Abby L. Harvey
GHG Monitor
6/6/2014
Proposed regulations released by the Environmental Protection Agency this week setting carbon emission reduction targets for each state would drive innovation, EPA Administrator Gina McCarthy said in announcing the rules, though it remains unclear how much the new regulations will drive the development of technologies such as carbon capture and storage. “It doesn’t just give states more options; it gives entrepreneurs and investors more options to play too,” McCarthy said. “It’ll deliver the certainty that private investment is looking for that will unleash market forces that will drive even deeper reductions through innovation and investment. It will spur cleaner technologies and power of all sorts so that we can bring new low carbon technologies to the table. Our plan will pull private investment off the shelves and into our clean energy revolution and send it in every direction, not just one or two that we know about today because the opportunities are endless.”.
President Barack Obama echoed that sentiment during a conference call early this week saying, “when Americans are called on to innovate, that’s what we do, whether it’s making more fuel efficient cars, or more fuel efficient appliances, or making sure that we are putting in place the kinds of equipment that prevents harm to the ozone layer and limits acid rain.”
Center for Climate and Energy Solutions (C2ES) Senior Fellow, Kyle Aarons says the flexibility of the proposed regulations introduces more variables to the mix than American ingenuity. “It’s really up to the states,” Aaron’s said. “If a state chooses to use a carbon pricing mechanism to implement the standards, like if it follows the [Regional Greenhouse Gas Initiative] RGGI example and uses cap and trade, then it’s really going to be up to the market were the cuts come from. That might be in the form of new technologies or it might be increased deployment of existing technologies.”
Unlike the widely controversial proposed performance standards for new build coal-fired plants which mandate the use of carbon capture and storage, the new regulations leave the path to meeting emissions reduction targets up to the states. While states may use CCS as a means to meet their targets, the proposed rule does not recognize it as a best system of emissions reductions (BSER) for existing coal plants. “Application of CCS at existing units would entail additional considerations beyond those at issue for new units,” the proposed rule says. “Specifically, the cost of integrating a retrofit CCS system into an existing facility would be expected to be substantial, and some existing [Energy Generating Units] EGUs might have space limitations and thus might not be able to accommodate the expansion needed to install CCS. Further, the aggregated costs of applying CCS as a component of the BSER for the large number of existing fossil fuel-fired steam EGUs would be substantial and would be expected to affect the cost and potentially the supply of electricity on a national basis. For these reasons, although some individual facilities may find implementation of CCS to be a viable CO2 mitigation option in their particular circumstances, the EPA is not proposing and does not expect to finalize CCS as a component of the BSER for existing EGUs in this rulemaking. Nevertheless, CCS would be available to states and sources as a compliance option.”
The exclusion of CCS from the BSER for existing plants doesn’t mean that further development of CCS and other clean energy technologies is unlikely, Aarons said. “All states have the flexibility to go beyond the target that EPA set for it. If a state wants to drive technology even farther and cut carbon even more, that wouldn’t be too surprising for a state to do that. We’ve already seen 10 states currently with cap and trade programs in place for carbon in the absence of a federal requirement, so it wouldn’t be that surprising for some states to go beyond EPA’s requirements in the future.”
Regardless of the EPA’s finding that CCS is not widely feasible for the mass reduction of CO2 emissions from existing plants, some in the CCS community remain optimistic about its inclusion in individual states’ measures to meet their targets. “CCS is included as a remedial technology which can be used to cut emissions under the EPA plan. We believe that it will be practically impossible for the U.S. to meet the EPA’s stated carbon reduction goal for the power sector without CCS for coal-fired plants. There is still much strategic value in coal for base-load generation, and renewables and natural gas in our view simply can’t replace the bulk of it,” Jonathan Carley, Vice President of Business Develop with CO2 Solutions said of the proposed rule.
