House of Commons - Science and Technology

Select Committee on Science and Technology Written Evidence

APPENDIX 16

Memorandum from IChemE

EXECUTIVE SUMMARY

IChemE[10] believes that fossil fuels will be required as a primary energy source for electricity generation and in industry well into the second half of the 21st Century. CO₂ emissions will continue to present a major challenge. CO₂ capture and storage technologies (CCS) provide a real opportunity to reduce greenhouse gas emissions and meet the UK's climate change commitments.

CCS technology also offers a route to the sustainable production of hydrogen from fossil fuels in the short and medium terms. This can be achieved through direct conversion rather than via a two-stage process where fossil fuel is burnt to generate electricity and the electricity is subsequently utilised for the electrolysis of water and hydrogen production. It is essential that CO₂ capture and storage options are further developed and pursued to an industrial scale.

CCS technology comprises three main stages:

CO₂ capture at power stations—technologies can be incorporated into the design of new power stations or retrofitted to existing power stations. In addition, there is the option of deploying Integrated Gasification Combined Cycle (IGCC) technology, which provide a route for CO₂ capture prior to combustion. This process is already well established in the chemical industry and existing technology is currently ready for scale-up.

Transportation—by pipeline and pumping of CO₂ between the point of capture and the point of storage. This technology is also well proven and has been successfully deployed in the USA.

Geophysical storage of CO₂—The British Geological Survey and others have identified substantial storage capacity beneath the North Sea. This storage can meet UK needs for at least the current century.

Chemical engineers maintain that the technologies required for the demonstration of CCS already exist. A programme of research and development activity in UK industries and universities would build on existing expertise and develop competitive advantage. UK industry would be better placed to take full advantage of international programmes and export CCS technology developed in the UK to countries with a high consumption of fossil fuels, in particular India, China and other SE Asian nations.

Chemical engineering is central to the further development and implementation of CCS technology and IChemE welcomes the opportunity to present evidence before the Science and Technology Select Committee.

INTRODUCTION

Chemical engineers are well placed to offer technical advice in this subject area.

The discipline embraces a fundamental understanding of thermodynamics and systems thinking which are critically important in any investigation into the capture and sequestration of CO₂ as part of a carbon abatement strategy. CCS involves the processing of fuels, or flue gases, to remove CO₂ and the subsequent pumping and pipeline transport to a site of secure storage. IChemE believes that the implementation of CCS technologies is central to reducing CO₂ emissions from power generation and industrial plant.

The outlook for natural gas is uncertain and prices are subject to significant market pressure. Security of supply remains a concern at the highest level, including the Prime Minister who stated on 27 September 2005:

How much longer can countries like ours allow the security of our energy supply to be dependent on some of the most unstable parts of the world?

Coal and other fossil fuels present the only realistic route for large-scale hydrogen production. The potential of CCS allied to underground coal gasification is also worthy of further detailed investigation. IChemE believes that the capture of CO₂ from coal plant should be given equal weight with that from other fossil fuels.

The UK's strengths include technical expertise and knowledge, particularly from the IEA Greenhouse Gases Programme, universities, the British Geological Survey, and well-established contracting companies with experience in all aspects of process design, plant development and chemical engineering expertise for CCS.

Access to the North Sea as a potential reservoir is a major asset and many plants are sited in locations that are ideally suited for the application of CCS in geologically stable strata under the sea.

IChemE believes that there is a need for a clearer definition of the Government's energy policy and looks forward to the publication of a further Energy White Paper in 2006. If CO₂ targets are to be achieved without the replacement of nuclear capacity then the implementation of CCS on a large scale becomes essential. CCS is the only technology that can reduce emissions from fossil fuels to near zero. Other Carbon Abatement Technologies, (CAT), can be applied to existing fossil fuel plants but there will be an increasing need for application of CCS, especially in new plants, as fossil fuels continue to be used for at least until 2050 and possibly to the end of the century.

