Legal, Policy & Research Developments
Durban platform for Action
No doubt as a surprise to most, COP17 in Durban ended in a political deal to extend the Kyoto Protocol into a second commitment period and in parallel set up the formal reporting and monitoring framework for both developed and developing country post-2012 pledges that came out of Copenhagen and Cancun. But perhaps most surprisingly, the political deal includes a formal COP decision ("platform" in COP-speak) to negotiate by 2015 the new legal basis – exact form still to be determined – that would apply from 2020 to both developed and developing countries, Kyoto and non-Kyoto Parties, large and smaller emitters.
During the 17th conference of parties held in Durban in December 2011, CCS was included as an eligible project activity under the CDM. For more information read our client alert.
Latest study shows that CO2 pressure dissipates in underground reservoirs.
Scientists at the Lawrence Berkley National Laboratory have conducted an in depth study into the sequestration of CO2 in underground formations. The study specifically debates some of the conclusions drawn in an earlier study by Ehlig-Economides and Economides and counters their claims that carbon dioxide cannot feasibly be stored underground. The study concludes that CO2 storage will occur mainly in partially closed or open formations, where pressure build-up is relieved through natural processes of saline water movement. The report is available here.
Environmental think tank offers a new way to measure CCS.
The Center for Climate and Energy Solutions has released a first-of-its-kind framework for measuring emission reduction from CCS projects. The new framework consolidates the numerous existing formulas from various sources into one system for measuring the greenhouse gas reduction benefit of CCS. Full details are available here.
New CCS network announced
A group of the worlds leading environmental advocacy organizations have launched the Environmental NGO Network on Carbon, Capture and Sequestration (ENGO Network on CCS). The network has been formed to assist in developing domestic and international policy frameworks for the safe and effective deployment of CCS technologies.
Current members include: The Clean Air Task Force, The Environmental Defense Fund, Green Alliance, The National Resources Defense Council, The Bellona Foundation, The Climate Institute, The Pembina Institute, World Resources Institute, and Zero Emission Resource Organization. The network's website can be accessed here.
IEA Working Paper on Bioenergy and Carbon Capture Storage (BECCS)
The International Energy Agency has released a Working Paper on combining Bioenergy with CCS to produce energy with negative emissions. The paper focuses on the treatment of such 'negative emissions' under current and planned carbon accounting frameworks. It concludes that although current frameworks provide limited guidance, proposed and revised guidelines could provide an environmentally sound reporting framework for BECCS. The Working Paper is available here.
South Korea opens first CCS research centre.
The first CCS research centre in South Korea was opened in Seoul at the beginning of this year. The new CCS Research Center has a budget of up to 173 billion won over the next nine years to develop new technologies to capture, transport and store carbon dioxide.
CCS include in the National Energy Science and Technology Development 12th Five Year Plan.
The Chinese government has included CCS technology in the latest National Energy Science and Technology Development Five Year Plan. Some of the details include an aim to capture 300 000 tonnes a year of CO2 from coal to oil products and building 35MW of Oxy-Fuel Combustion Capture demonstration projects over the next five years. Significant funding has also been earmarked for CCS research and development specifically on CCUS which looks specifically to 'utilizing' any captured CO2 for commercial purposes.
New investment in CCS for the LaTrobe Valley
The Australian and Victorian governments have announced that they will collectively provide $100 million towards the development of Victoria's first CCS project known as CarbonNet. The Commonwealth will provide $70 million with the Victorian government contributing $30 million. CarbonNet is the second project to be selected for funding under the Australian Government's Carbon Capture and Storage Flagships program. The funds will primarily go towards studies to demonstrate the feasibility of the $1 billion plus CarbonNet project which aims to facilitate low emissions brown coal electricity generation in the region. The full announcement is available here.
CCS in new draft Energy White Paper
The draft Energy White Paper released by the Australian Government at the end of 2011 makes a number of references to CCS's role in Australia's energy future. Most pertinently, 'The Clean Energy Transformation' chapter points to Treasury's financial modelling of the carbon pricing mechanism, under which clean energy technology, including CCS, is anticipated to play a significant role in Australia's large-scale electricity generation by 2050. According to this modelling, and particularly with regard to CCS technologies, the Paper asserts that fossil fuel-fired plants equipped with CCS could provide between 26 and 32 per cent of total generation.
As the Paper acknowledges, there is no 'significant' CCS capacity in Australia today, even though there exists 'highly prospective geological storage sites for carbon dioxide onshore and offshore' and that these sites 'could support the development of near zero net emissions coal fired or gas-fired base load electricity generation.'
