Government should support carbon capture and storage for energy intensive industries to meet carbon targets

Wednesday 25 March 2015
Dustin Benton Dustin BentonPolicy director020 7630
In its effort to shift to a low carbon economy, the government is exploring new carbon capture and storage (CCS) technologies to mitigate CO2 emissions from existing fossil fuel power stations.

It has initiated two CCS demonstration projects: the White Rose coal plant in Yorkshire and the Peterhead gas plant in Aberdeenshire. But, as a new technology it is still very costly, meaning it is unlikely to compete well with cheaper, more established low carbon power options. This threatens its potential to be developed further.

But new analysis from think tank Green Alliance highlights that CCS is the only technology available to decarbonise heavy industry to the extent needed to meet carbon targets and protect the UK from climate change. So it will be important to keep CCS as a competitor in the mix of available options. 

The research also points out that, if the government were, for instance, to include the Humber heavy industries in its CCS demonstration project at White Rose power station, it could reduce the project’s cost by nearly two thirds per tonne of CO2.  Doing so would help to bring the cost of CCS down and more into line with solar and offshore wind, and reduce the need to continually hand out compensation to energy intensive industries for their high carbon costs.

Despite the higher investment needed to create these ‘industrial CCS clusters’, nine times more carbon could be captured. And the cost would still compare favourably with other government supported energy projects like Hinkley C.

The government has a choice: adapt CCS for industry, or run the risk that it will not offer a route to decarbonise industry or provide low carbon power.

Three steps are recommended for the government to ensure an economically viable future for CCS: 

1.    Piggy back industrial CCS clusters on existing CCS demonstration plants
2.    Foster competition between different CCS technologies to bring the price down
3.    Create a new funding mechanism for CCS

Head of energy at Green Alliance, Dustin Benton, said:

“CCS is one low carbon option amongst many for the power sector. But to decarbonise industry, CCS is the only choice. UK CCS deployment has been painfully slow to date, but creating industrial CCS clusters would cut carbon faster as well as cutting costs. Supporting clusters makes sense, whereas simply compensating energy intensive industries for high carbon prices does not.”

Notes to editors

[1] Decarbonising British industry is published as part of Green Alliance’s Climate and Energy Futures programme. For more information contact Dustin Benton, head of energy and resources, on 0207 630 4522.
We are happy to write articles for placement.

[2] View the report 

[3] Green Alliance is a charity and environmental think tank focused on ambitious leadership for the environment.

[4] Decarbonising British industry will be launched at an event in central London on Wednesday 25th March from 3pm. Lord Deben will give a keynote speech before discussing the question, ‘Where next for CCS?’ with a panel featuring Angus Gillespie, vice president CO2 at Shell International Ltd, Sarah Tennison, low carbon manager at Tees Valley Unlimited, and Dustin Benton, head of energy at Green Alliance. The event will be chaired by Richard Black, director of the Energy & Climate Intelligence Unit. 

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