Whilst CCS technologies will guarantee a significant reduction in CO₂ emissions, other abatement techniques are also likely to be needed as part of a balanced portfolio of techniques deployed in parallel with CCS, if the 60% CO₂ reduction target by 2050 is to be achieved. Important contributions will be made by advanced steam based generation systems, fuel cell technology and other techniques for the more efficient use of fossil fuels, particularly the use of IGCC and small scale combined heat and power (CHP).

CAT strategies that have the potential to deliver immediate and substantial reductions in CO₂ emissions include increasing the thermal efficiency of existing plants through the addition of a super critical steam stage and more efficient use of low-grade heat. Advanced plants, particularly those using gasification, can incorporate CCS into the design at the pre-combustion stage thus offering the option of virtually CO₂ emission free power.

CHP, even on a micro-scale, offers many advantages, particularly when combined with energy recovery from wastes such as municipal, agricultural and forestry residues recovered at a local level.

IChemE emphasises that the only practical alternative to CAT is nuclear power. Alternatively, human activity must be reduced to a level that can be safely supported by renewable energy; this is both politically difficult and virtually impossible in the short term. IChemE therefore considers that CCS is the essential component of CAT. CCS should be seen as a major contributor to maintaining current standards of living and rapid deployment of the technology will be required in order to fulfil the energy and CO₂ reduction needs and obligations of the UK.

IChemE considers that a three to six year period would be realistic for demonstration plant operation and would welcome the possibility of international support for a UK-led initiative in this area.

IChemE contends that all of the required technologies for CCS already exist, can be scaled up and can be improved as results of research and development become available. Relevant chemical engineering technologies are already being applied in the USA, Canada and Norway. Delegations from the DTI have visited installations in these countries.

Absorption processes have existed at oil refineries around the world for over 50 years. Several international companies can supply CO₂ capture equipment off the shelf and the necessary technologies could be deployed today if the incentives were there to do so.

IChemE also notes that the UK only accounts for 2% of CO₂ emissions globally. Many emerging economies are undergoing rapid economic expansion and developments in these countries are of central importance to the overall trend in CO₂ emissions. The growth of these economies is proportional to their energy use. There is heavy dependence upon energy-intensive industries and much energy will be generated from coal. China has a massive programme of coal-fired power station construction. There is huge scope for the technologies developed in the UK to be exported to countries with a high and increasing consumption of fossil fuels including China, India, Russia, Brazil and Mexico.

IChemE welcomes the initiative recently announced by the Prime Minister to promote a coal-fired power station in China with CCS and looks forward to further examples of international co-operation.

THE VIABILITY OF CARBON CAPTURE AND STORAGE AS A CARBON ABATEMENT TECHNOLOGY

The current state of Research and Development in, and deployment of, CCS technologies

CCS is best applied to large, stationary sources that offer economies of scale in construction and minimise the extent of the supporting transport network. In the year 2000, about 190 Mt CO₂ from the UK's total energy related emissions were produced in energy conversion plant.

Scientific assessment of the optimum means by which CCS can be achieved using existing technologies is ongoing and the UK based IEA Greenhouse Gas Programme, established in 1991, is a significant contributor.

Work has focused on all aspects of the technology, including the study of different generation systems, CO₂ capture options, transport challenges and an examination of the behaviour of CO₂ in the different geological formations available for storage.

The UK plays a leading role in this research and in the overall environmental considerations including aspects of the legal and technical status of CCS in relation to CO₂ storage.

Development of CCS is supported by research into advanced gas separation technology including oxygen from air, CO₂ from hydrogen and CO₂ from gaseous mixtures in power stations.

Some power station applications would benefit from developments in gas turbines to extend their capability to use gases of different composition and further work in these areas would support the development of CCS. However, IChemE argues that the time has come to promote a demonstration of CCS using proven methods. This would facilitate a wider understanding of the process and, crucially, build confidence in the environmental acceptability of the future use of fossil sources.

