For many years, carbon capture and storage (CCS) — trapping carbon emissions as they are emitted by power stations and industrial installations and storing them underground — has been hailed as vital to helping decarbonise the economics of energy.
The circumstances are stark, says Luke Warren, chief executive of the Carbon Capture and Storage Association: “If you remove CCS from the mix, the cost of meeting the target of limiting average temperature to two degrees centigrade rises by 138 per cent.”
Nonetheless, progress in establishing the credentials of the process has been slow. According to Greenpeace, the environmental pressure group: “Despite years of vociferous backing from the International Energy Agency, the Intergovernmental Panel on Climate Change and a host of major world leaders, CCS continues to move forward at only a snail’s pace”.
The world’s first commercial-scale plant was opened in 2014 at the Boundary Dam coal-fired power plant in Saskatchewan, Canada, and two more plants are due to be commissioned this year, one in Mississippi and the other in Texas.
Shell’s Quest scheme in the Canadian province of Alberta, launched in November 2015, is the world’s first CCS project to reduce emissions from the processing and burning of oil sands.
While there are 22 projects operating or under construction worldwide, capacity is tiny compared with what is needed to meet a target of curbing global warming levels to a 2 degree centigrade target, let alone the 1.5 degree aspiration agreed at Paris climate talks.
Part of the problem is that power generators and industrial emitters say they cannot afford to create CCS facilities without government help.
“Companies cannot make the huge investments needed with no prospect of a return. We need a framework where we can develop hundreds of plants over time,” Mr Warren says. “There are a lot of costs around the development of infrastructure such as pipelines and storage facilities that mean the costs of early projects will be quite high, but as other projects are linked in to that infrastructure costs will fall quite quickly.”
Ben Caldecott, director of the Stranded Assets Programme at the University of Oxford’s Smith School of Enterprise, says: “Policymakers are not willing to write a blank cheque for this.”
A case in point was the UK government’s decision late in 2015 to withdraw funding for a £1bn CCS technology competition. The US had also decided earlier in the year to stop funding the FutureGen project aimed a demonstrating the feasibility of capturing emissions from coal-fired stations. Many CCS initiatives were launched before the financial crisis and have become casualties of governments’ need to retrench.
Benjamin Sporton, chief executive of the World Coal Association, is optimistic that the industry is set to take off. “Boundary Dam has provided important learning about how to cut the costs of CCS, with developers saying they could build a second plant for 30 per cent less than the first one,” he says.
“Coal will play an important role in the world’s energy mix for years to come, so if we are going to meet our climate targets, CCS is essential,” he adds.
Yet others argue that focusing on CCS for power generation is the wrong approach.
“Many CCS advocates put it across as a magic bullet that means you don’t need to do the other stuff like energy efficiency and clean technology. That’s very far from the truth,” says Anthony Hobley of the Carbon Tracker Initiative, which highlights the potential for stranded assets in the fossil fuels sector.
CCS for large-scale power generation does not make sense, adds Mr Caldecott. “There are multiple risks including competition from new technologies such as renewables and energy storage. There are also performance penalties in relation to efficiency and water use, while there is also political opposition, especially for onshore storage [of CO2],” he says.
The technology really comes into play for emissions in industries such as steelmaking where there is no alternative way of cutting emissions, argues Mr Hobley. “In energy, there are clear alternatives to coal but for some industrial processes it’s very hard to see how they can cut emissions without CCS.”
Focusing on industrial applications in the first instance also makes CCS more manageable, says Aniruddha Sharma, chief executive of Carbon Clean Solutions, a company that makes chemicals that he says can cut the cost of carbon capture facilities by 30 per cent.
“In the UK, we can build a CCS facility for the chemical industry that can capture 60,000 tons of carbon a year for £20m-£23m. In India, we can do it for £10m-£12m. That’s a scale that companies can work with. Talk of billion dollar utility-scale facilities just scares people,” he says.
The other problem for CCS compared with other low-carbon technologies is the end-market — a renewable energy project creates electricity that can be sold but there is a limited market for captured CO2. It is notable the three plants that will be operational by the end of the year are all using the captured gas to help improve productivity in nearby oil wells in a process known as enhanced oil recovery (EOR). “The projects that have got off the ground have been those where they have a use for the CO2,” says Mr Sporton.
However, apart from EOR and some demand for carbonating beverages, there is currently limited call for CO2.
Unless that changes, or governments are more prepared to step in to support the industry, progress is likely to remain slow.