[MUSIC] Today we have the pleasure of having with us Mrs. Samantha McCulloch from the International Energy Agency, that will help me in exploring the issue of carbon capture utilization and sequestration. The issue with this technology is that in all scenarios we say that this is a necessary component of the decarbonization strategies. It's not possible to achieve complete decarbonization, or in fact negative emissions as some people see inevitable, without carbon capture utilization and sequestration. And yet, so far, very little has been happening. And so, some people squarely say that there is no future for this technology and it's a waste of time. And other people insists that this is a necessary component, so how do you see this from the point of view of the agency? >> So it's a nice introduction and thank you for having me. I think we can take perhaps this in three parts. Firstly, really recognizing the importance of CCS in changing climate goals. There are a number of reasons why the IEA in particular see CCS as being really essential to achieving deep decarbonisation and net zero emissions globally. The first is role in industry particularly, we see that there are a few alternatives to CCS for deep decarbonisation in some industrial processes. That's particularly in cement, in chemicals production, in steel production. Also in the power sector, well, there has been immense developments and cost reductions in renewable energy. We still see a significant role for CCS in decarbonizing the power sector, that's particularly recognizing that this currently around 2000 gigawatts of coal fine power plant globally. Half of that is in Asia, where the average age of those coal plants is less than 11 years. So this is a young and often quite efficient fleet that could in theory be operating for many decades to come. That's a different challenge to perhaps the US or Europe, where the average age of that coal fleet is around 40 years. And finally in terms of the importance of CCS in achieving climate goals, we've already recognized the role of CCS in supporting negative emissions through in combination with bioenergy. But also new or emerging technologies such as direct to capture combined with either some forms of utilization or storage. So, in response to, we certainly recognize that CCS is a critical part of the, I guess the climate toolbox that we need to meet the Paris Agreement objectives. You're absolutely right that the progress has not been sufficient, particularly in the past decade. There has been significant progress made in some areas, but it's still insufficient in terms of where we would need to be to achieve our climate goals. But having said that, I think there are signs that are encouraging currently. We're seeing since the Paris agreement was ratified and as countries really start to look at their long term climate goals, they're increasingly recognizing the need for CCS, and identifying what that role for CCS could be. From an IEA perspective, we're trying to support our member countries and other countries and as well as the industry, to really identify how we can support early deployment of CCS. That includes through policy support, but also looking at new business models that would make CCS viable in the near term. >> Some people say that CCS is not a good solution because it would only serve the purpose of extending the lifetime of fossil fuels, allowing us to use them for longer than would otherwise be the case. And they believe that we should purely and simply abandon fossil fuels. Would you agree with this? >> Well, there's two points I'd make in relation to that. First, is going back to the role of CS with bioenergy and in supporting negative emission technologies, so it's not just a fossil fuel technology, it's not just a coal technology. And the practical reality is that we'll continue to rely on fossil fuels for many decades to come in industry but also empowered generation. I've already discussed in some part of the issue is the existing coal fleet. And I think from a practical point of view, we need these technologies to avoid a long term locking of emissions. And just to put that in context IEA in our world Energy Outlook last year did an analysis of the existing power generation fleet, industrial facilities globally. And identify that if those plant were to continue to operate, they would eat up more than 90% of the allowable carbon budget to 2040, if they were to continue to operate. >> Yeah, sure. >> So, while, of course, we need to look at other strategies, reducing the use of fossil fuels, we need all technology solutions to address that locking emissions, and CCS is one of those solutions. >> So what are the major obstacles, in your opinion, to a more significant uptake of this technology? Why is it so difficult? >> So, I would say that the primary obstacles are no longer about the technology themselves. I think while CCS is a suite of technologies, it's not just one particular technology. We have enough know-how about CCS to be able to deploy it. From the capture point of view of applying some of these technologies in the industry for decades, and indeed it's an inherent part of some industrial processes. From a storage point of view we've been injecting CO2 for enhanced oil recovery in the United States, since the early 1970s. Projects such as the Sleipner project in Norway, have been operating for more than 20 years now. So I think the expertise is there, the technology is there, that's not to say there's more room for further technology developments, but we know enough now to get on with the task of deploying CCS at scale. There has been some progress in that regard. We have 23 large scale projects operating around the world on different applications, and they've demonstrated the technical viability of CCS. But primarily, now the obstacles are really commercial and a lack of political and policy support. >> So