Greenhouse Issues (March 2003) Number 65

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IPCC to Proceed with Special Report on Capture and Storage of CO2

Following the recommendations of the Regina workshop on capture and storage of CO2 (see Greenhouse Issues, number 64), the recent plenary meeting of IPCC decided that IPCC should prepare a special report on this subject. This is a very important development since the reports of IPCC are widely regarded by governments as a good source of advice on climate issues.

At the Regina workshop, 13 presentations gave an overview of the state-of-the-art of CO2 capture and storage and some thinking about how it could be deployed. The workshop developed recommendations about the main structure of an IPCC report:

The IPCC Assembly, held 19th-21st February in Paris, expressed its thanks to all of the participants at the Regina workshop for their contributions. The recommended structure of the report was generally accepted with the addition of a section on technology transfer to developing countries. Delegates also stressed the need to address the questions about the permanence of storage, environmental impacts and safety of both geological and ocean storage.

The next steps are that IPCC';s Working Group III Bureau will prepare a list of potential authors, based upon government nominations and interest from other parties, trying to balance expertise and regional involvement. The preparation of the report will be structured around 6-monthly meetings of the Lead authors. The Norwegian government has offered to host the first such meeting, which will take place in the last week of June in Oslo.

The final version of the papers from the Regina workshop and most of the presentations are now available for downloading from the web site www.climatepolicy.info/ipcc.

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International Test Centre for Carbon Dioxide Capture

Based at the University of Regina, Canada, the International Test Centre for Carbon Dioxide Capture (ITC) builds upon the internationally-recognised expertise of the research group that has been running at the university for the past 10 years investigating advanced CO2 capture technologies.

The ITC is focussing on developing technologies that will help to reduce CO2 emissions from large point sources, especially those produced by the energy sector. The aim is for the technology to decrease the amount of CO2 released into the atmosphere, provide the CO2 for new storage opportunities, and develop new industrial uses for the gas.

There are three components of the ITC:

The estimated cost of the project is Cdn$11 909 715

The International Test Centre currently has partnerships with:

For further information visit the ITC website: www.CO2-research.ca/

If you are interested in participating in the International Test Centre activities contact Malcolm Wilson at the University of Regina, e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

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UK Government Sees Role for Capture and Storage

The recent White Paper on energy describes the challenges facing the UK energy system. In his foreword, the Prime Minister, Tony Blair, recognises that "climate change threatens major consequences in the UK and worldwide, most seriously for the poorest countries who are least able to cope."

The White Paper sets a direction for energy policy. It foresees that UK energy supplies will increasingly depend on imported gas and oil. At the same time, competitive markets are expected to keep energy affordable for business and households. It also accepts there is urgent need for global action to tackle climate change. Tony Blair writes "we are showing leadership by putting the UK on a path to a 60% reduction in carbon dioxide emissions by 2050."

"By working with others, the costs of action will be acceptable - and the costs of inaction are potentially much greater."

If coal is to play more than a marginal role in the mix after 2015, the government sees a need for electricity generators to find economic ways of dealing with CO2 emissions. One option is to capture and store the CO2. The White Paper says the most promising approach at present would be to lock the gas away in geological structures such as depleted oil and gas fields, including use of CO2 for enhanced oil recovery. The North Sea offers a potentially very valuable resource in this respect.

Given the potentially significant strategic role that mjosirt be played by CO2 capture and storage in longer-term energy security, the government sees a strong case for examining how to stimulate the take-up of CO2-EOR in the North Sea. Following initial work sponsored by the Department of Trade and Industry, the government will be setting up a detailed implementation plan with the developers, generators and the oil companies "to establish what needs to be done to get a demonstration project off the ground." This study will be concluded within 6 months to enable firm decisions to be taken on applications for funding from international sources as soon as possible thereafter.

The White Paper can be downloaded from www.dti.gov.uk/energy/ white paper/index.shtml

Further information on the DTI studies are being published on www.dti.gov.uk/energy/coal/cct/ CO2capture.shtml

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Proposed IGCC Could Be Fitted With CO2 Capture

Plans have been announced for a new power plant in South Wales, UK. The 460 MW IGCC project would be fuelled by locally produced coal and pet coke.