CARBON DIOXIDE CAPTURE

There are three main routes for the capture of CO₂ from fossil fuel combustion plant, post-combustion capture, pre-combustion capture and oxy-fuel combustion. Each of these processes involves the separation of CO₂ from a gas stream and five technologies are currently available: chemical solvent scrubbing, physical solvent scrubbing, adsorption/desorption, membrane separation and cryogenic separation.

1. Post-Combustion Capture

Following the combustion of fossil fuels in air, flue gases are produced containing predominantly nitrogen and carbon dioxide (5-20% by volume). The preferred technique for CO₂ removal entails "scrubbing" the flue gas with a solvent after reactive impurities have been removed. Typically an amine is used and this bonds with the CO₂.

The solvent is then heated, breaking down to release high purity CO₂ and the original solvent. Current processes are very energy intensive and this significantly reduces the net electricity output.

Amine scrubbing has been used for the removal of hydrogen sulphide and CO₂ from hydrocarbon gas streams for over 50 years. The largest operating unit in the USA captures 800t CO₂ per day—less than 10% of the capacity that would be required for a 500MW coal fired power station.

There is potential for advances in amine technology that could increase solvent efficiency, reduce degradation and minimise energy needs for regeneration. These developments offer long-term opportunities for significant reductions in capture costs and improvements to electricity generation efficiency.

2. Pre-Combustion Capture

This "gasification" process involves the reaction of the fossil fuels with oxygen or air and steam to produce a gas consisting mainly of carbon monoxide and hydrogen. Technologies for the gasification of coal, natural gas or oil derivatives have been developed and operated on a large scale and are used to produce mixtures of carbon monoxide and hydrogen for use in chemical synthesis in many countries. Examples include the Sasol plant in South Africa, which uses coal to make a wide range of fuel and related products, and plants using natural gas, such as the BP plant at Hull for chemicals and ammonia.

For pre-combustion power generation applications, the carbon monoxide produced by gasification can be reacted with further steam to make CO₂ and more hydrogen. The CO₂ is then separated and the hydrogen is used as fuel in a gas turbine combined cycle plant.

An advantage of this process is that the fuel gas for the gas turbine will be hydrogen, diluted with nitrogen or steam reducing NOx emissions. It is expected that this gas mixture can be used in existing gas turbines with little modification. General Electric has conducted successful tests with a turbine running commercially on hydrogen. The main advantage of pre-combustion separation over post-combustion is that it produces much lower volumes of gas for treatment that are richer in CO₂ and at high pressure. This reduces the size of the gas separation plant and thus reduces capital costs. As with post-combustion capture, this route has substantial opportunities for cost savings and energy efficiency improvements via technological development.

In the longer term, hydrogen has a significant potential in the powering of future vehicles and in fuel cells. In the USA this is acting as a major driver in the development IGCC technology.

In addition to its application in cleaner power generation, production of hydrogen from fossil fuels is considered to be the first stage for a "hydrogen economy".

3. Oxyfuel Combustion

A further process involves fossil fuel combustion in an oxygen (O2)/CO₂ mixture rather than in air to produce a CO₂ rich flue gas. The advantage of oxyfuel combustion is that it produces a highly CO₂ enriched flue gas that, in principle, enables simple and low cost CO₂ separation methods to be used. In addition, the formation of NOx is greatly reduced. Disadvantages included a requirement for an air separation plant to produce the O2. This has a high capital cost and requires a significant amount of energy to operate. A number of technical uncertainties remain, including questions over boiler performance.

All three approaches could be applied to new plant or retrofitted to existing facilities. New plant has the advantage of allowing maximum integration of the capture facility into the power generation facility. Retrofitting existing plant is likely to have a lower capital cost requirement.

CARBON DIOXIDE TRANSPORT

CO₂ can be stored and transported in gaseous, liquid or solid forms. However, in flue gases CO₂ is found in gaseous form and thus it is more convenient and economic to transport CO₂ in this form obviating a need for the construction and operation of cryogenic plants for the liquefaction or solidification of the CO₂. Such plants require large capital investment and appreciable energy inputs, thereby reducing the net abatement of CO₂.

