Year in review – CCS on the move

Publish date: December 10, 2014

This has arguably been the most momentous year for CCS in quite a while. The opening of the world’s first full-scale commercial CCS project in Canada marks a significant milestone. The Boundary Dam coal power plant is right now capturing 90% of its CO2 emissions while providing 110MW of low carbon base load electricity. 2014 also saw calls for an EU-wide Emissions Performance Standard (EPS) intensify after the USA introduced emission limits on coal and gas power plants. The IPCC’s 5th Assessment Report came out this year and makes unequivocally clear that CCS and Bio-CCS must be part of the mix if we are to limit global warming to 2°C. With this message from the world’s foremost authority on climate change we continue our mandate: To combat climate change with all available solutions, from renewables and efficiency to battery storage and CCS. Below we summarise some of the most impactful steps made to further CCS in 2014, before outlining a few expectations for the year ahead.

The United Nations shines spotlight on CCS

2014 was the year CCS has been waiting for, given the vocal support it received from United Nations System. The IPCC’s 5th Assessment Report could not have been clearer in calling for CCS, showing that a failure to deliver the technology will more than double the cost of decarbonisation.  The IPCC also confirms that Carbon Negative solutions like Bio-CCS (the combination of CCS and sustainable bioenergy) will be necessary to keep the world from becoming a hot house. The UN climate chief, Christiana Figueres, therefore urged nations and companies to prioritise investments in CCS.

Bellona provided input to several UN processes in 2014. Our active engagement in consultation processes and conferences in the United Nations Economic Commission for Europe (UNECE) and United Nations Framework Convention on Climate Change (UNFCCC),  contributed to these UN bodies shining a spotlight on CCS:  The European UNECE countries along with the USA and Canada have now called for strong incentives for CCS to be provided in the global post-2015 climate deal to be agreed in Paris next year.

EU – CCS gets a fresh start with new Parliament and Commission

2014 has seen the halls of power change at all levels of the European Union, with a new European Parliament and new European Commission being elected. Driving CCS forward has been stated as a clear priority of the newly elected Vice-President for Energy Union, Maros Sefcovic, and Commissioner for Energy and Climate Action, Miguel Arias Canete. Bellona is excited that the tempo has increased in the new European Parliament as many new figures active in driving CCS deployment in the Union have emerged.

The year got off to a fantastic start with the European Parliament passing a report urging action on CCS. Moreover, energy security moved to the centre of the European energy debate. In this context, Bellona worked to ensure CCS was brought into sharper focus for countries that see coal as a reliable energy source. The European Commission in its energy security communication made clear that there is no room for compromise between energy security and decarbonisation goals, stating that sustainable use of fossil fuels, both in electricity production and in industry, can only be achieved with CCS. This message was repeated with the G7 identifying CCS as a key energy security asset. 2014 also saw agreement on the EU’s 2030 Climate and Energy Package.  Bellona welcomes the setting of a greenhouse gas reduction goal of at least 40% by 2030 which sends important signals to negotiators in Paris next year. With an explicit reference to CCS as a crucial climate mitigation technology as well as commitment to increasing funding dedicated to CCS demonstration projects after 2020 under the NER400 programme, the 2030 Package has meant a significant step forward for CCS.

The EU’s technology platform for CCS, the Zero Emissions Platform (ZEP), of which Bellona is a founding member, has delivered two excellent reports this year. The first unambiguously shows that the inclusion of CCS leads to significant savings when decarbonising the European energy system. The second mapped the complexities of commercial CO2 storage operations, identifying business models to deliver this critical climate infrastructure.

ZEP also organised two high-profile events in the European Parliament, focussing first on CCS in relation to energy security and second, on CCS in relation to energy intensive industries and European industrial growth. Members of the European Parliament were joined by Commission officials and industry leaders in agreeing that Europe needs CCS fast.

Globally – Biggest emitters take on new leadership

A lot has happened for CCS globally. The UK and Canadian governments signed an agreement last month to deepen their collaboration on CCS, thus reinforcing their positions as global CCS leaders.

Moreover, the joint declaration by China and the US committing themselves to ambitious greenhouse gas emission reductions has entailed an unprecedented shift in dynamics ahead of the UN climate negotiations in Lima and will likely act as a catalyst to the conclusion of the post-2015 climate deal next year. Importantly, the world’s two largest emitters have explicitly announced their plans to enhance cooperation on CCUS while the CCS projects currently under construction in China have doubled to twelve.

Growing support for CCS has also emerged from South Asia. Bellona took part in two events in Indonesia and South Korea and shared the organisation’s knowledge and experience on CCS in energy-intensive industries as well as on public communication of the technology. Bellona finds the great number of CCS projects and initiatives that are currently underway in the region highly encouraging.

CCS on the ground – projects progressing around the globe

The opening of the world’s first industrial-scale CCS coal plant at Boundary Dam in Canada marks a game changing moment for CCS. From this year on, CCS is tangible, demonstrated and working. Its launch has been a clear indication that the remaining barriers to CCS deployment are no longer technological, but only political.

