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7 December 2007 - Carbon capture and storage is "the only technology we cannot manage without if we are to reduce CO2 emissions," Ronald Oxburgh, former chairman of Anglo-Dutch major Shell and current president of the Carbon Capture and Storage Association, said, reports Platts.
But, he added, there was currently no business case for developing the technology.
Speaking at the Sparks and Flames conference in Amsterdam, Oxburgh said that European governments should guarantee a minimum carbon price for CCS projects in order to get the technology developed. He added that CCS needed a minimum carbon price of around $50-$60/mt in order to make it profitable.
But Seb Walhain, director of environmental markets at Benelux bank Fortis, said that such subsidies would be unnecessary if the EU were able to give long-term certainty over the Emissions Trading Scheme framework. If this happened, then banks could write put options for investors, creating the minimum carbon price for them financially.
Oxburgh said that CCS will be necessary because large energy importing countries such as China and the USA had large supplies of coal, which they will inevitably use. Power generation will "depend on fossil fuels for at least the next 50 years," he said.
CCS would increase the price of electricity by some 30%, he said, because it increases the capital costs of power plants and decreases their inefficiencies.
However, carbon abatement technology would become in the future a "trillion-dollar" industry "of the same order as the oil industry," and so investment in technologies now would make financial sense later, he said.
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