Contribution of coal and lignite to the EU’s energy security EESC Brussels, 15th September 2015 Jonas M. Helseth

Some Global Trends The world is facing truly great challenges and the predictions are tough on the resources. Consequences: more extreme weather events, rising sea levels, less drinking water, spreading of diseases, extinction of endangered species, migration of climate refugees. Go through the graphs. Not independent trends. The challenges are interlinked and the solutions need to remember that. Example of biofuels. 70% of water goes to food production. We believe we can do something about these trends by addressing the challenges in an holistic way where the solution for one sector does not come at the expense of another. 80-90% of global energy production is based on fossil fuels. 2/3 of the global population requires greater access to energy in order to raise their standard of living. Global energy demand is projected to increase by 40% by 2030. Fossil fuels remain the dominant source of primary energy worldwide. The account for more than ¾ of the overall increase in energy use between 2007 and 2030.

Cumulative Total of CO2 Emissions (Gigatonnes) To keep warming to 2oC 80 percent of known carbon reserves can not be used conventionally. Will the world stick to this limit?

The ‘trilemma’

CO2 Capture & Storage, CCS All three stages are being undertaken successfully in various capacities across the globe. Attended the recent launch of Boundary Dam – the world’s first power plant with full-scale CCS. The project – a €1 billion, 110 MW retrofit of SaskPower’s Boundary Dam coal-fired power plant in Saskatchewan, Canada – will capture some 90 percent of climate changing carbon emissions before they go up the chimney. State-owned SaskPower said Boundary Dam unit will trap around 1 million tons per year of the greenhouse gas CO2, or the equivalent of taking 250,000 cars off the road, in one of the more fossil fuel-dependent regions of Canada. The captured CO2 will be then be injected into nearby oilfields to enhance oil recovery, turning waste into a money-spinner. Next year, we’ll see the opening of another and even larger project with Kemper in Mississippi, US, and Texas might not follow too far behind. In Europe, the UK is progressing two full-scale CCS projects. White Rose – first CCS project to be awarded NER300 funding. White Rose will capture CO2 from a coal/biomass facility for storage in the southern North Sea, while Peterhead will capture CO2 from a fossil gas power plant to be stored in the central North Sea. There are numerous other smaller-scale or research-focused projects.

The EU Energy Security Strategy “Due to the large climate cost of coal, any significant use of the fuel is inseparable from Carbon Capture and Storage (CCS). The development and deployment of CCS technologies in Europe is therefore imperative should Europe utilise its largest indigenous energy source” From Bellona Europa’s input to Commission on the EESS “Coal and lignite's CO2-emissions mean that they only have a long-term future in the EU if using Carbon Capture and Storage (CCS). CCS also offers the potential to further improve gas and oil recovery that would otherwise remain untapped.  Therefore, bearing in mind the rather limited uptake of CCS to date, further efforts in research, development and deployment should be made in order to fully benefit from this technology“ Text of the EESS

IPCC: No CCS ≈ 2 x cost to attain 450ppm / 2 degree target

World’s 1st full-scale CCS power plant is open Canada wins CCS race with Boundary Dam, Saskatchewan ‘Seeing is believeing’ What does this mean for Europe: There are no longer any technological excuses not to deliver CCS – only lack of political will

EU ETS & the NER300

The way forward for Europe Integration of CCS into relevant policies, from the CCS Directive review to wider policy initiatives such as the 2030 framework, ETS reform and energy security No capacity payments for utilities without CCS Feed-in-premia (e.g. UK Contracts for Difference) Emissions Performance Standards (EPS) CCS certificates? Political clarity on future CO2 allowance scarcity (via comprehensive EU ETS reform) Continuation and expansion of NER300 scheme (NER400+) To date, incentives for CCS deployment in Europe have been solely based on the carbon price. This will remain insufficient in preparing Europe for commercial CCS deployment. CCS is the only established abatement technology that does not benefit from effective support in the current suite of EU-level policies. The substantial and swift deployment of CCS requires both sticks and carrots. Most effective amongst these are industrial funds, feed-in-tariffs or contracts for difference, and CCS certificates, alongside firm CO2 pricing and emission performance standards.

Thank you for your attention. jonas@bellona Thank you for your attention! jonas@bellona.org @jonashelseth @Bellona_EU www.bellona.org