THE STATUS OF CCS PROJECTS WORLDWIDE

CLARE PENROSE – GENERAL MANAGER, ASIA PACIFIC

Japan Members Meeting

Tokyo, 19 June 2014

The world has significant fossil fuel reserves…

Source: IEA (2013)

…We also need to address climate change

‘Business as usual’ is incompatible with climate change objectives.

‘Business as usual’ leads to a world of rising average global

temperature.

A 4°C world is so different from the current one that it comes with high

uncertainty and new risks that threaten our ability to anticipate and plan

for future adaptation needs.

World Bank Group President Jim Yong Kim, November 2012

Renewable technologies are not the sole answer to mitigating the

rise in global temperature:

o decarbonising power without CCS would cost 40% more than

with CCS

o in many industrial processes, accounting for over 20% of CO2

emissions, there is no alternative to CCS.

The Global Status of CCS

4

The Global Status of CCS: 2013

The Institute monitors Large Scale Integrated CCS

projects being deployed around the world as a method of

tracking progress in CCS development

Report released annually

The Global Status of CCS: February 2014

Provides overview of significant international CCS

project, policy and regulatory developments since

release of 2013 report

Large-scale CCS projects by project lifecycle and year

21 projects in operation or under construction – 50% increase since 2011

CO2 capture capacity by actual or expected year of

operation

CCS is a reality with 40 Mtpa of CO2 that can be captured by active

projects

Where large-scale CCS projects are being deployed

North America continues to dominate the projects landscape; China

increasing in importance; project progress has stalled in Europe

There is a shift in sectors that are deploying CCS

Air Products

Century Plant

Coffeyville

Enid Fertilizer

Great Plains

Lost Cabin

Lula

Shute Creek

Sleipner

In Salah*

Snøhvit

Val Verde

ACTL Agrium

Kemper

ACTL Sturgeon

Boundary Dam

ESI

Gorgon

Illinois Industrial

QuestUthmaniyah

Don ValleyHECA

Lake Charles

TCEP Medicine Bow

FutureGen 2.0

NRG

PetroChina Jilin

ROAD

Sinopec Qilu

Spectra

Yanchang

Sinopec Shengli

2015

EOR

Dedicated Geological

Pre-2014

Power generation

20172016

Hydrogen

production

Natural gas

processing

Chemical

production

Iron and steel

production

Syngas

Fertiliser

production

Oil refining

2014 2018 2019 2020

= 1Mtpa of CO2 (areas of circle are proportional to capacity)

Coal-to-liquids

White

Rose

CCS projects in the power and industrial sectors and projects utilising

dedicated geologic storage options becoming more important

* Injection suspended

Peterhead

Key large scale CCS projects

9

Boundary Dam, Saskatchewan, Canada: a post-combustion

capture, integrated power station project, due to commence

operation in 2014.

Kemper County, Mississippi, US: a pre-combustion capture,

IGCC power generation project, due to commence operation in

the second-half of 2014.

Yanchang Integrated CCS Demonstration, China: Pre-

combustion capture from a coal-chemical plant, for use in an

enhanced oil recovery operation in Shaanxi Province.

Emirates Steel Industry, Abu Dhabi, UAE: the world’s first iron

and steel project to apply CCS, is scheduled for full-operation by

2016.

Key large scale CCS projects

10

Boundary Dam, Saskatchewan, Canada: a post-combustion

capture, integrated power station project, due to commence

operation in 2014.

Kemper County, Mississippi, US: a pre-combustion capture,

IGCC power generation project, due to commence operation in

the second-half of 2014.

Yanchang Integrated CCS Demonstration, China: Pre-

combustion capture from a coal-chemical plant, for use in an

enhanced oil recovery operation in Shaanxi Province.

Emirates Steel Industry, Abu Dhabi, UAE: the world’s first iron

and steel project to apply CCS, is scheduled for full-operation by

2016.

Business case for CCS

TECHNOLOGY Confidence that the technology will work

Operational projects in power critical to positive perception

of CCS and to gain experience.

UNDERSTANDING

AND ACCEPTANCE Awareness and

understanding of CCS

is low, perception of it

as ‘experimental’

Operational projects

are key to turn this

around.

POLICY AND

MARKETS Importance of CCS

consistently

acknowledged in global

climate discussions, but

CCS is not treated

equivalently to other low-

carbon technologies.

Business

case for

CCS

Collaboration and aligning three pillars of the business case for CCS

Technology

ASSESSMENT

Individual components are well understood.

Many aspects are already technically mature.

Safe storage demonstrated by projects for over a decade.

Pilot and larger scale test facilities are important contributors to knowledge.

Confidence that the remaining technical challenges can be met over time.

OPPORTUNITIES

Integrated operation at large scale in power and industrial processes is key:

o initial CCS demonstrations in power plants – starting in 2014 in Americas

o positive perception of CCS as a ‘proven’ technology, building public

confidence through large-scale projects in new applications

o learning by doing cost savings

o more early mover projects will confirm effectiveness, establish best

practices.

R&D (collaboration) to advance technologies is a ‘game changer’.

The ‘rocks’ are also important – identification of viable storage sites.

12

Policy and markets

13

ASSESSMENT

International policy discussions consistently acknowledge importance of CCS

but…

Industry highlights that national climate and energy policies do not provide long

term clarity to support widespread adoption of CCS projects.

CCS is often not treated equivalently to other low carbon technologies.

National regulations have advanced but critical uncertainties remain:

o in the US, for example, impact of recent EPA proposals

o more broadly, addressing long-term liability issues

Existing CCS funding programs for large-scale projects mostly exhausted.

OPPORTUNITIES

Re-invigorated policy incentives ( and regulation) to maintain momentum.

Continued development of low-carbon future roadmaps for CCS.

Post Kyoto 2020 agreement for decision in 2015.

Capacity development scope is significant – all can learn from what has worked,

building capacity in developing countries is critical for longer-term deployment.

Significant global policy and regulatory developments

• US EPA releases proposals

dealing with power plant CO2

emissions and geologic carbon

storage

United States

• Alberta Government releases

final draft of the Regulatory

Framework Assessment report

Canada

• COP 19 held in Warsaw

• Focus on universal post-2020 climate

agreement in Paris, in 2015

Global

• UK Energy Act receives Royal

Assent and becomes law

United Kingdom

• EC proposes climate targets out to 2030

• European Parliament supports MEP

Chris Davies’ report on CCS in Europe

Continental Europe

Understanding and acceptance

15

ASSESSMENT

Stakeholder relationship management accepted as critical to project delivery.

Global awareness and understanding of CCS context is low.

Focus of CCS communication is on risks and challenges not value and benefits.

Perception of CCS as experimental, not cost competitive and associated with

fossil fuel instead of role in low-carbon energy.

Building a trusting relationship with key stakeholders is critical for projects.

OPPORTUNITIES

Successful global large-scale integrated projects is critical to establish public and

political confidence in CCS.

CCS projects are demonstrating improved sharing and use of best practice.

Encourage public advocacy of CCS from trusted groups – academics and NGOs.

Improve access to education materials and experts.

Public engagement and understanding

Public engagement and understanding

New Institute initiatives to strengthen public

understanding

An easy-to-access knowledge repository.

Brings together information and publications from the Institute and organisations

active in CCS, energy and climate.

http://decarboni.se

Aimed at the general public, explaining CCS in a simple and engaging way.

Addresses challenge of limiting CO2 emissions while keeping global average

temperature increase to within two degrees Celsius.

Will house educational resources for students and educators.

http://co2degrees.com