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IPC

Directions to 2050Directions to 2050Financing Carbon Capture Financing Carbon Capture and Storage Technologyand Storage Technology

General Guidelines General Guidelines

Action in the EUAction in the EU

An international approach An international approach

What it means in practice What it means in practice

CCS certificationCCS certification

David HoneGroup Climate Change AdviserShell Future Fuels and CO2

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General Guidelines for CCS Support

• Underlying price for CO2 must be in place

• Recognition of the demonstration nature of the technology

Clear demonstration objectives in place

A timeline for action

Funding commensurate with the task at hand

A focus on delivery of fewer complete projects, rather than limited funding for many.

• A robust approach to CO2 storage certification (and MRV) based on 2006 IPCC GHG Inventory Guidelines.

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General Guidelines for CCS Support

EU-ETS recognises CCS

Demonstration programme announced in 2007

Funding available through to 2015

300 million EUA (~€6-9 billion)

10-12 projects only

EU CCS Directive

Now in place in the EU (on the way in the USA & Australia)• Underlying price for CO2 must be in place

• Recognition of the demonstration nature of the technology

Clear demonstration objectives in place

A timeline for action

Funding commensurate with the task at hand

A focus on delivery of fewer complete projects, rather than limited funding for many.

• A robust approach to CO2 storage certification (and MRV) based on 2006 IPCC GHG Inventory Guidelines.

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Replicating the model internationally

Create a “sector-based” mechanismwithin the Copenhagen Agreement

- Large scale preparatory step towards absolute targets in developing countries

- Clear purpose and end-point

- Built on the foundation elements of the international agreement (e.g. mechanisms, MRV)

- Negotiated separately (by a limited number of parties) as “satellites” to the main agreement

- Typically focussed on a sector

- Technology capacity building, funding and financing

- Best practice capacity building

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Objective: Establish CCS in three major developing countries through a 25 project programme

Funding flow Funding flow

Example: A “sector based ” agreement that accelerates CCS deployment

CCS Certs.CCS Certs.

Emissions trading adopted in key

developing country power sectors

Initial CCS roll-out in

developing countries

First large scale CCS demo projects (e.g. China)

Initial CCS infrastructure

funded directly

2009 2010-2015 2020 2025+Clean technology funding framework emerges globally

CCS Project Mechanism &

certification processes

finalised

$ £ ¥ €

• EU-ETS• US-ETS

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Evolution of the CDM and CCS Certification

CDM / JI (Kyoto 2008-2012)• Small / Moderate scale• Development “dividend”• SD criteria• Additionality• Exhaustive project by project process

Cost of abatement€/tCO2e

AbatementGtCO2e per year in 2030

CO2 Storage Certificate• Recognises CCS globally• Certifies tonnes sequestered• Standardised rules• Potentially tradable

CO2 Storage Certificate• Recognises CCS globally• Certifies tonnes sequestered• Standardised rules• Potentially tradable

Clean Development Mechanism• Existing CDM rolls forward• Smaller scale than CTM• Development agenda• Focus on less developed economies

Clean Technology Mechanism• Focussed on the higher end of the

abatement curve• Principally clean electricity• Recognises CCS• Drives sector-based approach

Clean Technology Mechanism• Focussed on the higher end of the

abatement curve• Principally clean electricity• Recognises CCS• Drives sector-based approach

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CO2 Storage Certificate

With an eye on the future:

• Develop a [tradable] carbon sequestration unit (CSU) that is based on internationally accepted criteria for the longevity of storage.

Applies anywhere in the world Awarded on the basis of ensuring long-term storage as per

the 2006 IPCC Guidelines for National Gas Inventories. Could also support a CCS project in the CDM.

• Best developed by a body dedicated to CCS, e.g. the Global CCS Institute (Australian), IPAC (Canadian) or Carbon Sequestration Leadership Forum (CSLF).

• Underpins the necessary development of institutional capacity building for CCS measurement, reporting and verification.

• Opens up the possibility of a range of policy options for the expanded deployment of CCS.

http://blogs.shell.com/climatechange