In view of the large volumes of CO₂ involved in a CCS scheme (10-30Mt per year), transport by pipeline is the only practical option. Significant experience has been gained in the USA where the gas is used extensively for Enhanced Oil Recovery (EOR). For EOR around 22Mt CO₂ is transported annually via a 4,000km pipeline system from naturally occurring geological sources of CO₂ in New Mexico and Colorado to the West Texas oilfields. The transport of CO₂ by pipelines is therefore established commercial technology.

CARBON DIOXIDE STORAGE

Various methods are proposed for the storage of captured CO₂ including injection into geological formations, deposition into water columns on the deep ocean floor and conversion into solid minerals. This response focuses on geological storage. Understanding of the processes involved is more advanced and can be undertaken within the UK and its surrounding territorial waters. Geological storage requires permeable rock strata that provide space for the gas to be stored. These strata must be sealed by rock that is impermeable to CO₂ and there are three main options available

1. Depleted or Near Depleted Oil and Gas Reservoirs

Oil reservoirs are a good option, since prior to exploitation, they have retained hydrocarbons over geological time scales. These reservoirs have been extensively investigated and mapped. Globally, storage capacity capable of holding an estimated 125Gt of CO₂ has been identified.

EOR may mobilise some of the oil remaining in a reservoir after primary and secondary production is complete. CO₂ dissolves in the oil, reducing its viscosity and rendering it more mobile. CO₂ based EOR is an established onshore process in North America. It is yet to be demonstrated offshore. IChemE believes that EOR merits particular attention in the UK since it represents an appreciable storage option for CO₂ while offering a financial return from the additional oil extracted from the North Sea. However, EOR must be implemented before normal secondary production is terminated; once a field reaches its cessation of production rate, the option for EOR is lost. The North Sea has many ageing oil fields that are reaching this stage, bringing a real urgency to decision making if the benefits of EOR are to be maximised.

An estimated 800Gt of CO₂ storage capacity may be found in gas fields globally. CO₂ injection may also help with additional gas extraction from a field but the potential benefits are markedly less than with EOR and storage would generally only be considered once a field was largely depleted.

2. Deep Saline Aquifers

With an estimated global storage capacity of up to 10,000 Gt of CO₂, this option presents the largest potential capacity for storage of all the geological options. Saline aquifers have little value as sources of water for drinking or irrigation because of their depth and high dissolved mineral content. The world's first commercial scale storage of CO₂ in aquifers was begun by Statoil in 1996 in conjunction with natural gas production from one of the North Sea natural gas fields. Up to 1Mt CO₂ per year have so far been injected into an aquifer formation about 800 meters below the seabed. Regarding the geophysical storage of the CO₂, the British Geological Survey have concluded that there is extensive storage capacity under the North Sea which will serve the United Kingdom's needs for at least the current century.

3. Unmineable Coal Seams

This option offers storage potential because CO₂ is preferentially adsorbed onto coal displacing previously adsorbed methane. In addition to offering the storage of CO₂, there is the potential for the collection of the methane, with a financial return. Permeability of the coal seam is a key factor and whilst coals in North West Europe have relatively low permeabilities the estimated global storage capacity is 150Gt of CO₂. This storage option is currently at the research stage.

PROJECTED TIMESCALES FOR PRODUCING MARKET-READY, SCALABLE TECHNOLOGIES

The UK Government aspires to reduce CO₂ emissions by 60% by 2050 with real progress by 2020. If policy objectives are to be met, IChemE believes that government must initiate action on several fronts. In view of the continued reliance on fossil fuels, a demonstration of CCS is a key priority.

