CARBFIX MINERALISATION SUMMIT 2024
Reykjavik, Iceland - 12/13 September
Sixteen years ago I stood on a small concrete platform in the Sahara Desert – no sand dunes, just a rough stoney patch beneath the sun. Five kilometres away CO2 was being separated from methane at the In-Salah gas extraction plant and transported along a pipe. It emerged from the sand and fed into a pump on the platform.
I put my ear close to the metal and heard the sound of CO2 being sent for permanent underground storage instead of being allowed to escape into the atmosphere.
Seeing is believing, it is said, and I have been convinced since then not only that carbon capture technology has an essential role to play in curbing climate change but that we have the ability to bring about its deployment on a large scale within a short space of time.
Which takes me from the heat of the Sahara to the cool of Iceland.
A good place from which to address one of the most basic questions about CCS, one which I was asked when I was a member of the European Parliament’s environment committee and which is being asked again by the new members recently elected: “Is CO2 storage safe?”
It may seem a naïve question. When Russia invaded Ukraine there were many calls for Europe to build up its gas reserves, which it did successfully, and no-one questioned how much of that inflammable gas was being stored in rock deep beneath peoples’ homes.
So why there are concerns about the alleged risk of storing inert CO2 in a not dissimilar way is a bit of a mystery, but they exist.
Where better to counter them than from a country with the geology of Iceland?
Dramatic pictures of hot molten lava trying to escape FROM the ground will have given many people an impression of Iceland.
So it’s quite something to be able to say that the country also provides the best example in the world of a place where CO2 is so determined to stay IN the ground that it can quickly become PART of the ground.
And that’s about as safe as you can get.
After nearly 17 years of political involvement with carbon capture in Europe I have acquired a degree of institutional knowledge.
In 2008 I took the Storage Directive through the European Union’s legislative procedures. It provides the basis for establishing sites for the safe and permanent sequestration of CO2. It was approved in anticipation that hundreds of CO2 storage sites would soon be developed.
But in fact the legislation has yet to be applied on a truly commercial basis.
I think I can claim that more CO2 has been consumed in Belgian beer in Brussels than has yet been stored under the terms of the Directive. But that will change soon.
All of us involved with CCS have experienced frustrations and disappointments.
I’ve seen hopes from the European Commission that CCS deployment will be driven forward by the cost of Emissions Trading allowances dashed as their price collapsed.
I’ve seen Commissioners desperate to promote supposed alternatives to CCS , and industry making claims that the steel and chemicals sectors will have no need for the technology.
Buit I have also seen the pendulum swing back, with acceptance once again that carbon capture technologies have a key role to play, and with the European Commission announcing earlier this year that their extensive use is “indispensable” to the achievement of carbon neutrality.
Only this week Mario Draghi recognised in his report that massive investment in carbon capture technologies is needed if hard-to-abate and energy intensive industries are to decarbonise, and acknowledged that achieving this will become increasingly urgent as free carbon allowances come to an end and business has to start paying the full cost of its emissions.
Without use of these technologies we cannot realise the ambition of net-zero emissions.
But time is not on our side, and the resources needed to achieve the requirement in full are not currently available.
Over the years I have been to many, many conferences about carbon capture. A pleasure though they may be they are not cheap to organise and they are not cheap to attend.
We who attend are very good at talking to ourselves. But we are very poor indeed at talking to the policymakers who can really make a difference.
If all the money that has been spent on CCS conferences had been devoted to direct engagement with policymakers then perhaps we would have moved the dial much further on.
Because the scale of what must be accomplished is simply not appreciated by enough people in positions of political influence.
Last February, the European Commission published its Communication on Industrial Carbon Management. It says that the EU needs to capture 280 million tonnes of CO2 annually by 2040 to be on the path towards carbon neutrality.
A Commission official told me last week that 280 million tonnes is not a “target” but it is what the economic modelling says is necessary.
That’s the same economic modelling upon which the whole of Europe’s climate policy is based so if it’s very wrong then much else must be very wrong too.
But I can understand why Commission officials are aghast at what their economic model says is necessary.
Back in 2008 the European Council agreed and announced that up to 12 CCS demonstration plants should be in operation by 2015.
It was a magnificent demonstration of Prime Ministers making policy by press release, with absolutely no substance behind the declaration and nothing of detail to explain how it would happen.
Not surprisingly, the result was that nothing did happen.
