McKinsey&Company, 2008

Fossil fuels are forecasted to continue to play a major part of the energy mix to at least 2050. One of the solutions being discussed to reduce GHG emissions from fossil fuel energy generation is CO2 Capture and Storage (CCS). CCS is a group of technologies for capturing the CO2 emitted from power plants and industrial sites; compressing this CO2; and transporting it to suitable permanent storage sites, such as deep underground. CCS could also provide the main means of curbing emissions from heavy industrial sectors such as steel, cement and refineries, which together account for around 10-15 percent of Europe’s CO2 emissions.

Previous reports have estimated the potential impact of CCS in 2030 at between 1.5 and 4 Gt/year of abatement globally. The McKinsey/Vattenfall cost curve 1.03 estimated the global potential at 3.6 Gt/year, and in Europe at 0.4 Gt/year – around 20 percent of the total European abatement potential in 2030.

For the reference case (defined for new coal power installations, which is the basis for the cost calculations) of new coal power installations, CCS costs could come down to around € 30-45 per tonne of CO2 abated in 2030 – which is in line with expected carbon prices in that period. Early demonstration projects will typically have a significantly higher cost of € 60-90 per tonne.

Storage is a key uncertainty that will determine the shape of the CCS roll-out. Experts believe there is sufficient storage potential in Europe for at least several decades. Depleted oil and gas fields, one key option, are well known and lie mostly in the North Sea, while deep saline aquifers, the other key option, are more widespread but also less researched and understood. In an ideal case, deep saline aquifers will be available locally for main emission clusters, but it is possible that longer transport and offshore storage may be required for some areas.

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