Bergen CCS Conference Presentation

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Presentation given at the High Level Conference, Fighting Climate Change with Carbon Capture and Storage

May 2009

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Bergen CCS Conference Presentation

  1. 1. Directions to 2050 <ul><li>Financing Carbon Capture and Storage Technology </li></ul><ul><ul><li>General Guidelines </li></ul></ul><ul><ul><li>Action in the EU </li></ul></ul><ul><ul><li>An international approach </li></ul></ul><ul><ul><li>What it means in practice </li></ul></ul><ul><ul><li>CCS certification </li></ul></ul>David Hone Group Climate Change Adviser Shell Future Fuels and CO 2
  2. 2. General Guidelines for CCS Support <ul><li>Underlying price for CO 2 must be in place </li></ul><ul><li>Recognition of the demonstration nature of the technology </li></ul><ul><ul><li>Clear demonstration objectives in place </li></ul></ul><ul><ul><li>A timeline for action </li></ul></ul><ul><ul><li>Funding commensurate with the task at hand </li></ul></ul><ul><ul><li>A focus on delivery of fewer complete projects, rather than limited funding for many. </li></ul></ul><ul><li>A robust approach to CO 2 storage certification (and MRV) based on 2006 IPCC GHG Inventory Guidelines. </li></ul>
  3. 3. General Guidelines for CCS Support EU-ETS recognises CCS Demonstration programme announced in 2007 Funding available through to 2015 300 million EUA (~ €6-9 billion) 10-12 projects only EU CCS Directive Now in place in the EU ( on the way in the USA & Australia ) <ul><li>Underlying price for CO 2 must be in place </li></ul><ul><li>Recognition of the demonstration nature of the technology </li></ul><ul><ul><li>Clear demonstration objectives in place </li></ul></ul><ul><ul><li>A timeline for action </li></ul></ul><ul><ul><li>Funding commensurate with the task at hand </li></ul></ul><ul><ul><li>A focus on delivery of fewer complete projects, rather than limited funding for many. </li></ul></ul><ul><li>A robust approach to CO 2 storage certification (and MRV) based on 2006 IPCC GHG Inventory Guidelines. </li></ul>
  4. 4. Replicating the model internationally <ul><li>Create a “ sector-based ” mechanism </li></ul><ul><li>within the Copenhagen Agreement </li></ul><ul><li>Large scale preparatory step towards absolute targets in developing countries </li></ul><ul><li>Clear purpose and end-point </li></ul><ul><li>Built on the foundation elements of the international agreement (e.g. mechanisms, MRV) </li></ul><ul><li>Negotiated separately (by a limited number of parties) as “satellites” to the main agreement </li></ul><ul><li>Typically focussed on a sector </li></ul><ul><li>Technology capacity building, funding and financing </li></ul><ul><li>Best practice capacity building </li></ul>
  5. 5. Example: A “ sector based ” agreement that accelerates CCS deployment Funding flow CCS Certs. 2009 2010-2015 2020 2025+ Objective: Establish CCS in three major developing countries through a 25 project programme Emissions trading adopted in key developing country power sectors Initial CCS roll-out in developing countries First large scale CCS demo projects (e.g. China) Initial CCS infrastructure funded directly Clean technology funding framework emerges globally CCS Project Mechanism & certification processes finalised $ £ ¥ € <ul><li>EU-ETS </li></ul><ul><li>US-ETS </li></ul>
  6. 6. Evolution of the CDM and CCS Certification <ul><li>CDM / JI (Kyoto 2008-2012) </li></ul><ul><li>Small / Moderate scale </li></ul><ul><li>Development “dividend” </li></ul><ul><li>SD criteria </li></ul><ul><li>Additionality </li></ul><ul><li>Exhaustive project by project process </li></ul>Cost of abatement € /tCO 2 e Abatement GtCO 2 e per year in 2030 <ul><li>CO 2 Storage Certificate </li></ul><ul><li>Recognises CCS globally </li></ul><ul><li>Certifies tonnes sequestered </li></ul><ul><li>Standardised rules </li></ul><ul><li>Potentially tradable </li></ul><ul><li>Clean Development Mechanism </li></ul><ul><li>Existing CDM rolls forward </li></ul><ul><li>Smaller scale than CTM </li></ul><ul><li>Development agenda </li></ul><ul><li>Focus on less developed economies </li></ul><ul><li>Clean Technology Mechanism </li></ul><ul><li>Focussed on the higher end of the </li></ul><ul><li>abatement curve </li></ul><ul><li>Principally clean electricity </li></ul><ul><li>Recognises CCS </li></ul><ul><li>Drives sector-based approach </li></ul>
  7. 7. CO 2 Storage Certificate <ul><li>With an eye on the future: </li></ul><ul><li>Develop a [tradable] carbon sequestration unit (CSU) that is based on internationally accepted criteria for the longevity of storage. </li></ul><ul><ul><li>Applies anywhere in the world </li></ul></ul><ul><ul><li>Awarded on the basis of ensuring long-term storage as per the 2006 IPCC Guidelines for National Gas Inventories. </li></ul></ul><ul><ul><li>Could also support a CCS project in the CDM. </li></ul></ul><ul><li>Best developed by a body dedicated to CCS, e.g. the Global CCS Institute (Australian), IPAC (Canadian) or Carbon Sequestration Leadership Forum (CSLF). </li></ul><ul><li>Underpins the necessary development of institutional capacity building for CCS measurement, reporting and verification. </li></ul><ul><li>Opens up the possibility of a range of policy options for the expanded deployment of CCS. </li></ul>
  8. 8. http://blogs.shell.com/climatechange

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