28 May 2008 11:22 [Source: ICIS news]
SINGAPORE (ICIS news)--Carbon capture and storage (CCS) projects to reduce greenhouse gases (GHG) need a push from governments to be economically viable, said a senior executive with Shell Chemicals on Wednesday.
"Carbon capture needs to be part of the solution on climate change," said Ben van Beurden, executive vice president of Shell Chemicals, in an interview with ICIS at the Asia Petrochemical Industry Conference (APIC). "By 2050, global energy demand could double, and with this comes more carbon dioxide (CO2)."
And while CCS technology would continue to improve and become more efficient, "we need incentives from governments to move ahead on the learning curve," he said.
For the economics to work, the price of carbon credits needs to rise to around €100/tonne, said van Beurden. The current price of carbon credits under the EU Emissions Trading Scheme (ETS) is around €50/tonne.
Under the ETS, companies can generate carbon credits for reducing emissions and sell them to others that need to emit more CO2.
Incentivising CCS is already under discussion at High Level Groups (HLG) in the EU, said van Beurden.
"People are realising it’s an important component of the climate change and energy solution," he said. "We hope to get movement from the EU in the next year or two."
Government incentives could come in the form of R&D grants or by doubling the value of carbon credits, said van Beurden.
CCS involves the capture and injection of CO2 into oil fields for enhanced oil recovery, or simply into the ground or the sea.
In April, Shell started building an $80m CCS demonstration project in Alberta, Canada, next to its refinery and oil sands upgrader unit, said van Beurden.
"Another option we’re looking at is taking CO2 from Rotterdam and injecting that into depleted gas fields," he said.
Other companies exploring the use of CCS include UK-based companies BP and Rio Tinto, and Norway’s Statoil.
APIC runs from May 27-28.
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