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The move shocked many in the industry, not least because of what senior ministers had said about the technology in the past. David Cameron warned in 2007 before becoming prime minister that without CCS the UK might not meet its targets for reducing carbon emissions.
The UK is not the only country looking again at the support it has promised to CCS, which many oil, gas and coal producers argue could help mitigate consumption of their fuels. Last year, the US federal government suspended funding for a project in Illinois called FutureGen, which had aimed to be the first “clean-coal power plant” by 2012.
“CCS is struggling around the world,” says Stuart Haszeldine, professor of carbon capture and storage at the University of Edinburgh. “But that is because of governments around the world being unable to bite the bullet on how to deliver it. No government has sorted out how to make it into a profitable and repeatable business.”
Advocates of CCS argue that carbon dioxide produced from power stations or other industrial uses could be siphoned off at large scale and reasonable cost and injected into deep underground rocks. This would prevent the CO2 from leaking into the atmosphere and contributing to the warming of the atmosphere.
The technology already exists: in the 1970s the oil industry started to inject the CO2 it produces back into rocks to generate more pressure and force more oil from below the ground. But the emphasis of CCS is now firmly on its environmental potential.
Shell, for example, has been running the Quest project in Alberta, Canada, since last November. The scheme has stored nearly 1m tonnes of CO2 so far, the company says — equivalent to the emissions of 250,000 cars in a year.
“We carried out the scheme there very much because the Canadian and Albertan government helped support it,” says Tim Bertels, who manages CCS projects at Shell. The company received C$890m from the Albertan and the national governments, part of which was given to cover the high upfront costs and part of which is made in payments for the carbon stored.
There is no reason this model cannot be widely deployed to cut the emissions of coal or gas power plants, but the costs are high.
Last year, the Boundary Dam coal-fired power plant — also in Canada — became the first electricity generator to fit CCS technology. But that scheme, which cost C$1.4bn, would not have been viable without a 10-year deal to sell the captured carbon dioxide to the Canadian oil group Cenovus Energy for use in enhanced oil recovery.
Having taken the decision to scrap the UK’s CCS development competition, Mr Cameron explained in January that the high costs were part of the reason. “At the moment, it seems to me that with carbon capture and storage, while I completely believe in the idea, the technology is not working,” he said.
The International Energy Association estimates that up to $4tn of CCS projects would be needed to keep the world’s climate goal of limiting global temperature rises to 2°C.
But the Carbon Capture and Storage Association argues that without this spending the cost of meeting the target will rise 138 per cent. “After Paris, the need for CCS is greater than ever,” says Prof Haszeldine. “Can we meet our climate targets without it? No.”
This article has been amended since original publication to reflect the fact that David Cameron was not prime minister in 2007.