Recently the International Energy Agency (IEA) published a report looking at the progress of renewable energy technologies. One of the report key findings is that Carbon Capture and Storage (CCS) is not seeing the necessary rate of investment despite being one of the technologies with the greatest carbon emissions savings potential. It is obvious that more CCS funding sources such as carbon investments and financial support on behalf of governments are urgently needed.
In short, CCS is a technology used for capturing carbon dioxide as it is emitted from different sources of greenhouse gas and its subsequent storing deep underground. The international community has already made an attempt to include CCS in the carbon market; the COP 17 in South Africa identified the conditions for accepting CCS projects in the Kyoto Protocol’s Clean Development Mechanism (CDM). Since CCS can facilitate the reduction of carbon emissions, CCS projects could be perceived as a way to produce carbon offsets.
In the EU, the European Commission is trying to secure CCS funding by monetising EU carbon allowances (EUAs) from the New Entrants Reserve (NER) of the EU Emissions Trading System (EU ETS). One of the objectives of this financial support would be to secure the transition of CCS projects from pilot to commercial scale. Then, the EU ETS is expected to provide an incentive for carbon investment in commercial CCS projects considering that CCS technologies may be applied in the different sectors included in the EU ETS.
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