The 2003 Energy White Paper highlighted security of supply and affordability amongst its priorities and IChemE contends that these policy goals cannot be delivered without heavy reliance on fossil fuels in the medium term. CCS must therefore be deployed in conjunction with the development of other energy sources and a renewed emphasis on energy conservation.

Without the implementation of CCS, DTI projections indicate that current policy will not prevent the CO₂ "emissions gap" increasing after 2010. In common with other developed economies, the UK is heavily reliant on electricity. Access to clean and reliable sources of energy is of paramount importance. DTI energy projections indicate that the UK will continue to be highly dependent on fossil fuels in 2020 and economic growth is likely to increase that dependency. An increase in generation capacity of 10% by that date is expected.

In order to secure the UK's energy and climate change goals, IChemE proposes a two-pronged approach, comprising improvements to existing technologies and plant in the short/medium term and large scale implementation of CCS in the medium/long term:

Short Term (0-3 years, but continuing beyond this date)

Existing plants are made more efficient through best practice, including co-utilisation with bio-fuels to reduce emissions.

Medium Term (3-10 years, but with action commencing now)

CCS is developed within 6 years to demonstration level alongside concurrent development of coal gasification technology.

Long Term (10-20 years)

CCS technologies developed to commercial plant scale.

IChemE considers that 3-6 years is a realistic timescale for demonstration plant operation and urges the government to seek international partners for a UK-led initiative in this area.

COSTS

DTI estimates indicate that the current cost of CO₂ abatement by storage in depleted gas reservoirs is of the order of £34-93 per tonne of CO₂. EOR is more cost effective with net costs of the order of £6-50 per tonne of CO₂. Expressed as an additional cost of electricity, these abatement costs equate to 1.0-2.3p/kWh and 0.2-1.0p/kWh respectively. Costs may be reduced with further developments and innovations and already compare favourably with other large-scale abatement options. For example, the current estimated costs for wind generation range from £85 per tonne CO₂, (DTI), £95 per tonne CO₂, (Irish Electricity Supply Board), to £38-£76 per tonne CO₂, (US Department Of Energy).

These additional costs act as a major disincentive to potential stakeholders. Power producers, gas suppliers and the oil producers, will not implement CCS, including EOR, commercially under current market conditions without additional financial incentives.

NETA has been successful in keeping electricity prices low. Record low prices have been achieved at 1.7p/kWh. However, these low prices make it impossible for investors to consider investment in new plants, which in turn hampers the take up of newer, cleaner technologies. A recent report predicts that the days of cheap electric power in Europe are now limited from the need to replace a large amount of ageing capacity and where power prices need to be in the range of 2.5-2.8p/kWh to support new investment.

GEOPHYSICAL FEASIBILITY

EOR is deployed at Weyburn, a large commercially viable oil field in Canada. The CO₂ comes from a coal gasification plant in North Dakota that produces hydrogen. The hydrogen, in turn, is reformed to produce substitute natural gas. CO₂ is captured and extracted and 5,000 tonnes per day is piped to the Weyburn field for injection both horizontally and vertically into wells and channelled with water. The project has been extensively monitored to address the issues of the efficiency of CO₂ and results reveal no significant leakage of CO₂.

Progressive Energy Ltd., predicts that considerable additional oil could be extracted from the North Sea using similar methods to those deployed at Weyburn, extending the life of North Sea fields and increasing oil yields.

The existence of extensive storage capacity for CO₂ in the North Sea offers a major commercial advantage for the development of CCS technologies in the UK.

In the first instance the geocapacity must be mapped and matched against major sources of CO₂. Following mapping, a number of different scenarios can be evaluated. These scenarios have already been modelled and the knowledge exists to implement the selected processes once the go ahead has been given.

In order to meet UK emissions targets, rapid action is required and as previously indicated EOR will need to be implemented by 2008 before the cessation of production point is reached in many depleting North Sea oil fields.