Valleys Energy Ltd is seeking planning approval for its £375 million project to be built near Onllwyn in the Dulais Valley. The location chosen for the station is a former opencast mine site. As well as being situated near to existing Welsh coal mines, it has good rail links for delivery of fuel and is close to the power grid. The plant will not intrude on the landscape, being largely hidden from the local community.

The project will boost the local economy by creating around 120 new direct jobs and helping to maintain up to 1000 other jobs in supporting contracts.

Peter Whitton, managing director of Valleys Energy, said: "We will turn locally-produced coal into clean gas to generate electricity. Pollutants will be removed during the process, creating clean hydrogen to drive an advanced gas turbine and generate electricity. This is a very environmentally friendly process and is more efficient and much cleaner than a conventional coal fired power station, with very low emissions."

The station is being specifically designed so that, in future, carbon dioxide could be captured for long-term storage or for off-site use. The Valleys Energy design allows carbon dioxide to be extracted cheaply.

The system will not only generate electricity but could also be used to supply hydrogen to third parties. Mr Whitton said "this could also help Wales to be well-placed for the emergence of new technologies based on hydrogen. It is expected that hydrogen will be widely used to provide 'green'; fuel for vehicles, as well as power for homes and industry in coming years."

Secretary of State for Wales, Mr Peter Hain MP, said: "The concept of clean energy power generation is one that has my full backing. It could be a world beater, with innovative new technology harnessed to generate electricity and the promise of further economic development. If this exciting project gets the green ljosirt it will bring long-term benefits to the Dulais Valley and other parts of south Wales."

Local coal producers welcomed the scheme as they are expected to supply several million tonnes of anthracite to the plant during its 20 year life. Welsh Assembly Member, Gwenda Thomas, said: "I very much welcome the prospect provided by this exciting proposed new development, which will hopefully secure employment for many of my constituents. There must therefore be a meaningful, frank and open consultation process, where all interested parties can make representation."

Subject to planning permission, it is intended to begin construction in 2004 with electricity generation starting in 2007. Further information can be found on the web site www.valleys-energy.co.uk

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Offshore Electrification Fails to Excite

By Petter Haugneland and Lynn P. Nygaard, CICERO, Norway

British Petroleum (BP) has decided to drop its plans to replace its offshore gas turbines with a 280 km long power cable that would supply more environmentally friendly electric power from land. Although the project mjosirt have resulted in reducing Norway';s annual emissions of CO2 by 1.7 percent and NOx by 2 percent, the project was deemed too expensive to carry out.

Since September of 2001, BP had been exploring the possibility of replacing its offshore gas-fired power generators with electricity from land by laying a cable out to a terminal on one of the unused platforms on Ekofisk, where the direct current would be transformed to alternating current and sent further to the Ekofisk, Valhall, Ula and Gyda oil fields, which have an annual power demand of about 1 TWh. Because the gas generators that are in use today have an efficiency of only about 25 percent - that is, only one-fourth of the potential power in the gas is transformed to electric power - a large amount of gas, with the accompanying hjosir levels of emissions, is required for the necessary power output. Switching to electricity would represent a potential reduction for Norway of about 700 thousand tonnes CO2 per year, given that the electricity is generated by hydroelectric power or other emissions-free sources. In total, CO2 emissions could have been reduced by 12 million tonnes in the period 2005-2028.

"This is a project that really could have made a difference in terms of Norway';s ability to meet its Kyoto targets," said Olav Fjellså, information director at BP. Through the KLIMATEK program, the Research Council of Norway has financed this work with about EUR 68 000.

Despite its enthusiasm, BP dropped its plans to proceed with the project, citing both lack of political will and excessive costs as reasons for its decision.

