"EU CCS Support Measures 'Not Up To The Job'"

16 May 2012
ALYN GIVES KEY NOTE SPEECH AT CARBON CAPTURE & STORAGE SUMMIT
  
SNP MEP and Scotland's sole member of the European Parliament's Energy Committee has delivered a hard hitting key note speech at a high level summit on Carbon Capture and Storage, arguing that a clearer plan is needed for the successful development of CCS technology and the EU risks falling behind international competitors unless we get our act together.

The summit focused on the impact of the global financial crisis on the faltering roll out of CCS, the state of play regarding CCS funding models, and explored the future applications and uses for CCS that may help drive its commercialisation potential.
 
Alyn said:
 
"I was delighted to address the summit and represent the European Parliament, and of course, Scotland. Carbon Capture and Storage is a critical new technology that would transform the way we generate power, help reduce carbon emissions and ensure security of supply.
 
"The role of CCS in the EU Energy Roadmap, which outlines the EU's low carbon strategy, was significant- but so far only on paper.  The roadmap emphasised the need for Carbon Capture and Storage to be applied to both coal and gas-fired power plants and heavy industry. The EU has rightfully underlined the urgency to develop post 2020 strategies for energy decarbonisation.
 
"However, that objective can only be met if demonstrated at industrial scale well before 2020, as part of the ongoing EU CCS demonstration programme.

Passing legislation is easy- finding the budget is much more difficult. It is currently cheaper to emit carbon that it is to capture and store it, and in these hard economic times when budgets are stretched, CCS will struggle to reach the front of the funding queue unless we find new ways to encourage them.

"Demonstration projects will require Government support for some years to help bridge the financial gap until the effectiveness of CCS technology is proven, costs fall and full scale commercial projects become viable. While there have been promising developments in Scotland, we have not done as well as we need to.  The present EU support and encouragement structures seemed a good idea at the time but are demonstrably not up to the job we now face.  We need a much more focussed demonstration programme prioritising fewer projects with greater resource."

 
 
ENDS
 
Note to Editors:
 
The Summit was The Third Brussels Carbon Capture and Storage Summit 2012: "Assessing the Regulatory and Financial Framework for CCS" organised by Forum Europe in Partnership with Bellona Europa.

SPEECH:

Session: "The Role of CCS under the 2050 Energy Road Map- Moving to a low carbon society."

 

The role of CCS in the EU energy roadmap is significant, on paper at least.

Today's conference is of course about whether we're likely to actually match our grand targets. I'll sketch out a couple of thoughts on how we can kick that on. By way of my bona fides I'm a corporate lawyer to trade, have been an MEP since 2004 and am a substitute member of the Industry Research and Energy Committee. More to the point, I'm an MEP representing Scotland, where as I'll outline we have an almost unique confluence of public, NGO and governmental support as well as a well suited infrastructure, as well as academic and industry experience and enthusiasm for this technology.

The EU Energy Roadmap 2050 clearly shows that CCS is a key enabler for the cost-effective decarbonisation of the EU economy. The EU has rightly underlined the urgency to develop post 2020 strategies for energy decarbonisation- to ensure a sufficient ramp-up and widespread deployment of CCS and avoid continued overall uncertainty. The roadmap points out that CCS must be applied on all fossil sources from around 2030, and calls for a successful demonstration programme with a clear business case.

So far so good, but we lack a business plan. The objective can only be met if demonstrated at industrial scale well before 2020, as part of the ongoing EU CS demonstration programme.

So far so good, but we lack a business plan. The objective can only be met if demonstrated at industrial scale well before 2020, as part of the ongoing EU CCS demonstration programme.

Deploying CCS as of 2020, to ensure widespread use by 2030, requires a successful CCS demonstration programme between 2012 and 2020, including a robust regulatory and commercial framework that will enable and incentivise industry investment in CCS projects, technologies and infrastructure.

