Insights and Commentaries
Why carbon capture could be the game-changer the world needs
23rd March 2019
The clock is ticking, and greater ambition is needed.
The scale of the challenge is unprecedented. The world economy is set to double in the next 20 years, while we need to cut our emissions by more than half in that time and become net-zero by mid-century. Limiting global warming to 1.5˚C requires monumental action. We need to change the way we live, the way we work, the way we farm and eat, and the way we consume energy.
Implementing this enormous shift will require substantial new investments in low-carbon technologies and efficiency. The IPCC SR 15 report finds that if the 1.5˚C goal is to be met, investments in low-carbon energy technology and energy efficiency will need to increase by roughly a factor of five by 2050 compared to 2015 levels.
But the sad fact is the world is dangerously off-track. The current trajectory, as defined by the pledges and targets that governments have made under the Paris Agreement, would limit warming to about 3.0°C.
Global CO2 concentration hit an all-time high in 2018. This is despite the record renewable generation capacity installed and operating globally, suggesting that renewables - while part of the solution - are not the complete solution. Indeed the IEA finds that of the 38 clean-energy technologies we need to meet our climate targets, only four are currently on track. Energy efficiency improvements have slowed down, and progress on key technologies like carbon capture and storage (CCS) remains stalled.
Policymakers need to respond to these challenges with urgency, enabling policies that drive investment and clean-energy deployment in the short-term, while demonstrating sustained commitment to a low-carbon environment for success in the long-term.
Growth: Decarbonisation can be a driver for prosperity
But what sounds daunting might well be an unprecedented opportunity for economic growth. Former heads of governments and climate leaders agree: Decarbonisation is also the growth story of the 21st century. The New Climate Economy found that bold climate action can deliver $26 trillion in economic benefits through 2030 (compared with business-as-usual), while generating more than 65 million jobs and avoiding more than 700,000 premature deaths from air pollution in 2030.
These findings should not go unnoticed, and governments should be looking for ways to capture this potential and translate it into actual economic growth.
Technology neutrality: Let’s not discard any solutions
We need ambition - but we also need cool heads. If we continue to perceive this challenge along the lines that have divided us for so long — as a tug-of-war, in effect — we will lose as a collective.
One of the key technologies that is off-track in the IEA’s clean energy monitor is carbon capture and storage (CCS), a set of technologies that prevents carbon dioxide emissions from entering the atmosphere and safely stores them deep underground in dedicated geological storage.
CCS first started to gain recognition in the 2000s as a means of capturing emissions from the dirtiest source of energy: coal-fired generation. This perception, that CCS is about delivering ‘clean coal’, coupled with the fact that its deployment globally has been slower than predicted has hung an albatross around its neck.
The truth is that CCS has much wider applications. It remains the only technology that can deliver deep emissions reductions in hard-to-abate industrial sectors such as steel, fertiliser and cement. Decarbonising these sectors is not simply about electrifying them with zero-carbon power; most of these processes require either carbon in their chemistry or high heat input, neither of which electricity is able to provide.
As global emissions continue to rise we are likely to overshoot our climate goals, and therefore carbon dioxide will need to be permanently removed from the atmosphere and used or stored. In fact, all four scenarios outlined in the IPCC SR15 report rely on carbon removal, with three of the four scenarios foreseeing significant amounts of carbon capture and storage.
CCS can also have a role to play in generating power, as most emissions linked to energy infrastructure are already essentially locked-in. Coal-fired power plants, which account for one-third of energy-related CO2 emissions today, represent more than a third of cumulative locked-in emissions to 2040. Most of these plants are in Asia, where average coal plant is just 11 years old with decades left to operate. Looking ahead, more than 200 GW of coal capacity is under construction globally with 300 new plants to come online in the next few years in India and China alone. CCS is the only technology that can truly decarbonise these facilities.
In OECD countries, renewable intermittency poses a real challenge to grid operators. Zero-emission electricity is central to our future but balancing services are likely to continue to be dominated by gas-fired plants for several decades yet. CCS is necessary.
High cost is often touted as the reason behind CCS’ failure to scale up. Based on ‘micro’ measurements such as the levelised cost of electricity, power generation that incorporates CCS may appear more expensive compared to other sources. However, modelling by climate organizations such as the IPCC and the UK Committee on Climate Change repeatedly demonstrates that at a ‘macro’ system level - which surely should matter more from a societal point of view - achieving deep decarbonisation would be extremely difficult and costly, if not outright impossible, without CCS.
At a micro level, while the cost of CCS could be more than $100 per tonne of CO2, it can also be as low as $20 a tonne for those applications where CO2 removal is an inherent part of the production process, such as in natural gas processing. Within that range, the IEA finds that as much as 450 million tonnes of CO2 can be captured and stored with a commercial incentive as low as $40 per tonne of CO2. Harnessing these low-cost opportunities could provide a solid foundation for scaling up CCS deployment.
Technology innovation will also help. In the US, an emissions-free natural gas power plant began test operations in 2018, which has carbon capture built in as part of the combustion cycle aiming to compete with conventional combined cycle generation. If proven in practice, this could be a game-changer.
Justice: Investing in a fair transition and new energy economy
In the past, vast changes in the economy have led to socioeconomic displacements. A successful energy transition will seek to avoid such displacements through smart policies. Carbon capture can play an integral role in enabling a just transition for workers currently employed in the energy sector. It can also be a catalyst to new energy economies – particularly CCS with hydrogen. Decarbonised hydrogen production by steam methane reforming (SMR)/gasification coupling with CCS has been at scale in commercial practice for decades with industrial applications.
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Turning to policymakers: What’s next?
Government support for climate investments: According to the IEA, 70% of global energy investments are expected to be driven by government decisions - and so how the energy transition will pan out depends on policymakers. Sufficient investment in CCS will not happen without strong and sustained government policy.
A value on carbon: Climate policies needs to reflect the externalities created by pollution through placing a value on carbon, like the tax credits in the US or the carbon tax in Norway. A value on carbon creates a business case for investment in CCS.
Policy confidence: CCS requires investment in long-lived capital assets, which will not happen without having confidence in predictable and stable policies.
We may still have just enough time to save the world from the disastrous effects of climate change – but only if we enact those decarbonisation policies that will enable growth and a just transition. In a technology-neutral playing field, CCS will naturally take a central role as one of the key climate solutions.