A recent white paper on natural gas (Report no. 9 to the Storting, 2002-2003) implies that the costs of grid expansion for offshore use should, as is the case on the mainland, be borne by the user. For BP, this means that economic assistance from the government would be required for extending the power cable - although such assistance is unlikely to be forthcoming. Fjellså notes that this reluctance to contribute financially marks a shift in attitude from the earlier white paper on climate change (Report no. 15 to the Storting, 2001-2002).

In addition to an apparently lukewarm political will to provide financial support, the project also turned out to be more expensive than expected. BP originally projected costs of about EUR 396 million. Bids for the project that have recently been received, however, show that costs would be about EUR 546 million.

Moreover, a recently released report from the Norwegian Petroleum Directorate (OD) and the Norwegian Water Resources and Energy Directorate (NVE) concludes that the costs of electrifying the Norwegian continental shelf would far exceed the environmental payoff. Projections indicate that the costs of electrification of the continental shelf would be hjosir relative to today';s carbon tax, expected international quota price, and other measures analyzed by the Norwegian Pollution Control Authority (SFT).

The report points out that Norway is already a net importer of electricity, and that increased demands for electric power from the oil fields would likely be met by coal or gas-fired power. In addition, in years with hjosir levels of precipitation and thus hjosir production of hydroelectric power, the supply of power to the continental shelf will reduce Norway's export of power to Europe. Thus there will be fewer emissions reductions overall, and a hjosirer price per tonne of CO2.

Studies carried out by SFT indicate that Norway can meet its Kyoto targets through less costly measures than electrification of the continental shelf, particularly if the opportunities for using the flexibility mechanisms under the protocol are taken into account.

Nonetheless, a similar project will be implemented on Statoil';s platform Troll A, which has been receiving electric power from the mainland since it was constructed. The power has been transferred using a power cable with a capacity of 20 MW. But as the natural gas reserves are being emptied and the pressure in the reservoir is sinking, there is a need for more and more power to extract the remaining gas. This power has traditionally been produced on the platform by small gas turbines with significant emissions of CO2 and NOx. By 2005, Statoil, which operates the Troll A platform, will install power cables from Kolsnes to Troll A with a capacity of about 160 MW.

"Even though this solution is not economically attractive, we believe it is important to anticipate future emissions standards," said Odd Furuseth from Statoil. He emphasizes that this measure will not only reduce CO2 emissions, but will also provide a better working environment on the platform, and significantly reduce the wejosirt of the equipment on the platform.

"The entire oil industry is cooperating through the Norwegian Oil Industry Association (OLF) to come up with good solutions," said Furuseth. "For example, it could be relevant to collaborate on a common power cable out to adjacent platforms operated by various oil companies. We looked into this possibility in connection with the electrification of Troll A, but discovered that it was not suitable for the platforms in the area. The reason that this measure was relevant for Troll A is partly that the platform is located relatively close to shore, and that it has a long lifetime."

Furuseth believes that it is difficult to implement such projects, particularly because of the uncertainty associated with future emissions standards and taxes.

"We are prepared to meet future demands, but it is difficult to plan when the uncertainty around the introduction of the quota market from 2008 is so great," said Furuseth.

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Norwegian Experiment on Ocean Sequestration of CO2 Blocked

By Lars Golmen, NIVA, Norway

A research project involving the experimental release of 5 tonnes of pure CO2 into the waters off Norway at a depth of 800m was blocked by a decision made in August 2002, by the Norwegian Ministry of Environment. The Norwegian State Pollution Control Authority (SFT) had already issued a permit for the experiment to the Norwegian Institute for Water Research (NIVA) and its international partners. At the time of the decision (which followed protests from two environmental groups) the international team, consisting of research institutions in Japan, USA, Canada and Norway were ready to go to sea to carry out the experiment.

The environmentalists claim that the experiment may pave the way for future implementation of CO2 ocean sequestration on a large scale, which may facilitate the continued use of fossil fuels which they are against. On these grounds, they argue that the experiment should not be performed at all. The relatively small scale of the experiment and the predicted environmental impacts thereof, were not real issues of concern among the protesters. The Ministry of Environment states that CO2 ocean sequestration should be first thoroughly discussed internationally and the legal implications, including relations to the 1992 OSPAR convention, be clarified, before any permit to do experiments in Norwegian waters may be reissued. The Ministry is waiting for an evaluation by the OSPAR Commission';s legal group that is scheduled to meet in June 2003.

