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GLOBAL STATUS OF CCS: 2016 John Scowcroft Global CCS Institute WFES, Abu Dhabi, 18 January 2017 Cover image: Aerial view of Tomakomai CCS Demonstration Project facilities located at Tomakomai City, Hokkaido, Japan. Image provided by JCCS.

The Global CCS Institute Our Vision for CCS: CCS is an integral part of a low-carbon future

OUR OUR MISSION MISSION



We are an international membership organisation.



Offices in Washington DC, Brussels, Beijing and Tokyo. Headquarters in Melbourne.



Our diverse international membership consists of:

To To accelerate accelerate the the development, development, demonstration demonstration and and deployment deployment of of CCS CCS globally globally

Reserves to production ratio: o governments, ~75 years

o global corporations, o small companies,

11

Fact-based, Fact-based, influential influential advice advice and and advocacy advocacy

o research bodies, and

22

Authoritative Authoritative knowledge knowledge sharing sharing

o non-government organisations. 

Specialist expertise covers the CCS/CCUS chain.

Fossil fuel demand growing and reserves robust

Primary energy demand by fuel source: (million tonnes of oil equivalent) 7%

20000 16000 12000

6 trillion barrels of oil equivalent

14% 6%

8000

13%

4000

81%

0

19%

5%

Fossil fuel proved reserves:

Reserves to production ratio: ~75 74% 81%

1990

2014 Fossil Fuels

Renewables

years

2040 Nuclear

Source: IEA World Energy Outlook, 2016 (New policies scenario)

Source: BP Statistical Review of World Energy 2016

CCS is critical in a portfolio of low-carbon technologies CCS contributes 12% of cumulative reductions required through 2050 in a 2DS world compared to ‘business as usual’

Power

Non-OECD ~ 95 Gt CO2

~ 95 OECD

Source: IEA, Energy Technology Perspectives (2016)

Gt CO2

Industry

CCS is essential to meet Paris Agreement ambitions 6

Global temperature increase (degrees Celsius)

5

4

3

Reserves to production ratio: ~75

CCS is necessary to ‘close years the gap’ 2

1

0

Do nothing (business as usual)*

COP 21 climate pledges

Paris Agreement ambitions

*Absence of efforts to stabilise the atmospheric concentration of greenhouse gases.

All emissions reductions solutions are necessary

Source: IEA, Energy Technology Perspectives (2016).

Mitigation costs more than double in scenarios with limited availability of CCS No CCS

Percentage*

150

100 Limited bioenergy

Cost increase under limited technology availability scenarios

50 Nuclear phase out 100

Limited solar/wind 100

100

100

Baseline cost with all mitigation options utilized

*Percentage increase in total discounted mitigation costs (2015-2100) relative to default technology assumptions – median estimate Source: IPCC Fifth Assessment Synthesis Report, Summary for Policymakers, November 2014.

A significant task within one generation Almost 4,000 Mtpa of CO2 captured and stored by 2040 (IEA

Global Status of CCS November 2016

2DS Scenario)**

38 large-scale CCS facilities combined CO2 capture capacity of approximately 70 Mtpa*: • 21 facilities in operation or construction (40.3 Mtpa) • 6 facilities in advanced planning (8.4 Mtpa) • 11 facilities in earlier stages of planning (21.1 Mtpa) *Mtpa = million tonnes per annum

40 Mtpa

Non-OECD

**Source: IEA, 2016. Energy Technology Perspectives: Towards Sustainable Urban Energy Systems. Paris. OECD/IEA.

OECD

Large-scale CCS facilities by region or country – November 2016 Early planning

Advanced planning

Construction

Operation

Total

North America

1

1

5

10

17

China

5

3

-

-

8

Europe

2

1

-

2

5

Gulf Cooperation Council

-

-

-

2

2

Rest of World*

3

1

1

1

6

Total

11

6

6

15

38

* Includes facilities in Australia, Brazil and South Korea.

North America dominates – three of the five facilities in construction soon to be operational, China has most facilities in planning, facility pipeline needs replenishment

Key CCS facility developments globally

Reserves to production ratio: ~75 years

How to work out the costs

• MCA - often used to define a supply curve of abatement options, which shows sequentially the competitiveness of various options • Can also identify those technologies that are not commercially attractive today, but will be in the future.

• Greenhouse metric called ‘CO2 avoided’ - average cost of reducing CO2 while producing a unit of output • Is LCOE the most relevant metric?

• Suffers from a few shortcomings!

But what does LCOE show?

GEOGRAPHICAL COVERAGE OF STORAGE RESOURCE ASSESSMENTS

Strong policy drives investment – CCS must be afforded ‘policy parity’ USD billion since 2006

• Scale of renewables investment is instructive

3,000

2,500

2,500

• CCS has not enjoyed commensurate policy support • Enhanced oil recovery has provided impetus in North America • Policy parity is essential • How do we get CCS onto a similar curve?

2,000

1,500

1,000

500

20 -

CCS

Total clean energy

Data source: IEA 2015 “Tracking Clean Energy Progress”. Bloomberg New Energy Finance “Clean Energy Investment By the Numbers – End of Year 2015” fact pack.

Global CCS status – a recap to guide future action

 CCS is indispensable in a least-cost approach to global decarbonisation  Opportunities for cost reductions are being identified  The task is enormous – the urgency of CCS deployment is only increasing  Deployment is not a technology challenge  Supporting CCS in industrial applications and non-OECD countries is very important  Policies that spur investment are the missing pieces in the jigsaw

A plan of action for CCS – completing the jigsaw  ‘Policy parity’ must be provided to CCS o Provision of equitable level of consideration, recognition and support alongside other low-carbon technologies  For CCS, this means policies specifically tailored to the technology and its lifecycle stage, including: o Providing predictable and enduring policy arrangements o Implementing effective and cost-efficient CCS law and regulation o Incentivising early storage site identification and characterisation o Re-doubling R&D efforts to reduce costs and increase efficiency o Encourage efficient development of hub and cluster arrangements

Call to action

1.

We cannot hope to tackle the scale of the climate challenge without CCS

2.

It is time to implement effective policies which focus on this outcome

3.

Strong leadership is needed by decision-makers in government and industry to realise the full potential of CCS

The Global Status of CCS: 2016

The Institute’s key publication Summary Report, Key Findings and other advocacy materials can be found at: http://status.globalccsinstitute.com/ Full report is available online at the Institute’s Members Portal.

www.globalccsinstitute.com