Select Committee on Science and Technology Written Evidence


Memorandum from Rio Tinto Plc


  As a significant thermal coal producer, Rio Tinto is keenly interested and involved in the development of technologies which can make a significant contribution to reducing global greenhouse gas emissions, particularly in the energy sector. With the right policy conditions, Carbon Capture and Storage (CCS) technology can fulfil this role. The main barriers which must be overcome are not technological but rather relate to funding and investment. The immediate priority is to accelerate the development and deployment of CCS via a number of international demonstrations under varied conditions. This will both bring down the cost of the technology and provide confidence in operation to secure public acceptance for CCS.


  1.  Rio Tinto is a significant energy producer, providing low-sulphur thermal coal to power stations that supply homes, businesses and industries in the US, Australia and the Asia Pacific region, and metallurgical coking coal to iron and steel mills in Asia and Europe. In light of the global nature of these interests, this memorandum concentrates on the international aspects of Carbon Capture and Storage (CCS) technology.

  2.  Rio Tinto believes that emissions of greenhouse gases (GHG's) resulting from human activities are contributing to climate change. Avoiding human caused changes to the climate is an important international goal. Rio Tinto shares the priority of the UK Government to reduce emissions of greenhouse gases to achieve this goal (refer to Rio Tinto's Climate Change Position in Annex 1).

  3.  Rio Tinto recognises that addressing the challenge of climate change will impose costs for GHG abatement and necessitate a change in the way the world uses energy. A full and comprehensive portfolio of policy and technology options will be required to achieve the highest benefit and lowest overall cost for society.[3]

  4.  Rio Tinto continues to be involved in a range of activities designed to reduce CO2 emissions. The most recent of these is the group's involvement with a major carbon sequestration project in the USA (For further information, see Annex 2).


  5.  Carbon capture and storage technologies can make a significant contribution to reducing GHG emissions. The IPCC Special Report on CO2 Capture and Storage[4] approved by governments (including the UK), and a number of recent studies by the IEA, Battelle and EPRI have concluded that CCS will reduce the global cost of emissions reductions and allow for a greater reduction of emissions. Further, Carbon Capture and Storage is the key enabling technology for reducing CO2 emissions from coal (which accounted for 38% of global CO2 emissions in 2002).[5]

  6.  CCS is only one technology in a broad portfolio of options, including energy efficiency, demand side management, advanced conventional pulverised coal technologies, and renewable technologies. Wherever they are viable, each of these options should be pursued across all sectors of the economy.

  7.  Further, it is clear that both the developed and the developing nations (and noting the rapid growth of coal fired power in China and India in particular) will continue to meet much of their electricity generation needs from coal for the foreseeable future. Action is required by developed and developing economies to accelerate the development and deployment of advanced coal technologies.


  8.  The widespread application and ultimate success of CCS will depend on reducing its cost; which will require significant investment in research, demonstration and deployment. The recently released IPCC report suggests the major contribution of CCS to climate change mitigation would come from deployment in the electricity sector. Application of CCS to electricity production, under 2002 conditions, is estimated to increase electricity generation costs by about 0.01-0.05 US dollars per kilowatt hour (US$/kWh), depending on the fuel, the specific technology, the location, and the national circumstances.[6] The IPCC Special Report also concludes:

    (a)  The global geological storage capacity for captured CO2 has been estimated to be sufficient so that CCS could contribute up to 55% of the cumulative mitigation effort worldwide until 2100.[7]

    (b)  The health, safety and environment risks of CO2 pipeline transport and subsequent geological storage are comparable to existing hydrocarbon operations and practices.[8]

    (c)  The risk of potential leakage of geologically sequestered CO2 is very low. Observations and models have shown that fractions retained in well chosen reservoirs are likely to exceed 99% over 1000 years.[9]

  9.  Rio Tinto's view is that the immediate priority is to accelerate the development and deployment of CCS and to gain wider public acceptance for CCS. This will require numerous international demonstrations under varied conditions.


  10.  As identified in the DTI's report "Strategy for Developing Carbon Abatement Technologies for Fossil Fuel Use", there is significant potential for under-investment in carbon abatement technologies due to the very high costs of initial demonstration plant and the long time frames likely to be involved before commercial returns can be reasonably expected. Additionally inconsistent national approaches and the need for collaboration across nations require governments to intervene. Spill-over of benefits to competitors and regulatory uncertainty are also of concern to industry and could delay the required investment in CCS technologies.

  11.  Everyone, including future generations, will benefit from a stable climate. Industry on its own cannot be expected to bear the full cost of developing and demonstrating new technologies.

  12.  For both the above reasons, the UK Government has an important role to play, both within the UK, the EU, and in collaboration with other governments internationally.

  13.  The main imperatives for CO2 capture technology development relate to funding and investment issues. However, the storage of captured CO2 requires a suitable regulatory regime to ensure safety and reliability. These key factors require in-depth research and demonstration programs to assure the public that CCS is safe and not a major risk to the environment.

  14.  In order to accelerate the momentum for development of these technologies, public and private investment will need to be coordinated. Most importantly, a strong core of nations (including the large developing economies) will need to collaborate and share costs and knowledge in order to accelerate development and particularly to demonstrate the potential of CCS.

  15.  The 10 areas for action identified by the DTI's "Strategy for Developing Carbon Abatement Technologies for Fossil Fuel Use" are, therefore, a useful starting point for determining policy direction and taking action.

  16.  Rio Tinto also applauds the role the UK has played as a foundation member of the Carbon Sequestration Leadership Forum (CSLF). It welcomes the leadership of the UK government in initiating the agreement between the EU and China to construct a CCS demonstration projects in China. In its own right and as part of the CSLF, the Government can further assist in the reduction of greenhouse gases by:

    (a)  Increasing the number, pace and scope of CCS projects;

    (b)  Adequately resourcing and providing incentives for CCS projects;

    (c)  Raising the profile of CCS within the domestic and international community;

    (d)  Increasing the involvement of stakeholders' representatives;

    (e)  Supporting attempts to increase global acceptance of CCS; and

    (f)  Developing the policies and frameworks to enable rapid development, commercialisation and deployment of CCS.

September 2005

3   The International Energy Agency (IEA) predicts world energy demand will grow by nearly 70% over the next 30 years, most of it in the emerging economies. Without corrective action CO2 emissions will continue to follow this same trend. Back

4   IPCC "Special Report on Carbon Dioxide Capture & Storage" Sept 25th 2005, Montreal Canada. Back

5   IEA-CIAB "Road mapping Coal's Future" 2005. Back

6   IPCC "Special Report on Carbon Dioxide Capture & Storage" Sept 25th 2005, Montreal Canada point 14. Back

7   Ibid point 19. Back

8   Ibid point 21. Back

9   Ibid point 25. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 9 February 2006