CCS ‘within reach in 2020s’ with new industry structure and obligation, says report

The government must act now to revive the carbon capture and storage (CCS) industry, because it will dramatically reduce the cost of meeting low-carbon targets and it is ready for commercial implementation.

That was the conclusion of a new review by the Parliamentary Advisory Group on CCS, which also proposed a framework for the industry. It said the government should set up a CCS company with two subsidiaries: one whose business would be capturing emissions, funded by a Contract for Difference; and one that would manage transport and disposal in a network operated under a regulated model like that used for electricity and gas networks.

The Advisory Group said government should act now because the technologies were well understood and it was currently able to take advantage of storage sites in the North Sea. On the capture technology, it said that the poor design of the government competitions intended to fund pilot projects had obscured the fact that the technology could be installed much more cheaply – a cost of less than £85/MW.

The report also recommended that the government set an obligation to store a set volume of carbon dioxide each year, to give investors certainty over the industry trajectory.

Prof Stuart Haszeldine, director of Scottish Carbon Capture & Storage (SCCS) and report co-author, said: “What has been missing until now is the method for making CCS happen.

He said a delivery company with regulated and reliable profits would attract investors to provide the necessary infrastructure, adding, that sites such as Grangemouth, Teesside and Mersey where existing pipelines could be used for transport ”are the natural places to grow the first small CCS start-ups… “Once operating, a CCS system has value for other emitters and can be added to incrementally.”

He warned, “With offshore pipelines already being decommissioned, actions that maintain infrastructure are needed immediately. Some pipelines can be taken into temporary public ownership while new CCS organisations are created. Using these, we could begin storing CO2 commercially by the early 2020s.

“… we believe that initial investment need not be large. Just £300 million is enough for engineering design studies, which would unlock the investment needed to build a project. Once established, the CO2 networks can be privatised and government investment recovered.

“A new CCS Obligation system will create a market for CO2 storage and ensure a long-term trajectory for decarbonising the UK economy. … By mandating a quantity of CO2 to be stored each year, this creates a predictable and controllable pathway to ‘net-zero’ carbon by mid-century, which business can rely on.”


Download the full report from CCSA