Documents considered by the Committee on 8 March 2017 Contents

10Carbon Capture and Storage

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee and the Environmental Audit Committee

Document details

Report from the Commission on implementation of Directive 2009/31/EC on the geological storage of carbon dioxide

Legal base

Department

Business, Energy and Industrial Strategy

Document Number

(38505), 5908/17, COM(17) 37

Summary and Committee’s conclusions

10.1Carbon capture and storage (CCS) is a way of ‘decarbonising’ fossil fuel power generation, through capturing and storing the carbon dioxide (CO2) produced. It is considered to be of critical importance to meet the UK’s carbon targets at least cost and to fulfil the ambition of the UN Paris Agreement on climate change.62

10.2The EU’s CCS Directive was adopted on 23 April 2009. It established a legal framework for the safe geological storage of carbon dioxide (CO2). The objective of the CCS Directive is to ensure that there is no significant risk of leakage of CO2, no damage to health, no damage to the environment, and to prevent any adverse effects on the security of the transport network or storage sites. It sets out requirements covering the entire lifetime of a storage site.

10.3The Commission reports that the provisions of the Directive have been consistently applied. Some Member States have advanced in their assessments of storage capacity but further and more detailed assessments will be needed if CCS projects begin. Despite the lack of positive assessment for technical and economic feasibility for CCS retrofitting, newly built power plants are generally going beyond the legal requirements .

10.4When the CCS Directive was adopted, it was hoped that demonstration and commercialisation of CCS would have advanced further than has been the case. To date, there are no examples of commercial application of CCS in the EU. There are nevertheless several demonstration projects underway.

10.5Despite support for the technology in the UK, progress towards commercial viability has been slow. The Coalition Government’s £1 billion CCS competition was cancelled in 2015. This was the second CCS competition to be cancelled following the first cancelled competition running from 2007–2011. In a report published on 20 January 2017, the National Audit Office (NAO) calculated that £168 million (in 2015–16 prices) were spent by the Government on these two CCS competitions. The NAO made a number of recommendations to be taken into account by the Government in the next phase of supporting CCS.63

10.6The current Government has said that it is considering the findings and recommendations made in the report “Lowest Cost Decarbonisation for the UK: the critical role of carbon capture and storage”, published in September 2016 by the Parliamentary Advisory Group on Carbon Capture and Storage,64 and will set out its approach to carbon capture and storage in due course.65

10.7In his Explanatory Memorandum on the Commission’s Report, the Parliamentary Under–Secretary of State, (Jesse Norman), expresses contentment with the Commission’s Report, noting that it has no new policy implications. He makes no reference to the prospects for commercialisation of CCS in the UK.

10.8The Commission’s Report raises no issues and we are therefore content to clear it from scrutiny.

10.9We report the document to the House because of the continued uncertainty over the Government’s approach to Carbon Capture and Storage, a matter which we consider to be of political importance. We ask that the Minister either set out to us its approach to CCS or tell us when the House can expect to receive such details.

10.10We note that the Minister of State for Climate Change and Industry, (Nick Hurd), was asked to comment on these matters by the Business, Energy and Industrial Strategy Committee in an evidence session on 10 January 2017.66 We therefore draw this chapter to the attention of that Committee. We also draw it to the attention of the Environmental Audit Committee, which recommended in a Report of 8 November 2016 that the Government publish a CCS Strategy.67

Full details of the documents:

Report from the Commission on implementation of Directive 2009/31/EC on the geological storage of carbon dioxide: (38505), 5908/17, COM(17) 37.

The Commission’s Report

10.11Whilst all Member States have notified the Commission of their implementation measures, the Commission considers that only sixteen Member States’ legislation fully conforms to the CCS Directive requirements. Exchanges with the remaining Member States are ongoing regarding bringing their legislation fully in line with requirements.

10.12There has been little recent activity within Member States to identify areas where storage may or may not occur. A storage site exploration permit was submitted in Spain. Five German federal states have passed laws banning underground storage of CO2, or are preparing to do so.

10.13The UK is identified as the only Member State where a CO2 storage permit was applied for during the reporting period.68 A storage permit application was reported as under evaluation in Italy, with a further application expected in the Netherlands.

10.14Under Article 33 of the CCS Directive, operators must assess the technical and economic feasibility of carbon capture, transport and storage (referred to as ‘capture readiness’) when applying for a licence for large (300MW or more) thermal power generation stations. Where the assessment is positive, land must be set aside to accommodate future installation of CO2 capture plant.

10.15None of the 29 assessments carried out across seven Member States found CCS to be economically feasible. Technical difficulties were identified in some countries. Irrespective of this, applicants in four countries proposed to set aside land to allow future installation of CO2 capture plant. During the reporting period, 14 applications were granted in the UK, where legislation on capture readiness goes beyond the CCS Directive requirements.

10.16Whilst demonstration and commercialisation of CCS has not advanced during the reporting period, a number of Member States continue to support or plan to further support research activities to improve the technology and knowledge of underground storage of CO2, with a number of countries exploring opportunities to utilise CO2.

10.17Two active CCS regional networks are working to develop common, cross-border CO2 transport and storage infrastructure which could allow Member States, where underground storage is not available, to deploy CCS: the North Sea Basin Task Force (UK, Netherlands, Norway, Germany and Belgium) and the Baltic Sea Region CCS network (Estonia, Germany, Finland, Norway and Sweden).

10.18The report concludes that:

Minister’s Explanatory Memorandum of 21 February 2017

10.19The Minister says that, as the document is a progress report and does not make any proposals, it does not have any policy implications. The Government, he concludes, is content with the Report as drafted.

Previous Committee Reports

None.


62 Letter from the Committee on Climate Change to the Secretary of State for Energy and Climate Change, 6 July 2016.

63 National Audit Office, Carbon capture and storage: the second competition for government support, HC 950 Session 2016–17, 20 January 2017.

65 PQ 58702 [on carbon emissions], answered on 13 January 2017 and HC Deb, 24 January 2017, col 70WH [Westminster Hall].

66 Q28.

67 Environmental Audit Committee, Fifth Report of Session 2016–17, Sustainability and HM Treasury, HC 181.

68 This was for the Peterhead CCS project in the context of its participation in the UK’s CCS competition.




10 March 2017