Global CCS Institute Meeting 20 June 2013. Presentation on Global Outlook of CCS by Juho Lipponen, Head of Carbon Capture & Storage Unit, International Energy Agency (IEA).

1. © OECD/IEA 2010
A Global Outlook for CCS
GCCSI Japan Members’ meeting
Tokyo, 20 June 2013
Juho Lipponen
Head of Unit, Carbon Capture and Storage
International Energy Agency

2. © OECD/IEA 2010
Twenty-eight IEA member countries
IEA members
Accession countries (Chile and Estonia have begun the process of joining the IEA)
Partner countries that attended the 2011 Ministerial Meeting
Dedicated CCS Unit since 2010, launched with financial support from Australia (RET / GCCSI)

3. © OECD/IEA 2010
Outline
1. Advancing CCS remains critically important
2. CCS is ready for scale-up
3. Where do we need to be by middle of the century?
4. How do we get there?

4. © OECD/IEA 2010
Atmospheric CO2 concentration at historic high
400ppm concentration was recorded in May 2013.
http://keelingcurve.ucsd.edu/

5. © OECD/IEA 2010
Record-high CO2 emissions in 2012
Annual CO2 emissions reached
record high 31,6 Gt in 2012
Significant differences in world
regions in 2012.
WEO 2013
WEO 2013

6. © OECD/IEA 2010
Advancing CCS remains critically important (1)
2. Fossil fuels accounted for
85% of all incremental
energy demand in the last
decade
WEO 2011
1. Energy-related CO2
emissions have doubled
in the past 40 years

7. © OECD/IEA 2010
Advancing CCS remains critically important (2)
3. CCS is the only option for
many energy-intensive
industries
4. CCS is part of a cost-
effective portfolio of
technologies in any
ambitious scenario

8. © OECD/IEA 2010
Advancing CCS remains critically important (3)
5. CCS can help
preserve an
economic
value of fossil
fuel reserves
6. CCS can help “unlock”
emissions already
locked in
WEO 2013
WEO 2012

9. © OECD/IEA 2010
Advancing CCS remains critically important (3)
7. CCS can help
reduce
investment
cost in the
power sector
8. Global energy supply
is today as carbon-
intensive as it was in
1990
WEO 2013
IEA Energy Sector Carbon Intensity Index, ESCII

10. © OECD/IEA 2010
CCS NEEDS TO BE A
SOLUTION AS OF
EARLY 2020s.

11. © OECD/IEA 2010
Outline
1. Advancing CCS remains critically important
2. CCS is ready for scale-up
3. Where do we need to be by middle of the century?
4. How do we get there?

12. © OECD/IEA 2010
CCS is making progress
Source: GCCSI, BNEF
Projects in “operate”, “execute” and “define” phases according to GCCSI criteria.

13. © OECD/IEA 2010
CCS is making progress
Source: GCCSI, BNEF
Projects in “operate”, “execute” and “define” phases according to GCCSI criteria.

14. © OECD/IEA 2010
Inputs into CCS are not negligible...
Source: BNEF
Source: IEA Source: IEA
Source: GCCSI
Money spent on CCS projects globally Government pledges for CCS support
R&D spending on CCS technologies by IEA countries
Numbers of CCS-related patents

15. © OECD/IEA 2010
The need for project experience in industry-CCS (1)
Source: Industry-CCS annex to IEA TCEP report 2013.

16. © OECD/IEA 2010
1. Commit public funding to ~10 pilot and
demo-scale projects in cement, steel etc.
2. Support projects according to their
contribution to knowledge (not immediate
CO2 emission reductions)
3. Incorporate CCS in forward-looking
industrial strategies
4. Address competitiveness concerns of
sectors in global competition
5. Better exploit synergies between sectors
6. Involve all industry sectors in actions to
advance CCS
The need for project experience in industry-CCS (2)

17. © OECD/IEA 2010
CCS: still waiting its cue from governments
260 45-65MtCO2 stored in 2020 in a 2°C
stabilisation scenario
MtCO2 maximum projected
capture rate in 2020

18. © OECD/IEA 2010
Outline
1. Advancing CCS remains critically important
2. CCS is ready for scale-up
3. Where do we need to be by middle of the century?
4. How do we get there?

