Insights and Commentaries
National coal council recommends policy action to speed CCS deployment
15th July 2015
Topic(s): Carbon capture, Economics, law and regulation, Policy, use and storage (CCUS)
The Institute’s Pamela Tomski, Senior Adviser – Policy and Regulation, was a Lead Author of “Fossil Forward – Revitalizing CCS: Bringing Scale and Speed to CCS Deployment”, a study released in January 2015 by the National Coal Council (NCC). The NCC serves as an advisory committee to the United States (US) Secretary of Energy. It provides advice, guidance, and makes recommendations as requested by the Secretary on matters pertaining to coal and the coal industry. Ms Tomski was appointed to the council by The Honorable Dr Ernest J. Moniz, the US Secretary of Energy, in May 2014. In this Insight, Ms Tomski reports on the NCC report recommendations.
In May 2014, US Secretary of Energy Dr Ernest J. Moniz requested that the National Coal Council (NCC), an advisory committee to the Secretary, assess the value of the Department of Energy’s (DOE) Carbon Sequestration Program. In response, the NCC released Fossil Forward – Revitalizing CCS: Bringing Scale & Speed to CCS Deployment, an assessment of the cost, safety and technical operation of carbon capture, utilisation and storage (CCUS) and the progress made by the US DOE and others. The study also contains recommendations on how to advance commercial scale CCUS deployment.
The NCC study featured a chapter on the global status of CCUS (largely informed by the Institute’s Global Status of CCS: 2014 report), and assessed DOE’s Carbon Sequestration Program in terms of its progress regarding public-private investments; CCS cost, safety and technical operation; and industry views.
In June 2015, Janet Gellici, the NCC’s Executive Vice President and Chief Operating Officer, conducted an Institute webinar on the NCC study, Revitalizing CCS: Bringing Scale and Speed to CCS Deployment.
The Global CCS Institute hosted a webinar featuring the NCC report findings. Slides from the webinar are available above and a recording is available on the Global CCS Institute website.
A number of the NCC’s principal recommendations from the study are similar to the Institute’s recommendations for decision makers as both call for policy parity for CCS vis-à-vis other low carbon technologies, funding support for CCS research and development activities, increased funding for demonstration projects, and international collaboration. Upon release of the study, it was noted that although the US DOE has been a world leader in the development of CCS technologies, more large-scale demonstration projects are needed to advance technical and operational experience, drive down costs and bring CCS to critical mass.
The NCC made the following principal recommendations to the Secretary:
- In order to achieve CCS deployment at commercial scale, policy parity for CCS with other low carbon technologies and options is required. Policy parity for CCS in funding, extending tax credits, and other subsidies provided to renewable energy sources will facilitate creation of a robust CCS industry in the US, benefitting the American people and leading to the development of lower cost, near zero emission energy technology.
- Technology and funding incentives must be significantly better coordinated to be effective. A plan is needed to ensure a total of 5-10 gigawatts (GW) of CCS/CCUS demonstration projects are in operation in the US by 2025. Federal incentives, including feed-in tariffs, tax credits, production credits, loan guarantees and "contracts for difference," must be reviewed for their combined adequacy and effectiveness in supporting CCS deployment.
- DOE program goals need far greater clarity and alignment with commercial technology and financing approaches used by industry. A DOE-industry task force should be convened to clearly define the role and objectives of individual projects in achieving broad program goals, to achieve a better understanding of industry technology and investment goals, and to prioritise projects in light of limited budgets and the need to advance CCS technologies to Technology Readiness Level 9 (the most mature level where the actual system is proven under operational mission conditions).
- Funding for CCS RD&D is limited and must be enhanced and focused. DOE should continue its strategy of fostering a portfolio of technologies for implementing CCS. While "priming the pump" with early stage funding for promising technology concepts is important, budgetary constraints and the need to move more quickly to advance large-scale CCS projects dictates a need for DOE to support technologies that show a clear promise of meeting or exceeding the Department's CCS performance goals.
- Public acceptance continues to be a major hurdle. There is a need to accelerate DOE's efforts in CCS/CCUS public engagement, education and training activities, especially those targeting counties and states with demonstration projects and regions with potential infrastructure sites.
- Control of GHG emissions is an international issue in need of international initiatives. In addition to maintaining existing CCS/CCUS international collaborative efforts, such as the Carbon Sequestration Leadership Forum (CSLF) and the US-China Clean Energy Research Center (CERC), international partnerships in commerce should also be pursued. Fostering CCS/CCUS demonstrations projects in developing nations could provide a low-cost means to increase global knowledge and acceptance of commercial scale CO2 storage.
As a result of the study, the NCC has received considerable interest in many issues highlighted in the report, with a particular focus on the issue of policy parity for CCS with other low carbon technologies. The NCC anticipates receiving an official request from DOE Secretary Moniz in the coming weeks to follow-up on the recommendation with more detail. Key questions the NCC will likely address include:
- What type of incentives and policies are currently available for CCS deployment?
- What policies and incentives can be employed to level the playing field for CCS and address market challenges?
- Are the tax and sequestration credits proposed in the Administration’s 2016 financial year proposed budget sufficient?
- What new approaches are needed?
It is anticipated that the NCC will produce a white paper in the third quarter of 2016 that provides specific recommendations on how to achieve policy parity for CCS vis-à-vis other low carbon technologies.
In addition to the NCC’s latest study, over the past 15 years there have been nine other NCC reports for the Secretary on carbon management technologies. These reports consistently call for government, industry and international partnerships to advance CCS research, development and deployment. The NCC has also recommended efficiency enhancements for the existing coal fleet, and has called for financial incentives to support first-of-a-kind and early mover projects.