Audit finds high risk of CO2 capture project failure
SYDNEY (Reuters) - Carbon capture and storage projects, seen as crucial in the fight against global warming, face a high risk of failure due to their high costs and should be applied across many sectors to ensure success, an audit says.
The Global Carbon Capture and Storage Institute, in an audit of the world's carbon capture and storage (CCS) projects aimed at reducing carbon dioxide emissions, found 213 projects active or planned. Only seven were operating and capturing CO2 at all stages.
The world needs to build 100 major projects for capturing and burying greenhouse gases by 2020 and thousands more by 2050 to help combat climate change, says the International Energy Agency.
Carbon capture and storage could lower CO2 emissions by about 19 percent, it says.
The CCS audit released on Wednesday found there was growing action being taken to achieve a G8 objective of deploying at least 20 commercial scale CCS projects globally by 2020. But at this stage there was not enough projects meet the G8 objective.
"We certainly want to see some genuinely commercial projects start emerging in the early 2020s," said Nick Otter, CEO of the Australia-based Global CCS Institute, adding he was confident the G8 target could be met.
"We now have in place the most comprehensive database of CCS projects ever created and with our partners we will use this knowledge to fast track key projects...," said Otter.
The audit found 213 active or planned projects with 101 of commercial scale. There were 62 fully-integrated, commercial scale projects aimed at capturing CO2 at every stage (capture, transport and storage) of the CCS process, but only seven of these were actually operating.
The leading developers of fully integrated, commercial scale projects are Europe, the United States, Australia and Canada.
The majority of advanced CCS projects focused on coal-fired power, due to the world's heavy dependence on such energy, but due to commercial, technical and regulatory hurdles there was a need for a more diverse portfolio of projects to ensure success.
The audit said the world must exploit cost advantages in advancing projects in countries such as China and India and in industries such as natural gas processing and fertiliser production where CO2 capture was part of the operation.
It said capital costs alone could be 30 percent lower in China and India due to low labour rates.
It also called for CCS projects in the cement, aluminium, iron and steel industries, given their significant contribution towards CO2 emissions.
"This report demonstrates the need to not only deploy more projects, more quickly, but to deploy more types of projects, and in more places, so that we can learn how to design the best possible facilities, bring down costs and create a valid business case for CCS," said Otter.
The audit said CCS projects faced a high risk of failure, due to the new technologies and high costs. The cost of power generation at a coal-fired plant rose by up to 78 percent with CCS, it said.
The audit also cited the unknown future value of CO2 as a hurdle to investment in CCS. It said the market price for carbon required to develop CCS in a coal-fired plant was $90/tonne of CO2 and $112/tonne for a natural gas plant. The European carbon price closed on Tuesday at $21/tonne.
The CCS report is published on www.globalccsinstitute.com
(Editing by David Fogarty)
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