Too Early or Too Late for CCS-What Needs to be Done to Overcome the Valley of Death for Carbon Capture and Storage in Europe?

Abstract

Climate change has been identified as a key challenge for our modern society. Economic growth and societal welfare has always been associated with increasing energy consumption and environmental pollution. However, the key question to be answered is how much of our money we would like to invest in a better environment. The most cost-effective solution to combat climate change would be to reduce the emission of greenhouse gases where this could be done at lowest cost. However there is no real driver to reduce emissions for an individual, unless there is a legal requirement or a cost associated to the release of CO2. Neither option will work if it is applied only at national or regional scale. At a European and Member State level, numerous policies are in place designed to incentivise carbon reductions to facilitate the introduction of low carbon technologies such as Carbon Capture and Storage (CCS). In Europe, the financial support for CCS demonstration via the EEPR and the NER-300 initiatives gave an expectation of the construction of 10-12 demonstration plants in Europe. The hope that these projects can be successfully deployed has been significantly declining in line with falling CO2 certificate prices. Near term stalling of CCS deployment in Europe, including technology readiness (e.g. up-scaling, by-products, emissions, aquifer storage); economics (CAPEX, OPEX), liabilities (e.g. probability, value, guarantees); and public and political acceptance is a likely future development. Different support mechanisms need to be applied for technology development, technology introduction and technology deployment, taking into account local conditions and interactions between different instruments. In particular all measures for technology deployment should enable a level playing field for CCS and other carbon reduction options.