UN blocks carbon capture's entry to CDM offset scheme

Hopes that China and other emerging economies could soon access a new source of finance to fund the development of Carbon Capture and Storage (CCS) technologies appear to have been dashed yesterday, after UN officials ruled that CCS projects should not be included in the Clean Development Mechanism carbon offset scheme.

Members of the UN Subsidiary Body for Scientific and Technological Advice gathered at the UN's Poznan conference ruled that CCS projects should not be able to generate revenue by selling UN-approved CER carbon credits, on the grounds that the technology remains largely untested.

They argued that allowing governments in the developed world to fund such projects through the CDM would effectively make emerging economies a testing ground for systems that are not yet guaranteed to work on a large scale.

Critics maintain that while technologies capable of capturing and storing carbon dioxide work in principle, they have not been sufficiently tested and more standards need to be developed to ensure that carbon dioxide that is sequestered underground is stored safely and does not leak back into the atmosphere.

The first commercial scale CCS plant in the world has only recently started operating at the Schwarze Pumpe power plant in Germany, while the UK's first demonstration plant is not expected to begin operating before 2014.

However, some experts had argued that including CCS projects in the CDM would have represented one of the simplest means of raising finance for a technology that remains expensive, while also providing coal-fired power stations in countries like China with an incentive to deploy such systems.

Earlier this week, Nobuo Tanaka, director of the International Energy Agency, added his voice to those calling for CCS to be incorporated in the carbon credit scheme, arguing that "these technologies need all the financial help they can get".

Norway delegation chief Hanne Inger Bjurstrom insisted that the UN could yet be forced into a u-turn on the issue, telling news agency Bloomberg that carbon capture could "still be included in the CDM before 2012", but he warned that "it's now even more difficult than we had expected".