Carbon capture isn’t really a technology problem

That is the message GCE Ocean Technology brought to Enova in our response to the proposed CCS support scheme. The scheme is welcome. But the way it picks winners could reward low risk over real innovation.

In our opinion, carbon capture technology mostly works. What does not work yet, is the business case around it.

That was the takeaway from BIR’s shelved capture project at the Rådalen plant in Bergen, and it was confirmed at an open R&D meeting we hosted in May with industry, researchers and public funders: the barriers are mostly systemic. So, when Enova put its new support scheme out for consultation, we had something concrete to say.

The scheme is welcome, but the criteria worry us

We fully support Enova’s ambition to develop technology, infrastructure and business models for a cost-effective CCS value chain. Our input is not about whether the scheme is needed.

It is about whether the proposed qualification and competition criteria are the right tools to get there.

Enova describes the underlying market failures well – insufficient CO₂ pricing, no pricing of negative emissions, fragmented demand, coordination challenges, asymmetric market power.

Our concern is that the scheme mainly closes the financing gap, while several of those market failures are barely touched by the competition criteria themselves.

Ranking by lowest support need can mean ranking by system risk

This is our main point. The proposed competition ranks projects by the lowest support need per tonne CO₂. That looks objective.

But the support a project needs is shaped by a long list of factors its owner cannot control:

• power prices and carbon prices
• public planning and regulatory processes
• access to transport and storage capacity
• the still-developing market for carbon removal

The result can be a competition that ranks projects by system risk rather than by innovation, learning value or societal benefit.

For small and medium-sized emitters especially, the biggest innovation potential often is not the capture unit at all, but new business models, regional hubs, smarter logistics and shared risk.

We think this is the single most important issue in the whole consultation.

Reward the hubs, and mind the maturity clock

Two more points. Projects that gather several emission sources into regional hubs should be actively rewarded through the assessment criteria as they cut costs, build volume, trigger collaboration and help standardise solutions, with greater value for society than standalone plants.

And the requirement of an investment decision within 24 months and operation within five years can quietly favour projects where the regulatory clarifications are already in place, and shut out those still waiting on public processes outside their control.

What we asked Enova to do

In short, we recommend that Enova:

• let the ranking criteria reflect market failure and system risk, not cost alone
• put more weight on business models and value chains
• reward regional hubs and collaboration between several emission sources
• reduce the weight of factors project owners cannot influence
• consider standardised assumptions for power and carbon prices
• check that the maturity requirements leave room for projects awaiting public clarifications
• stimulate R&D that lowers costs and builds the future CCS market

Norway does not just need more capture plants. It needs a support scheme that triggers the projects that build the future CCS value chain – because the biggest barriers sit in the interplay between technology, economy, logistics, market and public framework conditions, not in the capture unit itself.

------------------------------------

Join workshop on CCUS in Bergen 19 August.