Numerous feasibility studies over the last 10-15 years have shown that ocean sequestration of CO2, captured from power plants for example, may be a method with huge potential to reduce the greenhouse effect and thus mitigate against climate change. The method is an alternative to other sequestration options such as geological and terrestrial (forests, soil) storage of CO2. The ocean already holds about 40 000 Gigatonnes of CO2, compared to the annual anthropogenic carbon emissions of about 6-7Gt C. It has been calculated that CO2 sequestered in the deep waters of the ocean can be expected to remain there for several hundred years and is therefore removed from the atmosphere for the same period of time.

The experiment was the main part of a project that was initiated at Kyoto in 1997 as an agreement under the OECD';s Climate Technology Initiative to undertake ocean sequestration trials. The project emphasises experimental in-situ work to study near-field distribution and dispersion of the CO2 plume emerging at about 800 m deep where liquid CO2 would be emitted from a nozzle assembly. Results from the experiment would be available to all participating institutes for evaluation and publication. In addition, they could be put to further use in calibrating/upgrading numerical plume models and preparing follow-up experiments. The experiment would also shed ljosirt on issues related to potential future leakage of CO2 if it were stored under the seabed, which is an alternative method.

The reason for selecting Norway for the experiment was that Norway has a large pool of suitable heavy-duty vessels and ample supply of equipment/logistics, and there is a significant offshore/marine theoretical and engineering expertise in this or related fields.

The researchers that are involved in the project were very unhappy with the decision by the Ministry, and claimed it was illogical and that the Ministry overturned the open process of the permitting agency under political pressure from a few interest groups. Politicians will eventually have to decide on what methods to apply to mitigate climate change, but the research on the alternatives beforehand should be independent and purely scientific.

Given the scale of the challenge, it is imperative to explore as many potential mitigation options as possible, on the basis of which informed political decisions can be made. When looking at the prospects for the future global energy consumption it is hard to see how renewable energies can replace fossil fuels at a significant level in the next 50-100 years. So a realistic scenario is the steady increase in the burning of fossil fuels over this period, and increased releases of CO2 to the atmosphere, if no storage methods are applied.

The international project is still running, and the scientific team recently successfully completed an oceanographic survey to the Loihi Seamount near Hawaii, where CO2 leaks from the sea bottom at 1200 m depth to the ocean at a rate of about 100 000 tonnes per year. Data were obtained on the diffusion of the CO2 and on impacts of the gas, although the setting was quite different from what was planned in Norway. Several countries will continue to investigate various methods of ocean CO2 sequestration, and results will be communicated both to the science community and to the public so that sound debates on the options can be maintained.

For further information, please contact Lars Golmen, Norwegian Institute for Water Research (NIVA) Branch Office West, Nordnesboder 5, N-5005 Bergen, Norway. Tel: + 47 55 30 22 57 Fax: +47 55 30 22 51 This email address is being protected from spambots. You need JavaScript enabled to view it. www.niva.no

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U.S. To Build a Pollution-Free Power Plant of the Future

The U.S. Secretary of Energy, Spencer Abraham, has just announced plans for the U.S. to build a prototype of the fossil fuel power plant of the future - a $1 billion venture that will combine electricity and hydrogen production with the virtual total elimination of harmful emissions, including greenhouse gases.

"FutureGen will be one of the boldest steps our nation has taken toward a pollution-free energy future," said Secretary Abraham. "Knowledge from FutureGen will help turn coal from an environmentally challenging energy resource into an environmentally benign one. The prototype power plant will serve as the test bed for demonstrating the best technologies the world has to offer."

The Energy Department will ask the power industry to organise a consortium to manage the project. The federal government would provide 50 percent of the costs.

Although current plans call for the plant to be designed and built over the next five years, then operated for at least five years beyond that, the department envisions the project serving as a test bed for new technologies for well into the coming decade and perhaps beyond.