Now how best to achieve that? The Parliament has not been idle, we've produced in the Davies Report a list of ideas. On 15 March, the Parliament approved a 'Road map for moving to a competitive low carbon economy in 2050' which highlights this very issue. It's likely this report has put the roadmap back on the table. The roadmap is likely to be discussed again at the next meeting of the EU Environmental ministers, in June 2012, or during the Irish presidency.

The key point of the report was clear: yes, setting targets can drive change, however we need a robust strategy which actually engages with the local actors.

I say local deliberately, because some member states are more enthusiastic on this technology than others, and some places that aren't member states are more enthusiastic still.

The North and Irish Sea offer huge capacity as natural and effective storage facilities for CO2 in depleted hydrocarbon reservoirs and saline aquifers. Our 40-plus years of experience of the oil and gas industry in Scotland means that  much of the skill set and supply chain for this new sector is already in place, as is much of the infrastructure required. We also have world leading industrial research and academic institutions at the leading edge of CCS research and technology.

We also have support. Support from the public, as well as NGOs across the spectrum. It may be surprising to some but far from opposing Carbon Capture and Storage, environmental NGOs such as Friends of the Earth Scotland, World Wildlife Federation Scotland, support the demonstration of CCS technology.

Dr Richard Dixon, director of World Wildlife Federation Scotland, said last year that, "Along with renewables and energy efficiency, CCS should be a major part in Scotland's energy policy going forward"

My own party, the National Party, is the majority government of Scotland, and we have a clear vision: whilst every effort must be made to improve and expand the development of our technologies in renewables- wave, wind, tidal, biomass, you name it we're it- alongside the accelerated expansion of renewables, the electricity mix must benefit from cleaner fossil fuel technologies. 

So why have we not been able to get this moving faster? Even with all these positives, how come we still don't have a project going we can point to?  How is it that several years into the process we're still seeing CCS projects competing with each other rather than collaborating, bidding for funding in a series of divisive beauty parades?

Not least at a time when the budget available is small and getting smaller?

I think there's two reasons, one is obvious and one perhaps less so. The financial crisis is evolving on a daily basis. We're all strapped onto a rollercoaster and nobody knows where it is taking us. The Financial Perspectives- the long term budget of the EU- are being worked upon now, and that will be a more fluid process even than usual. I've given confidential advice to our government that in a worst case scenario we could see so much domestic resource taken up with shoring up the currency that I think we need to think realistically about there being NO EU funding in structural funds, CAP, Horizon 2020. Think about it, you're a member state Finance Minister, you already see a big chunk of your national reserve going to "Europe" because of the currency, how enthusiastic are you to see more go? EU programmes are additional to domestic spending, they'll need to compete harder than most.

The second reason why I think CCS has struggled is that it got off on the wrong foot. The benefits of the experimental technology were oversold, by some. In the same way as the GM debate was set on the wrong track by the actions of a couple of players, so has the debate over CCS, notable in Germany, been star crossed. My, and the Scottish position is clear: CCS has a potentially hugely significant role to play in our energy future, but you're short of advocates in Brussels for a reason, and I would suggest, gently, that that reason is because some of your colleagues have claimed too much for a still experimental technology.

CCS is not a silver bullet, and if you present it as such then you invite attack of your project, not support.

So is NER300 working? We'll see. It strikes me as good a way as any to flush out projects, but there is an  inefficiency and a divisive element to such a competition that tends towards further dividing an already pretty divided sector. Demonstration projects will therefore require Government support for some years to help bridge the financial gap until the effectiveness of CCS technology is proved, costs fall and full scale commercial projects become viable. While there have been promising developments in Scotland, and the UK, we need to get our European act together because if we don't we'll lose what lead we have, this is an international market.

So I'd close with a plea-use us- You all have MEPs, ask our advice. Unite yourselves. Conferences like this are crucial to the industry speaking with as close to one voice as you can. Unite around a common statement that s realistic about what CCS offers and what it can achieve. Engage with the NGOs, and indeed politicians, that are most critical of you, they're not going away and you do have a good story to tell. You're not short of supporters in the Parliament, the Commission and elsewhere, but warm words and sympathy are cheap. If we're serious about finding budget to fund out promises, we'll need all the help we can get.