Hi Folks,

More carbon capture news:

1) The UK Treasury has released: "Carbon capture and storage: A consultation on barriers to commercial deployment"

The Government will consult on:

A) Barriers to wide-scale commercial deployment of CCS in the UK; B) The potential role of economic incentives in addressing those barriers.

Specifically, the consultation aims to build understanding on: the current state and future development of CCS technologies and the likely costs attached to deploying them commercially; the potential carbon savings available from CCS; the barriers which currently exist to further development and commercial deployment; and whether there is a case for Government intervention and if so the forms this might take. Other relevant information on CCS which falls outside these questions would also be welcomed.

The deadline for responses is 11 May 2006.

Available at: http://www.hm-treasury.gov.uk/media/1E0/C5/bud06_carbon_250.pdf

2) Buget 2006 Outcomes relating to CCS:

The following is from Chapter 7 of the UK Treasury Budget 22 March, available in full at (look for Chapter 7, "Protecting the Environment"):

http://www.hm-treasury.gov.uk/budget/budget_06/budget_report/bud_bud06_repindex.cfm

7.22 The Government believes that the UK has the capacity to be a world leader in energy technologies. In January 2006, the Government launched the Energy Research Partnership, which is designed to give strategic direction to UK energy research, development, demonstration and deployment. The Energy Research Partnership, under the joint chairmanship of Paul Golby, Chief Executive of E.On UK and Sir David King, the Government's Chief Scientific Adviser, is today committing itself to raising substantial sums of private investment to develop a new National Institute for Energy Technologies. This will bring a new level of focus, ambition and industrial collaboration to the UK's work in the field of energy science and engineering, particularly in relation to energy sources and technologies that reduce carbon emissions and contribute to the security of energy supply. The objective of the institution will be to build on existing funding structures in order to better leverage the already substantial funding for energy research in the public research base.

7.23 The new National Institute will be a 50:50 public-private partnership. The Energy Research Partnership has committed to raising substantial sums of private investment, sufficient for the Institute to have critical mass, and BP, EDF Energy, E.On and Shell have already announced their intention to be involved. The intention is that the private sector investment would be matched (up to a pre-determined limit) by public science and technology investment, building on the Research Councils' growing energy programmes - a model that has proved to be extremely effective with other large-scale research and development projects. The intention is to establish a virtual institute with a 'design life' of a finite period, probably a decade, with clear objectives specified over that time, and a strong public-private governance structure. Funding would be allocated competitively, using existing facilities where possible, but also building strong national and international linkages.

7.25 Carbon abatement technologies, which enable fossil fuels to be used with substantially reduced carbon emissions, could make an important contribution to meeting the Government's energy policy objectives both domestically and globally. In particular, carbon capture and storage (CCS) is an innovative process by which the carbon in fossil fuels is captured as carbon dioxide and committed to long-term storage in geological formations. It is likely to be a critical technology in global carbon reduction strategies, particularly for countries with fast-growing economies and rapidly growing fossil fuel consumption. To advance the understanding of CCS, the Government is launching a consultation document on the barriers to wide-scale commercial deployment of CCS in the UK and the potential role of economic incentives in addressing those barriers.

7.26 In the 2005 Pre-Budget Report, the Government also announced that it intended to work collaboratively with Norway on the issues surrounding the costs of, and barriers to, CCS. A memorandum of understanding was signed by the Energy Minister, Malcolm Wicks, and the Norwegian Energy Minister, Odd Roger Enoksen, in November 2005. As part of this initiative a North Sea Basin Task Force was established, made up of public and private organisations from the North Sea rim, with the aim of developing common principles on the regulation and management of carbon dioxide storage under the North Sea. The inaugural meeting of the Task Force was recently held in Oslo. Since the Pre-Budget Report, discussions between the British and Norwegian Governments, and key industry players, have revealed that the UK and Norway are facing similar decisions about the commercial deployment of CCS.Further discussions will take place later this year to share information on the feasibility and costs of CCS.

7.30 The development of an energy services market could improve energy efficiency across all sectors of the economy and optimise benefits to consumers in the long term. Supplying energy on an energy services basis helps shift the focus of producers and consumers from the supply of units of energy to the supply of the overall services for which energy is used. It therefore offers the potential for reducing demand and carbon emissions. HM Treasury hosted a seminar in January 2006 to explore how Government and the business community can encourage the development of energy services markets in the UK. Following the seminar, an independent industry group will develop proposals on energy services and demand reduction which will feed into the Energy Review.

7.33 The CCL is playing a crucial role in enabling the UK to meet its Kyoto targets. CCL rates have not been raised since its introduction. Budget 2006 announces that, to ensure the UK continues to make progress in tackling climate change, CCL rates will increase in line with current inflation. The inflation increase will be introduced on 1 April 2007. The Government is committed to returning CCL revenue to business, discussing with business the most effective way of supporting investment in energy efficiency and the environment.