EU Stumbles in Carbon Capture Race

by | Dec 10, 2012

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Steel giant ArcelorMittal has pulled out of the European Union’s subsidy program for carbon capture and storage projects, the latest in a string of setbacks threatening to derail the bloc’s plan to develop CCS while other nations, including the US, press forward.

After ArcelorMittal withdrew its funding application for a project in France, it appears the EU’s $1.9 billion initiative won’t finance any CCS projects in its first round of funding, reported Bloomberg. Last month, the UK government learned it would not receive any EU funding in the first round.

Energy secretaries from the US, UK, Canada and nine other countries agreed nearly two years ago to accelerate the development of carbon capture projects.

Projects in North America, where researchers estimate geological formations have the capacity to store 500 years of carbon dioxide, have had greater success developing CCS than in Europe.

Canada’s Saskatchewan provincial government approved plans proposed by utility SaskPower in April 2011 for one of the world’s first commercial-scale CCS projects. Construction is currently underway to build a $1.24 billion coal-fired power plant outfitted with CCS. SaskPower also signed an agreement in March 2012 with Hitachi to create a CCS test facility.

Shell is also developing a CCS project in Canada. The oil company announced in September 2012 it will build a $1.36 billion carbon capture and storage project to cut carbon dioxide emissions up to 35 percent at its 255,000-barrel-per-day oil sands upgrader in Canada. The company is pursuing another CCS project that would permanently store CO2 in the North Sea.

Meanwhile, CPS Energy of San Antonio signed the first US power purchase agreement in January 2012 for electricity from a commercial-scale CCS project. The utility, the largest one in the US owned by a municipality, will buy about 200 MW of power from the Texas Clean Energy Project, a coal-based power plant with carbon capture planned for just west of Midland-Odessa.

Last month, the Illinois Basin-Decatur Project, the country’s first demonstration-scale project to use CO2 from an industrial source and inject it into a saline reservoir, announced that it had injected 317,000 metric tons of Co2 in its first year.
But there have also been failures in the US, including American Electric Power shelving its plans to build one of the first carbon capture and storage facilities in the country. The decision terminated a cooperative agreement with the US Department of Energy. AEP dropped plans to build the $668 million project largely due to the absence of federal legislation on climate change, which made it difficult to justify significant investment aimed at reducing its carbon footprint, company executives said at the time.

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