Governments, Companies Must Hasten Carbon Capture, IEA Says

By Angela Macdonald-Smith

Nov. 24 (Bloomberg) -- Governments and coal producers need to step up efforts to develop power projects that capture carbon pollution to have a chance of meeting emissions targets, the head of the International Energy Agency said.

Without so-called carbon capture and storage, or CCS technologies, emissions reductions in developing nations such as China and India are “impossible,” IEA Executive Director Nobuo Tanaka said in an interview today. The technology is also critical to ensure the future exports of Australia and other coal-producing countries, he said.

Australia, the world’s biggest coal supplier, produces more than 80 percent of its electricity from coal, which emits more greenhouse gases when burnt than natural gas. Rising costs are delaying CCS projects and jeopardizing plans to meet emission- reduction targets, the IEA, a Paris-based adviser to 28 nations, said last month.

“Everybody knows that CCS is necessary, but actually I observe that not really many things are happening, so I’m a bit concerned at the speed of development of CCS,” Tanaka said in an interview in Gold Coast, in Australia’s Queensland state. “For the sake of coal exports, CCS is a prerequisite, eventually in the future.”

Xstrata Plc and Japan’s Electric Power Development Co. are among companies involved in low-emissions coal-fired generating ventures in Australia.

Nuclear, Renewables

Projects that capture carbon dioxide and pump it underground for storage will probably first start making a contribution to emissions reductions after 2020, Tanaka said. By 2030, 30 new CCS power plants will need to be built every year to meet a target of stabilizing greenhouse gases in the atmosphere at 450 parts per million, he said.

By 2050, CCS projects need to represent at least a quarter of power generation globally to meet reduction goals, Tanaka said. A further 25 percent should be from nuclear power, and 50 percent from renewable energy, he said. The IEA supports CCS projects being included in the United Nations’ Clean Development Mechanism program to drive investment, he said.

The global economic crisis risks further slowing investment in CCS projects, endangering security of supply and carbon reduction targets and potentially boosting the contribution that will be required from nuclear, Tanaka said.

“If we postpone these investments in CCS, certainly the cost of mitigation can be higher,” he said.

Since Chernobyl

Australia started its first demonstration project in April for the underground disposal of carbon dioxide as part of a government-backed strategy to prolong the use of coal as a fuel source while reducing harmful emissions.

The required expansion in nuclear power is threatened by a lack of expertise and university training in the area, given development of the industry has “slowed down to almost zero” since the 1986 Chernobyl accident, Tanaka said. “Huge” resources are required for the construction of 20-30 reactors a year, he said.

The decline in crude oil prices, which have dropped more than 60 percent since July, is slowing investment in exploration and new projects, risking a “more acute supply crunch” once the global economy recovers, Tanaka said. The Organization of Petroleum Exporting Countries, which meets later this week to discuss production levels, needs to react “flexibly” to market demand and supply interruptions, he said.

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