symbolic, then we’re in deep trouble. We need to implement it quickly, and then some. But it’s clear that cutting carbon emissions won’t happen fast enough. CCS (and for that matter geo-engineering) offer to help.
But there’s a defeatist sleight of hand in that previous paragraph. We may start by agreeing that we need to move fast, but then somehow we slide into accepting that we are unable to just decide to do this. So instead we turn to trying to fix things with technology. But are we really incapable of acting decisively? Are we really limited to moving at a slow, ‘politically feasible’ pace – or is this just a framing of the situation by vested interests?
On first encountering CCS, you might ask the following: prevention being better than cure, why dig up carbon only to re-bury it? If you’re confronted with a flooding bathroom, surely one of the first actions is to turn off the taps? Go for the root cause of the problem and shut it off. Otherwise, we’re into an ‘eating a spider to catch a fly’ series of escalating problems and side effects.
Although the recent post here on CCS stated that ‘a revolution in the global economy is needed’, CCS doesn’t offer one. With CCS, we’re still firmly in the ‘frame’ that takes digging up the fossil fuels for granted. Questioning the digging up falls outside the frame.
Cap & Share, on the other hand, does offer a revolution. Not the kind that overthrows capitalism perhaps, but one that does put capitalism at the service of humankind. We simply insist on the market operating within a set of rules we decide. It’s like our decision to abolish slavery: we said to the market, ‘these are the rules, slavery is out; now go and do your thing within those rules’.
With Cap & Share our ground rule is that the worldwide extraction of fossil fuels must be capped (limited to a certain amount, in accordance with the latest science, that reduces briskly each year towards zero). That’s the ‘Cap’, and we achieve it through an annual global auction of fossil fuel extraction permits. Then we share out the auction income to all adults (that’s the ‘Share’). This is essentially a global Cap & Dividend system (similar to the ‘Fee & Dividend’ idea, advocated by the Citizens’ Climate Lobby and others). Cap & Share replaces the need for emissions trading, national emissions limits, and indeed any scrutiny of emissions at all. Everything’s taken care of ‘upstream’, by turning off the taps.
So Cap & Share takes the root cause of most emissions – namely the extraction of fossil fuels – and tackles it head on; CCS simply tries to ‘cope with it’. CCS, like ge-oengineering, is a useful avenue to pursue (and surely, we’re going to need everything we’ve got), but all too often CCS will be used to give cover to those who want to maintain the ‘extraction is sacrosanct’ frame in place.
Where does all this leave us?
With the feeling, perhaps, that Cap & Share and CCS seem to be at odds. But no. Despite this, I would argue that we should see them as partners.
On the one hand, Cap & Share which tackles fossil fuel emissions, can be complemented by CCS, which can tackle the non-fossil CO2 emissions (steel and cement production, say). And conversely, Cap & Share delivers (among other things) a carbon price, which is needed for CCS.
So, do we need CCS? Probably; and CCS needs a carbon price. But are CCS and a carbon price sufficient? No. We need both partners. We need to get serious; to make the carbon price high enough to enforce an effective cap; we need a simple system to do this – and one that also addresses inequality would be good. In other words, we also need Carbon Cap & Share – the other CCS.
Today as we celebrate World Earth Day 2016 and leaders head to New York to sign the Paris Climate Agreement at UN Head Quarters we publish the last part of a three-part interview by Shayne MacLachlan of the OECD Environment Directorate with Kamel Ben Naceur, Director of Sustainability, Technology and Outlooks at the IEA
SMacL: Are there any countries where policies that support CCS are in place, and why aren’t more governments following your CCS recommendations to prevent an overshoot in emissions?
KBN: Many countries have recognised the importance of CCS and are implementing policies to support its development and future deployment, including through investment in national CO2 storage assessments and pilot RD&D programs. A good example is Japan, which is undertaking site surveys to identify CO2 storage opportunities in parallel with an integrated pilot project at Tomakomai. The challenge for policy makers in Japan and elsewhere is to build these efforts towards large-scale CCS deployment – a task that will require significant public investment and long-term political commitment.
The United States and Canada are currently leading the way with large-scale CCS deployment, hosting 15 of the 22 projects expected to be in operation before 2020. To a large extent this has been underpinned by EOR opportunities which provide a much-needed revenue stream for the captured CO2 and eliminate uncertainty around storage availability.
