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28 March 2024

Governments urged to back CCS plans

Masdar is creating a carbon capture venture. (EB FILE)

Published
By Nadim Kawach

World governments need to introduce incentives and join hands with the private sector to set up costly carbon capture and storage (CCS) projects to ensure clean environment and boost energy efficiency.

The Riyadh-based International Energy Forum (IEF) made the call in a joint working paper with the Canberra-based Global CSS Institute during a symposium in Algeria this week. The paper, which was obtained by Emirates Business , considered CCS projects as expensive ventures that require massive funds and government backing in order to be commercially feasible.

The paper referred to a few scattered CSS projects in the region and other countries, including a carbon capture venture being constructed in Abu Dhabi by the government-controlled Masdar.

"Cost and funding are key challenges facing CCS deployment. There is a high degree of uncertainty in estimating the costs of CCS due to differences in methodologies applied to existing projects and also uncertainty regarding the evolution of costs over time.

"Current costs levels and technology risks are a serious barrier to large scale commercial deployment of CCS," the paper said.

"Considering the scale of investment needed, Governments worldwide will be required to address the funding gap and to help facilitate private sector investments via public-private partnerships in CSS demonstration... in the regulatory and fiscal environment, the benefits of reducing emissions are not yet sufficient to outweigh the costs of deploying CCS."

Citing independent estimates, the paper said the costs of CCS for power generation, based on the use of commercially available technology, range from $62 to $112 per tonne of CO2 avoided or $44 to $90 per tonne of CO2 captured. Recent forecasts by the International Energy Agency (IEA) showed total CCS-related investment in power generation alone will amount to $556 billion (Dh2 trillion) over the period 2010-2030.

IEF and the Global CSS Institute, which was launched last year, said technological improvements should help reduce costs but investment in CCS will only occur if there are suitable incentives and regulatory mandates.

"Funding for near-term demonstration projects is required in order to continue to prove CCS at the commercial scale and to reduce costs.

The paper said state incentives should include taxing emissions so that it is cheaper to store the CO2 than emit it, developing cap-and-trade emissions programmes, and offering direct government subsidies or funds to cover the CCS installation costs.

The paper said that a vast number of initiatives and activities are under way to support widespread deployment of CCS technology, including CCS research and development, construction of pilot and larger scale CCS demonstration and the development of directives and related regulations across a number of countries.

Several large scale demonstration projects have been announced in Europe, North America and Australia along with co-operative programmes in non-OECD countries, it said. "There is a rising interest and involvement in CCS in oil and gas producing countries, including Saudi Arabia, Algeria and the UAE... there is a triple challenge behind existing projects: A technical challenge, which consists of showing that CCS technology actually works and works well; an economic challenge which consists of carrying out these operations with acceptable costs; and the challenge of public acceptability."

According to project engineers, Abu Dubai's CSS project is the first in the region and one of the largest in the world. The venture, which could cost more than $1bn, is expected to remove in excess of five million tonnes of CO2 a year from the emirate's air and push them back into oil fields. By pushing such immense CO2 quantities back into the oil reservoirs, the main onshore oil producing company will be able to increase recovery rates from its hydrocarbon wells.

"Abu Dhabi is a major oil and gas producer and is heavily reliant on these fossil energy sources to produce its electricity and operate its factories… hence it felt the need to reduce emissions," said Yves Rey, Senior Project Manager at the Carbon Management Unit.