2015 came and went.
Sixteen months ago, at long last, Denmark’s Kalundborg CO2 Hub became the first full-chain carbon capture project to secure a Final Investment Decision to commence construction. It will capture 430,000 tons of CO2 annually from two biogenic power stations for permanent storage at the Northern Lights site.
On paper, there are bigger projects. Titan Cevery ment plans to capture two million tons annually from its major plant in Greece. But there are many smaller projects in design too.
So let’s say that the size of Kalundborg is average.
To capture 280 MT of CO2 by 2040 will require construction of 650 projects of the same size to commence over the next 13 or 14 years.
That’s one major carbon capture project somewhere in Europe securing a final investment decision every 7.5 days.
To put it mildly, achieving this will require a huge increase in ambition.
Kalundborg is happening because its owner, Orsted, too the initiative. It’s happening because the Danish government became convinced of the need for carbon capture and is providing the financial support that can justify the private sector investment. And it’s happening because a site exists where captured CO2 can be stored.
And Kalundborg was quickly followed by final investment decisions being taken in the Netherlands.
Through these successes we can identify some of the deficiencies that must be addressed if CCS is to progress.
Its deployment is held back because there is no legislative requirement to make it happen. Because there is no CO2 storage site available, or transport distribution system to reach it. And because in most cases there is still no business case to justify private sector investment.
And without the support of policymakers there never will be.
European industry developed without an appreciation that CO2 emissions were a problem. We would have done things differently had we known. Now it’s harder to bring about change.
Every chief executive, every potential investor, will naturally be cautious about making a huge commitment to invest in carbon capture. Understandably so.
They will ask: “do we want to be the first to invest in a carbon capture plant costing hundreds of millions when next generation improved technology may soon reduce the costs? Do we want to risk losing out by doing something our competitors are not? Is the government offering support that will make a difference?”
And these questions come before we get into details, and the Devil hides in the details.
Will the capture plant deliver the capture rates promised and at the costs claimed? Will the storage sites be available and the injectivity rates match those promised? Will the CO2 ships be available when they are needed? Will the pipeline be delayed by public protest? What happens to my business model if the cost of carbon allowances doesn’t rise but falls?
How do I ensure that my investment is derisked?
I want to be the person who stands up and tells you a great tale about the progress being made and the certainty of securing investment on a huge scale. I want to be the person who tells you of the hundred and more carbon capture projects in Europe that are soon to be realised.
But I can’t do that, because although they exist too many have little substance – they are paper projects not proper projects.
And I am worried, because despite the flurry of progress last year, not a single final investment decision for a major new carbon capture plant has been taken in Europe this year.
Has CCS stalled just when it appeared to be moving forward?
Given the uncertainties involved I can understand why so many people in business want to demonstrate that they are studying the potential of carbon capture, yet why so very few of them want to press the button that says GO.
Sleipner in Norway has been capturing CO2 for nearly 30 years, and the Heidelberg cement plant at Brevik will start doing so next year. Denmark took the initiative within the European Union, and is seeking to become a hub for CO2 storage both offshore and onshore. Around Rotterdam, five carbon capture plants are now under construction.
Germany and France have adopted strategy papers to support industrial carbon management through CCS. Sweden has secured Innovation Funds for the major waste-to-energy plant in Stockholm. Austria has lifted its ban on CO2 storage. A pilot project to capture and store 15,000 tonnes of CO2 was initiated last week by Snam and Eni in Italy. Greece is developing plans for storage.
It’s not the technical difficulties that hold us back, it’s the financial uncertainties and administrative burdens.
No carbon capture and storage project can progress in the face of opposition from the government where it is based. Every CCS project needs the enthusiastic support of its government if it is to succeed.
But too many Member States still report nothing of substance and very few have in place a policy agenda that has real substance.
The European Commission is playing a constructive role. The requirement of the Net Zero Industry Act that oil and gas companies provide 50 million tonnes of CO2 storage capacity by 2030 is unprecedented. It is intended to free the logjam and create the basis of a CO2 storage market.
The Commission is attempting too to accelerate permitting procedures, and is providing some funding for CCS from the Innovation Fund.
But it can and must be do more.
I expect to see requirements for low carbon products to be introduced, giving an incentive to those who first invest in carbon capture and who face costs above those of their competitors.
