Mixed response to UK consultation on mandatory CCS

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The analysis of the responses was made by WWF-UK. An emission performance standard (EPS) would complement the current EU emissions-trading scheme (ETS) by setting a limit to the amount of CO2 emitted per kilowatt-hour. It would act as a regulatory stick to build coal-fired power plants with CCS – or none at all.

A common concern was that an EPS on coal-fired plants would cause a move from expensive coal to cheaper gas – which has been dubbed a “dash for gas.” This highlights the need to adopt a long term perspective and lower an EPS to a level so that it also requires CCS for gas-fired power plants.

Many participants in the consultation also expressed concern for the implementation of EPS without a “level playing field.” An EPS in only some member states, for example, would cause energy production in those states to be more expensive and thus less competitive.

An EU-wide EPS would not in principle create this problem, but could do so indirectly by increasing electricity prices in comparison to trading partners. Nevertheless, by going first the EU would set the bar for  pushing CO2 capture and storage (CCS) technology higher.

From another perspective, many respondents highlighted the fact that CCS has not yet been commercially deployed and opined that an EPS should follow, rather than precede, the commercial availability of CCS.

As many other respondents pointed out, however, the EU ETS does not set a floor price for CO2 emissions and thus does not create the necessary incentive for private investment that is required to make CCS commercially available.

“It would be extremely unwise to rely on the CO2 signals coming from the ETS to ensure that investment is made to limit CO2 emissions from coal generating plants. An EPS has real value in providing a market signal against which investment decisions can be made”, wrote Progressive Energy.

“The absence of a floor price of carbon under the EU ETS means that risk is not mitigated sufficiently to drive private sector investment in CCS. EPS should be applied to the entire plant generation capacity, not just 25 percent”, explained Tees Joint Strategy Unit.

Other respondents emphasised that in order to achieve a rapid deployment of CCS technology within a narrow timeframe, an EPS is key. Organisations such as CCSA, IChemE and National Grid emphasised that an EPS would act as a “mandatory tool” that would accelerate investment in CCS.

“In order to avoid global temperature rising by more than 2°C in accordance with Intergovernmental Panel on Climate Change (IPCC) recommendations, CCS commercial deployment must be achieved by the goal year of 2020,” said Eivind Hoff, director of Bellona Europa.  “As many industry stakeholders – including, more recently, Royal Dutch Shell – point out, the current EU emissions-trading scheme is not sufficient to provide industry with the necessary incentive to make the much-needed investments in CCS within this narrow timeframe,” said Hoff.

Click here to download the entire DECC response.