Abby L. Harvey
GHG Monitor
9/25/2015
What once seemed a very promising future for carbon capture and storage has fallen by the wayside due to a lack of market development, but all is not lost, according to MIT Senior Research Engineer Howard Herzog. “The number one reason for CCS not meeting the expectations of 2009 has been the lack of market development. Because it is always cheaper to emit CO2 to the atmosphere than to capture and store it, markets will only evolve if climate policy is put in place that forces reduction of atmospheric CO2 emissions,” Herzog wrote this week in a thought leader article published by the Global CCS Institute.
Herzog noted that while progress has been made in the development of CCS technologies, including the world’s first commercial-scale CCS plant coming online in 2014, these advances have been much slower than was anticipated only a few years ago. Given the failure of the United Nations Framework Convention on Climate Change to produce a post-Kyoto climate protocol in Copenhagen in 2009, as well as the United States’ failure to pass cap and trade legislation, CCS never got the policy support it needed to grow at a substantial rate.
“Today, the exact timing and extent of climate policy is not at all clear. This makes it hard for industry to make big investments in CCS. Companies that have made significant investments in CCS are now cutting back or dropping out,” Herzog wrote, noting European utility Vattenfall’s abandonment of its CCS research and development efforts, including a CCS pilot plant in Germany.
The next step in climate policy will be the agreement to come out of the 21st session of the UNFCCC scheduled for December in Paris. While there is reason to believe a climate deal will be reached, it might hinder, not help, the development of CCS, Herzog said. The country contributions to the agreement already announced will not meet the goal of limiting global temperature rise to 2 degrees Celsius. “By themselves, these plans will not incentivize any large-scale deployment of CCS. Worse still, Paris will push the timeframe for any stronger climate policy out for at least another decade,” Herzog writes.
However, U.S. national policy could fill the gap between what is needed to advance CCS and what can be provided at the international level. “Going forward in the US, the market pull can come from the newly released Clean Power Plan, which will require utilities to reduce CO2 emissions by 32 [percent] by 2030 from 2005 levels. On the technology push side, the US Department of Energy’s fiscal year 2016 budget request to Congress included a 30 [percent] investment tax credit for CCS, as well as a production tax credit of US $50 ton/CO2 stored,” according to Herzog.
