As we have already blogged during Durban, whilst a globally binding deal on climate is not likely at Durban, there has been, as predicted, progress on the Green Climate Fund and now Carbon Capture and Storage (CCS).
At the Cancun climate talks (COP 16) last year, it was proposed that CCS should be included as one of the CDM mechanisms. Saudi Arabia has been the main protagonist in getting CCS on board.
This breakthrough is welcomed by many, and particularly energy intensive industries for which CCS has the potential to provide significant carbon savings.
Although the decision has been made to include CCS projects as part of CDM, the final text has not been agreed with a number of issues still remaining, but expected by the close of the conference today.
Looking at the draft text available currently, some of the rules will likely be that CCS projects can only be held in countries where there is specific domestic legislation on CCS.
A key issue is liability and who should bear responsibility for the stored CO2 (and any subsequent leakages in the life time of the project). This seems to have now been resolved with agreement that the developers will be liable during the creation period of the project, and after 20 years, liability will be transferred to the host country. This agreement closely mirrors the rules in the EU's CCS Directive 2009.
The issue of potential leakage could be addressed by a reserve of credits for all projects, which could be saved for any loss, but questions still remain about how many credits should be reserved. There are currently three options on the negotiating table: For 2% of Carbon Emission Reduction certificates (CERs) issued to be reserved, others are calling for a much higher 20%, others still are calling for this to be decided at a later date.
Financing has been another thorny issue in the negotiations with wide ranging cost estimates for the price of carbon – between $50-100/tonne CO2 for current-generation CCS projects. There is a risk of the need for external financial support, i.e. governments, to get these projects up and running.
Whilst none of the details are clear yet. This is certainly a step forward for getting CCS to scale and a viable technology for industry to reduce their carbon emissions significantly. This should provide a clear signal to the UK government of the importance of this technology in the low-carbon mix.