Memorandum submitted by the Carbon Capture
and Storage Association
INTRODUCTION
The Carbon Capture and Storage Association
welcomes the opportunity to respond to the Environmental Audit
Committee's Inquiry into Carbon Capture and Storage and would
like to submit the following evidence.
1. All of the evidence that the Association
submitted, both written and oral to the EAC inquiry, The 2007
Pre-Budget Report and Comprehensive Spending Review remains valid
in this context. A copy of this submission is appended.[16]
2. We are currently awaiting the Government
Consultation on "Capture Readiness" we have not formulated
a formal position on the subject but we would like to make the
following observations:
3. The CCSA is positively in favour of measures
that stimulate the commercial introduction of CCS and prefers
incentives as a means to do so but in the absence of sufficient
financial inducement will be happy to consider all other options.
4. Our philosophy is that mandating the
concept of `Capture Ready' is largely unnecessary however, if
it is necessary to introduce it as a political expedient, it should
be minimally prescriptive as the extent of readiness will be a
commercial decision set against the risk of excessive cost in
a future regulatory regime.
5. We consider that it is not yet appropriate
to mandate CCS on new plant because it is insufficiently proven
to give certainty about cost and performance. This is exactly
why demonstrations are needed to encourage "learning by doing"
and to bring forward cost reductions and performance improvements.
6. There are severe dangers of unintended
consequences resulting from mandating CCS on new coal plant, such
as sweating existing dirty assets or driving towards over-dependence
on gas.
7. At present, there is a discussion taking
place on mandatory CCS for new plant in relation to the European
Directive on CCS. Whilst uniformity across Europe should be an
aim, it should be remembered that it may be more difficult or
expensive to mandate CCS at any level in some Member States than
in others.
8. Most investors accept that CCS will become
mandatory at some point in the lifetime of a new plant and believe
CCS is an important part of the climate mitigation mix. They are
therefore not uncomfortable about a statement that anticipates
this. Their concerns relate firstly to fixing a timescale given
the reservations expressed in 3 above and secondly, facing an
unstable long term regulatory environment.
9. To stimulate investment in new power
plant we would like to see the uncertainties surrounding regulation
resolved as quickly as possible. In the UK this means bringing
forward the CCS consultations on Regulation and Capture Readiness
without any further delay.
The view expressed in this paper cannot be
taken to represent the views of all members of the CCSA. However,
they do reflect a general consensus within the Association.
2 June 2008
16 Third Report from the Environmental Audit Committee:
The 2007 Pre-Budget Report and Comprehensive Spending Review:
An environmental analysis, HC 149 Back
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