Other CO₂ storage studies:

The Sleipner Project

Statoil selected the Utsira Formation, a 200-250m thick massive sandstone formation located at a depth of 800-1000 metres beneath the North Sea, as the reservoir for the storage of CO₂ extracted from natural gas production in the Sleipner field. CO₂ has been injected and stored in the formation rather than released to the atmosphere since 1996. No evidence of leakage has been detected.

http://www.iku.sintef.no/projects/IK23430000/

NASCENT (Natural Analogues for the Geological Storage of CO₂)

The project is addressing issues associated with geological CO₂ sequestration that include long-term safety, stability of storage underground, and potential environmental effects of leakage. NASCENT is studying accumulations and seepages of CO₂ where models are being built to predict the long-term fate of CO₂ in storage facilities and potential leakage scenarios. A number of sites containing naturally occurring CO₂ accumulations in mainland Europe have been identified for detailed examination.

http://www.co₂captureandstorage.info/project_specific.php4?project_id=92

IChemE believes that further research is needed to understand offshore seepage of CO₂.

Specifically, natural CO₂ seepage is generally hydrothermal and the CO₂ is at a different temperature from the seawater thus bypassing natural systems. There is a need to know how low rates of CO₂ seepage affect organisms living close to the ocean floor. Acidification of the oceans also requires further study, however, as with all carbon abatement strategies; the potential risks must be dispassionately balanced against the risk of doing nothing at all.

OTHER OBSTACLES OR CONSTRAINTS

IChemE cannot identify any major technical or engineering constraints that might prevent the deployment of CCS. The Institution believes that there is the requirement for a demonstration project to confirm the feasibility of the geological storage aspects of CCS. International collaboration on such a project should be encouraged.

The existence of large potential markets and industries to exploit those markets does not always deliver success and other factors must be considered to encourage new technology. These are addressed in the next section.

FINANCIAL CONSTRAINTS

IChemE highlights three areas of concern:

1. Lack of experience with the European Union-Emissions Trading Scheme (EU-ETS)

EU-ETS is the main market-based policy aimed at facilitating EU greenhouse gas abatement and it will have an increasing impact on the viability of investment in CAT and CCS technologies.

Whilst CCS is not ruled out for the present phase of the scheme, protocols for its inclusion are yet to be agreed. There are uncertainties over its introduction into other EU member states and over implementation, monitoring and verification. Potential investors have no experience of the scheme. CAT and CSS are capital intensive; as a consequence, investment may be delayed until investors have more confidence in EU-ETS.

2. Uncertainties over the implementation of market-based applications

This issue is linked with the uncertainty over the treatment of CAT and CCS within the market-based mechanisms being introduced to encourage CO₂ abatement. This currently applies mainly to EU-ETS but could also apply to other mechanisms under the Kyoto Protocol. This may affect investment decisions by power generators, for example, in the retrofitting of more efficient boilers that reduce CO₂ emissions but do not eliminate them completely. It is conceivable that permit mechanism may act as a disincentive to investment in CAT and CCS to the detriment of CO₂ abatement.

3. New Commercial Relationships between Producers, Transporters and those who commit CO₂ to long-term storage.

The deployment of new technologies for capture, transportation and storage of CO₂ will lead to new contractual and working arrangements between the operators of large combustion and process plant, gas transporters and off-shore operators. Organisations who may not have previously worked together will be required to share operational and financial risk. Conflicts may arise to the detriment of early CCS projects.

This constraint mainly affects CCS for which the deployment of a series of technologies for capture, transportation and storage will involve new contractual and working arrangements.

REGULATORY CONSTRAINTS

IChemE highlights four areas for consideration.

1. Legal and Regulatory Regimes

The majority of the UK's potential geological CO₂ storage capacity is offshore. Three international treaties, designed to protect the marine environment from waste dumping, apply to the injection of CO₂. These treaties were not designed with CO₂ emissions and the potential need for CO₂ injection in mind. The unintended consequences of these treaties and their impact on CCS will need to be addressed.

