Finance for sustainable carbon projects, ICSC/327
Sustainable carbon technologies such as carbon capture and storage (CCS) are recognised as a key mitigation option within scenarios for achieving net zero, as well as within a large number of Nationally Determined Contributions (NDCs) and long term climate change mitigation strategies. The case for CCS deployment is particularly strengthened when considering the enormous growth of unabated coal-fired power in the Asia-Pacific. The report describes the gulf between current levels of CCS deployment and what will be needed to reach net zero, along with the challenges in financing large scale fossil fuel power with CCS projects. To address investment barriers and mobilise private resources, a wide range of funding sources, financial instruments and models are needed to scale-up CCS worldwide. However, current climate finance flows to CCS are small, with almost all mitigation funding being directed towards renewable energy, low-carbon transport, and other activities unrelated to CCS. The availability of climate finance worldwide for sustainable carbon technologies in the coal fired power sector is reviewed and assessed, including through development finance, green bonds and carbon markets. With a transition out of coal funding providing the broader international narrative, despite its important role, finance for coal-fired power with CCS is being overlooked in favour of support for other project types.