Manufacturing our Future: Industries, European Regions and Climate Action

Transcription

1 Engineering Conferences International ECI Digital Archives CO2 Summit III: Pathways to Carbon Capture, Utilization, and Storage Deployment Proceedings Manufacturing our Future: Industries, European Regions and Climate Action Jonas Helseth Bellona Europa, Belgium, Follow this and additional works at: Part of the Engineering Commons Recommended Citation Jonas Helseth, "Manufacturing our Future: Industries, European Regions and Climate Action" in "CO2 Summit III: Pathways to Carbon Capture, Utilization, and Storage Deployment", Jen Wilcox (Colorado School of Mines, USA) Holly Krutka (Tri-State Generation and Transmission Association, USA) Simona Liguori (Colorado School of Mines, USA) Niall Mac Dowell (Imperial College, United Kingdom) Eds, ECI Symposium Series, (2017). This Abstract and Presentation is brought to you for free and open access by the Proceedings at ECI Digital Archives. It has been accepted for inclusion in CO2 Summit III: Pathways to Carbon Capture, Utilization, and Storage Deployment by an authorized administrator of ECI Digital Archives. For more information, please contact

2 Manufacturing our Future: The Urgency of CO2 Storage for Industries, European Regions & Climate Action Just and achievable industrial decarbonisation ECI CO2 Summit III 23 rd May 2017, Cetraro Italy Jonas Helseth Director, Bellona

3 Bellona & CCS

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5 The less deep decarbonisation we achieve now - the more negative emissions in the future i.e. Less industrial decarbonisation now results in more carbon negative in the future

6 Solutions need to prevent stock of CO 2 in atmosphere from increasing

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8 Many models cannot reach about 450 ppm CO2eq concentration by 2100 in the absence of CCS CDR technologies such as BECCS are fundamental to many scenarios that achieve low-co2eq concentrations Carbon-Negative Cement Steel Refining & Chemicals Gas Coal

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11 A typical wind turbine is 89% steel The high renewable scenario of the EU energy 2050 roadmap anticipates 1,000 GW of wind power to be installed. This will require 100 million tonnes of steel Deeply decarbonising steel requires CO 2 transport and storage infrastructure Credit: thinkstock, moodboard

12 Energy efficient and passives buildings use materials like cement to increase thermal mass, heating the building in winter and cooling it in summer Deeply decarbonising cement requires CO 2 transport and storage infrastructure Credit: thinkstock, ondatra-m

13 In Europe, we don t have CO2 infrastructure in place Reviewing the investment and delivery profile of each part of the CCS chain turns this on its head 1st 2nd 3rd

14 million Annual investment to characterise and develop EU storage industry 2,500 EU Energy Roadmap, Annex 1, CO 2 capture estimates 2,000 1,500 Net Characterisation Net Operational Drilling Net Rig/Subsea installation 1, /06/

15 million Annual investment to characterise and develop EU storage industry 2,500 EU Energy Roadmap, Annex 1, CO 2 capture estimates 2,000 1,500 Net Characterisation Net Operational Drilling Net Rig/Subsea installation 1, /06/

16 European Commission We need an executable PLAN for EU CCS at scale!...but it has to fit with(in) existing EU initatives

17 Bellona March 2015: 6 steps to a CO 2 economy in Norway 1. Set up a market maker to buy CO 2 2. Capturing CO 2 from existing sources 3. Transporting and using CO 2 for developing commercially profitable CO 2 storage 4. The role of EOR 5. Develop hubs 6. Contribute nationally and internationally

18 Executable Plan (2015) Phase 1 Deliver existing / planned single source/sink CCS projects in prime locations which can be expanded into strategic European CO 2 hubs; Phase 2 Start sourcing CO 2 from nearby emitters to create CCS hubs, i.e. clustering additional CCS projects near the groundbreaking CO 2 transport infrastructure. Ensure that the storage capacity identified and is appraised well in advance of its need, driven by hub expansion; Phase 3 Expand the hub over a wider region and potentially across neighbouring countries. This could be coordinated and financed by regional CO2 Market Makers, capitalised by EU/national funds

19 EU ETS & the NER300

20 With the EU economic crisis, Industrial output and related CO2 emissions fell, and the ETS EUA (CO2) price plunged Market purists say Great, that was the idea: Europe will exceed its 2020 emissions target! but is job loss a climate solution? What about our consumption? Picture source: The Economist

