Select Committee on Science and Technology Written Evidence


Memorandum from Carbon Trust

The Carbon Trust is an independent company funded by government. It was set-up by Government with support from the private sector in 2001. Its aim is to accelerate the transition to a low carbon economy by helping organisations reduce their carbon emissions and develop commercial low carbon technologies. We welcome the opportunity to contribute to the House of Commons Science and Technology Committee's inquiry into carbon capture and storage (CCS) technology.

CCS is a wide-ranging subject covering, for example, the technologies needed for carbon dioxide separation and capture, geological considerations relating to long term (i.e. on geological rather than human timescales) storage, and public, attitudinal and legal aspects associated with long term storage of carbon dioxide. As part of its Low Carbon Technology Assessment study, published in 2003, the Carbon Trust considered carbon capture and storage. We concluded that although the carbon abatement potential of carbon sequestration was high the Carbon Trust is not material to its development. We have therefore not engaged deeply in carbon capture and storage and therefore others are better able to contribute detailed material on the technological, geological, attitudinal etc. aspects of capture and long term storage. Our comments therefore focus on the development and deployment of CCS and the role of Government funding for R&D and technology transfer.

We note that the scope of the Committee's inquiry is descried as looking into "the viability of CCS as a carbon abatement technology for the UK". We think there are two dimensions to this:

    (i)  CCS as a technology option for the UK to run alongside continued used of coal (and gas) combustion for point source bulk power generation; and

    (ii)  the extent of and opportunity for the UK to win commercial returns in the global market for CCS through the exploitation of a competitive advantage in this area.

Each dimension requires a different approach to equipping the UK with the necessary capabilities to deliver successful policy and commercial outcomes; and although some individual activities will underpin both outcomes it is important to be clear which one is being supported by which Government support instrument and why.


The science and engineering needed to underpin current generation CCS is pretty well known. Of course, more research needs to be done on as yet unproven concepts (such as ocean storage) but compared with some new and emerging low carbon technologies, CCS does not present any particular technological challenges—though there are significant uncertainties about the long term storage of carbon dioxide.

Carbon dioxide capture processes from point source power production fall into three general categories: (i) post-combustion separation of flue gas—currently operated at around a dozen facilities worldwide; (ii) pre-combustion separation—capturing carbon dioxide before fossil fuel combustion thereby offering scope to use more efficient separation methods; and (iii) oxy-fuel combustion in power plants—burning the fossil fuel in pure or enriched oxygen and thereby creating easier to capture carbon dioxide rich streams.

Each of these technologies carries both an energy and economic penalty—anything from 15-25% and 1-2p/Wh are widely quoted by experts. Some commentators argue that without technology cost reductions going forward, carbon prices would have to be of the order

100/tC for CCS technologies to be adopted by the power industry on a significant scale.

Following the capture process, carbon dioxide needs to be stored, so that it will not be emitted into the atmosphere. Geological sinks for carbon dioxide include depleted oil and gas reservoirs, enhanced oil recovery, unminable coal seams, and deep saline formations. Together, these can hold thousands of gigatonnes of carbon (GtC)—the scale needed if CCS is to make a global contribution to reducing carbon dioxide emissions from fossil fuelled power generation. The technology to inject carbon dioxide into the ground is well established. Deep saline formations, both subterranean and sub-sea bed, may have the greatest carbon dioxide storage potential. These reservoirs are the most widespread and have the largest volumes. Research is currently underway to understand what percentage of these deep saline formations could be suitable for carbon dioxide storage.

Annex 1 gives some further details of CCS technologies drawing from Carbon Trust technology fact bases.


Having decided what the desired policy and commercial outcomes are (and that is not a matter for the Carbon Trust), the Government's role and mechanisms to facilitate their achievement can be considered further. Without a conscious determination to do otherwise, there can be a knee-jerk reaction to see "Government support" for technology solely in terms of support for R&D. We acknowledge that there may well be a role for publicly supported R&D but mainly in partnership with commercial players—not just because of the sheer scale of CCS projects but also, and more importantly some would argue, it encourages shared ownership with the private sector of the challenges, the desired outcomes and rewards.

