When: details

Today there are a lot of CCS research projects worldwide, but only a few large-scale commercial CCS projects are in operation. By 2030 CCS could be a requirement for all coal and gas power plants. Read below for information on how this could happen.

Today, coal and gas power plants emit all of their CO₂ into the atmosphere, just as all large industrial production plants do. If CCS technology where implemented, then these CO₂ emissions would be almost eliminated. But since CCS is expensive and there are no regulations making it mandatory, it is no surprise that there are very few CCS projects in operation today.

In the US, large volumes of CO₂ have been injected into oil fields since the 1970s with the intention of enhancing oil recovery (EOR). However, these projects are not characterized as complete CCS projects because the CO₂ comes from natural reservoirs. This means that there is no CO₂ capture.

In fact, there are only four full-scale CCS projects in operation worldwide. These are:

• The Sleipner project in the North Sea off the western coast of Norway; CO₂ storage started in 1996.
• The In Salah project in Algeria.
• The Weyburn project in Canada, where CO₂ is injected into an oilfield for the purpose of enhanced oil recovery (EOR).
• The Snehvit project in the Barents Sea north of Norway.

The four full-scale commercial CCS projects that are currently in operation today.

The largest potential for CCS as a strategy for reducing CO2 emissions are fossil fuel power plants. However, none of the four projects mentioned above include CO₂ capture from power plants. Instead, the CO₂ in these four projects is separated from a mixture of natural gas and CO₂, which is a much simpler operation than capturing CO₂ from power plant flue gas.

The development of CCS will go through 3 different phases:

Development phase
CCS is currently in the development phase. This is illustrated by the fact that there are a lot of ongoing research projects all over the world, but only a few large-scale commercial projects.

Demonstration phase
The next phase for CCS is the demonstration phase. The G8 leaders have proposed building 20 CCS demonstration projects worldwide. The demonstration projects could be in operation around 2015, provided that our politicians come up with funding for the projects within a few months. CCS demonstration projects will be too expensive for the industry, so public co-funding will be necessary.

Commercial phase
Provided the demonstration phase is successful, CCS could become commercially viable by 2020. This means that from 2020 CCS could be a requirement for coal and gas power plants.

But the prevailing practice of unchecked CO₂ emissions today is about to change. The G8 leaders are eager to reduce global CO₂ emissions and have stated that CCS will be one of the main tools to achieve this goal. The challenge is to reduce the costs related to CCS. The G8 leaders have suggested building 20 demonstration plants worldwide to do just this.

This approach is supported by scientists and other experts. There are a lot of reserch activities on CCS all over the world, and researchers agree that they now know so much about CCS that full-scale demonstration projects are the next logical step in order to learn more.

Demonstration projects for CCS are planned for all over the world, including Australia, Brazil, Canada, China, the EU and the USA. The first of them will probably be in operation around 2020. Industry is particularly eager to build the demonstration plants as soon as possible so that they can take a leading role in CCS technology development, which they believe can be a large market in the future . However, the demonstration plants will be expensive, too expensive to be financed by industry alone. Therefore, the costs of building the demonstration projects will be shared by industry and governments.

How to split project costs has yet to be defined, and mechanisms for public funding are not in place. In fact, funding CCS demos is an ongoing political discussion. It will be very interesting to see what kind of funding mechanisms world leaders and national governments choose.

CCS will be commercially viable when the cost of emitting CO2 becomes higher than the cost of implementing CCS. When this occurs, CCS will be widely deployed. It is highly unsure when CCS will become commercially viable, but the EU is hoping to make it happen by 2020. This is optimistic given current uncertainties regarding cost-sharing , yet realistic if funding mechanisms for demonstration projects are established now.

Building demonstration projects for CCS, in accordance with the G8 leaders plans, will certainly give valuable experience with CCS technology that can lead to considerable cost reductions for CCS technology. But what about the costs of emitting CO₂?

There are no global prices on CO₂ emissions today, but some initial steps have been taken to establish a price on emissions. The Kyoto Protocol was a promising first step. However, it does not solve the challenge of establishing a global price on emissions as long as several key countries do not take part in the Kyoto agreement.

