Why CCUS - The Facts

Why is carbon capture utilization and storage (CCUS) important?

• » HOW IT WORKS: Carbon Capture Utilization and Storage (CCUS) could have significant impact as a carbon mitigation technology in greenhouse gas (GHG) emitting industries. The technology involves an integrated process of capture, transportation and long-term storage of carbon dioxide (CO2) in subterranean geological structures (Global CCS Institute, 2011).

  Many countries still depend on fossil fuels for energy generation, industrial and transport activities. Coal in particular is abundant in regions that have large existing or projected energy demand and limited alternative energy generation and supply options. With an average of two coal-fired power stations being built in the developing world every week, reduction in local pollution and emissions of greenhouse gases (GHGs) from the combustion and processing of fossil fuels will remain one of the world’s biggest challenges in the years ahead.
  
  
• At the 2009 Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), a number of countries agreed that action should be taken to limit the increase in average global temperatures to 2°C (UNFCCC 2009a). At the 17th Conference of Parties held in Durban , South Africa in December 2011, CCUS was accepted as one of the climate change mitigation technologies eligible for implementation under the UNFCCC Clean Development Mechanism, opening the door for developing countries that want to implement CCS projects to benefit from climate finance market mechanisms. CCUS is relevant in a number of industrial sectors —either as an interim solution until other options become economically and technologically viable or as a long-term solution to reducing carbon dioxide emissions.
  

What is the World Bank Group's role in CCUS?

• The World Bank Group (WBG) has been engaged in providing assistance to its partner countries on carbon capture capacity building since the establishment of the World Bank Multi-Donor CCS Capacity Building Trust Fund (WB CCS TF) in December 2009. The government of Norway and Australia based Global Carbon Capture and Storage Institute are the two donors of the WB CCS TF at present. The objectives of the WB CCS TF are to support strengthening capacity and knowledge sharing, to create opportunities for WBG partner countries to explore CCS potential, and to facilitate the inclusion of CCS options into low-carbon growth strategies and policies developed by national institutions.

Which are the countries that are implementing CCUS?

• The WB has active CCUS programs supported by the WB CCS TF in nine countries including Botswana, Republic of South Africa, China, Kosovo, Indonesia, Egypt, Jordan, Maghreb, and Mexico. The WB is discussing a possibility to start a new program in India.
  

Globally, what is the status of CCUS adoption today?

• CCUS is a new domain and given its high associated costs, the technology deployment is not widespread. The Global CCS Institute routinely reports on the status of adoption. You can get more information from: The Global Status of CCS: 2011 and the Global Status of Large Scale Integrated CCS Projects - December 2011 Update.

What are the barriers to CCUS adoption today?

• Technical barriers: Full integration of the CCS technology elements at scale is yet to be achieved.
  
  
• Economic barriers: Sectoral economic issues could arise from potential increases in the cost of electricity production if CCS were to be employed in the power and industry sectors.
  
  
• Legal and regulatory barriers: Adequate legal frameworks are necessary to provide investors with the security for CCS deployment.
  
  
• Financial barriers: As a new and expensive technology, financing mechanisms are needed to help make CCS projects economically viable and financially attractive for investment by the private sector.

What are the objectives of the Bank's latest study on CCS?

• The objectives of the Bank's latest study completed in June 2011 were to inform partner country technical experts and policy makers on: 1) Technical, environmental (GHG emissions), regulatory, and socioeconomic issues related to potential CCS deployment in regional energy infrastructure, and 2) Existing and prospective financing mechanisms that that might encourage deployment of CCS in developing countries.

What if we delay mitigation actions?

• Although we may save in the short term, the long term implication and costs will be much higher. The scale of the problem requires multiple avenues of mitigation. CCUS is one such avenue that provides opportunities for existing energy and future to capture and storing CO2 emissions at least cost. If we fail to act now, globally, we will not be able to stay within the 450 ppm targets, and this could trigger an array of negative climate change impacts.