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Europe drags feet on carbon capture

European carbon emissions aren’t falling fast enough, but carbon capture and storage projects still remain low on the priority list

Carbon capture and storage (CCS) remains something of an ugly duckling in the fight against climate change in Europe. While the continent has demonstrated an appetite for renewable energy projects, few countries are sinking investment into large-scale CCS, even as momentum builds in Australia, China, Japan and even the US.

The EU Emissions Trading Scheme (ETS) has provided little support for the sector, with carbon allowances trading well below levels that would incentivise costly CCS projects. Governments, while not ruling out big CCS investments, have yet to fully commit to them.

"A number of European states have support for CCS in EU policy papers and so on, but that does not mean that they are truly prepared," said Gøril Tjetland, a CCS advisor at Bellona, an Oslo-based environmental consultancy.

Yet, if the Paris climate change goal of restricting global warming to below two degrees above pre-industrial levels is to be met, then Europe will almost certainly have to lead the way. It will need to reduce carbon emissions from power and industrial processes to near-zero within the next four decades or so at most.

It's hard to see how that will be achieved without the deployment of CCS to remove and bury carbon dioxide (CO2). Storage could also be needed for CO2 stripped from the atmosphere, as some European countries hope to do when technology allows it.

Power generation accounted for less than half of global carbon emissions (42%) in 2015. Manufacturing industries and construction accounted for almost a fifth and transport for nearly a quarter, according to the latest available data from the International Energy Agency. Emissions from petroleum refining, manufacture of solid fuels, coal mining, oil and gas extraction and other energy-producing industries accounted for another 5%.

The pace at which renewables can displace coal, gas and oil is likely to be limited by the speed at which large-scale batteries and other storage techniques can be introduced and improved. In industrial and manufacturing processes, efficiency gains can reduce, but not eliminate, carbon emissions.

Missed target 

In Europe's largest economy, Germany, solar and wind penetration has already met government targets, with renewables' share of power generation averaging around 36% in 2017. There's room for more, but growth is unlikely to match past levels. And while coal will be gradually replaced by less polluting gas in the power mix, Germany is likely to miss its official 2020 target of reducing carbon emissions by 40% compared to 1990 levels. A figure of around 32% looks more likely. Other techniques, including CCS, will be needed if emissions cuts are to be accelerated.

Norway's emissions per barrel are around three times those of Saudi Arabia

In Norway, virtually all electricity is sourced from renewables, due mainly to the country's prodigious hydropower resources. But industrial emissions—including those from oil and gas production—are actually higher than in 1990. Norwegian per capita emissions are similar to those of Poland, whose power sector runs mainly on coal.

Bellona has calculated that Norway's emissions from hydrocarbons production, at 6.28 tonnes of CO2 a barrel, is around three times those of Saudi Arabia, because offshore production—especially in mature fields that require enhanced recovery techniques—creates more CO 2 than onshore. In absolute terms, Saudi Arabia, with its much bigger oil industry, produced 26.9m tonnes of CO2 in 2015, compared with 12.3m tonnes in Norway.

Norway has been a CCS pioneer, with its Sleipner and Snøhvit undersea storage pilot ventures. Three CCS projects are lined up in the cement, ammonia and waste incineration sectors; but a cut in funds allocated to CCS to almost zero by the Norwegian government in its draft 2018 budget has put those in jeopardy. However, the projects remain under discussion and funding decisions are expected in coming weeks.

UK takes another look 

The UK, like Norway, can exploit the opportunities provided by carbon storage in now depleted oil and gas caverns under the North Sea. But Britain pulled the plug on funding for a competition to commercialise CCS in 2015. Now, CCS is back on the agenda, as part of the government's Clean Growth Strategy, published in October 2017. This outlines how the UK will deliver on its commitment to reduce emissions by 80% by 2050

The strategy identifies a need to "demonstrate international leadership in carbon capture, usage and storage (CCUS), by collaborating with our global partners and investing up to £100m in leading-edge CCUS and industrial innovation to drive down costs". It also says the UK should work in partnership with industry, through a new CCUS Council, to provide the option of deploying the techniques at scale in the UK by the 2030s.

Source: IEA. 2015 data

The Clean Growth Strategy hasn't won unanimous praise. The UK's parliamentary Committee on Climate Change, an independent advisory body, said it lacked detail: "Although ambitious, the strategy does not go far enough. Urgent action is needed to flesh out current plans and proposals, and supplement them with additional measures, to meet the UK's legally-binding carbon targets in the 2020s and 2030s."

But Luke Warren, chief executive of the Carbon Capture and Storage Association, a UK industry group, is optimistic. "We are pleased that the Clean Growth Strategy is very clear on CCUS and sets out some strong ambitions for CCUS," he said. "There are some strong statements in there around reaffirming commitment to CCUS and wanting to become a world leader."

Warren added that the government had committed to developing a CCUS deployment pathway by the end of this year and had also undertaken to review investment instruments to underpin CCUS. "If the government delivers on those commitments, then potentially CCUS could be back on track," he said.

Dutch drive 

In the Netherlands, another country with North Sea storage potential, the picture for CCS is brighter. Plans are afoot for some 20m tonnes a year of CO2 to be captured and stored in depleted offshore oil and gas fields by 2030. The initiative is based on a hub at the Port of Rotterdam, where industrial complexes account for around 20% of the country's carbon emissions. The project could also be extended to pipe in captured carbon from surrounding countries, including Germany and the UK.

The Port of Rotterdam Authority hopes that state support will be forthcoming, following a recent court case, which has effectively forced the government to up the ante on climate change action. Under a ruling coalition agreement, now being finalised, Dutch CO2 emissions could be set to fall by 49% by 2030. If the project has to rely on the carbon price for support, its future will be bleaker—at least in the short term.

Plans are afoot for some 20m tonnes a year of CO2 to be captured in the Netherlands

Some sector specialists estimate that a carbon price of around €30/tonne ($36/tonne) is needed to make the Rotterdam project economically viable. In early May, the price of carbon allowances on the EU ETS was only €13/tonne.

However, that represented a sharp rise since the start of the year, when the price was down at around €8/tonne. A recent report from Carbon Tracker Initiative, a think tank, estimates that the current push to mop up oversupply of carbon permits in the EU ETS could push the price up to €25-€30/tonne by 2020-21 and even higher later in the decade. If that happens, CCS will start to look a lot more attractive financially, with or without direct government support.

Technological developments may also help the cause. Modular carbon capture units have been developed by companies such as Norway's Aker Solutions for small-scale projects. These could also be used as the basis for larger schemes, allowing CCS projects to start small and grow as more investment becomes available.

In a European environment, where funding remains at a premium, such incremental technology could make all the difference in revitalising a key weapon in the fight to curtail global warming.

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