Photo credit: Center for American Progress

Carbon capture and storage (CCS) demonstration projects are being scrapped both in the U.S. and in Europe. Costs of CCS remain high due to large capital investments needed for capture equipment and the resulting reduction in power output from the addition of a CCS unit to an existing power plant. Obama has proposed to cut funding for CCS research by around 20% in his most recent budget proposal [1]. Things are not looking good for CCS, but with a recent MIT report arguing that we are on track for 4 to 7 degrees of global warming by 2100 [2], this is not the time to abandon a technology that will be instrumental in the transition to a low carbon society.

At one point those concerned with CO2 emissions considered carbon capture and sequestration from large point sources of carbon emissions as a key part of the response to concerns over climate change. CCS provided a means to reduce greenhouse gases while still using the vast resources of fossil fuels to meet a growing energy demand. The technology provided a way for coal-fired plants to drastically reduce their CO2 emissions. Consequently, the IEA’s projection that CCS should account for as much of the reductions in emissions by 2050 as renewables comes as no surprise [3].

In response, governments throughout the developed world began pouring money into CCS demonstration projects.  Up to $24 billion worldwide was invested, according to an industry institute [4]. Utilities with a large number of coal plants in the US viewed CCS as a hedge against stringent future climate policies, and often covered up to 50% of demonstration projects that easily cost hundreds of millions of dollars.

Just two years ago it was fairly easy to obtain financing for CCS projects, yet today the landscape has changed dramatically. First of all: we are no closer to reaching a global agreement on emissions reductions. The introduction of a cap-and-trade system in the U.S. failed in 2010, and in Europe reduced economic activity has contributed to a collapse in the price of CO2 allowances. Major CCS projects worldwide, such as Longannet in the UK and Jachswalde in Germany, have been cancelled or postponed. AEP completed a successful pilot project in West Virginia, but lack of climate policies made the company reluctant to move ahead with the full-scale project.  The only projects going ahead are those that rely heavily on additional revenues from selling CO2 for Enhanced Oil Recovery (EOR), a process where CO2 is pumped into oilfields to increase extraction of petroleum. Those revenues will undoubtedly play an important role in creating incentives for the first couple of CCS projects, but the storage opportunities in potential EOR fields simply aren’t big enough for it to be more than a limited contribution to overall emissions reductions.

Budget cuts in both the U.S. and the EU do not create a welcoming atmosphere either. When unemployment is at record-high levels it is hard for any politician to try to push climate legislation that could force companies to invest in capture equipment that may add 50% to 100% to the cost of electricity.

The prospects for CCS in the U.S. are worsened by low-emission natural gas increasingly replacing coal as the preferred fuel for electricity generation. Lower CO2 concentrations in flue gas from natural gas-fired power plants makes it more expensive to capture the CO2. At the same time there has been little to no appetite for carbon capture in the developing world, where the number of coal plants is increasing rapidly. CCS can substantially reduce emissions from fossil fuel power plants, but it takes about a decade to develop to a commercial scale technology. We need to start developing the technology soon if we are to have a realistic chance of significantly reducing CO2 emissions in the near future!

Given their current share of global electricity production of around 3% [5], it will take many, many years before non-hydro renewables can supply a majority of the world’s electricity. Unless there is a massive build-up of nuclear capacity, the world will find it difficult to significantly reduce emissions in the near term without CCS as part of the solution.

Yet for CCS to be part of the solution we need to rethink how we go about developing the technology. First of all, there needs to be a clear path towards creating markets for low- or zero-carbon generation technologies. Low-carbon technologies will most likely never be able to compete with fossil fuels at a large scale unless a significant price on emissions is enacted.

Government support for large-scale demonstration plants and R&D need to be ramped up, so that investors are sure that the governmental financial support is solid and stable, despite current budget cuts. Reliable support for technology development and implementation is a mantra constantly heard for wind and solar, but is equally important for CCS. Financial support should be concentrated on a few projects to ensure that enough money is available to actually build those demonstration plants receiving support. Support should be focused on proving, at a commercial scale, technologies that could easily be ramped up to provide emissions reductions on a scale large enough to make a global impact.

The effects of carbon dioxide on the climate are real, we cannot run away from climate change and eventually emissions will have to decrease. Taking the necessary steps in proving carbon capture technology today would make future reductions much less costly than they would otherwise be, and that is something worth investing in.