In the EU an initial CO₂ cap and trade market has been established. The EU emission trading scheme (ETS) defines an emission cap for the EU, and industrial stakeholders are given allowances for how much CO₂ they can emit. In the years to come, an increasing part of the allowances will be auctioned instead of being handed out for free. Industrial stakeholders must buy quotas on the market if they emit more CO₂ than they are allowed, and they can sell their quotas if they emit less CO₂ than allowed. The latter can occur if they implement emission-reducing technologies like CCS.

Hopefully, there will be a global market for CO₂ emissions within a few years. The first step is the international climate negotiations taking place in Copenhagen in December 2009 where the aim is to establish a global post-Kyoto agreement.

Today, the price of CO2 on the EU ETS is about 20 euros per tonne of CO₂. In comparison, CCS costs are five times as high. But this will most likely change. The figure below shows that CCS costs could decrease considerably, mostly due to the construction of demonstration plants. Combined with an increasing cost of CO₂ quotas, in the future it will eventually be cheaper to invest in CCS rather than to buy a CO₂ emission quota.

Forecast of development of CCS costs and Carbon Price.

Taking all factors into account, when will CCS happen? The first demonstration projects will most likely be in operation by 2015. Widespread deployment of commercial projects will take place a few years later, perhaps from 2020 onwards.

CCS Milestones

Past milestones:

1972
The first injection of CO₂ in an oil field in Texas, USA. The CO₂ was used to enhance oil recovery (EOR).

1986
The whole concept of CO₂ capture and storage (CCS) was for the first time presented by Norwegian researchers.

1996
The Sleipner project in the North Sea opens as the world’s first large scale commercial CO₂ storage project, storing one million ton CO₂ annually. CO₂ is separated from natural gas produced from the Sleipner field and injected into the Utsira formation, an aquifer 800 m below the bottom of the sea.

1997
Working with the Kyoto Protocol, world leaders acknowledge CCS as a potential mitigation mechanism, but no incentives were included in the final agreement.

2004
Second commercial large scale project in operation: The In Salah project in Algeria

2005
Australia is the first country to establish a regulatory framework for CCS.

The Norwegian government vows to finance the construction of two full-scale CCS plants (Kårstø and Mongstad) and an international CCS technolgy center (TCM) in Norway.

2007
EU heads of state and government commit to build 10-12 demonstration projects for CCS by 2015.

The G8 leaders recognize the critical role of CCS in tackling climate change, and recommend to build 20 CCS demonstration plants worldwide by 2010.

Entry into force in California of an emission performance standard (EPS) of 1100 pounds of CO2 per Megawatt-hour for electricity procured by local publicly owned utilities. As a result coal power plants will only be allowed if they have CCS

2008
The EU Climate package: An EU wide demonstration programme for CCS is established, and income from 300 million allowances from the European Trading Scheme (ETS) will be used to finance the demonstration programme. A new directive for CO2 storage and financial mechanisms for CCS demonstration projects were also part of the agreement.


Future milestones

2009
In December 2009 Copenhagen hosts the climate summit, where the aim is to agree on a post-Kyoto agreement. Hopefully CCS will be recognized as one of the tools for greenhouse gas emission reduction under any international offset mechanisms such as the Clean Development Mechanism (CDM).

2015
10-12 CCS demonstration projects to be operational, according to EU plans.
2020.

Date suggested by a cross-party group of Members of the European Parliament for the application of an emission performance standard making CCS de facto mandatory for all coal-fired power plants being permitted after 1 January 2009.

2020
First large scale commercial project including CO₂ capture, transport and storage could be in operation

2030
80-120 commercial CCS projects to be operational in Europe. These could precent up to 400 million tons CO₂ emissions in EU – one fifth on EU planned savings.

2050
All large CO2 producers all over the world have installed CCS?

1. Carbon Capture & Storage: Assessing the Economics McKinsey & Company. 2008

• Interactive map with planned CCS Projects
• How to deploy CCS