At the same time, the Government has also announced it will no longer proceed with the introduction of emissions standards or CCS ready requirements for new coal fired power stations. The draft Energy White Paper is available here.
Algae. Tec joins forces with Lufthansa to develop sustainable aviation fuel.
Perth biofuels company Algae. Tec has signed a memorandum of understanding with Lufthansa airlines to evaluate the use of algal oil produced in its unique bioreactors as a source of aviation fuel. The bioreactors capture carbon dioxide emitted by power stations to use as a food source for the algae which in turn is capable of producing different biofuels including biodiesel and potentially jet fuel.
Funding for new study into CCS at Loy Yang Power plant announced.
A grant of more than $200 000 has been announced to fund a study into the feasibility of applying CCS technologies to the carbon intensive Loy Yang power plant. The $226 000 grant will be provided by the Global Carbon Capture and Storage Institute to support a Worley Parsons study into the impact of retrofitting post-combustion capture technology on an existing brown coal power plant.
CCS test drilling begins in Western Australia
The Department of Mines and Petroleum has begun drilling in Harvey, south of Perth, to investigate the potential for underground CO2 storage. The $8.5 million South West Hub project will involve the collection of data and samples at the Harvey One Well from as far as three kilometers underground. The project is the first non-commercial one of its kind in WA and the second in Australia.
New amendments to laws governing offshore CCS
The Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Act 2011 (the NRA Act) has commenced and amends The Offshore Petroleum and Greenhouse Gas Storage Act (OPPGS) . The NRA Act amends the OPGGS Act to expand the functions of the existing National Offshore Petroleum Safety Authority to become the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).
New regulations, The Offshore Petroleum and Greenhouse Gas Storage (Safety) Regulations 2011, have also come into effect to reflect the changes made in the amending Act above. The new regulations ensure that the full range of regulatory functions and powers currently exercised by the Safety Authority under the earlier Safety Regulations can continue to be exercised by the expanded NOPSEMA. The new Act along with subordinate regulations are available here.
Report clears world's largest CCS project
An international research group based at the University of Regina has found that the world's largest CCS project is not leaking CO2 onto neighboring properties. The project operating in Saskatchewan and run by Cenovus Energy Inc was accused by neighbors of leaking CO2 onto their properties. The report has vindicated the Calgary based company and also supports the long term feasibility of underground CCS projects.
Research into Nanotech and CCS
Researchers at the University of Alberta have teamed up with GE to investigate the use of nanotechnology in CCS. The project is investigating ways to harness the properties of zeolites, rocks with molecular-sized pores, to manufacture industrial membranes that can be used for high temperature gas separation. The aim of the project is that an industrial-sized membrane would snare molecules of CO2 without obstructing the flow of hydrogen.
Although the project is still in the early stages of development GE is planning to conduct field-tests in 2014. The technology has the potential to lower current CCS costs by 25%.
CCS earmarked for €1 billion from new EU infrastructure fund.
Carbon Capture and Storage technology is in line to receive as much as €1.37 billion from the European Unions energy infrastructure package. The figure represent around 10%-15% of the overall package according to António Correia de Campos, the rapporteur tasked with seeing the energy infrastructure package through the European Parliament.
The energy infrastructure package sets out how CCS technology would allow the continued use of fossil fuels while still significantly reducing carbon emissions. The Commission is aiming to have the infrastructure package voted on by the end of May.
Potential first Biomass-CCS power plant in the world
The Norwegian energy company Sargas has announced plans to build a new power plant fitted with CCS technology in Malta. The plant will be fuelled by biomass from waste from olive production. This project has the potential to be the first example of carbon negative energy deployed anywhere in the world.
EU funded clean coal project for Indian thermal power sector
The Tiruchi Regional Engineering College (TREC) has begun implementation of the European Union funded project for developing a cluster for Clean Coal Technologies (CCT) and CCS Technologies within the Indian power sector.
The project, in partnership with Bharat Heavy Electricals Ltd, will involve the dissemination of new skills, technologies and techniques into the Indian power industry in order to develop CCT and implement CCS projects across the country. The project is funded 60% by the European Union.
Construction of CIUDEN's georlogical storage centre underway
In February 2012 the works for the construction of CIUDEN's geological storage centre in Spain commenced. The project comprises one storage tank, two monitoring tanks and an interpretive centre. More than EUR 50 million has been invested in the centre. Works are expected to finish in 2013.
The Gulf's first large-scale CCS project given go ahead.
