Clean Coal May Need $15 Billion Investment, Credit Suisse Says

By Angela Macdonald-Smith

Oct. 31 (Bloomberg) -- Low-emissions coal-fired power technology, or so-called clean coal, probably needs a further $15 billion of investment and 10 more years of research and development to be ready for commercial use, Credit Suisse Group said.

While the process, involving the capture of carbon pollution from power generation and its storage underground, is ``absolutely critical'' to global efforts to tackle global warming, it is still an early-stage technology, Paul Ezekiel, New York-based managing director of carbon trading at the bank, said today.

Spending on carbon capture and storage, or CCS, isn't sufficient to achieve the Group of Eight industrialized countries' goal of developing 20 large plants by 2010, the Paris-based International Energy Agency said this month. The technology must account for almost a fifth of the world's emission-reduction effort to meet a planned 50 percent cut in all greenhouse gases by 2050, it said.

``To my mind, carbon capture and storage is the single most important problem facing the management of climate change,'' Ken Newcombe, Washington, D.C.-based chief executive officer of C- Quest Capital LLC, a capital markets advisory firm, said earlier at a conference on Australia's Gold Coast.

The technology involves extracting carbon from emissions made during power generation and industrial processes and piping it into underground storage rather than venting it into the air. Schlumberger Ltd., Santos Ltd., Royal Dutch Shell Plc and Xstrata Plc are among companies involved in proposed projects in Australia.

China Ventures

The government in Australia, which gets about 80 percent of its electricity from coal, last month set up a A$100 million ($67 million) global clean-coal institute to help channel public and private investment in low-emissions power projects. China Huaneng Group, the nation's biggest power producer, together with government research agencies in China and Australia in July started a project to capture carbon dioxide emitted by a coal- fired power plant.

``Australia has a unique opportunity to contribute to an effort in China to make china a leader in the commercial demonstration of this technology,'' Newcombe said. The Rudd government needs to ``scale up'' its commitment to support carbon capture, he said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net