Which industrial sectors stand to benefit the most from large-scale, commercially viable carbon capture and storage technology? During today's OnPoint, Brad Page, CEO of the Global CCS Institute, explains why he believes the United States is the global leader in CCS technology development and talks about pathways to addressing the technology's policy and financing hurdles globally.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Brad Page, CEO of the Global CCS Institute. Brad, thank you for coming on the show.
Brad Page: Pleasure, thank you.
Monica Trauzzi: Brad, carbon capture and storage technology has long been considered the solution for keeping coal in business while reducing emissions. For those who are not familiar, can you talk a bit about how your organization is involved in sort of the business and policy discussions that are happening globally on CCS and specifically in the industrial sector?
Brad Page: Sure -- thanks, Monica. So the institute is a member-owned organization initially established by the Australian government, and we have members located all around the world including governments, researchers, large corporations and some smaller advisory firms as well. Our role very much is about explaining CCS to laypeople, to promoting an understanding of the significance of CCS in the climate change arena, and finally and very importantly actually sharing the knowledge of actual experiences to try to progress the progression of the technology more quickly than it might otherwise happen.
Monica Trauzzi: How critical is CCS in Australia, where emissions are expected to go up?
Brad Page: Well, CCS is potentially quite critical in Australia. Australia at the moment is going to be host of the largest storage facility anywhere in the world, in the Gorgon project, which is expected to come online in the next 18 months or so. And that will store up to around 4 million tons of CO2 a year. So that's our first major-scale project. Certainly there are very good opportunities in other areas, but of course you've got to have the right policies and you need the right sort of market settings as well.
Monica Trauzzi: So which industrial sectors have the most to benefit from CCS?
Brad Page: Well, it's a very broadly applicable technology, and so most people would immediately think of power generation and particularly coal-fired power generation, and that's understandable. But in fact when we look at the projects that are already in existence, the majority of them are in industrial processing such as gas processing, biofuels creation, and now we're starting to see applications on steelmaking facilities. The first one has just been approved for construction in Abu Dhabi. So it's actually across quite a broad range. Just on the industrial application rather than power, CCS is probably the only technology available to deal with the emissions from many of those facilities. And in fact it's an area that gets little attention and is probably deserving of a lot more.
Monica Trauzzi: So how are various regions internationally approaching CCS, and what are sort of the key differences that you see in your work?
Brad Page: Well, it is quite stark, the differences. So if we started in the Americas with particularly North America we've seen traditionally CCS being applied in non-power applications, with the carbon dioxide being used quite often for enhanced oil recovery processes. That's been a useful approach because the value of the CO2 to the upstream oil industry has given an additional revenue boost to those projects and has been part of the reason why they've been able to be prosecuted. Interestingly, increasingly we're starting to see pure geologic storage activities coming on, and the ADM Decatur program is a good example of that.
In the Asia Pacific region we're seeing quite a different set of drivers. China is now No. 2 in the world for the total number of large-scale projects it has, and much of those projects are both on power and also coal-to-chemicals activities, which you don't see in broad scale in other parts of the world. Again enhanced oil recovery is part of their story, but it's not exclusively so. When you move to countries like Japan where there are now two storage activities underway -- most people believe Japan has little opportunity for storage. I think they're starting to discovery that that's not necessarily the case. But in Japan's case it's very much focused about meeting their emissions targets. So we see quite a distinct set of arrangements in the Asia Pacific region compared to the Americas.
Then in Europe, Middle East and Africa -- I think Europe's in a very difficult position economically just at the moment, and I think we've seen successive governments finding it difficult to continue the sort of financial support that's necessary for first-of-a-kind projects. But we still have in prospect several good opportunities there, including the road project in the Netherlands, whilst in the Middle East we've seen two projects now, one in Saudi Arabia in operation and the second, as I mentioned before, on the steelworks in Abu Dhabi, and we believe there are more planned there. These again are partly enhanced oil recovery, but it's also I think an increasing realization in those countries that dealing with emissions is important.
Monica Trauzzi: But yet with all these projects going on, we're still at a place where there isn't this global commercial viability. So what's missing?
Brad Page: What's been missing for a very long time in fact is adequate policy support to recognize the important role that CCS can play and should play in climate change mitigation. If we were to compare the sorts of support around the world that renewable energy has been receiving and see the upshot of that, we see in excess of $2 trillion worth of investment in renewables over the past decade. In the same period we've seen $20 billion in CCS investment. And when we work our way through what's the defining difference there, it's very much around the sorts of policies that governments around the world allocate and therefore will lead to capital investments. We're a bit short on adequate policy support just now in many parts of the world.
Monica Trauzzi: Is it necessary to have more public investment, more private-sector investment, or a combination of the two?
Brad Page: Look, I think it's a combination of the two, and there's no single policy that you'd say had to be put in place universally around the world. I think these things need to be tailored for the particular circumstance of each individual country. What we would say is, though, that private capital investment will follow where there is predictable and stable policy that gives it an adequate return. And we've seen that in certain countries, and we've certainly seen that in the United States. The U.S. has more projects than anywhere else. We've seen it in Canada as well, and we've seen it also in China, embodying in a slightly different way. But I think when we look across Europe we find that the policy has been variable, to say the least, and inconsistent, and that does very much chill private-sector investment.
Monica Trauzzi: So here in the United States obviously the big FutureGen project did not pan out. How would you rate the Office of Fossil Energy at DOE and the level of attention that they're paying to advancing CCS?
Brad Page: Well, I'd actually say that that office is one of the leaders in the world. I think the United States can hold its head very high on the way that it's approached CCS and the funds that it's allocated. I think it's very easy to point to something like FutureGen, which has a celebrated history, but on the other hand what impresses me consistently is the sorts of commitment and focus that the Office of Fossil Energy and the NETL and therefore the administration bring to the ongoing development of CCS and how analytical that they actually are about where investment will be best made. I actually think they're world leaders in this area, and I think that the United States has been the beneficiary -- indeed, the world is becoming the beneficiary of the efforts.
Monica Trauzzi: So what is the pathway that you envision for bringing CCS to a point of global commercial viability? How do you see it going?
Brad Page: Sure. Well, I think that the Paris agreement actually is a big opportunity now, that we've seen plenty of analysis, including from the IPCC, the International Energy Agency, and so on that to reach a 2-degree target really did require a significant amount of CCS. But to reach a 1½-degree target means even more of everything will be required. And I think that we see from a lot of analysis that if you don't have CCS, you really cannot attain those 1.5-degree outcomes. Now it's going to take a little time for governments to work through their iterations of targets. It will take time for them to work out the policies that are required to reach those targets. But one of the things we've been encouraged by is to the extent to which we've been having discussions with a range of governments, and who in fact in their targets that they submitted to the UNFCCC process have indicated that they expect CCS to be a significant part. So over time I think we'll see policy changes which will lead to that private-sector capital coming onboard and being deployed.
Monica Trauzzi: Very interesting discussion. We'll end it right there. Thank you so much for coming on the show.
Brad Page: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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