World Expro: The new EU directive on the geological storage of carbon dioxide is now safely in place. What are the outstanding implementation challenges?
Karl Falkenberg: The Climate and Energy Package was formally adopted on 5 June this year. That means we now lead the world with our climate legislation, and have the tools we need to start making the cuts in greenhouse gas (GHG) emissions that scientists say are essential.
A key component of the package is Directive 2009/31/EC, which is one of the first legal frameworks in the world to ensure the safe applications of CCS. It's a wide-ranging piece of legislation, covering everything from risk management and monitoring to liability for leakages, closure and long-term stewardship.
There are four main implementation challenges. The first is ensuring consistent practical implementation on the ground.
This involves a number of key issues, and we will be working closely with member states to draw up guidelines and negotiate any possible problems. We will need at least three different sets of guidelines.
Firstly, for risk assessment and ensuring there is no possibility of transport and storage networks being put in danger. Secondly, the directive indicates that the long-term transfer of responsibility for a storage site to the state should happen once all available evidence indicates that the site will be completely and permanently contained, and that will require guidelines on how such assessments are to be made in practice.
Thirdly, we will need to make recommendations about the financial contribution operators must provide to the state before it takes responsibility for a storage site. Once the state becomes responsible for continued monitoring, the contribution must cover at least that element to ensure taxpayers do not bear the burden of CO2 storage.
We will also look at providing guidelines on some of the key stages of the risk-management process, such as site selection and monitoring, and financial security, to ensure that taxpayers do not wind up bearing the burden of any problems encountered during the operational phase. We hope to develop draft versions of the guidelines by the end of 2009, and to consult member states and stakeholders in early 2010.
We are proud of our European framework but a global framework is needed. A second implementation challenge is therefore to ensure the completion of an international regulatory framework for this important technology.
Now that we have a robust EU risk-management framework, we can proceed to the ratification of the changes made to the OSPAR (Oslo/Paris) Convention on the protection of the North East Atlantic, which are necessary to allow the environmentally safe geological storage of CO2 under the North Sea.
A third implementation challenge is to complete the integration of CCS into the emissions trading framework. The revised Emissions Trading Directive 2009/29/EC, also adopted as part of the Climate and Energy Package, ensures that CO2 captured, transported and safely stored will be considered as not emitted under the ETS.
This is the major long-term incentive for CCS deployment in Europe, but to make it operational we need to adopt guidelines for monitoring the CO2 avoided by applying CCS and reporting any leaked emissions. Draft monitoring and reporting guidelines are currently under scrutiny by the European Parliament and Council, and we are aiming for adoption by the commission in September 2009.
The final challenge is to provide the technical expertise needed for the commission's opinions on the two key moments in the life of a storage site: the draft storage permit and the draft decision on the transfer of responsibility to the state. The commission review is an unusual step but it is essential in the early phase to ensure public confidence in the consistent and safe implementation of the directive across the EU.
The commission will set up a scientific panel to provide technical assessment to support the opinion, hopefully before the end of the year.
What progress has been made with the funding of CCS demonstration plants?
The deployment of this technology depends on two things. Firstly, we need a robust carbon price.
That will be delivered by the revised Emissions Trading System, which is designed to achieve our objective of a 20% reduction in GHG emissions by 2020. However, we also need early demonstration projects to bring down the costs.
The European Council set out an objective of having up to 12 CCS demonstration plants operational in the EU by 2015, and we need to make substantial progress towards that goal.
Under the European Energy Programme for Recovery, €1.05bn is reserved for support for CCS deployment, covering expenditure over the next couple of years. Seven projects are envisaged, in the UK, the Netherlands, Germany, Spain, Poland, France and Italy.
Five of the major power projects involved will receive €180m, with two smaller projects receiving lower amounts.
But some funding issues still need to be resolved and they are currently being discussed with member states. The timetable is driven by the European Council's request: to have projects on the ground by 2015, we need to make funding decisions in 2011 and, to do that, we need to adopt the modalities by the end of 2009.
So time is extremely tight, but with the support of member states and the European Parliament I am sure we can meet the deadlines.
Are there any plans for demonstration projects outside Europe?
Restricting demonstrations to Europe – or even to developed countries – will not give us the experience we need to exploit the full potential of CCS at the global level, which is vital if warming is to be limited to no more than 2°C above pre-industrial levels.
According to predictions by the Intergovernmental Panel on Climate Change, in the absence of any additional policies, CO2 emissions from energy use are expected to rise by 45-110% between 2000 and 2030. Two-thirds to three-quarters of that growth will come from developing regions.
Even with strong action on renewables and other low-carbon technologies, fossil fuels will still account for half of the world's energy supply by 2050.
Given these projections, there is a desperate need to make the inevitable combustion of coal more climate compatible. CCS technologies could make a significant contribution.
Our analysis indicates that under an emissions scenario compatible with the 2°C target, around 18% of global fossil fuel power generation would have to be fitted with CCS by 2030.
China has abundant coal resources, which make up 70% of its energy mix. That coal will remain the primary energy source in the medium term.
Under the EU-China Climate Change Partnership of 2005, both sides committed to developing and demonstrating advanced near-zero emissions coal (NZEC) technology through carbon capture and storage. In June 2009, the commission adopted a communication showing how we plan to build on the first phase of the EU-China NZEC project, which concludes this autumn, and how we will support the construction and operation of a demonstration CCS plant in China.
Are you hopeful about the future of CCS?
Carbon capture and storage technologies are not moving us away from fossil fuels, but they do form a key part of a broad strategy to slow emissions and bring them under control. Together with other initiatives on renewables and energy efficiency, the CCS initiative will help us make the deep cuts in greenhouse gas emissions that the economies of tomorrow will need.
We don't have a choice: we have to meet those targets, if dangerous and possibly catastrophic changes are to be avoided.