Despite recent successes such as Britain's ambitious new CCS Roadmap (see UK Relaunches CCS Policy, 4/16) and Norway's newly-opened Mongstad demonstration project, there is growing concern within the international CCS stakeholder community that forward momentum at the global level has stalled and a critical window of opportunity for technology development may be closing (as exemplified by last month's cancellation of the Pioneer Project in Alberta--see Small Step Forward for Biochar in Australia, Big Step Back for CCS in Canada, 4/29). Influential bodies such as the Global CCS Institute have expressed continuing frustration with the anemic rate of expansion. For example, in the most recent update to its Global Status of CCS tracking database, the Institute declares that
Bringing early-stage demonstration projects of a complex, multi-stage, expensive technology such as CCS to a successful conclusion is difficult and time consuming. It needs concerted, coordinated effort between governments and the private sector, and also needs the local communities affected by these projects to be fully involved in the process. Measured progress is being made to bring such projects to fruition around the world, but concern is being expressed about the pace at which such projects are proceeding if climate goals are to be reached. (p. 4)
At the recent third Clean Energy Ministerial (CEM3) held in London in April, the Carbon Capture, Use and Storage (CCUS) Action Group reported that "Many countries have policies and mechanisms in place to support the deployment of CCS, and these actions are vitally important. However, more needs to be done to deliver CCS at the scale and on the timeline required" (p. 1). A more detailed report prepared by the Global CCS Institute along with the International Energy Agency (IEA) for CEM3 concludes that, "despite developments in some areas, significant further work is required. CCS financing and industrial applications continue to represent a particularly serious challenge" (p. 3). Another recent report by the Institute, Asian Development Bank (ADB), World Bank, and World Resources Institute (WRI) calls for donors to provide an additional $5.2 billion to help jump-start CCS activities in developing countries.
Policy support is clearly inadequate across all aspects of the CCS technology platform, from different links in the CCS chain (capture, transport, and storage) and different applications (power generation versus industrial) to unresolved regulatory issues such as long-term liability, public acceptance, and (carbon) price uncertainty. What is most lacking, arguably, is money. CCS technology is expensive, due in large part to its associated energy penalty of 10-40% (i.e., 10-40% of the power generated by a plant equipped with CCS is needed solely for operating CCS). It is imperative to drive down CCS costs, which requires significant investments in demonstration plants in order to achieve technical innovations, process improvements, and economies of scale. Yet current political and commercial considerations preclude large-scale public or private investments in CCS. Put simply, CCS needs more money now to cost less in the future, and there is every reason to expect that this money will not be forthcoming.
One possible way around this impasse would be for governments to mandate a performance standard for some fraction of the generation fleet such that compliance effectively requires the addition of CCS. By adopting an indirect equipment standard in this manner, applicable to some mix of old and new coal and gas plants, generators would be forced to develop cost-effective CCS systems and technologies, thereby lowering costs across industry and enabling wider deployment of CCS in power generation and beyond. This would likely facilitate the resolution of many other funding and regulatory issues, and also pave the way for geoengineering technologies such as BECCS and DAC.
Indeed, there is already policy movement in this direction. For example, a controversial draft rule proposed last March by the US EPA would limit all new power plants to emissions of no more than 1,000 pounds of CO2 per MWh of electricity generated. In order to comply with this proposal, all new coal-fired plants would have to be fitted with CCS. Such regulatory action would represent a sharp turn away from market-based incentives toward command-and-control instruments, and would assuredly spark a backlash. But with CCS in its current desultory state, and little progress on the horizon, performance standards may offer a way to break the CCS cost deadlock.