What Went Wrong? Learning From Three Decades of Carbon Capture and Sequestration (CCS) Pilot and Demonstration Projects

Abstract

The delivery of operational clean energy projects at scales, is essential for addressing climate change. Carbon capture and sequestration (CCS) is among the most important clean technology, however, most CCS projects initiated in the past three decades have failed. This study statistically evaluates the reasons for this unfavourable outcome by estimating a hazard model for 263 CCS projects undertaken between 1995 and 2018. The results indicate that larger plant sizes increase the risk of CCS projects being terminated or put on hold; increasing capacity by 1Mt CO₂/y increases the risk of failure by nearly 50%. We also examined the impact of technology push and market pull policies and found that existing support mechanisms have not been sufficient in mitigating the risks associated with project upscaling. CCS deployment at the gigaton scale depends on substantially reducing project risk while increasing expectations of financial returns. Gradual upscaling, increased policy support, particularly for demonstrations of the viability of CCS, while also building a market through carbon pricing would help remedy the current imbalance between risk and return. Increasing the expected payoffs for CCS so that hundreds of real projects are brought on-line will require the co-evolution of technology innovation, institutions, investment, and deployment strategy for CCS technology.

Keywords: CCS， hazard model, deployment, climate change