Global carbon capture begins - as Australia dithers

Yesterday's historic power plant opening in Canada shows carbon capture and storage, despite its cynics, is actually market-ready. So why the recent timid approach in coal-rich Australia?

Carbon capture and storage took a big step forward yesterday, in Saskatchewan, Canada, with the ribbon cutting of Sask Power’s Boundary Dam, now the world’s first operating power station with CCS at commercial scale.

CCS is an important complement to energy efficiency and renewable energy for ensuring we avoid extreme climate disruption. But cynicism about its role is widespread. Although CCS is being used around the world on oil and gas extraction and industrial processes like ethanol production, it is only now starting to emerge at commercial scale in the power sector. (A project in the US, Kemper County Energy Facility, is set to start capturing carbon next year.)

This has contributed to doubts about the technology expressed by some environmental groups and representatives of fossil fuel industries, though each side starts from a different perspective. The green groups tend to say CCS will never be a real solution and is just a fig leaf for fossil fuels; fossil fuel groups have welcomed funding for CCS research, but resisted any policy to require its deployment.

"Studies suggest that coal with carbon capture and storage may be the low-cost, low-carbon solution," says one section of the website of Peabody Energy, the world’s largest private-sector coal company. But another section opposes US regulations to reduce carbon pollution from power plants, maintaining that "while this technology is promising for the future, it is not commercially available".

Projects like Boundary Dam show that Peabody’s claim is starting to crumble.

While CCS increases the cost of power production, Boundary Dam has found ways of gaining extra revenue: the captured CO2 will be sold for enhanced oil recovery (byproducts fly ash and sulphuric acid are also sold for industrial use).

And the costs are coming down: Sask Power’s chief executive has noted that adding CCS to the power plant’s other units could be done 30 per cent more cheaply.

But policy is critical. The project would not have gone ahead if Canadian law hadn’t forced it to: in 2012 Canada set a 50-year lifetime limit on existing coal stations. After that point coal stations have to close unless they use CCS. From 2015, any new coal stations must also use CCS.  

North America is the current leader on CCS but China is catching up rapidly. The world’s biggest emitter has doubled its large CCS projects to 12 since 2011, and is working closely with the United States (the world’s second biggest emitter) on information and technology sharing.

The Middle East is also home to interesting developments, with the world’s first large-scale CCS project in the iron and steel sector moving into construction. 

This is not to say that we can expect CCS to start rolling out at the same speed as a PV panel production line. But the technology is clearly market-ready – what’s its lacking is policy support. This could be provided through emission limits or prices, incentives for early deployment and performance standards for specific types of facilities.

Sadly, Australia’s advancements in CCS have, if not stalled, been left with no pathway to market. The Gorgon LNG project off the coast of Western Australia will become the world’s largest storer of CO2 when it comes online in 2016. But our other three CCS projects are in pre-feasibility stages. And as with other developing technologies, the trick with CCS isn’t to get a single demonstration up and running but to get the second project up, the third ... the tenth.

Who’s shirking support for CCS in Australia? An obvious answer is the industry with the most to gain. The coal industry’s much-vaunted COAL21 Fund has stopped levying members, and its objectives have been amended to promote coal use rather than low emissions research. Yesterday the Minerals Council of Australia announced the launch of a "Leadership Roundtable" on reducing emissions from fossil fuels. Given its primary function appears to be to "share information", this initiative has a long way to go to be credible either with the public or the increasingly concerned investment community.

The current and previous governments have been edging away from the technology. Both made cuts to the CCS Flagships program. The Gillard government reneged on its promise of emission standards for new power generators and, at the behest of the Greens, excluded CCS from support from the Clean Energy Finance Corporation. The abolition of the carbon price has removed the one long-term investment signal that would have assisted eventual CCS deployment.

But the climate community should also take some responsibility for leaving this technology almost friendless. CCS is no substitute for renewable energy and energy efficiency, but alongside these it can enable faster and deeper emissions reductions from electricity generation, industrial processes and bio-energy.

Research by the Potsdam Institute shows that without using CCS on bioenergy (bio-CCS) to strip carbon emissions from the atmosphere we would overshoot the 2-degree goal by 10 per cent.

Our own research has showed that bio-CCS would help Australia play its fair part in avoiding 2 degrees, but without the technology we’d overshoot our national carbon budget by 20 per cent by 2050. In the context of Australia’s increasing weather extremes, bio-CCS offers greater long-term certainty of permanent carbon removal than soils and vegetation.

Numerous studies show that without CCS, achieving the global goal of warming becomes less likely and more expensive. The IEA noted in its 2013 World Energy Outlook that use of CCS could reduce the cost of global power sector decarbonisation by around $US1 trillion through 2035.  

CCS is far from an ideal solution – and "clean coal" remains a misnomer – but spurning this technology adds to the already substantial challenge we face. And after the Boundary Dam ribbon cutting, writing off the technology as "a pipe dream" just got a little harder. 

Olivia Kember is policy and research manager for The Climate Institute.

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