"Renewables and nuclear will not solve climate change, they'll only defer it"

BusinessGreen.com: How big an impact will the economic slowdown have on the prospects for carbon capture and storage (CCS)?
Jeff Chapman: It obviously will have an impact on the energy sector as a whole and environmental spending in particular. The big question is whether investment will hold up and the answer is "who knows?" It all comes down to how much political will remains. Unfortunately for CCS, the recession has come at a crucial time with the EU debating how best to fund the proposed 12 demonstration projects.

How do you expect the projects to be funded?
The one big idea at the moment is for 500m carbon allowances to be set aside for CCS projects. That would effectively be a form of currency and if the predictions for the price of carbon post 2013 of around €40 a tonne are accurate, it would be worth about €20bn, which should be enough to fund the projects. The only viable alternative doing the rounds is for some of the money raised through the auctioning of credits to go towards CCS, but the member states are very hostile to anything that would ring-fence that revenue and some argue that it even goes against their constitutions. In that light, using allowances as a form of currency seems the easiest option.

Should the funding debate be resolved, where do you expect to see the demonstration plants?
Some people are calling for all available technologies to be trialled and with each demonstration taking place in a different member state, but that is a pretty stupid approach as the countries are at different levels of readiness. If we are serious about getting these demonstration projects in place as soon as possible, it makes sense to build more facilities in the countries that are ready for them. That means the UK and Norway, followed by The Netherlands and Germany. Most other countries aren't even close to having the necessary legislation in place to support CCS. The UK doesn't have it either yet, but the Energy Bill is moving forward and that gives the government the authority to put legislation in place.

What sort of timeline are we looking at for these projects to get underway?
The EU directive would force member states to put the relevant legislation in place two years after the directive has been finalised, but that still means it is unlikely to be finalised in most countries until mid-2011. You are simply not going to find 12 countries ready to go, so we could see a good number of the demonstration projects being delayed for years.

Why such long delays for a technology all governments seem agreed is critical for tackling climate change?
If the projects are going to get public funding, then it has to be an open competition and you need architecture in place to run that competition. It has taken a long time in the UK to just get to the stage where that architecture is in place and we've got a shortlist. If that has to be replicated in 12 countries, it is going to take a long time.

How can the industry shorten these timelines?
We need an incentive to get member states to agree to speeding up the processes. The best means would be to tie CCS into the legally binding climate change targets the EU is going to set itself. Across Europe there is a target of cutting emissions by 20 per cent by 2020 and a target of generating 20 per cent of energy from renewables by the same date that will not be met and looks increasingly expensive. One option could be to allow CCS to offset some of the renewables target. That is regarded as heresy by the renewables industry, as they see it as draining investment from them, but if we don't hit that renewables target, we miss the emissions target, which is surely the important thing.

An alternative means for driving forward adoption is the Californian model of effectively banning any power plant without CCS. The Conservative Party has said it would introduce similar standards, but is this approach viable?
You can't mandate something until it is proven at the requisite scale. We need to get to that stage, which is why the demonstration projects are so important.

How close are we to the technology being proven?
It's all been proven in pieces, but never proven at the scale that is required with the quantity of contaminants you get in the emissions when you burn coal. Post-combustion capture is pretty sensitive to contaminants, so that is the biggest unknown. With pre-combustion capture, it is not proven at this scale at all, although scientists are confident it can be done.

Even if it is proven to work, will energy firms install the technology unless they are forced to do so?
A recent study by McKinsey estimated the first wave of plants would cost around €60 to €90 per tonne of captured CO2, and the second wave would bring that down to between €30 and €50. That is still less than the cost of offshore wind and if those costs were accurate it would make the government's strategy of relying on the price of carbon in the carbon market to drive CCS projects viable. Firms would invest in the technology as it would prove cheaper than buying carbon credits to cover their emissions.

Despite these challenges there still seems to be plenty of confidence that CCS will take off in Europe. Why is that?
The confidence arises from the sheer inevitability of CCS. There is a view that renewables and nuclear will not solve climate change, they'll only defer it. Because as long as there are fossil fuels out there, at some point in the future mankind will dig them up and burn them. At that point someone else will say, "if they are doing it I'm doing it too". The only answer has to be trapping it. That said, unless there are clear and conclusive policy moves soon to make it happen, industry will get bored.

And what would happen then?
Canada is doing CCS; Australia's economy is 80 per cent dependent on energy through aluminium, coal and uranium and it is going to do CCS; the US has set itself the target of energy-independence, which means it will remain reliant on coal and will have to use CCS; Japan will find it difficult to do CCS, as it does not have the right types of rock readily available, but it is gearing up to fund projects abroad. All that means is that if Europe doesn't act it will get left behind.

Dr Jeff Chapman is chief executive of the Carbon Capture & Storage Association (CCSA).

The CCSA was established in March 2006 with a goal of uniting specialist companies with an interest in CCS, including manufacturing and engineering firms, the energy sector and mining firms, as well as a wide range of support services, such as law, banking, consultancy, and project management.