it's a matter of cost, it's too expensive? >> It depends on the technologies. CCS isn't just one application at one cost. So we identified at the IEA last year, just for example, that more than 450 million tons of CO2 each year could be captured for the useful storage, with an incentive of less than $50 a ton. And actually more than 200 million of those tons could be captured with an incentive of less than $20 a ton. So I know all CCS is expensive, some applications of CCS are going to be more expensive, more energy intensive, but there is a spectrum, and there is an opportunity to deploy CCS at a lower cost in some instances. I would also say that over the past decade the experience that we've gained from CCS has led to potential cost reductions. Not just through technology development but principally through deployment. Some of these large scale projects that have been operating, many of them, in fact, have identified that if they were to build the plant again, they would immediately be able to have cost savings in the vicinity of 30%. So it also underscores the importance of achieving cost reductions through deployment, not dissimilar to what we've seen in the renewable energy space with wind, offshore wind, solar PV. With the deployment brings the learnings that can deliver very significant cost reductions. >> So we can say that we need a price for carbon emissions of $50 a ton before CCS can become more frequent, and the uptake more significant? >> So, price on carbon emissions or a carbon tax or some form of recognition of that externality will be important in terms of addressing climate change. It's an efficient way of reducing emissions from an economic perspective. While it will be important, I think realistically, what we're going to see is a layering of other incentives and mechanisms to support CCS in the near term. Because a $50 carbon price is not necessarily politically acceptable in many jurisdictions around the world. So it will depend on Where we're talking, but in essence there are different mechanisms that can support CCS. And I would use the example of, in the United States they've recently expanded a tax credit for CO2 storage or for CO2 use, including enhanced oil recovery. And that tax incentive, or tax credit, that's being introduced is already generating quite a lot of investment activity and a lot of interest. And so that in itself is starting to spur sort of a next wave of CCS projects in the US. >> So, what can we do to convince governments that this is an important thing to support? I mean, CCS is not sexy, that's the problem, is it? >> I'd have to agree with that, it's kind of an often technology in many ways where a lot of governments are really looking at it and starting to appreciate, that will really be essential, particularly in the industrial sector, and we're talking in European context and. And likewise the industry also coming to the table. And I think one of the challenges is that no one government, no one industry can necessarily solve all the challenges around CCS on their own, it really does require some partnerships between governments and industry. And we're increasingly seeing that now, for example, towards the end of last year the IEA hosted what was really an unprecedented meeting of ministers and CEOs to discuss CCS. And as part of that, for example, the UK government and the Norwegian government signed an MOU to really start looking at opportunities to deploy CCS within Europe. Governments at looking at infrastructure, cross border infrastructure to support CCS deployment across countries. >> So there is also perhaps a beginning of international cooperation, international initiative to promote CCS? >> I think we're definitely seeing that, it's been ongoing, I mean the cooperation on CCS on various levels has been occurring for more than a decade, I suppose, particularly in the research base, which has been quite valuable. But there's increasing funding and effort going into supporting a global approach. That includes, for example, through initiatives such as the World Bank, where countries including Norway, the UK and some others are funding pilot projects. Fire Trust Fund, a World Bank Trust Fund in countries such as Mexico, in Indonesia, in South Africa. Also the Asian Development Bank has been very active in the Asia Pacific region, to start to support the deployment of CCS. And there's been a great deal of international cooperation in that space also. >> And this would be an item on which even countries that are not so committed to decarbonization or worried about climate change. Or countries that are heavily dependent on coal, countries that are net oil and gas exporters and so on. This is something they should be willing or interested in participating, right? >> I think there is a number of countries, particularly those heavily dependent on fossil fuels, that have a strong strategic interest in seeing CCS deployed and being involved in that process. There is also potential market. I mean, if you look at the scale of CCS deployment that could be required if we are going to reach quite ambitious climate targets. There is a technology market there, there is a service market there in terms of taking the CO2 and storing it. So there's potential for commercial opportunities for those countries and companies that are looking at getting engaged on CCS at an early stage. Similarly, there's countries that are developing CCS projects, particularly CO2 storage facilities. That can then act as a incentive for investment for future industry that might need to rely on CCS in the future as emissions requirements start to bite. >> Thank you very much. I think this has helped our students, our public to understand the importance of CCS, and how this is an essential component of our future efforts to decarbonize and preserve climate from catastrophic change. Thank you very much. >> Thanks for having me. >> [LAUGH]