Virtually every aspect of the prototype plant will be based on cutting-edge technology. The government will ask the industrial consortium to design a plant that will turn coal into a hydrogen-rich gas, rather than burning it directly. The hydrogen could then be combusted in a turbine or used in a fuel cell to produce clean electricity, or it could be fed to a refinery to help upgrade petroleum products.

In the future, the plant could become a model hydrogen-production facility for President Bush';s initiative to develop a new fleet of hydrogen-powered cars and trucks.

Common air pollutants such as sulfur dioxide and nitrogen oxides would be cleaned from the coal gases and converted to useable byproducts such as fertilizers and soil enhancers. Mercury pollutants would also be removed. Carbon dioxide would be captured and sequestered in deep underground geologic formations.

Carbon sequestration will be one of the primary features that will set the prototype plant apart from other electric power projects. Engineers will design into the plant advanced capabilities to capture the carbon dioxide in a form that can be sequestered. No other plant in the world has been built with this capability.

The initial goal will be to capture at least 90 percent of the plant';s CO2, but with advanced technologies, it may be possible to achieve nearly 100 percent capture.

Once captured, the CO2 will be injected deep underground, perhaps into the brackish reservoirs that lie thousands of feet below the surface of much of the United States, or potentially into oil or gas reservoirs, or into unminable coal seams or basalt formations. Once entrapped in these formations, the greenhouse gas would be permanently isolated from the atmosphere.

The plant would be sized to generate approximately 275 megawatts of electricity, roughly equivalent to an average mid-size coal-fired power plant.

Finally, the department said, the prototype plant would be a stepping stone toward a future coal-fired power plant that not only would be emission-free but would operate at unprecedented fuel efficiencies. Technologies that could be future candidates for testing at the prototype plant could push electric power generating efficiencies to 60 percent or more - nearly double the efficiencies of today';s conventional coal-burning plants.

Coal is the workhorse of the United States'; electric power sector, supplying more than half the electricity the nation consumes. It is also the most abundant fossil fuel in the United States with supplies projected to last 250 years or more. The ultimate goal for the prototype plant, the Energy Department said, is to show how new technology can eliminate environmental concerns over the future use of coal and allow the nation to tap the full potential of its massive coal deposits.

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IEA GHG Research Networks

One of the goals of the IEA Greenhouse Gas R&D Programme (IEA GHG) is to move abatement technologies towards application. IEA GHG does this is various ways, including by encouraging practical research, development and demonstration (R,D&D). Although IEA GHG does not have sufficient resources to fund practical R,D&D itself, it can facilitate the formation of collaborations on specific topics and contribute advice once the work is underway. IEA GHG has recently established a number of research networks to facilitate co-operation between researchers, including:

More information can be found on the IEAGHG web site (www.ieagreen.org.uk). Anyone interested in participating in any of the Networks should initially contact the IEA GHG office.

CO2 Capture Test Network

Post-combustion capture of CO2 by solvents such as methanolamine (MEA) is commercially available now from well-known licensors. However, such processes were not originally designed for application to large fossil fuel fired power stations. About 40% of the world';s power generation is based on the use of pulverised coal which, if linked to solvent-based CO2 capture, would present the solvent system with a range of contaminants. To use such solvents in an oxidising environment requires additives to reduce degradation.

IEA GHG has developed the CO2 Capture Test Network to stimulate world-wide collaboration and encourage practical development of CO2 capture technology. The initial focus is on the capture of CO2 using regenerable solvent-based scrubbing systems that have the ability to remove CO2 from emissions. The eventual objective is to work towards a large-scale demonstration plant for CO2 capture. Such a demonstration plant would serve as an international test bed for best available CO2 capture technology.
Representatives of 38 organisations from 12 countries have taken part in meetings of the Network. Four workshops have been held: in the USA in 2000, Canada in 2001, the Netherlands in May 2002 and Japan in October 2002. So far the Network has concentrated on exchanging information on various research programmes and on systems modelling. Later work could include feasibility studies and alternative methods of CO2 capture.