19. © OECD/IEA 2010
By 2050: 120Gt of CO2 safely stored
 2050: > 7000Mt CO2 stored pa; CCS routinely used in all applicable power and industry
 2030: > 2000Mt CO2 stored pa; CCS routinely used in power and industry; ready for
deployment in 2nd phase industry
 2020: Several dozen large-scale projects in coal and gas power and 1st phase industry

20. © OECD/IEA 2010
By 2050, 15% of net power generation could
come from CCS-equipped plants

21. © OECD/IEA 2010
Mix of CCS-equipped generation varies around the world
© OECD/IEA 2011

22. © OECD/IEA 2010
Industrial applications vary widely by region

23. © OECD/IEA 2010
Where is CO2 storage needed?
Note: Mass captured in GtCO2

24. © OECD/IEA 2010
Total investment in CCS: 3.6 trillion USD
0 10 20 30 40
Trillion USD
CCS
Other low-carbon
technology
 2013-2020: USD 100 bn
 2020-2050: USD 3,5 trn
 Economic benefit: if CCS
removed from portfolio,
investment cost in the
power sector increases by
40% until 2050
 Note: investment needs in
other low-carbon
energies are equally
significant
Additional investment requirements to reach 2DS scenario goals

25. © OECD/IEA 2010
Top-10 regions/sectors: 55% of total effort
Source: IEA

26. © OECD/IEA 2010
Outline
1. Advancing CCS remains critically important
2. CCS is ready for scale-up
3. Where do we need to be by middle of the century?
4. How do we get there?

27. © OECD/IEA 2010
A pathway for wide deployment
Next seven years:
Creating
conditions for
wide deployment
2020-2030:
Large-scale
deployment picks
up speed
2030 and beyond:
CCS is
mainstream

28. © OECD/IEA 2010
A comprehensive policy commitment to CCS
Permitting
framework
Technology
RD&D framework
Incentive framework
Long-term vision for CCS deployment
Regulation
for safe,
effective
storage
Efficient
resource
management
Prices of
limits on
emissions
Targeted
deployment
incentives
Demonstration funding
All parts of the policy puzzle must be in place if CCS is to excel, starting with a clear
vision for the future for CCS

29. © OECD/IEA 2011
Where do we need to concentrate efforts?
 Introduce financial support mechanisms.
 Implement policies that encourage storage exploration,
characterisation and development.
 Develop national law and regulation that require new
base-load fossil-fuel power generation capacity to be
CCS-ready.
 Prove capture systems at pilot scale in industrial
applications.
 Implement governance frameworks that ensure safe and
effective storage.
 Reduce the cost of electricity from power plants
equipped with capture through continued technology
development.
 Encourage efficient development of CO2 transport
infrastructure anticipating future locations.

30. © OECD/IEA 2011
Top-ranked action for next seven years:
Creating the business case
 This decade is not about CO2 reductions, but about technology
learning
 The main policy mechanisms should provide mid-term revenue
certainty
1. Direct financial support by governments for CAPEX: grants, loans, equity etc.
2. Direct support for operations: feed-in tariffs, production tax credits, certificates,
portfolio standards etc.
3. Leveraging existing markets for CO2 (such as EOR)
4. Specific policy to incentivise sectors in global competition (cement, steel etc.)
 Need to inspire from successful policies for renewables

31. © OECD/IEA 2011
IEA – GCCSI collaboration
Strategic level
 Strategic partnership IEA-GCCSI (Australian financial contribution to IEA)
 Communication between top management
 Strategic vision for CCS and recommendations on needed actions
Sharing information
 Monthly phone calls
and exchanges of info
Events
 Joint events
 Invitations to speak
 Joint planning &
information
exchange prior to
events
Publications & analysis
 Common papers &
documents
 Direct contributions to
each other’s work
 Commenting of drafts
 Use and references to
each other’s data and
analysis

32. © OECD/IEA 2010
NEW IEA CCS ROADMAP
LAUNCH:
Tuesday 2 July

33. © OECD/IEA 2010
Thank you!
juho.lipponen@iea.org
+33 1 40 57 66 80
www.iea.org/ccs