Beyond these projects, it would be fair to say that global CCS deployment efforts lack a sense of urgency and reflect a tendency to focus on alternative low emission technology options that are perhaps easier to deploy in the short-term. Yet the message from the IEA and others is clear: CCS will be essential if we are to achieve the ambitions of the Paris Agreement.
SMacL: Do you think that making CCS compulsory, as a condition of extracting fossil carbon out of the ground, is an option worth considering?
KBN: I would recommend that governments be flexible in identifying opportunities to support early CCS deployment. Mandating CCS as a general condition for coal, gas or oil extraction is unlikely to be practical or effective in supporting CCS deployment, as these resources are often traded or exported and their end-use is beyond the influence of the producer. However, there may well be targeted opportunities to implement policies to achieve a similar outcome. For example, Australia’s Gorgon LNG project will soon be the largest CO2 storage project in the world, and the requirement to capture and store the CO2 from the natural gas processing was imposed by the Government as a condition for project approval.
SMacL: There seem to be as many articles these days about how we can recycle, or use CO2 as there are about CCS. Is the use of CO2 just one type of CCS that can make emissions reduction more profitable, or is it something else entirely?
KBN: The utilisation of captured CO2 can make a major difference to the economics of CCS projects. More than half of the large-scale CCS projects currently in operation are associated with EOR, and global EOR activities use around 70 Mt of CO2 each year. Approximately 50 Mt of this is from naturally occurring sources, but in time this could be replaced with CO2 captured from power and industrial facilities. With appropriate site characterisation and monitoring, CO2-EOR can provide a permanent storage solution.
Alternative utilisation technologies such as mineral carbonation and CO2 concrete curing have the potential to provide long-term storage in building materials, but in general these opportunities are limited and would not be an alternative to geological storage. Similarly, today’s commercial uses of CO2, including for chemical solvents, refrigerants, decaffeination of coffee and carbonation of soft drinks are at relatively small scale. For example, the global beverage industry uses around 8 Mt of CO2 each year, which is approximately 0.5% of the CO2 that would need to be captured and stored in 2030 in the IEA 2 degree scenario.
The conversion of CO2 to liquid fuels could potentially replace fossil fuels (thereby reducing emissions) but would not deliver the same net climate benefit as geological storage as the CO2 is ultimately re-released.
SMacL: Do you think it’s inevitable that we’ll use the remaining stocks of fossil carbon in the ground? If we don’t choose to use CCS, by when do we need to stop using fossil fuels in the power sector?
KBN: It is in no way inevitable that we will use all of our global fossil fuel resources, particularly considering we still have more than 120 years of coal resources based on current production rates. Even with widespread deployment of CCS, this level of coal use would be incompatible with global climate goals.
In the event that CCS were not available for power generation, it is likely that fossil fuels will continue to feature with a significant percentage in the electricity mix until at least 2050. In the IEA 2 degree scenario, unabated coal and gas still account for around 16% of global capacity in 2050. A decision not to deploy CCS in the power sector would also remove the opportunity for negative emissions through BECCS, which may have wider implications for how quickly we can transition to net zero emissions globally.
Today we publish the second part of a three-part interview by Shayne MacLachlan of the OECD Environment Directorate with Kamel Ben Naceur, Director of Sustainability, Technology and Outlooks at the IEA
SMacL: I’d like to know more about the assertion that CCS is the only known technology that can reduce CO2 emissions from various industrial activities, such as iron and steel, chemical and cement production. Can you explain why this is the case and whether there are any competing alternatives under development? How much would CCS raise the cost of a tonne of steel or cement?
KBN: CCS can play an important role in the decarbonisation of various industrial processes and, in some cases, may be the only option for deep emission cuts. For example, the production of iron, steel and cement emit CO2 from generating heat and electricity, but also from chemical reactions inherent in the process, including the reduction of iron ore to iron and the heating of limestone to produce cement. There are some emissions in industrial processes which can be reduced through energy efficiency and switching to low carbon heat and electricity generation, but CCS is needed to reduce the majority of emissions generated in these processes.
The increase in the cost of a tonne of product due to CCS depends on a range of factors including the process, technologies and the proportion of CO2 being captured. The indicative cost increase per tonne of steel, depending on the production technology, could be USD150 to USD250.
