Europe has to lead on CCS
Regardless of the commitments last December within the framework of the EU Energy and Climate Package, coal will remain an important source of energy in Europe. In 2007, it accounted for 30 percent of the EU energy mix which is only one percent less than in 1995. The need to enhance energy security - which is a more and more important priority for the EU - will also influence the continued significance of coal. Several member states, including Poland, plan to build or are building new coal-fired power stations. Even in countries which aim to sharply reduce CO2 emissions, coal has a role to play as a transition technology before the full potential of renewable sources and energy efficiency is achieved
Paweł Świeboda and Agata Hinc*
IEA foresees in its World Energy Outlook 2008 that coal production will double in the world to 2030. This means that the only realistic measure to reconcile goals of climate policy, economic concerns and needs of energy security, is the development of Carbon Capture and Storage (CCS) technologies. Many predict that in the energy sector and in the industry, CCS can contribute to one fifth of reductions that are indispensable to limit up to 50 percent the emissions of greenhouse gases to 2050. CCS technology relates to highly concentrated emission sources, from which millions of tons of CO2 are generated annually. The technology is new, although the oil and gas industry has thirty years of experience in using CO2 to extend its oil extraction. Estimates show that there are geological conditions enabling us to store 10 thousand billion of tons of CO2 world-wide.
Year 2009 will be of key importance for the development of CCS technology. The financial crisis requires public investment in technologies of the future which will ensure competitiveness and economic development for years to come. Spending on eco-technology plays an important role in the Obama stimulus package. Increasing investments in R&D in the area of new energy technologies, transport and storage, is advanced in Europe as well, as evidenced by the latest strategic document of the German Ministry of Economy from 5 February. This philosophy is right – it means that today’s investments have to serve future generations which will pay off our debts. Lord Nicolas Stern claims that the current financial crisis may stimulate the development of low-carbon economy which will not only limit the risks of global warming, but can also lead to the fall in unemployment.
A bold political vision will be needed on CCS to make possible the development of technology on a large enough scale to counteract the growth in greenhouse gas emissions. Additionally, we will need to create legal and institutional frameworks and transport logistics as well as a supervision and monitoring system. We will also need to build social acceptance and address misgivings associated with the safety of CCS installations. A bold political vision is very important also because investment decisions have to be taken right now while we will have to wait for their results. One of the arguments in favor of speeding up decisions on development of clean coal technologies is the common interest of all EU member states. CCS technology will not lead to similar differences of opinion we have seen on relations with energy-producing countries.
The coming months will be crucial in getting the commercial CCS application off the ground. To bring this goal closer, the EU has decided to build up to 12 demonstration plants in a period to 2015, which will require additional support of 1 billion euro per installation. According to the decisions of the European Council, 300 million emission permits within the framework of the ETS system, with a total value of about 9 billion euro, will be assigned on CCS projects in Europe. Currently, the system of criteria for financial support from the community budget is being established. It is meant to launch a programme which will test all key technologies in the framework of a broad geographic spectrum of localizations in Europe. The more complex projects will receive higher allocations and the simpler ones lower. We will also need an independent monitoring and supervision system for the implementation of individual decisions.
International competition in the area will be stronger and stronger. Only in the last couple of days the Norwegian government decided to allocate 750 million dollars to the centre for CCS technology, and Canada 850 million dollars on “development and demonstration of promising technologies, including CCS projects”. Leaders in comprehensive research and tests will benefit from a strong position on the international market. Time to develop a European technological specialization in this area is now.
* Paweł Świeboda is a president and Agata Hinc is an analyst – “Sustainable Development” Programme, demosEUROPA – Centre for European Strategy
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