2. Monitoring and Verification

Market-based arrangements, such as EU-ETS, require monitoring and verification procedures to ensure that contracting parties make accurate declarations of their actual emissions in relation to their permitted emissions.

These arrangements conform to the needs of all CAT with the exception of CCS. Additional measures will be needed to account for the potential leakage of CO₂ during transport and injection and also any seepage during storage.

3. Long-term ownership of stored CO₂

CO₂ injected into geological formations will be at pressures of around 60-100 bar. Although this CO₂ will gradually dissolve in ground water and ultimately be immobilised by mineralisation processes, the potential for leakage will persist for several centuries. This raises questions over long-term ownership of storage sites and the organisation responsible for taking remedial measures should leakage occur.

4. Planning and authorisation

The planning process for the construction and operation of industrial plants, both on-shore and offshore, in the UK is well established. These are full and complete for most CAT; however, CCS raises new issues in relation to the authorisation of storage sites, particularly regarding the International Treaties referred to above.

THE UK GOVERNMENT ROLE IN FUNDING CCS R&D AND PROVIDING INCENTIVES FOR TECHNOLOGY TRANSFER AND INDUSTRIAL R&D IN CCS TECHNOLOGY

In the short and medium term, natural gas and coal will continue to be used in large combustion plants in the developed and developing world. IChemE has outlined how CAT, in particular CCS can make a substantial and affordable contribution to the UK's CO₂ reduction targets and to potential actions on global CO₂ abatement. Through retention of coal in the UK's energy mix; CCS strengthens the security and diversity of energy supplies. Taking the lead in the development of CCS will demonstrate the UK's international leadership on climate change mitigation measures and will also offer substantial advantages in the commercialisation of these technologies both in the UK and export markets.

IChemE believes that the overall aim of the UK government should therefore be to ensure that the UK takes a leading role in the development and commercialisation of CAT, particularly CCS

Specifically, UK government should:

Supporting technologies include, improving oxygen separation methods, CO₂

₂

4. Initiate and encourage international collaboration in UK-based CCS development and demonstration projects, with the aim of sharing the costs and to attract developers of leading edge technologies to the UK. UK companies will benefit from involvement in the best and most relevant overseas developments.

5. Take steps to encourage the early commercial deployment of CCS technologies in the UK, with the aim of examining the cost and market implications of alternative measures to encourage full scale commercial deployment of CCS.

6. Encourage the use of CCS technologies for EOR though financial incentives, such as a reduction in royalty payments on recovered oil, as is being considered in Norway.

₂

8. Take a lead in the negotiation of national and international regulatory frameworks and market mechanisms needed to support CCS, with the aim of ensuring that the commercial deployment of CCS is not impeded by legal uncertainty or inappropriate legislation.

9. Develop and maintain a "Road Map" for the growth of CCS in the UK and measure progress.

CONCLUSION

Fossil fuels will be required as a primary source of energy for electricity production and in industry at least until the middle of the present century and probably beyond that. CO₂ emissions will remain a major political and environmental challenge.

For the foreseeable future, fossil fuels will be required not only to produce electrical power but also for the production of hydrogen, in both the short and medium terms. There is no other viable route to a hydrogen economy and ultra-low emissions transport fuel.

A demonstration plant for CO₂ capture, transport and storage is required. Such a plant can be built now using tried and proven technologies already developed on a large scale for other applications.

CO₂ capture and storage options should be further developed and pursued to an industrial scale for application in the UK and for overseas export opportunities.

Continued research and development support is essential and should be increased where possible. A collaborative approach is desirable with the UK taking the lead in some international projects and collaborating in others. The current DTI Programme for the development of CCS is welcome. The importance of a supporting R&D Programmes should not be overlooked to ensure that UK industry can benefit from contributions to International Programmes and benefit from worldwide industrial opportunities.

There is considerable scope and opportunities for the technologies developed in the United Kingdom to be exported to countries with high consumptions of fossil fuels such as China, India, and some South-East Asia countries.

September 2005

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