I look forward to a proposal on negative emissions, for if industry must pay for the release of emissions surely it should be rewarded when its investment in the capture and storage of those from biogenic sources reduces the concentration of CO2 already in the atmosphere?
And I believe that more can be done to develop the market in carbon credits, creating another source of revenue and strengthening the business case for carbon capture development.
Yet it is not the EU in Brussels but governments in national capitals that will drive forward the technology’s development in their own countries.
They must identify the requirements for industrial decarbonisation. They must agree strategies to promote deployment.. They must put in place the financial support needed to secure financial investment and reduce the risks to those that provide it.
The Draghi report calls for a greater proportion of revenue raised from the sale of emissions trading allowances to be used to support industrial decarbonisation. That will be welcome, but we must also note that the report spells out that unless Europe raises its productivity and sweeps away obstacles to progress we will not raise the money to do as we need.
It is never easy to get money out of governments and carbon capture support will not be provided unless we promote a convincing case to justify it.
We are not always helped by people who should be our friends and allies.
So-called environmentalists, such as those from the American NGO Oil Change International, undermine our efforts by claiming falsely that CCS is a failure and in any case just a tool of the fossil fuel industry.
The oil and gas sector, which has great expertise in the technologies of CO2 transportation and storage, makes loud claims that are not matched real substance. It is not I who says they are not doling what is needed to change their business model and invest in the energy transition but Fatih Birol, director of the International Energy Agency, and a man not renowned as being some kind of green leftie!
And then there are those in whatever line of business who seek to make big double-digit returns from early carbon capture investments. Financial support to derisk projects I endorse, but politicians will find it hard to defend subsidy payments from the taxpayer to companies that seek to make excess profits from a fledgling business sector that serves the public good. This is not the time for greed.
My organisation, CCS Europe, was set up last year out of frustration with the lack of political advocacy for CCS.
Last week, in Politico, the leading reporter of European policymaking, we were described as the EU’s largest carbon capture lobby and as one of Brussels’ hottest lobby groups.
I’m happy that we should be described as “hot”, but the suggestion that we are large is due solely the impression we have made.
We are a small advocacy campaign group that brings together hard-to-abate industry sectors and environmentalists.
We don’t have closed minds. We want European industry to thrive and prosper. If there are technologies available at a competitive cost that can avoid the need for carbon capture then they should be adopted.
We campaign for carbon capture because we don’t believe that technologies exist to curb emissions in every case.
We campaign for carbon capture because to achieve net-zero we need not only to stop putting CO2 intro the atmosphere but we must also take CO2 out of the atmosphere.
We campaign for carbon capture because without it there is a gaping hole at the heart of European climate strategy.
And we are ridiculously under-resourced given the scale of what must be accomplished, and the business opportunities that will be created for so many companies if we are successful.
We need to be much more effective than we are, and for that we need more companies to join us and contribute to our efforts.
But if CCS is to be advanced we need advocacy groups not just in Brussels but in every European country. The policymakers who recognise the importance of the technology need support, and industry and environmentalists have the lead role to play in providing it.
From Brussels we can advise, suggest and maybe stimulate. But the creation of national groups needs national players to take an initiative.
Carbon capture project developers are spending money employing consultants, commissioning FEED studies, sending people to conferences. But if they are not spending time and money on engagement with policymakers and those who influence them then they are wasting their money.
Given the scale of the business opportunities that exist for CCS I simply do not understand why the major plant and equipment suppliers in Europe are not doing more to develop this huge market.
Yet when I walk around the European Parliament I too rarely see them, and due to their absence CCS remains too low on the climate policy agenda and too rarely understood by politicians.
We need political champions, but they are few and far between, and will remain so unless the CCS community works to convince individuals one by one of the need to adopt the role.
Every single person here should be thinking about what they will do next week to arrange meetings with government ministers, national parliamentarians, and Members of the European Parliament representing their country.
You need to reach out to policymakers, explain the challenges you face, seek their help. If you need ideas about what they might do then talk with us so that your meetings have a particular purpose.
It will cost money. But without it everything else you do will be worthless.
We are working now in Brussels to persuade the new Commission of the need to provide leadership on carbon capture, and to drive home the message to national governments that measures to support it are essential if their climate policies are to succeed.
We need the help of industry and project developers to make sure that message is heard.
And to make clear to policymakers across Europe that carbon capture is practical, safe, cost-effective, and absolutely essential if we are to save the world from climate change.