commercialise CCS, ending an agreement with the U.S. Department of Energy, citing uncertainties over U.S. climate policy and a weak economy. Sweeney was confident that CCS projects would proceed, however, pointing for example to Shell’s own project in Alberta which last month won local and Canadian government funding. Friday’s ZEP report, “The Costs of CO2 Capture, Transport and Storage”, estimated that the cost of cutting emissions using CCS ranged from about 35-90 euros per tonne of CO2, after 2020, depending on the type and price of fossil fuel.
The ZEP study reported wide ranges in its cost estimates depending on for example on assumptions about fuel prices. It concluded that, regardless of those assumptions, the cost would be less if projects were coordinated into clusters, transporting CO2 from several sources into a single sink. “A strategic plan we show has a substantial impact on the transport and storage costs,” said Sweeney.
That compares with an EU carbon price of about 12.3 euros on Thursday, meaning at the moment it is much` cheaper for coal plants simply to buy emissions permits than to fit CCS.