In the UK, two CCS projects are progressing well. White Rose, a new-built oxygen combustion plant at the Drax site, received €300 million of funding through the EU’s NER300 programme. While the other UK project, Peterhead, a gas CCS project in Scotland, received a share of €121 million to progress engineering (FEED) studies.

Meanwhile, the Road CCS project in the Netherlands is neither moving forward nor backwards. The Norwegian, German and French along with the European Commission have all pledged funds to getting the project over the line; however it is not yet clear if the facility’s owners are sincere in aiming to reduce their emissions.

In the USA, the Kemper County passed the halfway mark and is set to become the largest CCS power plant in the world when it opens next year.

Finally in Norway, now without any CCS project, a three-day long parliamentary hearing brought scorn upon the Norwegian government and Statoil’s mismanagement and failure to deliver the flagship CCS project at Mongstad. Bellona is now working to ensure the Norwegian government delivers an alternative full-scale project in Norway.

Those who falter and those who take the lead – Utilities and Industry

In blunt terms, European utilities had a dismal 2014.Their shares continued to tumble as unwanted fossil assets lay idle and others belched unprecedented amounts of CO2 into the atmosphere. E.On seems to have come to the conclusion that they cannot prevail when tethered to a corpse, that corps being their unabated fossil generation which they are now attempting to cut loose.

It is not surprising then that initiative and leadership has turned to the industrial sector. For many energy intensive industries like steel and cement production, CO2 emissions are inherent to the process. This means energy efficiency measures can only reduce some emissions and CCS is needed for the rest. 2014 was a year when industry CCS moved up the European agenda. The cement industry not only woke up to CCS, but is testing CO2 capture technology at Norcem in Norway. The industry is also building expertise in CO2 use (CCUS).

Bellona Europa – what we’ve done to move CCS forward

The Brussels-based branch of Bellona has been involved in all the processes outlined below, working alongside excellent partners in Europe and globally.

A new Bellona report published in November brought attention to the urgency of developing a European CO2 storage industry. The key finding of the study “Scaling the CO2 storage industry” is that annual investments of €500 million must begin by 2020, if we are to deliver the storage capacity required by our future CCS projects.

Other publications of 2014 include a CCS brochure, outlining the role CCS must play in solving the climate puzzle, as well as a number of briefs on topics ranging from ETS reform and energy security to energy storage and the future of energy utilities. Regarding events, Bellona was active at key meetings  globally, such as at the Jakarta CCOP event on Communicating CCS to the Public, the Korean CCS conference, the Austin GHGT, European Parliament briefing on CCS and energy security, the annual SCCS conference in Edinburgh, the UNECE workshop on Cleaner Electricity Production in Geneva, the ZEP annual general assembly, and COP20 in Lima. Moreover, Bellona organised a number of other exchanges, including a visit from the Canadian CCS leaders of Saskpower  to Europe and of former parliamentarian and CCS champion Chris Davies to Norway. On the Old Continent work has progressed on developing a CCS Roadmap for Portugal, on which Bellona has cooperated with Portuguese research entities and GCCSI.

Bellona is also back on the ground in Ukraine with an office in Kiev that will provide support in restructuring the country’s energy system.

It has also been a year “on the move” in logistical terms for Bellona Europa, as the team moved into shiny new offices – still in the heart of Brussels. The occasion was marked with speeches from Norway’s Ambassador to the EU, Atle Leikvoll and the IPCC Vice-Chair, Professor van Ypersele. We are happy to say that all the office plants have so far survived.

What do we expect in 2015?

Bellona Europa is happy to see this year end with renewed optimism for the vital climate technology that is CCS.

2014 may well be remembered as the beginning of the end for European unabated fossil fuels as calls for an EU-wide Emissions Performance Standard (EPS) intensified. Quietly, an EPS has already become a reality in Europe as the European Investment Bank has decided to no longer fund any new power generation projects that emit more than 550gCO2/kWh.

The importance of an EPS for Europe is increasingly acknowledged by a number of EU, NGO and industry representatives, but the EU is still lagging behind the UK, Canada and the US, who have already undertaken measures in this direction. This was the year when the USA took a bold step on climate action and called time on unabated coal with an EPS. Under the rules coal plants would have two compliance options, either of which would require the application of CCS technology. Canada has had an EPS for some years, but it was 2014 when this rule resulted in the construction and opening of the world’s first CCS equipped coal plant. Bellona hopes 2015 will see Europe follow.

If anyone will be getting a lump of coal in their stocking this year it will be Euracoal. Bellona kindly asks Euracoal to just stop whatever it is they think they are doing. If the past is any indication of the future in 2015, expect to see a lot more vocal discussion of a European EPS, European utilities to sink further into the mud, and the coal lobby continue to flounder.