The key to delivering CCS across these sectors lies in the development of a fully-fledged CCS infrastructure which can be shared by a large number of industries. The effective development of this infrastructure generates CO2 hubs which can connect to industrial clusters via national and cross-border CO2 transport and storage facilities. This will in turn drive the creation of sustainable economic zones, which will deliver the least-cost route to decarbonisation across Europe’s energy and resource system, whilst at the same time generating new jobs and boosting economic prosperity at both local and regional level. The Zero Emission Technology and Innovation Platform (ZEP) has recommended a ‘market maker’ approach to developing CCS infrastructure. Market makers – either a state-owned or regulated private entity – could oversee the strategic deployment of CO2 hubs, collect CO2 from power and industrial facilities for transport and storage, and take any operational risk. This would allow the CCS industry the flexibility to build up volumes of CO2 in the pre-commercial phase.
However, the CCS industry cannot deliver these ambitions alone and concrete measures are required from the European Commission to realise the benefits of CCS for Europe. Above all, Europe must put in place the investment mechanisms and financing models that will deliver the cross-border transport and storage infrastructure that is necessary to create a number of CO2 hubs. Whilst the EU ETS is still considered the central tool of EU climate policy, the price is currently too low to incentivise CCS. It will therefore be necessary to introduce transitional measures that can drive investment in the initial CCS projects that will catalyse the wider roll-out of CCS in Europe. It is encouraging to note that CCS is being considered in the ongoing discussions regarding the Innovation and Modernisation funds, and the submission of four CO2 transport projects as Projects of Common Interest under the Connecting Europe Facility should also be seen as an extremely positive development.
There are signs that countries are beginning to wake up to the opportunities from CCS. Norway, already considered a CCS leader with the Sleipner CO2 storage project which celebrated its 20th anniversary last year, recently announced its intention to fund feasibility studies into CCS at an ammonia facility, a cement plant and a waste-to-energy project. If all three projects reach positive final investment decisions, they would reduce Norway’s CO2 emissions by 5%, but more importantly, they would demonstrate clearly the importance of applying CCS to multiple sectors. Elsewhere in Europe, the Port of Rotterdam has publicly stated its desire to develop the first industrial CCS cluster in The Netherlands. And in September this year, Germany and The Netherlands published a joint non-paper on EU industrial policy, which calls for EU action to promote low-carbon technologies in energy intensive industries, including carbon capture utilisation and storage (CCUS). It is essential that the European Commission and other member states provide as much support for these developments as possible.
Whilst it would be commendable to believe that CCS can be developed in every European country, the reality is that efforts must be focused on those countries that already possess key characteristics necessary for CCS deployment – such as available CO2 storage, good concentration of industrial emitters and a level of understanding of the CCS policies and incentive mechanisms that are required. To ensure the most effective development of CCS in Europe, collaboration – both between countries and between government and industry – will be absolutely critical. Areas such as the North Sea in particular provide major opportunities to develop cross-border CO2 hubs. North Sea countries are already co-operating to develop a joint offshore grid, and it is likely that CCS will be included in these efforts at some point. There is also great potential for collaboration regarding CO2 infrastructure in the Baltic region.
A number of countries are currently collaborating on CCS in the framework of the European Strategic Energy Technology Plan (SET-Plan). The SET-Plan highlights the areas where the EU needs to strengthen co-operation to bring new, efficient and cost-competitive low-carbon technologies to the market faster. As part of the SET-Plan, a dedicated implementation plan for CCS and carbon capture and utilisation (CCU) is under development, and this sets out ten key targets for successful deployment. Each target is supported by a corresponding activity and these include actions such as delivery of a whole chain CCS project operating in the power sector, delivery of regional CCS and CCU clusters, including feasibility of incorporating hydrogen infrastructure, and establishing a European storage atlas. ZEP is working hard to ensure the successful adoption of this CCS and CCU implementation plan which will help to establish a common technology base for the roll-out of CCS in Europe. It is expected that the implementation plan will be adopted at the wider SET-Plan conference in November this year.
As part of the ongoing work on the Implementation Plan, and to ensure continuity, ZEP emphasises the importance of ensuring a formal link between the SET-Plan and the Energy Union Governance proposals. Those Member States that are collaborating on the SET-Plan and have set concrete targets with corresponding actions should be encouraged to include these in their integrated national energy and climate plans.
Within the broader debate on the EU’s 2050 target, ZEP also supports the inclusion of national objectives for the deployment of low-carbon technologies. This would enable countries to take a longer-term strategic view of the policies and mechanisms required to deploy these technologies and the optimum mix of technologies that will be necessary to meet the overall target.
A study was recently published in Nature Geoscience which concludes that the Paris Agreement goal of limiting global warming to 1.5°C remains achievable; however it will require unprecedented amounts of renewable energy and CCS. According to the IEA’s 2017 Energy Technology Perspectives report, CCS will need to deliver 32% of the extra effort to move from a 2°C scenario to well below 2°C. A substantial proportion of this effort will need to be met by sustainable bio-CCS (BECCS) to deliver negative emissions. Delivering the goals of the Paris Agreement will be extremely challenging and it is likely that negative emissions will be required in the latter half of the century – particularly to enable flexibility in harder-to-decarbonise sectors such as aviation. There is a need to ensure that BECCS is increasingly considered in EU policies and ZEP has recommended that a new paragraph be introduced in the Energy Union Governance proposals to enable the Commission to more actively monitor progress on negative emissions.
However, all of these actions will fail to deliver CCS at the necessary scale unless Europe realises that CO2 transport and storage infrastructure should be considered as a public good. CCS infrastructure must be funded in the same way as other types of public infrastructure, to ensure the cross-sector benefits of CCS can be realised. And action must begin now – investment in this infrastructure must start today to ensure wide deployment of CCS from 2025. A delay of even ten years could cost power and industry an extra €200 billion to reach EU climate targets and could result in a complete failure to reduce Europe’s emissions at the necessary rate.
CCS is an indispensable solution for Europe to meet its climate goals at least cost. It is also the only decarbonisation option that can deliver significant emissions reductions for many energy intensive industries, thereby helping to ensure their long-term sustainable future. We now need to move away from considering individual projects and instead focus on CCS as a means to delivering sustainable regional growth in key European regions such as the Port of Rotterdam and the North Sea. This requires collaboration between countries, between Member States and the European Commission and between governments and industry. But above all else, it requires action now.
The European Zero Emission Technology and Innovation Platform (ZEP)
Article originally published on: http://www.paneuropeannetworks.com/environment/an-indispensable-solution/
Reproduced by kind permission of Pan European Networks Ltd, www.paneuropeannetworks.com
© Pan European Networks 2017