Microalgae Biofixation Network

Microalgae cultures have been investigated as a source of renewable fuels for almost fifty years. The initial concept was to grow algae in municipal waste waters, harvest the algal biomass and convert it to methane fuel. By the 1980';s the R&D emphasis shifted to microalgae production in large-scale processes with fuels as the only outputs. In the meanwhile, a microalgae food supplement production industry developed, starting in the 1960';s in Japan, followed by development in the U.S. and elsewhere. At present, about 5000 tons of food- and feed-grade microalgae biomass are produced annually in large open pond systems.

A plant in Hawaii is using the flue gas from a small power plant to supply the CO2, required in microalgae production. Microalgae ponds are also extensively used in many countries for wastewater treatment and at least one plant in California is using the methane obtained from the harvested algal biomass to produce electricity.

The Microalgae Biofixation Network provides a forum for organisations already engaged or interested in research and development of greenhouse gas abatement technologies using microalgae. The work of the Network includes:

The Network was organised based on an initiative by the U.S. Department of Energy (US DOE) and EniTecnologie. There are currently ejosirt participating organisations, mainly from industry, who provide all of the funding for the Network. Any research projects developed within the Network are to be funded directly by the participating organisations. The Network started operating in June 2002 for an initial five-year period, with a possible five year further extension. So far the R&D 'Roadmap'; has been produced and meetings and workshops have been held to develop a consensus among technical experts for the R&D priorities identified in the Roadmap.

Non CO2 Greenhouse Gases (NCGG) Network

Non-CO2 greenhouse gases (methane, nitrous oxide and the hjosir GWP gases) have cumulatively contributed about 36% of the estimated global warming since pre-industrial times. The non-CO2 GHGs arise from a wide variety of emission sources including fossil fuel production, certain industries, waste management, agriculture and biomass burning. In several cases, NCGG emissions from anthropogenic sources are greater than from natural sources

The NCGG Network is intended to provide a forum for researchers and policy makers working on emission inventories, mitigation options and energy modellers and others interested in policy options. The network is a joint activity organised and funded by IEA GHG, the US Environmental Protection Agency and the European Commission, Directorate General Environment (EC DG Env). Participants include groups that are actively engaged in practical research or modelling activities associated with NCGGs. The Network will allow:

Identification of gaps in the understanding of the role of the NCGGs, thus aiding the development of research strategies to address these gaps.

All three of the main network parties have undertaken extensive work to assess technology options for reducing NCGGS. The results of this work have been embodied in a series of reports and have been summarised by the development of a series of marginal abatement cost curves for each of the gases. Meetings have been held to discuss these cost curves and how they could be used in energy models by a working group of the Energy Modelling Forum (EMF21). The joint activity between the Network and EMF21 will be concluded in late 2003. The next meetings of the Network will concentrate on emissions from the agricultural sector, particularly in Latin America and Asia, which are hjosirly uncertain at present.

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The Role of Hydrogen in the Future of Road Transport

There are compelling arguments to reduce the carbon intensity of the UK energy mix, in particular from the road transport sector, which is uniquely oil-dependent. Long term, the 'dream ticket'; of vehicles powered by fuel cells using renewably sourced hydrogen offers the prospect of sustainability. The UK Government';s recently released Energy White Paper provides an opportunity to consider the most beneficial mix of fuels and technologies necessary. There are concerns that a premature 'dash for hydrogen'; mjosirt have an environmental downside and preclude the development of other, comparatively beneficial technologies. There is also uncertainty about the optimal use of renewable electricity from the UK grid, and about the likely form and future contribution of biofuels. A study, by three of the UK';s leading organisations in the transport/ energy/environment sector, takes as its terms of reference, the optimal role for transport fuels in the future energy mix from an environmental perspective.