The first large-scale CCS project in the Gulf is to go to tender after three years of negotiations between Abu Dhabi National Oil Company (Adnoc) and Masdar. The plan will see the injection of CO2 from a steel plant in Mussafah into an onshore oilfield. The pilot scheme will seek to capture around 800 000 tonnes of CO2 a year and is aiming to commence operations by the end of the 2012.
Masdar has further announced that it will investigate opportunities to generate carbon credits from the project by registering it under the CDM mechanism. If successful it would be the first such scheme to gain approval under the Kyoto Protocol Offset market.
New Bill deals with offshore CCS in Exclusive Economic Zone
A new Bill relating to offshore CCS have been introduced into New Zealand Parliament. The Exclusive Economic Zone and Continental Shelf (Environment Effects) Bill (the EEZ Bill) was introduced on 24 August 2011. The Bill creates an environmental consenting regime for activities in the EEZ and continental shelf. The text of the Bill is available here.
Flagship CCS project launched in Yorkshire
A flagship CCS test project has been opened by the Energy Secretary, Chris Huhne, in Yorkshire. Worth more than £20 million, the project is a partnership between Scottish and Southern Energy, Doosan Power Systems and Vattenfall and the project is further supported by DECC, the Technology Strategy Board and Northern Way.
The project deploys innovative new technology that will capture up to 100 tonnes of carbon emissions a day from SSE's Ferrybridge coal-fired power station.
Don Valley enters the UK government's new CCS competition
2Co Energy has announced that its 650MW Don Valley power project will enter the UK government's newly revamped CCS competition. The integrated gasification combined-cycle coal-fired power plant is expected to cost £6 billion to develop with CCS technology.
Previously known as the Hatfield project, the Don Valley project was unable to enter the previous CCS competition as its pre-capture design did not meet the narrow qualifying requirements of the earlier competition. However, the qualifying requirements for the new revamped competition are expected to be much wider. The Department for Energy and Climate Change's (DECC) notice of contract has now been published in the European Union's official journal and participants are invited to make proposals by 13 April. Note, however, that this notification is not the launch of the official tender, which DECC has said will follow shortly. A DECC spokesman confirmed:
"This is not the formal launch to the competition, it is simply a way of reconfirming our intent to launch shortly and begin to further advertise the process so as many as possible interested participants are aware and can participate."
Peabody and GreatPoint Energy sign global CCS development deal
Peabody Energy and GreatPoint Energy have signed an agreement to develop coal-to-hydrogen and coal-to-gas development projects around the world utilizing CCS technology. The joint venture will deploy GreatPoint's Bluegas technology with the hydrogen to be used for industrial applications and the SNG to piped back into the Gas utility grid. The captured CO2 will be used for domestic oil production through enhanced oil recovery.
Summit Power Group signs contracts for Texan clean coal project
Summit Power Group has entered into $2 billion worth of engineering, procurement and construction projects related to a proposed 400MW coal-fired power plant with carbon capture technology in Penwall, Texas. The plant will generate electricity through Integrated Gasification Combined Cycle (IGCC) technology while also producing other commercial products from gasified coal, such as fertilizer and compressed CO2 for enhanced oil recovery in the nearby Permian Basin.
Summit has contracted Selas Fluid Processing, a unit of German-based The Linde Group and the Korea-based SK E&C to develop the carbon capture element of the project. Siemens Energy will build the 400MW combined cycle power plant that will run on the syngas produced as well as supplementary natural gas.
Large scale injection of CO2 from biofuel production facility begins in U.S.
The Midwest Geological Sequestration Consortium (MGSC) has begun injecting carbon dioxide for storage at the Illinois Basin Decatur project. This large scale injection represents the first million-tonne demonstration of carbon sequestration in the U.S. with the CO2 stored permanently more than a mile beneath the surface.
The consortium is led by the Illinois State Geological Survey with Schlumberger Carbon Services managing all aspects of the design and construction of the project. The full story is available here.
Air Liquide joins FutureGen 2.0 CCS project
Air Liquide Process & Corporation Inc has been named, by the U.S. Department of Energy (DOE), to participate in the development of FutureGen 2.0 project. Air Liquide joins a team of developers that include AngloAmerican, Xstrata and Peabody amongst others. FutureGen 2.0 is touted as the worlds first full size oxy-combustion power plant incorporating permanent carbon capture and storage. The project is part of the DOE's commitment to $1 billion in federal funding for the clean coal power project. The FutureGen 2.0 website is accessible here.