Implementation of CCS linked to carbon credits market: From the available carbon storage options: terrestrial, ocean, mineral, and geological storage, the latter is considered the best available near-term option for CO2 capture and storage (CCS). The potential for CCS under the clean development mechanism (CDM) will also strongly depend on the future prices on international carbon credit markets, such as the EU ETS and the Kyoto Protocol.
Carbon capture capital intensive: In contrast to regular CDM investments, CCS investments are relatively high due to their inherent capital intensity with the most expensive element of CCS being the carbon-capture process.
Revamping generation plant dependent on carbon trading incentives: Retrofitting power plants is generally regarded to be most effective at relatively new, high-efficiency, coal fired power plants instead of low-efficiency ones or natural gas fired power plants. Nonetheless, due to its capital intensity, CCS under the CDM is unlikely to be driven by cost-effectiveness as explained before. Rather, incentives for furthering such technologies are offered within the EU through the EU ETS.
Favourite locations for CCS: Western Europe could be one of the main drivers for offshore CCS development. Similarly, the US and China could be more prone to develop enhanced coal bed methane (ECBM) initiatives. With respect to CCS in relation to onshore gas fields or aquifer injection, considering their favourable geographical distribution, overall global benefits of CCS in terms of GHG emission mitigation could be substantial.
Reference: Joint Implementation Quarterly April 2006, P.7. website: http://www.jiqweb.org
Erisk Net, 17/5/2006