Currently, the main players in CCS are the multi-national oil and gas companies. Their efforts dwarf public RD&D funding in this area. Therefore, the targeting of Government funding—is crucial. It requires decision-makers to consider and be clear about:

(i)  the objective(s) and desired outcomes of UK involvement;
(ii)  the nature and magnitude of the risks/barriers which Government intervention is seeking to overcome;
(iii)  the stage and scale of technological development; and
(iv)  who else is active in this field, what they are doing and why.

In the Government's strategy document on carbon abatement technologies published in June this year the objective was described as:

    "To ensure the UK takes a leading role in the development and commercialisation of Carbon Abatement Technologies that can make a significant and affordable reduction in carbon dioxide emissions from fossil fuel use."

Whilst perfectly adequate as a general objective, there would be merit, we think, in introducing greater clarity of purpose along the lines of the above. We believe that there are two strategic questions that need to be answered to help to develop the Government's approach to CCS. The first of these questions is around the strength of the UK's competitive or potential competitive position in relation to this technology. If the UK position is relatively weak then an appropriate strategy may be to focus on dimension (i) above and use CCS as a technology to reduce carbon dioxide emissions from coal (and gas) fired power generation. Under that scenario, it would make more sense to develop our [odq]informed buyer[cdq] understanding of CCS technology, research geological storage options and import the technology once costs have reduced. If, however, the UK has a potentially strong competitive position in the supply/value chain then an appropriate response may be for material Government investment in RD&D to leverage this strength for its commercial and environmental benefits. Given that Government resources for energy supply RD&D are limited the Carbon Trust believes that the UK should prioritise its support for the development of low carbon technology options where the UK has or can develop a competitive advantage. Understanding the UK's actual or prospective competitive position should, we think, be one of the focal points for this inquiry. (Our report entitled "Building Options for UK Renewable Power" discusses and expands on this view of the rationale for low carbon technology investment. We have attached a copy of the report to this note.)

The second strategic question is around the quantum of resource that the UK Government would need to put on the table in order for the UK to become a credible and material global player in this area.

At present, CCS is technically feasible but not commercially viable. There is currently no operational experience of CCS at scale in the UK and comparatively little experience worldwide. Demonstration projects are expensive and sparse. Consequently, there are few opportunities for "learning by doing" and little opportunity of gaining a better understanding of costs and the scope for cost reduction. CCS is at the stage where full scale demonstrations and trials would improve understanding and enable a better assessment to be made of the prospects for commercial and technical viability both for new and retrofit applications. A "learning by doing" demonstration project with the private sector (perhaps as part of the EU Framework programme given the high costs involved) would provide valuable information and operational data which would not only help inform project participants but also Government in terms of understand the competitive position of the UK and the quantum of Government support that might be required to develop a UK leadership position in this area. At the same time, a successful UK CCS demonstration project would provide an export promotional platform for UK skills and know-how. However, to enable the UK to take a strong international position it would require significantly more funding than the £40 million over four years currently be announced in the Government's carbon abatement strategy document.

The export aspect should not be under-estimated. Globally, fossil fuel power generation (and in particular coal) is growing—significantly in the rapidly industrialising developing countries such as China and India. Hanging on to the coat-tails of the rising trend in global carbon dioxide emissions resulting from more coal burn will require big-scale technologies deployed sooner rather than later. CCS, potentially, has an important role to play to mitigate carbon dioxide emissions from fossil fuel power generation and, if the market for CCS takes off, the UK undoubtedly has skills and services it can sell. Now whether there is a need for R&D support, or whether R&D is the right Government instrument to achieve the desired outcomes, needs consideration. An analysis of the CCS value chain would show whereabouts the UK had particular strengths and where, therefore, support should be provided to convert those strengths into competitive advantage. The Carbon Trust recommends that, if this analysis has not been carried out, it should be as a precursor to determining the nature and extent of Government intervention/support. Annex 1 (Figure 2) contains an illustrative schematic of the CCS supply chain.

November 2005

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