Mixed report card for CCS at Clean Energy Ministerial

The third Clean Energy Ministerial (CEM3) was held in London on 25-26 April 2012, bringing together Ministers from more than 20 participating countries to discuss progress made across a range of clean energy initiatives, including CCS. Among the documents provided to Ministers were:

• Tracking Progress in Carbon Capture and Storage – a joint report from the Global CCS Institute and the International Energy Agency (IEA) reporting on progress made by committed governments against recommendations made by the CCUS Action Group to CEM2 in April 2011 on concrete, near-term actions to accelerate CCS deployment;
• Global Status of CCS Update: March 2012 – the Institute’s latest assessment of the worldwide status of large-scale integrated CCS projects; and
• Funding Carbon Capture and Storage in Developing Countries – a report developed by the Institute working with a range of other organisations which made recommendations to Ministers on the need for and possible mechanisms to provide funding to enable CCS in developing countries.

The IEA also presented a report on Tracking Clean Energy Progress which highlighted the role of CCS.

The overall assessment of progress on CCS in these reports is that despite developments in some areas, significant further work is required if CCS is to realise the potential it holds as a way to achieve significant global emission reductions. In particular, CCS financing and industrial applications continue to represent a particularly serious challenge.

Financing of CCS was the theme of a roundtable discussion held during the CEM, which brought together Ministers and other government representatives, CCS project proponents and equipment suppliers, the financial community and peak NGOs, including the Institute. Despite the range of interests represented around the table, some clear themes emerged in terms of issues which had to be addressed for CCS to progress. These were the need for all parties to take a long-term perspective on CCS as an industry; the need to address issues of liability and risk, particularly residual risk; the importance of placing a value on CO₂, whether through sale for uses such as enhanced oil recovery or through carbon taxes/emission trading schemes; and the need to put CCS on an equal footing with renewables and other clean energy sources. All of these themes represent areas where government and industry need to work together.

An important announcement made by the UK Government during the CEM was the allocation of up to £60m to support the development of CCS technology in emerging markets. This announcement was in direct response to a recommendation made in the Funding Carbon Capture and Storage in Developing Countries report that $200m is allocated internationally for developing countries to accelerate the deployment of CCS in the near term. The £60m is the UK’s contribution to this recommendation.

The Carbon Capture, Use and Storage (CCUS) Action Group was established by the Governments of Australia and the United Kingdom in 2010. It brings together governments, institutions (including the Institute), and industry to facilitate political leadership and provide recommendations to the CEM on concrete, near-term actions to accelerate the global deployment of CCS. At CEM3, the CCUS Action Group noted:

• the progress report presented by the IEA and the Institute highlighting activity undertaken by countries against the CCUS Action Group recommendations; and
• the key messages and recommendations from the working group established to identify appropriate funding mechanisms to support CCS demonstration in developing countries.

Following CEM3, the CCUS Action Group will focus on three work streams centred around addressing financial and commercial issues, financing CCS in developing countries, and supporting the development of CCS in industrial applications. The Institute will lead the first two of these workstreams. In particular, the CCUS Action Group announced:

• that the Institute, in conjunction with the Program Managers’ Network (a network of governments involved in the management of large-scale demonstration programs), will work with jurisdictions, project proponents, and the investment community to analyse the financial and commercial risks associated with CCS demonstration; and
• the establishment of a working group, with strong representation from industry, to progress work on supporting CCS in industrial applications (this work will be led by the IEA and the Carbon Capture and Storage Association, with input from the Institute).

Government members of the CCUS Action Group were also urged to continue to take action to deliver further progress in these key areas by the fourth Clean Energy Ministerial in New Delhi, India, in 2013, with the assistance of CCUS member organisations.