The European Climate Change Programme (ECCP), initiated by the Commission, met with stakeholders from industry, NGOs and Member States in Brussels on May 8th. This meeting was part of the preparatory work for establishing legislation on CCS activities in the EU.
There was widespread consensus that a transparent and efficient regulatory framework needs to be put in place very soon in order to use CCS in the fight against global warming. The European Commission Directorate General responsible for the Environment (DG Environment) presented the Commission’s proposal and the time table for its adoption in the EU decision making bodies.
As pointed out by the Commission, the challenge now will be to convince the public, governments and operators that it is safe to store carbon dioxide underground and, furthermore, that it is worth the enormous costs to introduce the new technology. The Commission considers the risk of carbon dioxide leakage from the depleted geological formations in which it will be stored to be minimal.
But there was certain sticker shock at the price of the new technology expressed at the ECCP stakeholders’ meeting. There may be a loss of energy in the process of adopting the technology of EUR 30-60 euro per tonne averted from the atmosphere, a concept called an energy penalty.
Market mechanism or regulation?
The Commission presented three different schemes for regulating CCS. One way is to use market mechanisms in the Emission Trading Scheme (ETS), with or without supplementary legislation to specify CCS requirements. When the price of emitting carbon dioxide is higher than the cost of introducing CCS technology, industry will have an incentive to deploy the technology.
Another option is to create a whole new set of legislation specifically concerning CCS, and a third is to use existing environmental legislation and fit CCS into it, as occurred with the EU’s Integrated Pollution Prevention and Control (IPCC) directive.
ECCP stakeholders seemed to agree at the May 8th meeting that using existing environmental frameworks is insufficient to cover the concern of storing large amounts of carbon dioxide in reservoirs. On the other hand, it is doubtful whether market incentives will be enough to compel industry to make the huge investments needed for CCS.
A middle ground seems to be the best option, which would include revamping some current legislation to exclude carbon dioxide from the IPCC directive and use some kind of regulation to strong-arm industry to invest. It is unclear, however, if market incentives can work in this context. Indeed, the Emission Trading Scheme is already a controversial mechanism as the price of carbon dioxide emissions is still too low.
Another critical issue is how and when to retrofit existing power plants with CCS technology. The Dutch government expressed scepticism toward mandatory retrofitting of all existing plants at too early a stage. Following up on industry concerns, The Netherlands said CSS needs to be phased in gradually. The Commission said it had still not settled this issue.
Industry and NGOs teaming up
European Union Member States, the Commission and NGOs all agreed that CCS technology was only one way of dealing with climate change, and should not be singled out as the only option. Clearly, energy efficiency and renewable energy should be given top priority. The World Wildlife Federation (WWF) raised a series of technical questions related to the safety of carbon dioxide storage. But the NGO–once an ardent critic of CSS–stressed that the technology must be implemented rapidly to be an efficient tool against global warming.
The European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP) was also represented at the meeting. ZEP demonstrated that industry already has several CCS projects in operation and under construction.
The aim of ZEP is to allow power plants in Europe to have zero carbon dioxide emissions by 2020. A flagship programme, consisting of 10 to12 demonstration projects, will have to be built by 2015. This will be done so that sufficient experience is gained, as well as the scale of the economics involved calculated, to allow CCS technology to become commercially viable by 2020.