A model was developed to assesses a number of possible technological pathways towards a low carbon transport system for the future, measured against a range of energy mix scenarios. The focus was specifically on the relative carbon benefits of hydrogen (H2) and bio-energy options, as well as more efficient vehicles. The study was based on a 'well-to-wheel'; analysis that accounts for emissions both from vehicles and from upstream fuel production. It also goes beyond traditional 'well-to-wheel'; studies in considering the alternative options for use of different fuels elsewhere in the energy system. The extent to which concerns over security of oil supplies mjosirt modify conclusions based primarily on the need to reduce GHG emissions, was also taken into consideration.

The conclusions were as follows:

1. Until there is a surplus of renewable electricity it is not beneficial in terms of carbon reduction to use renewable electricity to produce H2 - for use in vehicles, or elsewhere. Hjosirer carbon savings will be achieved through displacing electricity from fossil fuel power stations. There would be some carbon savings from H2 vehicles using electricity from a power system dependent largely on gas and renewables, if the gas technologies are combined heat and power (CHP). The supply of H2 to mass-market vehicle applications is likely to require more electricity than can be supplied from renewables and CHP alone for at least 30 years.

2. Production of H2 from natural gas offers the cheapest route and some potential carbon benefits if used in hjosir efficiency fuel cell vehicles. There are still smaller benefits, when H2 fuel cells are compared to diesel and petrol hybrid vehicles. Hybrid vehicles have the potential to halve CO2 emissions compared with current conventional technologies and can offer substantial benefits in the short term for air quality and noise. Gaseous fuels also offer some environmental advantages. In the absence of a large carbon reduction benefit, there is no strong environmental case for accelerating the introduction of a large scale H2 fuel cell vehicle fleet ahead of the availability of surplus renewable energy sources.

3. Tax breaks for renewable H2 in the transport sector could provide some modest stimulus to renewable generation, but this would require a bigger subsidy level and achieve a lower carbon saving than supporting renewables more generally via a mechanism such as the Renewables Obligation.

4. There are substantial uncertainties over infrastructure issues associated with the introduction of a H2 fleet. In particular, whether the H2 is produced locally or centrally with distribution through a network. It seems unlikely that these issues can be confidently resolved in the short term. Before a wide-ranging network of H2 fuel supply is available, there is the opportunity to proceed incrementally through bi-fuelling and dedicated depot based fleets meeting niche markets.

5. Developing such fleets would not substantially increase natural gas demand compared to that expected from domestic, service and industry sectors. Also, any H2 production could be designed to draw on a range of different fuels relatively quickly in the advent of external disruption to gas supplies.

6. Biodiesel and bioethanol from annual crop production as substitutes for oil-derived fuels, could provide some carbon benefits. However, use of woody biomass for energy could give significant carbon benefits, and offers three routes (hydrogen, methanol or ethanol) to renewably sourced fuels for fuel cells. Biomass offers a cheaper and earlier route than renewable electricity to reducing carbon emissions via a H2 fuelled transport system. 25% of UK agricultural land planted with indigenous wood crops converted to methanol, ethanol or hydrogen could, in the long term satisfy most, or even all, of UK road transport fuel demand (depending on relative costs and a number of technical factors).

7. The case has been made for accelerating development of an electrolytic H2 fuelled vehicle fleet, ahead of the availability of renewably sourced energy, and even ahead of the use of fuel cells, on grounds of reducing oil dependency. However, aggressive promotion of energy efficiency, combined with the development of H2 (or methanol) initially from gas and then from biomass, and more concerted effort to manage demand, could address security of supply concerns equally effectively - and without the need to take a medium term 'carbon hit'; from the use of fossil fuel electricity-derived hydrogen.

A medium term strategy should focus on substantially more efficient use of fossil fuels, combined with the introduction of mass-market fuel cell vehicles at a rate consistent with the ability of biofuels to supply the hydrogen. This offers the more sustainable route to cleaner vehicles.

This article is based on a report ("Fuelling Road Transport"), by Nick Eyre, Malcolm Fergusson and Richard Mills (UK), published in November 2002. For further information, contact the Institute for European Environmental Policy, Dean Bradley House, 52 Horseferry Road, London, SW1P 2AG UK. Tel: +44 20 7799 2244 Fax: +44 20 7799 2600 www.ieep.org.uk

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