Shell boss calls for incentives to encourage carbon capture and storage
Tue 08 April 2008
View all news
Shell's Chief Executive has urged governments to rapidly introduce new incentives to ensure the rapid development of techniques to store CO2 underground. Shell also says that the carbon price may need to triple before industry will invest in the thousands of carbon capture and storage (CCS) schemes needed for reducing greenhouse gas emissions.
Speaking at the launch of Shell's Energy Scenarios to 2050, Jeroen van der Veer said: “Because CO2 capture and storage adds costs and yields no revenues, government action is needed to support and stimulate investment quickly on a scale large enough to affect global emissions. Delaying the widespread deployment of CO2 capture and storage beyond 2020 would translate into a yearly 1-ppm increase in long-term atmospheric CO2 stabilisation levels.”
Shell says that the technology needed in carbon sequestration - whereby CO2 is pumped into storage spaces such as old North Sea oil fields - is already there. What is needed was the right regulatory framework and pricing structure with carbon valued at between $50 and $100 per tonne.
Mr. van der Veer said there is an urgent need for incentives for companies to develop technology to capture CO2 from large industrial sites like power plants and to safely store it underground. A failure to do so, he said, could jeopardise Europe’s leadership of the fight against climate change.
Shell's Energy Scenarios to 2050 charted two plausible pathways in which the world’s energy picture may evolve over the next half-century. Shell called these 'Scramble' and 'Blueprints'.
In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of locally produced coal and homegrown biofuels increases fast. Taking the path of least resistance, policymakers pay little attention to curbing energy consumption – until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.
The Blueprints scenario is less painful, even if the start is more disorderly. Numerous coalitions emerge to take on the challenges of economic development, energy security, and environmental pollution through cross-border cooperation. Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes, and other policy instruments to improve the environmental performance of buildings, vehicles, and transport fuels.
A Blueprints world with widespread use of technology for CO2 capture and storage results in the least amount of climate change, provided emissions of other major man-made greenhouse gases are similarly reduced. It also provides a more stable business environment to make long-term investments.
However, Shell says that much work needs to be done to achieve energy developments like those outlined in Blueprints. Deployment of CCS and a wide range of low-carbon technologies will be needed to meet the climate change challenge.
Responding to a Guardian reporter, a Shell spokesman denied that Shell's scenarios, with a large and continuing role for fossil fuels, were influenced by the needs of a company with huge investments in high carbon power sources.
Related Links
< Back to news list