SMacL: The IEA has said that CCS gives the fossil fuel industry, and especially coal resource holders, a chance to protect the assets they have. Why haven’t large fossil fuel companies poured more resources into the development and implementation of this technology?
KBN: The IEA has highlighted that the deployment of CCS becomes a major determinant of the demand for fossil fuels in a climate constrained future. In our 2 degree scenario, more than 95% of coal-fired power generation and 40% of gas-fired generation will need to come from plants equipped with CCS by 2050. Deployment of CCS therefore presents an opportunity for fossil fuel resource holders to secure future demand and revenue, which the IEA has estimated could amount to around $1.3 trillion each for coal and gas between now and 2040.
For owners of emissions-intensive assets, including coal and gas-fired power plants, CCS can also provide a type of insurance mechanism. The option of retrofitting CCS to planned or existing plants can prolong their economic life and reduce the risk of asset stranding. With around half of global power generation owned by governments, there is also a strong public interest case for CCS.
An estimated USD13 billion in private investment has gone into large-scale CCS projects, including from fossil fuel and technology companies. This figure will need to increase by orders of magnitude if deployment of CCS is to be accelerated, however the conditions to support private investment have largely been absent. Policy and regulatory frameworks that provide targeted support for CCS and certainty for investors will be essential.
SMacL: If fossil fuel companies cannot be relied upon to deliver CCS on their own, what policies can governments put in place to stimulate the development and deployment of CCS? I have heard that carbon prices above fifty dollars would be needed, but is carbon pricing sufficient by itself?
KBN: CCS is an emissions reduction technology that will ultimately require a price on carbon if it is to be commercial. In the near-term, targeted policies will be needed to overcome the technical and commercial barriers to large-scale deployment – in much the same way that targeted policies have supported the deployment of renewable technologies with great success. Policy options for CCS include capital grants, taxation arrangements, regulation and (for power applications) feed-in-tariffs or contracts for difference which offset the higher operational costs associated with capturing and storing the CO2. Governments can also take a major step towards stimulating CCS deployment by identifying and developing CO2 storage infrastructure.
The costs of different CCS applications vary greatly. In natural gas processing, CO2 separation is already an inherent part of the process and the additional costs of CCS can be as low as USD5-20 per tonne of CO2 avoided. As an example, the investment in the Sleipner CCS project was in response to the Norwegian Government’s upstream CO2 tax, which in 1996 was around USD35 per tonne and currently stands at around USD50 per tonne. However the cost per tonne of CO2 avoided in power generation is significantly higher, at USD48-109 for a coal-fired power plant in the United States.
Shayne MacLachlan, OECD Environment Directorate
You may have seen the film called “Tomorrow”, or under the non-translated title “Demain”, popping up in cinemas all over the place. It’s a French documentary focussing on positive action in 10 countries, showcasing concrete examples in agriculture, energy and education that aim to address our current environmental decline. It’s certainly an encouraging and uplifting watch but I admit to leaving the cinema still troubled by the numbers I see daily and why globally we can’t shake our addiction to carbon. Not only are most of our economies still dependent on fossil carbon for the majority of energy supply, carbon dioxide (CO2) lingers in our atmosphere for a very long time. Even if we stopped emitting the stuff tomorrow, most of it will remain in the atmosphere several centuries from now. According to researchers, “About 50% of a CO2 increase will be removed from the atmosphere within 30 years, and a further 30% will be removed within a few centuries. The remaining 20% may stay in the atmosphere for many thousands of years.” Since the beginning of the industrial revolution (~250 years ago) we’ve released about 500 billion tonnes of CO2 from fossil sources and deforestation. We are currently on a path towards releasing the second half-a-trillion tonnes in the next 40 years.
Clearly a revolution in the global economy is needed for a heavy reduction of GHG emissions. You may have heard of Carbon Capture and Storage or CCS. This technology prevents CO2 from fossil fuel combustion from accumulating in the atmosphere. In its most common form, this is achieved by capturing the CO2 after combustion at an industrial facility or power plant before it is emitted, then transporting it in a pipeline to a suitable location for permanent storage deep underground in rock formations. These rock formations could be depleted oil and gas reservoirs, such as those where natural gas had been naturally stored for millions of years. The Intergovernmental Panel on Climate Change (IPCC) sees a big role for CCS in making a low carbon transition possible, both by tackling emissions from heavy industry and helping wean the power sector off fossil fuels at a politically feasible pace.
