HomeLow carbon futureWill the next government lead the world in industrial CCS?

Will the next government lead the world in industrial CCS?

KraftwerkThis post is by Richard Black, director of the ECIU.

It was just over ten years ago that Sir David King, then chief scientific adviser to the British government, beckoned a small group of journalists into a conference room to extol the potential of carbon capture and storage (CCS).

We were at the Met Office in Exeter for a conference designed to shed some light on the issue of precisely what the UN climate convention means by ‘dangerous climate change’.

Sir David told hacks from the BBC (me) and the main national papers that CCS offered a way to ameliorate climate change, however dangerous the latter might turn out to be.

Technology existed that could capture carbon dioxide entering the atmosphere from burning fossil fuels, he pointed out. Generating electricity with CCS-fitted power stations could help make climate targets more affordable; and Britain, with its expertise in North Sea oil and gas and a ready-made network of pipes leading to newly depleted reservoirs, was in a great position to lead the world, if only the government would get something built.

Unhappily for CCS proponents, most of his words would be equally relevant today.

Carbon capture: good for power but essential for industry
Reports from institutions such as the Intergovernmental Panel on Climate Change and the International Energy Agency regularly point out that CCS has great potential and that meeting the internationally agreed 2oC global warming target will be difficult or even impossible without it.

Some 22 working CCS projects exist around the world, and Britain is building two: the Peterhead gas-fired power station and the White Rose oxyfuel plant in Yorkshire.

However, given the scale of the climate problem, this is a long way short of a revolution.

So I was pleased this week to chair a debate at which Green Alliance launched a new report on CCS; and I was keen to hear whether the report’s author Dustin Benton could come up with anything fresh.

His macro-conclusion is that most policies on CCS – certainly in the UK – are shooting at the wrong target. It’s like one of those diet issues when you spend years being as careful as you can with the fat, only to learn that fat is good and carbs are the real villain.

Generally, in the UK, CCS has been treated in policy terms as something for the power sector.  It’s currently supported through contracts for difference (CfDs) under the reformed electricity market. In the EU, the NER300 mechanism for supporting innovative low carbon projects can encompass all applications of CCS, but currently only supports one: at the White Rose power station.

And this is a little odd; for, although CCS can play an important role in the power sector, it’s not absolutely necessary for power decarbonisation. A combination of renewables and nuclear power could do that job.

Where it appears absolutely pivotal is for heavy industry. Carbon dioxide is created in factories that produce cement, refine metals and make chemicals. If we’re to continuing making and using these things but significantly cut the associated emissions, then either we need to use CCS or find entirely new manufacturing methods.

So we have a dilemma: governments are currently supporting CCS in the context of power generation, but it needs to be supported for industry.

Piggybacking on power CCS brings the costs down
As Dustin Benton illustrates in a previous post, Green Alliance’s suggestion is to join the dots between the two.

Support for the White Rose and Peterhead power station projects will lead to essential infrastructure being built, notably a pipeline to carry CO2 and a facility for injecting it under the seabed. With further support, then, factories nearby could piggyback on these, sending their CO2 into the same pipe and the same injection well at relatively little additional cost.

The sums sound impressive. The White Rose project on its own would cut carbon at an estimated cost of £250 per tonne. Green Alliance calculates that connecting in pipes from the Scunthorpe steelworks, the Humber refinery and other industrial facilities nearby would bring the cost down to £91 per tonne.

When you set that alongside the costs of avoiding emissions using other technologies, it looks pretty good: not as cheap as onshore wind, but comparable with solar, and certainly cheaper than offshore wind.

What this approach would lead to, logically, are clusters of industry in various bits of the country, including fossil fuel power stations, with each cluster connected to a CO2 storage facility.

As if by magic, the UK already has one nascent cluster. In January, a group of four energy intensive companies in the north east announced themselves as the Teeside Collective, and will look at pooling their emissions into a common pot. In this case, however, there’s no power station involved, so the level and mechanism of support aren’t clear.

Questions that need to be cleared up
As Dustin Benton acknowledges, the CCS cluster vision comes with a host of questions.

The most important is: what funding mechanism can provide long term support, encourage competition, be flexible enough to accommodate factories opening and closing, and encompass both the power sector and industry, which come under different government departments?

It’s not clear what happens to factories that fall outside clusters, or whether the public would support or oppose the idea. It’s not clear who owns and is responsible for all elements of the process.

And it’s not clear whether any incoming UK government would have the desire, the breadth of vision and the political space to enact anything so broad and deep.

Industries, however, appear broadly to be onside. And that’s hardly surprising. Depending on how it’s funded, industrial CCS offers them an opportunity to keep on doing what they do and be protected from the cost escalations associated with a blunter policy measure such as a high carbon price.

And CCS technologies are likely one day to spread around the world. British companies stand to gain if they’re the ones leading the innovation charge. Although that too is a point that Sir David King made ten years ago in Exeter.

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Green Alliance is a charity and independent think tank focused on ambitious leadership and increased political support for environmental solutions in the UK. This blog provides space for commentary and analysis around environmental politics and policy issues as they affect the UK. The views of external contributors do not necessarily represent those of Green Alliance.