Last week the UK government hosted a series of high-profile events in Edinburgh on ‘accelerating carbon capture, usage, and storage (CCUS)’, as part of its new ambition to bring this technology back to the fore of climate policy – both in the UK and internationally.
On the first day, I attended a summit for energy ministers, fossil fuel company executives, and other key figures in the industry which was co-hosted by the International Energy Agency, while across town the UK CCS Research Centre ran a more research-focussed event. On the second day, the Global CCS Institute organised a larger conference with a series of panels discussing the policy and commercial challenges facing CCUS and how we might overcome them.
Several key announcements and launches were timed to coincide with the summit. Most significantly, the Climate Investment company set up by the Oil and Gas Climate Initiative (OGCI) announced that it would be working with six OGCI members (BP, ENI, Equinor, Occidental Petroleum, Shell and Total) to start pre-feasibility work for a gas-fired power plant with CCS in the Teeside area of the UK. Known as the Clean Gas Project, this high-efficiency 620 MW combined cycle gas turbine plant with post-combustion CO2 capture was originally conceived by the Energy Technologies Institute. Alongside this, the UK’s Department for Business, Energy and Industrial Strategy (BEIS) affirmed its commitment to deploy a CCUS demonstration project by the mid-2020s, allocating £45 million of innovation funding to CCUS (£20 million of which to CO2 utilisation specifically), and more vaguely, £315 million in funding to ‘decarbonising industrial sites’, which could potentially include CCUS. BEIS also released an ‘Action Plan’ or ‘Deployment Pathway’ for CCUS in response to the Cost Challenge Taskforce which earlier this year reported to government on means to reduce CCUS deployment costs – largely through new commercial structures and policy rather than technical advances.
All this activity forms part of the UK’s new approach to CCUS, which I first blogged about following a UKCCSRC event in May. Following the disappointing cancellation in 2015 of the ‘CCS Commercialisation Competition’ which was supposed to grant £1 billion to one or two large demonstration projects, the government has decided that it does, in fact, need CCUS to meet its climate goals, but would like to do it without putting so much taxpayers money on the table. As in several other countries in Europe, the story around CCUS has shifted away from being a means of decarbonising large power plants to greater focus on ‘clusters’ of emitting industries (steel, cement, petroleum, chemicals etc.). At the same time, the ‘U’ in CCUS (standing variously for usage or utilisation) is becoming a permanent fixture in the UK and worldwide, as governments are keen to stress that CO2 need not simply be a waste product to be stored, but could be used in commercial products (see Qian Zhu’s recent report on CCU). In the research community there are divided views on how much of an impact these relatively niche CO2 conversion technologies can really make on greenhouse gas emissions. Lastly, there is considerable interest in using CCUS to produce clean hydrogen, which can then be used as an energy vector in heat and transport – an ambition notably shared by Japan.
Despite the more positive noises on CCUS, there was not a great deal new to take away from these meetings for someone who has been following recent developments in the sector. The newly introduced 45Q tax credit in the USA, which would cut companies’ tax burden by up to $50/t of CO2 they store, is still receiving the most fanfare as a policy which could actually drive CCS deployment. Whilst the details of how this will be implemented are still being sorted out by the Internal Revenue Service, several speakers alluded to projects waiting in the wings (mainly bio-ethanol plants), with Occidental’s CEO laying out ambitious plans for expansion of CO2 storage linked to its enhanced oil recovery operations in the US and beyond. Elsewhere, the Norwegian government continues with its work (still at an early stage) to capture CO2 from a waste incinerator and cement plant for storage in the North Sea using both ship and pipeline transportation, and the Port of Rotterdam reported on its Porthos project to install CO2 transport and storage infrastructure to service various emitters in this heavily industrialised Dutch region. Both these plans are indicative of the new philosophy of industrial CCS clusters, in which making a viable business case for shared transport and storage of CO2 is the key goal. The UK, however, has not ignored the power sector, and is still interested in CCS with gas power plants such as the Clean Gas Project to provide dispatchable or baseload clean energy with which to supplement renewable sources. These plants are also seen as a source of reliable, large quantities of CO2 which can improve the commercial viability of a transport and storage infrastructure also servicing clusters of smaller emitters. Although the ‘Powering Past Coal Alliance’ formed by the UK and Canada last year strictly only aims to phase out ‘unabated coal’, Energy Minister Claire Perry was clear that coal with CCS is no longer an option in the UK.
More positive news for coal-CCS came from Canada’s International CCS Knowledge Centre (born out of the Boundary Dam CCS project ) which launched its detailed feasibility study for CCS retrofit of the 300 MW Shand power plant alongside the Edinburgh event. This study shows remarkable cost reductions of 67% compared to the pioneering Boundary Dam retrofit, as well as a CO2 capture rate which actually increases to 97% as the plant output is turned down (making it well suited to following renewables), and net-zero additional water consumption.
These Edinburgh meetings were always likely to be more about political symbolism than content, and it is undoubtedly significant that so many major CO2 emitting countries and companies could be brought to the table to affirm their support for CCUS.
Given greater urgency by the growing chorus of calls for stronger action on climate change in the run up to COP24 in Katowice – particularly the IPCC’s recent report on limiting warming to 1.5° C – there at least seems to be general recognition that CCUS is part of the solution.
And yet, even with all this high-level support, the need to find a new ‘narrative’ to sell CCUS to the world at large still occupied much of the discussions in Edinburgh; in this regard, the argument of preserving jobs and industrial communities was a popular theme. Sharing equal billing with this well-trodden topic at both events was the quest for a ‘business case’, or a set of policies which can allow the private sector to get on and invest in CCUS with least cost to government or consumers. Whilst this debate has gradually progressed in the UK, particularly regarding appropriate allocation of project risk between private and public sectors, we seem to be little closer to attaining the holy grail of commercial CCUS deployment in Europe. The government has commissioned several new studies for next year which may finally hone in on a way forward, so for now, the country’s dormant CCS industry is back to waiting, albeit with slightly renewed optimism.