In the IEA’s scenario for tackling climate change at lowest cost, CCS makes up 13% of CO2 emissions reductions by 2050 compared to business-as-usual (see chart). The IEA’s Executive Director, Fatih Birol, has said that CCS “is an emissions reduction technology that will need to be widely deployed to achieve our low-carbon future” but the IEA has repeatedly noted that progress in CCS deployment is slower than was hoped for.
Contribution of technologies and sectors to global cumulative CO2 reductions link
Source: IEA Energy Technology Perspectives 2015
In a three-part interview, I talked to Kamel Ben Naceur, Director of Sustainability, Technology and Outlooks at the IEA, to find out how delays in CCS might risk the low-carbon transition and what is being done to advance it.
- What is the situation for CCS in 2016? How many projects are up and running and, at up to a billion dollars per project, how should we judge their value for money?
There has been considerable momentum in the deployment of CCS in recent times. We now have 15 large-scale CCS projects operating throughout the world, and 7 more are expected to come online in the next two years. By 2020, these 22 projects will collectively be capturing as much as 48 million tonnes of CO2 each year from coal-fired power generation, natural gas processing, steel manufacturing, and fertiliser and hydrogen production.
These projects are providing essential hands-on experience and enabling learning by doing technology cost reductions. For example, the operators of the Boundary Dam project in Canada, which is the first large-scale project to apply CCS to a coal-fired power plant, believe they could reduce the costs of the next plant by 30%. The value of these first-of-a-kind projects therefore needs to be considered not just in pure dollar terms but in terms of their contribution to ensuring CCS technologies are understood and available at a lower cost for future deployment.
Unfortunately, beyond the current wave of projects, there are very few new CCS projects being planned and there is a real risk that today’s momentum will soon be lost without policy intervention.
- Following December’s Paris Agreement on Climate Change, there’s been a lot of talk about the need for CCS if we are to transition to a net zero emissions future. Can you explain what this means in practice?
All low emission energy technologies, including CCS, will have an important role to play in supporting a faster transition to net zero emissions and in meeting the ambitions of the Paris Agreement. The International Panel on Climate Change (IPCC) has confirmed that many long-term climate models are not able to constrain future temperature increases to 2 degrees or less if the availability of CCS and bioenergy with CCS (BECCS) is limited.
This reflects the unique contribution of CCS not only in directly reducing emissions from the use of fossil fuels, but in supporting negative emissions technologies that permanently remove carbon from the atmosphere. Negative emissions may be needed to extend carbon budgets and balance “stubborn” emissions that are difficult to eliminate, for example in aviation or agriculture. BECCS is one of the most advanced negative emissions technologies but other more nascent technologies such as Direct Air Capture or artificial trees will also depend on the availability of geological storage.
In practice, this means that investment in the identification and development of geological storage facilities will be important, both as a solution to fossil fuel emissions and to ensure that we retain the option of deploying these negative emissions technologies in the future.
- How certain can we be that there’s sufficient storage capacity for the CO2 and are we sure it will stay underground?
With more than 20 years of experience in large-scale CO2 injection, storage and monitoring, there is a high degree of confidence that the CO2 will stay underground. Since 1996, the Sleipner project in Norway has been injecting more than 1 million tonnes a year into a deep saline formation in the North Sea. Naturally-occurring CO2 has also been injected into oil reservoirs in the United States for Enhanced Oil Recovery (EOR) purposes since the 1960s. Provided that the geological storage sites are appropriately characterised and selected, with natural trapping mechanisms, the CO2 is very unlikely to migrate to the surface. Advanced monitoring techniques have also been developed which enable early identification and intervention should the CO2 not behave as expected.
Estimates of global storage resources indicate that capacity should be more than sufficient. The IEA has assessed that, by 2050, as much as 360 GtCO2 could technically be stored just through EOR operations, in a scenario where operators placed emphasis on maximising CO2 storage alongside oil production. This is around 3 times greater than the storage requirements in the IEA’s 2 degree scenario. However, investment in storage exploration and development is needed to better define this storage capacity at a regional level and to support future planning for CCS-dependent facilities.