Worldwatch Institute Study Concludes That Industry Will Face Many Uphill Battles
Tamar Hallerman
GHG Monitor
05/11/12
If pure numbers are the only indicator, international investment and development in large-scale carbon capture and storage projects has stalled over the last three years, according to a new study. However, the progress in the CCS industry is far more complicated a picture, Matt Lucky, head author of a Worldwatch Institute analysis on CCS released this week, points out.
Crunching data mainly from the International Energy Agency and the Global CCS Institute (GCCSI), the report presents an industry that has mostly seen anemic growth in new government investments in large-scale projects in 2011 compared to the year before, roughly $23.5 billion worldwide, but has also experienced significant growth in terms of storage capacity in operation, doubling since late 2010 to 23.18 million tons of CO2 stored per year, according to the report. “What’s interesting is that storage capacity did actually double, so it’s a little bit misleading when you’re just looking at the numbers,” Lucky told GHG Monitor. “A couple of the projects expanded [the amount of CO2 stored], which is optimistic when you talk about CCS because it shows that these plants started with a certain storage capacity and it must have been economic for them if they were then willing to go on and build a little more infrastructure and expand their storage capacity. So that’s a good sign in a climate of mostly bad signs, I think, for CCS development.”
CCS Faces Challenges on Several Fronts, Study Says
The study cites GCCSI’s most recent survey of the world’s large-scale integrated CCS projects, which concluded earlier this year that there are 75 projects currently in some form of development, four less than last year. The study attributes the net loss to the full gamut of challenges facing the industry, from the current high cost of the technology to the low price of carbon offsets in the European Union’s Emissions Trading Scheme and a ‘not in my backyard’ mentality that has set in across several parts of central Europe. “In terms of funding and actual project development, the industry faces a lot of setbacks,” Lucky said. In the U.S., Lucky said that one of the biggest future challenges to CCS may be the Environmental Protection Agency’s newly-proposed performance standards for new fossil fuel generation, which could turn away further investment from CCS technology (see related story). “Assuming that natural gas does replace coal and that stricter regulations are not adopted in the United States, it seems unlikely that it will really lead to greater growth in the CCS market,” he said.
