12 September 2017
The UK's Clean Growth Plan: On Thursday 7 September, SCCS sent the following open letter to Claire Perry, MP, Minister of State for Climate Change and Industry:
Re: Positioning Carbon Capture and Storage in the UK’s Clean Growth Plan
We look forward to the release of the UK Government’s Clean Growth Plan, which will set out the UK’s decarbonisation pathway to the 2020s and early 2030s. This will be another crucial step towards curbing emissions from industry, electricity generation, heat and transport in line with legally binding climate targets, and we welcome your intention for the plan to be ambitious as well as robust.
Climate science, interpreted by the Paris Agreement , implies that a large-scale capability to avoid carbon dioxide (CO2) emissions and to generate “negative emissions” will be needed well before 2050: carbon capture and storage (CCS) provides such a capability. Developing a CCS industry in the UK would be a cost-effective route to meeting our carbon targets as well as offering economic opportunities .
It has been suggested that an alternative to a domestic CCS industry would be to “buy-in” a CO2 management service from another state, most obviously from Norway. However, we strongly believe that this approach would be a false economy for the UK; more jobs and a better balance of payments can be realised by developing our own CO2 storage . Highlighted in the accompanying page are some of the issues and missed opportunities that the alternative approach would lead to.
We would be keen to arrange a meeting with you to discuss further these opportunities and the choices that face the UK.
Professor R. Stuart Haszeldine OBE FRSEProfessor of Carbon Capture and Storage
Director, Scottish Carbon Capture & Storage
On behalf of the Directorate of Scottish Carbon Capture & Storage
Positioning Carbon Capture and Storage in the UK’s Clean Growth Plan: Comparison of alternative approaches
In Norway CCS technology has been operating for over 20 years and a state-supported programme of expansion is now under way . Norway has made it clear that it sees a future market in storing CO2 for other states .
In practical terms, considering geography and current CCS development status, the alternative approaches between a domestic and “outsourced” CCS industry would mean:
- A choice between developing CCS at large-scale ourselves, or paying Norway for a service to collect and store our CO2.
- A choice between investing capital, with the possibility of return on investment, or paying an ongoing revenue charge.
- A choice between controlling the cost of indemnifying against liabilities ourselves, or of accepting that we will be charged for indemnification without control of costs.
- A choice between priority access to CO2 storage sites for our emissions, or accepting whatever storage capacity can be allocated to us, with the risk of under-utilised investment in CO2 capture plant in the UK and a failure to meet emission reduction plans.
These choices then raise several questions and concerns:
- Paying for the use of a Norwegian CO2 service does not remove the need for UK industry investment in capture and transport infrastructure in the UK. This may be the most expensive part of the system and is a non-recoverable cost until/unless the carbon price increases.
- How much CO2 could be sent from the UK for storage by Norway and what might that cost us? How does the cost compare with developing our own North Sea storage capability, which would also give us priority access?
- Who would develop the CO2 transport system – the UK or Norway? Who would operate it and what would it cost? And at what point would ownership of and liability for CO2 transfer? There would also be additional transport distances, and so costs, to access Norwegian storage sites.
- If we decide to rely on Norway for handling our carbon emissions, what are the implications of exiting the European Union? For example, how would costs and the ability to negotiate capacity be affected? Would the situation be advantageous or disadvantageous for the UK?
Rather than making a choice between these options, there may be potential for a co-venture between the UK and Norway. We would, after all, be developing CO2 storage in essentially the same North Sea geological formations. The development of a standardised CO2 transport system would also bring clear advantages.
The development of a UK CCS industry would enable us to export equipment and expertise, maintain high quality jobs in the North Sea oil and gas sector and also provide a CO2 management service to other European states, in parallel and in competition with the service likely to be offered by Norway.
Nationally controlled CO2 storage would support rather than hinder our energy-intensive industries, and those with inherent process emissions of CO2, thereby giving them a robust economic future and attract to the UK carbon intensive industries seeking to decarbonise their supply chain. It would also support the potential production and export of low-carbon hydrogen to Europe, a market that shows economic as well as environmental promise and one in which Norway is also interested .
In short, if we decide to use a Norwegian CO2 management service, we will relinquish any control of costs and a guaranteed availability of storage, which will adversely affect our ability to meet climate targets independently. Conversely, if the UK controls investment and delivery of a CCS industry, we can manage the cost of dealing with our own emissions while generating revenue from the sale of CO2 storage to other European states.
1 UNFCCC, 2015: http://unfccc.int/paris_agreement/items/9485.php
2 Committee on Climate Change, 2016: https://www.theccc.org.uk/wp-content/uploads/2016/07/Letter-to-Rt-Hon-Amber-Rudd-CCS.pdf
3 SCCS, 2016: http://www.sccs.org.uk/images/expertise/reports/working-papers/WP_SCCS_2016_01_Scottish_CO2_hub.pdf
4 Olav Skalmeraas, VP CCS Statoil, 2016: https://www.cslforum.org/cslf/sites/default/files/documents/london2016/Skalmeraas-Sleipner-Workshop-Keynote-London0616.pdf
5 Trude Sundset, CEO Gassnova, 2017 “Maybe we can turn the North Sea into a CO2 storage hub for all of Europe”: http://www.nordicenergy.org/wp-content/uploads/2017/06/4-Trude-Sundset-Gassnova-Annual-Public-Workshop-2017-Stockholm.pdf
6 Statoil, 2017: https://www.statoil.com/en/news/evaluating-conversion-natural-gas-hydrogen.html