Information about Carbon Capture and Storage - CCS
– where does the money come from?
What seems to be the problem?
The primary obstacle to a broad political endorsement of CCS is price.
CCS technologies are currently far from being profitable – be it from a business or a socio-economic perspective. The exact future costs of reducing CO2 emissions through the CCS technology is not known. But without support CCS will be financially unattractive from a business perspective in the next few decades.
The industry’s challenge is therefore to make the technology available as cheap as possible through taxpayer funding of all stages of the technology chain including research, development, demonstration, investment, operation and infrastructure. Technology commercialization and future viability on market conditions thus depends fundamentally on how much money it is able to squeeze out of the public.
The proponents of the technology have called for massive public subsidies in order to make CCS competitive with alternative technologies. Pressure from the industry has teamed up with a political awareness of security of supply of energy, climate problems and economic growth to make CCS appear as an indispensable technology in climate and energy policy over most of the industrialized world. The technological and economic problems that CCS at its current stage of development suffer from are assumed to be resolved through a coordinated public / private research, development and demonstration cooperation, in which public spending of billions of euros, dollars and yen etc. will play a decisive role.
CCS is a global phenomenon
Research, development and demonstration of CCS is most advanced in the richest part of the world. Particularly in the EU, Norway, Canada, Australia, Japan and USA. The overall efforts share a number of common features such as the formation of private / public partnerships and industry demands for extensive government support.
The EU, Canada, Australia, Japan, Norway, UK and the United States are well advanced in regulating the basics of establishment and operation of CCS and the policy framework for state aid to the technology.
The public subsidization that lies in the cards for CCS is exceptional. Obviously the billions of Euros, dollars and yen, etc. allocated to CCS can not be used for other purposes.
Open (corporate) letter to the EU
I an open letter 24 October 2013 to the President of the Commission 23 companies and investment businesses ask for a reform of the EU’s ETS, "in order that the EU-ETS can deliver in line with the EU's long-term decarbonization goal and remains a central climate policy instrument."
A new view on the financing of CCS?
The consultancy Climate Change Capital was amongst the signers of the open letter but in an op-ed published the same day on Climtae Change Capital’s website their chief consultant Ian Templeton writes there is a need for a new view on the financing of CCS.
-Until now the focus has been on the power plants and industries emitting CO2. But none of these have so far developed a full scale CCS because none of them can figure out how it should be financed or how it could have a sustainable economy
-Maybe we have been looking in the wrong direction - maybe we should look higher in the energy chain to those who supply the world with coal, oil and gas
-So: if you supply the market with fossil fuels then you should also muster a certain amount of certificates proving that you have stored CO2 permanently comparable to the emissions that the fuels are causing in the first place.
This would have three advantages:
These companies have the capital required, they are international, they understand the risk and they have experiences with large scale multi-disciplinary projects.