Progress on including CCS projects in the CDM: Insights on increased awareness, market potential and baseline methodologies.

Abstract: The inclusion of CO₂ capture and storage (CCS) in the Kyoto Protocol''s Clean Development Mechanism (CDM) is still subject to controversy and discussion. A myriad of barriers prevents CCS in the CDM. Apart from political barriers, economic, social and procedural barriers play a role. This paper discusses relevant new results on the human capacity, procedural feasibility and economic potential of CCS in the CDM. The conclusions of a capacity building effort in Africa show that awareness and knowledge are low but that capacity building efforts are well received. A reality check on methodologies for hypothetical CCS projects shows that most of the issues can be resolved, and the CDM institutional arrangements can accommodate CCS. A bottom-up estimate of the potential of natural gas processing CCS in the CDM, based on a previously proprietary database from the oil and gas industry, suggests that there is an annual potential of about 174MtCO₂ in 2020 in that sector. Most of that potential can be realized at CER prices between $20 and $30/tCO₂ but there is no sign of flooding the CDM market with cheap credits from CCS projects. Despite these results and more open information, the CCS and CDM debate, progress in the negotiations on CCS in the CDM is slow and there is no clear view on a solution. [Copyright &y& Elsevier]