SCAL­ING UP CAR­BON EMIS­SIONS WOULD RE­QUIRE IN­VEST­MENT

The Gulf Today - Business - - SPECIAL REPORT -

LON­DON: When coun­tries gather on Sun­day to ham­mer out how they will en­act pledges to cut car­bon emis­sions, a Nor­we­gian-led oil con­sor­tium will of­fer a so­lu­tion: pump some of your ex­cess car­bon diox­ide to us and we could store it for you.

En­vi­ron­men­tal­ists worry the costly tech­nol­ogy, known as car­bon cap­ture and stor­age (CCS), will per­pet­u­ate the fos­sil fuel sta­tus quo when rapid and deep cuts en­ergy use are needed to limit global warm­ing.

But pro­po­nents of CCS will be lob­by­ing hard at the two-week cli­mate con­fer­ence in Ka­tow­ice, Poland, for the ex­ten­sive in­vest­ment and reg­u­la­tory change re­quired to em­ploy it at scale, cit­ing UN as­sess­ments that it could play a role.

“The ex­pec­ta­tion is that Ka­tow­ice will be im­por­tant,” said Stephen Bull, a se­nior vice pres­i­dent at Nor­we­gian state-con­trolled oil company Equinor, which is in­volved in de­vel­op­ing a CCS project called North­ern Lights.

“CCS is the only way to go,” he said, ar­gu­ing that coun­tries need the tech­nol­ogy to help ful­fil the pledges they made around the time of the break­through Paris cli­mate change agree­ment in 2015.

A United Na­tions re­port warned on Tues­day that na­tions would have to triple their cur­rent ef­forts to keep global tem­per­a­ture rises within bound­aries sci­en­tists say are needed to avoid dev­as­tat­ing floods, storms and drought.

Along with the United States, Nor­way is one of the coun­tries at the fore­front of drive for CCS, build­ing on 20 years of di­vert­ing car­bon diox­ide from its vast gas out­put and us­ing some to push out hard-to-reach oil from age­ing fields.

Oslo plans what it says will be the first vi­able project to use CCS to limit in­dus­trial emis­sions by tak­ing car­bon diox­ide from in­dus­trial plants at home and abroad and stor­ing it per­ma­nently in empty oil reser­voirs un­der the seabed.

The rel­a­tively small scale of the project, along with the un­solved prob­lem of who will pay for it, high­light the ob­sta­cles to get­ting CCS tech­nol­ogy off the ground.

NEC­ES­SARY EVIL

Or­gan­is­ers of the es­ti­mated 1.6 bil­lion euros ($1.8 bil­lion) North­ern Lights project say it could store around 5 mil­lion tonnes per year of emis­sions from a Nor­we­gian waste-to en­ergy plant, a ce­ment plant as well as emis­sions from other coun­tries.

This is a tiny frac­tion of the 6 bil­lion tonnes per year that would need to be stored by 2050 ac­cord­ing to the In­ter­na­tional En­ergy Agency, which co­or­di­nates in­dus­tri­alised na­tions’ en­ergy poli­cies.

The project still needs the Nor­we­gian govern­ment to take a fi­nal in­vest­ment de­ci­sion, some­thing which Trude Sund­set, CEO of Gas­nova, the Nor­we­gian state’s CCS en­ter­prise, said was sched­uled for 2020 or 2021.

That would de­pend on how the project de­vel­oped, she said, adding it was also nec­es­sary to bring in­dus­try and other coun­tries on board.

“It is not easy to find a good busi­ness model in the short, medium term,” she said. “It’s naive to think one coun­try can pay; it has to be a col­lab­o­ra­tion be­tween in­dus­try and govern­ment.”

A Euro­pean Union cli­mate strat­egy pub­lished on Wed­nes­day said rapid de­ploy­ment of re­new­ables meant the po­ten­tial of CCS to be a ma­jor de­car­bon­i­sa­tion op­tion ap­peared lower than before. But it said CCS would be needed, es­pe­cially if the bloc wanted to reach a goal of net-zero green­house gas emis­sions by 2050. “For sure, we have to im­prove car­bon cap­ture and stor­age and we have to in­vest,” EU cli­mate chief Miguel Arias Canete told Reuters. Ear­lier at­tempts to fund CCS in Europe have largely failed. An EU pro­gramme in 2012 did not go on to fund a sin­gle CCS project and a Bri­tish sup­port scheme was can­celled in 2015.

Bri­tain’s govern­ment now plans to help de­velop the coun­try’s first com­mer­cial project which will cap­ture car­bon diox­ide to be used in in­dus­trial ap­pli­ca­tions by the mid-2020s.

Europe’s Green party pri­ori­tises en­ergy ef­fi­ciency, re­cy­cling, treeplant­ing and re­new­able en­ergy, but says there could be a role for CCS in off­set­ting emis­sions from pro­cesses like steel­mak­ing.

“We need to ex­per­i­ment with it. There is an in­dus­trial ap­pli­ca­tion − think steel,” Bas Eick­hout, Dutch Green MEP and cli­mate spokesman for the Greens, told Reuters. “The prob­lem is that the longer we wait, the more it (CCS) be­comes a nec­es­sary evil.”

COAL DE­BATE

Eigh­teen large-scale CCS plants are in op­er­a­tion around the world, ac­cord­ing to the Global CCS In­sti­tute, which says 2,500 CCS fa­cil­i­ties, each able to store 1.5 mil­lion tonnes a year, would be needed by 2040 to keep global warm­ing within a 2C rise.

Coun­tries as far afield as Al­ge­ria and Ja­pan are work­ing with CCS but only two of the world’s CCS op­er­a­tions are on power plants. The CCS in­dus­try sees po­ten­tial for many more.

While Europe fo­cuses on re­new­ables and re­plac­ing emis­sion­sheavy coal with gas, de­vel­op­ing coun­tries say they can­not move so fast and US Pres­i­dent Don­ald Trump, who pulled his coun­try out of the U.N.’S Paris cli­mate change ac­cord, pro­motes coal.

But the US In­sti­tute for En­ergy Eco­nomics and Fi­nan­cial Anal­y­sis (IEEFA) think tank said this month that coal plants are hav­ing a dif­fi­cult time com­pet­ing with wind and so­lar re­sources which have come down rapidly in price even with­out CCS.

“Eco­nomics is a se­ri­ous is­sue. And to do CCS on a wide scale you need to build a whole new in­fra­struc­ture: new pipe­lines, find repos­i­to­ries which would work, in­spec­tion equip­ment and then mon­i­tor­ing,” said IEEFA’S David Sch­lis­sel.

IEEFA es­ti­mates putting CCS on an av­er­age US coal plant would cost nearly $100/megawatt hour (MWH). This com­pares to av­er­age power pur­chase agree­ment prices for wind and so­lar of around $20$40/MWH or less since 2017.

The CCS In­sti­tute, which rep­re­sents com­pa­nies in­volved in de­vel­op­ing the tech­nol­ogy, said on Wed­nes­day a fea­si­bil­ity study on fit­ting CSS to a sec­ond coal-fired power sta­tion in Saskatchewan, Canada, had shown it could be done more cheaply.

It cited a cost of cap­ture at $45 per tonne of CO2, say­ing the study showed coal could be com­pet­i­tive with nat­u­ral gas.

Ma­jor min­ing com­pa­nies are also count­ing on CCS.

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