21 Can European emissions trading (ETS) CO 2 price drive icc(u)s and the development of CO 2 networks? The price signal comes late after storage and transport should be developed = delay The price signal does not encourage future planned sizing of infrastructure = no sharing and increased cost CO 2 storage and infrastructure is around and in use for a long time. Much longer than most industries plan commercial investment = reluctance to invest

22 Can European emissions trading (ETS) CO 2 price drive icc(u)s and the development of CO 2 networks? Result: Less decarbonisation, later, and at a higher cost In the interim industries will be paying the ETS, lacking options to deeply reduce emissions

23 2016: Bellona Europa investigated initial EU industrial CO 2 transport and storage hubs

24 Ruhr Area, Germany ~35 million tonnes of industrial (non power sector) CO2 German industrial emissions make up ~¼ of Germany s CO2 emissions What about the reform of the EU ETS...?

25 Ruhr Area, Germany ~35 million tonnes of industrial (non power sector) CO2 German industrial emissions make up ~¼ of Germany s CO2 emissions What about the reform of the EU ETS...?

26 What are Europe's goals for industrial development and policy tools for decarbonisation? EU industrial policies and targets (20 % increase in industrial output by 2020) EU goals: reduction CO 2 40% , 80-95% There is tension between these two goals Global competitiveness & Employment

27 The core reason for the tension is there is currently no accessible cost effective pathway for most CO 2 intensive industries to deeply decarbonise

28 Industry: Carbon floor price and climate aware investment Reduce emissions from 181 million tonnes CO 2 in 2014 to million tonnes in Modernisation and investment should be geared towards efficiency and emission reductions as early as possible, or the result will be stranded investments and capital depreciation, the draft says. The implementation of a European carbon price floor should be considered to strengthen the European Emissions Trading System (EU ETS) That s a 20% cut from now to !?

29 What are the outcomes if a feasible decarbonisation pathway does not materialise? Bad for industry added uncertainty, disincentive to investment Bad for climate - less action and at higher cost Bad for industrial regions and employment

30 There is a role for Regional, National Governments and EU to enable timely development of enabling CO 2 networks We need the support of industrial unions! Shared networks for wider and lower cost decarbonisation Certainty of decarbonisation pathway Lower the effective carbon price to decarbonise We propose using state-owned and/or -funded CO 2 Market Makers to break the current inertia. Regional CO 2 transport and storage infrastructure development organisations

31 Storage operators need a guarantee of income before they can invest in exploration, appraisal and feasibility work Transport operators need to have confidence in income in order to perform feasibility and routing studies, including public engagement Capture operators need to have a guaranteed CO 2 storage solution, at a known price, before they can gain finance Counterparty risk flows from each segment of the value chain to the other, making timely investment risky and more costly if they do occur Solution: Remove counterparty risk with regional coordination bodies to deliver each segment of the CCUS value chain in a timely and strategic manner The Market Maker is a regional CCUS coordination body a) Manages the development of primary infrastructure on behalf of the state (trunk pipelines, shipping terminals + back-up storage site) b) Has a duty to take all contracted captured CO 2 and ensure corresponding storage is available. The Market Maker is ideal for developing required storage volumes during the pre-commercial phase.

32 Example: the CO 2 Market Maker will start by: 1st 3rd 2nd

33 EIB Innovation EUROPEAN COMMISSION* Deployment EUROPEAN INSTRUMENTS CAN AID STRATEGIC DEVELOPMENT OF CO 2 CAPTURE, TRANSPORT & STORAGE BUT FRAGMENTED GOVERNANCE In billion (rounded) ENERGY INVESTMENTS STORAGE TRANSPORT CAPTURE European Energy Programme for Recovery (EEPR) ~4 R&I ERA-NET Accelerating CCS Technologies (ACT) Horizon 2020 (FP8) + ERA-NET ACT Research Fund for Coal and Steel REGIO European Structural and Investment Fund (ESIF) 454 CLIMATE ACTION Innovation Fund (NER 400) ~ 1-5 NER 300 (Bridge) 1 CONNECT Connecting Europe Facility (CEF) Projects of common interest (PCIs) 33 R&I Horizon 2020 (FP8) + ERA-NET ACT ENERGY SET Plan EERA EII KIC InnoEnergy Modernisation Fund ~ 1-4 European Fund for Strategic Investments (EFSI) 21 Caption X From ~2020 X Between X Since 2009

34 Lord Oxburgh s CCS report UK Parliament, 12 th September 2016

35 Launched December the Dutch are starting to look at decarbonisation on the system level

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38 @Bellona_EU Jonas M.