Insights and Commentaries
CCS opportunities and challenges in the Community of Portuguese Language Countries
15th June 2015
This Insight provides the viewpoint of Julio Carneiro, assistant professor of the University of Évora, on carbon capture and storage (CCS) technology opportunities in the Community of Portuguese Language Countries (CPLP). It is based on the findings of the report “CCS in the Community of Portuguese Language Countries – opportunities and challenges” which aims to broaden the discussion on CCS as a key climate change mitigation option in the nine sovereign states in which Portuguese is an official language. The report presents an oversight of the industrial, energy and CO2 emissions profiles, and it discusses the CO2 storage opportunities in these countries, namely Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, Portugal, São Tomé and Principe, East Timor and Equatorial Guinea.
The publication “CCS in the Community of Portuguese Language Countries – opportunities and challenges” is now available on the Global CCS Institute website. Together with the “CCS Roadmap in Portugal”, it is the result of a one year collaborative project, co-funded by the Global CCS Institute and conducted by:
- Centre for Environmental and Sustainability Research (CENSE) research group of the Universidade Nova de Lisboa,
- CGE research group of the Universidade de Évora,
- National Laboratory of Energy and Geology,
- Rede Eléctrica Nacional (REN)
- Bellona Foundation
CPLP member states. Image provided.
What is the link between Portuguese language countries and CCS?
CO2 emissions in the CPLP countries have doubled since 1990, reaching 538 million tonnes per annum (Mtpa) in 2012. The distribution of emissions is very asymmetric, with Brazil consistently accounting for 80%-85% of total emissions. However, the per capita emissions remain low at 2.05 tonnes in 2012, and only Equatorial Guinea (the 2nd largest per capita emitter in Africa, behind South Africa), and Portugal have substantial per capita emissions. Nevertheless, fast population and economic growth have prompted investments in the power and industrial sectors in several Member states, and emissions are likely to increase significantly in the coming decade.
CCS is not a high priority in any of the Member states, but Brazil and Portugal have been engaged in CCS activities for several years. This report focused mainly on those Member states where CCS has not been discussed at all, namely on six countries in Africa:
- Cape Verde
- Equatorial Guinea
- São Tomé and Príncipe
- and one in Oceania (East Timor).
What are the main drivers for developing CCS in the CPLP?
With the exception of Portugal, all CPLP countries are non-Annex I Parties of the Kyoto Protocol. Therefore, the current drivers for deploying CCS activities can be sought in Certified Emission Reductions (CERs) credits from CCS projects developed under the Clean Development Mechanism (CDM). However, the value of CERs is currently low and the future of the CDM post second Kyoto Commitment period (up to 2020) will be determined in the negotiations for the post 2020 climate agreement, due to take place at the Conference of the Parties (COP21) in Paris in December 2015.
Other drivers are connected to the fossil fuel upstream and downstream sectors in Angola, East Timor and Equatorial Guinea. Mozambique, where coal mining is an important activity, will also start natural gas production in 2018. The economy of these countries is, or soon will be, heavily dependent (more than 80% GDP) on fossil fuel production. These same countries are developing the hydrocarbon downstream sector, with investment planned in refineries, gas processing and LNG facilities.
With such a heavy dependence on fossil fuel production, deploying CCS can ensure a safer economic context for these countries, in the event of internationally adopted binding goals for reduction of emissions associated with fossil fuels. Deploying CCS can also allow those CPLP countries, which also rank among the fastest income growing countries in Africa, to decouple CO2 emissions and economic growth.
Another important driver can come from business opportunities, which may exist from the use of CO2 for enhanced oil recovery (EOR) in Angola, Equatorial Guinea and East Timor, or from storage in Mozambique’s extensive sedimentary basins of CO2 captured in South Africa.
What are the sectors with highest prospects for CCS development?
Mozambique seems to present the best prospects (other than Brazil) among CPLP countries to engage in CCS projects. Early opportunities exist in the gas processing and LNG sectors, with the onset of natural gas production in 2018. The country is also involved in an effort to develop its energy sector, based on its endogenous coal and gas resources, with up to seven new coal or gas-based power plants scheduled to come online in this decade.
As for Angola and Equatorial Guinea, use of CO2 in EOR is the most interesting prospect, since several hydrocarbon fields should be reaching maturity. The hydrocarbon downstream sector in these countries has also announced plans to build refineries and new LNG plants, and the latter could present early opportunities for CCS projects. The mature oil industries in these countries can provide the basis for a regulatory framework. Some prospects may also exist in East Timor, since the country plans to build a refinery, a petrochemical plant and a LNG facility, although conditions for storage are not the best.
Two other sectors are worth a remark: the cement and bioenergy sectors. The cement sector is growing fast, especially in Mozambique and Angola. Several new factories are being built or planned and the possibility of developing CCS projects in that sector should not be discarded. As for bioenergy, it is uncertain if the sector will develop in a consistent manner in the African CPLP countries. Nonetheless, the vast biomass potential especially in Guinea-Bissau and Equatorial Guinea, but also in Mozambique and Angola, are certainly worth considering for Bio-CCS projects.
Which are the most important challenges for CO2 storage?
The challenges to deploy CCS in the CPLP countries are considerable and reflect many of the challenges faced by CCS in developing countries. A critical factor is the low level of knowledge about the technology. This prevents decision makers from understanding how the technology can be relevant and it is a bottleneck for the academic community to engage in R&D activities.
Another critical factor is that the business model for CCS is not clear, particularly for Least Developed Countries (LDC) such as the majority of CPLP Member-states. The obvious business model for CCS in LDC countries (ie the CDM) is currently at a low level. Additionally, a possible business case for CCS in Mozambique is to capture and transport CO2 from South African sources and store it in the large sedimentary basins in Mozambique. However, the issue of transboundary storage of CO2 is not solved yet and it will be considered by the United Nations Framework Convention on Climate Change (UNFCCC) in 2016.
As for CO2 storage opportunities, offshore hydrocarbon fields are an obvious choice for Angola and the Equatorial Guinea, but Angola is also likely to have good onshore storage conditions in saline aquifers. Mozambique has extensive onshore and offshore basins and certainly will have storage capacity in saline aquifers far above its needs, as does Guinea-Bissau. In East Timor a precautionary approach should favour storage in the hydrocarbon fields, given the complex tectonic framework of the country.
Is there a funding envelope for CCS projects amongst CPLP countries?
Until now, funding for any cooperation among CPLP countries came mostly from the Global CCS Institute and the Carbon Sequestration Leadership Forum (CSLF). East Timor can eventually apply for funding from the Asian Development Bank CCS Fund.
Most of the CPLP countries are in Africa, and it would be interesting to involve the African Development Bank in discussions about CCS, so that a policy is defined regarding the technology.
The World Bank does have a CCS Trust Fund, but the remaining funds are already committed to South Africa and Mexico.
One interesting source of funding for initial studies is the Technology Needs Assessment (TNA) mechanism, managed by the Global Environmental Facility (GEF). This mechanism aims to assist developing countries to identify and analyse their priority technology needs. Mozambique will start this exercise this year and it should clarify the role that CCS can play in the country.
In the long run, the Green Climate Fund (GCF) could be an important source of funding, since it has explicitly included CCS as an eligible funding activity. If preliminary studies (storage capacity, role of CCS in each country) allow identifying early opportunities for pilot or commercial scale projects, the GCF may be a relevant source of funding in the coming decade.