Heavy dependence on Carbon Capture and Storage (CCS) to reach net zero targets around 2050 would be “highly economically damaging”, costing at least $30 trillion more than a route based primarily on renewable energy, energy efficiency and electrification, a new report from Oxford University’s Smith School of Enterprise and the Environment has found.
CCS is set to feature prominently at the COP28 Summit in Dubai this week, with major oil and gas producing countries expected to unveil shared carbon storage goals.
But the new analysis suggests that rolling out CCS throughout the economy, rather than just in a handful of essential sectors, makes little sense from a financial perspective.
The report, Assessing the relative costs of high-CCS and low-CCS pathways to 1.5 degrees, provides cost estimates for two different sets of pathways to net zero in 2050 – one that uses CCS to mitigate about one tenth of today’s emissions, and the other that uses it to mitigate about half of today’s emissions.
Based on the latest technology cost data, it concludes that the high-CCS route would cost approximately one trillion dollars per year more than the low-CCS route – a total additional cost of about $30 trillion by 2050. The researchers believe this is almost certainly an underestimate of the real difference.
“Relying on mass deployment of CCS to facilitate high ongoing use of fossil fuels would cost society around a trillion dollars extra each year – it would be highly economically damaging,” says Dr Rupert Way, Honorary Research Associate at the Oxford Smith School.
While Way says some level of CCS will certainly be necessary to achieve net zero, the analysis shows this should be reserved for essential use cases in hard to abate sectors. This is because renewables are already cheaper than unabated fossil fuels in many applications, and are only expected to get even cheaper in future, further increasing their cost advantage.
The report also provides the first publicly available, comprehensive summary of estimates of the cost of fossil power with CCS over the last 40 years, and finds no evidence of falling costs.
“Any hopes that the cost of CCS will decline in a similar way to renewable technologies like solar and batteries appear misplaced”, says Dr Way, “Our findings indicate a lack of technological learning in any part of the process, from CO2 capture to burial, even though all elements of the chain have been in use for decades”.
Taking a low-CCS route to net zero is also more benign from a social and ecological perspective, say the authors. “We found that land use requirements for energy crops are smaller in low-CCS pathways by 1.3 million square kilometres on average, an area equivalent to about half the size of Saudi Arabia”, says co-author Dr Andrea Bacilieri at the Institute for New Economic Thinking, University of Oxford. “The land use changes required by heavy reliance on biomass – often coupled with CCS – would likely threaten essential resources, like food and water, impacting their availability and prices. It could also further pose risks to human rights, and put into jeopardy biodiversity and ecosystem services, deteriorating the resilience of our ecosystems.”
The report also notes that CCS is not currently being developed even at the scale envisaged in the low-CCS pathways. The volume of CO2 being captured and stored around the world has approximately doubled in the last decade to 49 MtCO2/yr, but following the low-CCS pathway would entail approximately a 13-fold scale-up by 2030: following high-CCS pathways would entail an 85-fold increase. Meanwhile, 70% of current CCS projects use captured CO2 for enhanced oil recovery rather than storing it, a revenue stream certain to shrink as global oil demand falls.
“Governments need to get serious about CCS,” says Richard Black, study author and Honorary Research Fellow at the Grantham Institute, Imperial College London, “And that means three things: scaling up investment, sticking to essential use cases, and being very clear that CCS cannot be a blanket solution. CCS will likely be needed for some industries and perhaps for negative emissions, but seeing it as a way to compensate for ongoing fossil fuel burning is economically illiterate. Centring national and global decarbonisation strategies on a rapid scale-up of renewables and a corresponding reduction in fossil fuel use will leave us better off and we know it can be done.”