Developing technology for carbon capture, storage and use (CCSU) at scale is critical for the future of gas in Europe, but little progress has been shown to date.
Industry leaders attending the European Annual Gas Conference (EAGC) in Paris on Wednesday (6th November) broadly agreed that the next five years will be crucial for the deployment of CCSU.
Europe is committed to meeting a net-zero emission target by 2050, and this can be reached only if CCSU is implemented on a large-scale. Currently only around 30 mt of CO2 is sequestered from existing carbon-capture projects. This will have to be scaled up by a factor of 25 if Europe is to meet its climate targets with gas in the energy mix, according to conference delegates.
Commercial challenges remain. CCSU is expensive, and commercially sustainable business models have been lacking until recently because of low carbon prices. But the rise in the price of allowances on the EU’s Emissions Trading System to around €25 per ton since last year is a window of opportunity for the gas industry.
The push for a European Green Deal – with higher 2030 targets for CO2 emission reductions – may help prompt wider EU initiatives in the sector. The inclusion of the Northern Lights development in the EU’s Project of Common Interest (PCI) list was a positive signal for the CCSU industry. The project, led by Norway’s Equinor, intends to unite carbon-capture initiatives from heavy industries in the UK, Ireland, Belgium, the Netherlands, France and Sweden, and transport the captured CO2 by ship to a storage site on the Norwegian continental shelf. Northern Lights is now eligible for EU funding and a faster-permitting process. Northern Lights received approval from the Norwegian Ministry of Petroleum and Energy in September 2018.
If Northern Lights is developed in the next couple of years, it may encourage future initiatives for CO2 transport networks in Europe, representatives from environmental organisations present at EAGC told Interfax. With the inclusion of Northern Lights on the PCI list, the European Commission has signalled its confidence that the project may be commercially feasible in the longer run, the prospects of which have been improved thanks to the EU’s proposed taxonomy regulation, which seeks to provide guidance for investors in their evaluation of sustainable investments.
Similar initiatives have been launched at a global level. The Oil and Gas Climate Initiative, which is led by the chief executives of 134 major oil and gas companies, has recently agreed to implement a CCUS ‘kickstarter’ project that will develop facilities at five industrial hubs around the world.
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