Recently, I attended the conference CCUS 2021: Leading on net zero and clean growth, organised by the Carbon Capture and Storage Organisation (CCSA). This virtual event provided an opportunity for learning and collaboration between stakeholders in the carbon capture, use, and storage (CCUS) industry, and it was a useful supplement to my current research on business and policy models for CCUS.
Overall, the conference highlighted the high level of enthusiasm currently felt across the CCUS community. There is hope that the time is finally ripe for large scale deployment of CCUS across both the power and industrial sectors.
There were a number of discussions about the UK-based CCS cluster projects, such as in Teesside and the Humber, East Scotland, and South Wales. The consensus was that the projects should be moving forward, pending the final allocation of the current round of UK government funding. The sessions on CCUS clusters revealed some interesting insights.
First, there was strong support for shipping and rail as alternative options for CO2 transport, in addition to pipelines. Some project managers felt this option was extremely important for projects that are ready on the capture side but lack access to a nearby storage site. For example, the South Wales Industrial Cluster project includes shipping as a primary method for CO2 removal.
Next, speakers from the companies involved in the cluster projects all confirmed that the private sector increasingly views CCUS as essential for future operations. They believe that European political commitments to decarbonisation are credible and require immediate action to begin preparing for a low-carbon future. Getting on board with CCUS is seen as a way to be innovative and get ahead of the competition. This sentiment reinforces the role that good policy can play in encouraging private businesses to innovate and make climate-friendly changes.
However, when I asked how important government support is for the projects to move forward, the presenters confirmed that it would be difficult to continue without it. They cited the historic inconsistency in the UK government’s support programmes, noting that past funding competitions have highlighted the need for clearer regulations and risk sharing by the government. The funding support is also vital because of the high up front capital costs of building CCUS infrastructure.
The clear takeaway from these presentations is that government support for CCUS specifically, and stricter climate policies generally, will be key for the deployment of large-scale CCUS. The business models currently underpinning such investment rely on some sort of public funding. However, there was hope that in the long term, markets for CO2 will become more developed, and future investments will be self-sustaining.
In my upcoming report, available in draft in early 2022, I will be addressing the policy options and corresponding business models that support CCUS in power and industry. The CCUS 2021 conference really highlighted the questions that current industry players are facing, and I hope to provide a more in-depth discussion of these choices that will inform the future decision making of the government and private sector.