Publication Overview
A key objective of the study was to explore the concept of ‘value’, when applied to a technology deployed in a low-carbon energy system. CCUS is an available mitigation option to support energy transitions and has been highlighted by global IAMs as a necessary technology to limit anthropogenic warming to well below 2°C. Despite this, there continues to be dissent among academics, business leaders and policymakers regarding the role CCUS can or should play in a low-carbon future. This opposition appears to stem not only from a narrow and incomplete focus on cost, and the perception that CCUS is a high-cost mitigation option under all circumstances, but also a failure to recognise the value of CCUS from other perspectives, such as human, social and environmental, to support the energy transition to net zero. As a result, a wider, deeper, and multi-disciplinary review of the ‘value’ of CCUS is explored. Recent literature spanning sector-specific techno-economic models, global and regional IAMs, and social studies to explore the diverse value of CCUS is reviewed. Results from Princeton University’s Net-Zero America study are summarised, where five alternate modelled pathways to net-zero emissions in the United States provided an exceptional level of sectoral, temporal and spatial granularity to highlight the value of CCUS in these pathways. Finally, a semi-quantitative, 2×2 decision framework was introduced to help policymakers screen the relative competitiveness of CCUS as a mitigation option across multiple domains. This framework was applied across a number of case studies, including the United States, the UK, Indonesia, Australia and Japan, to highlight under what circumstances CCUS might prove to be a valuable mitigation option to help these jurisdictions achieve time-bound mitigation goals.
Publication Summary
- To limit global warming to well below 2°C countries must achieve net-zero emissions by around mid-century. Integrated assessment models (IAMs) are used to help inform this complex and daunting energy transition by identifying the lowest-cost mitigation pathways for countries to achieve economy-wide, net-zero emissions.
- CCUS is an available mitigation option to support these energy transitions and has been highlighted by global IAMs as a necessary technology to limit anthropogenic warming to well below 2°C.
- Moreover, there is much evidence in the literature on the value of CCUS in reducing the costs of energy transitions, in providing value beyond cost-competitiveness, in enhancing low-carbon energy security – particularly in the context of increased wind and solar electricity penetration – and in providing a mitigation option for hard-to-abate sources. In modelling by the IEA, CCUS is also used in the production of low-carbon hydrogen and to achieve negative emissions, primarily through BECCS.
- Despite this, there continues to be dissent and misinformation in some quarters regarding the role CCUS can or should play in a low-carbon future. In addition, the identification of cost-optimal pathways reveals little about the feasibility of their implementation or their economy-wide impact for individual countries. To achieve this, a broader, deeper, multi-disciplinary understanding of the value of mitigation options is needed. This is what this study sets out to achieve.
- Globally, IAMs have highlighted the role of CCUS, an available mitigation option to support energy transitions, as a necessary technology to limit anthropogenic warming to well below 2°C. There is much evidence in the literature on the value of CCUS in reducing the costs of energy transitions, in providing value beyond cost-competitiveness, in enhancing low-carbon energy security – particularly in the context of increased wind and solar electricity penetration – and in providing a mitigation option for hard-to-abate sources.
- Despite dissent and misinformation from some quarters regarding the role it can play in a low-carbon future, CCUS was found to create value from techno-economic, socio-technical and environmental standpoints and, in many cases, was found highly likely to enhance the robustness of long-term mitigation strategies and portfolios. Notably, compared to other low-carbon mitigation options, CCUS deployment has the potential to help overcome real-world deployment challenges related to energy transitions, e.g., issues of land availability, siting restrictions, social acceptance and the potential for negative environmental impact.
- As a tool to inform policymakers, a 2×2 decision framework was introduced in this study for use in making ‘high-level’ assessments regarding the option value of CCUS. As with all such tools, users need to be educated in its application, with its findings reflective of the level of detail employed. • Under the current paradigm, there is a severe risk that mitigation plans will be based entirely around techno-economic assessments and aim to support single-pathway options only. Given this, it is recommended that value-based assessments such as those explored in this study be extended to other countries and mitigation options, with increased rigour and subjected to peer-review.
- Although multi-disciplinary value-based assessments could be significant for helping to identify robust mitigation options and pathways, climate change will always be subject to deep uncertainty. For this reason, there is an additional value proposition associated with investing in RD&D to keep open the option for CCUS to be commercially deployed at scale within a short-term time period. Due to the long lead times involved in developing all the elements of CCUS, even if CCUS is not ultimately needed in a particular country application, it nevertheless provides a valuable hedging strategy in case other options fail or underachieve given the carbon budget involved. This risk-based approach to address the climate challenge is another area that warrants wider recognition and further research.
