Four large-scale carbon capture projects launched this year, but regulatory and cost barriers for the technology threaten the world's ability to prevent temperatures from rising to dangerous levels, a new report warns.

The annual report of the Australia-based Global CCS Institute cited a few signs of progress in 2013 -- the four new projects, along with eight existing ones in operation, are preventing 25 million metric tons of greenhouse gases from reaching the atmosphere annually. Yet all of the world's existing and new projects are on natural gas processing plants or other facilities that separate CO2 as part of a normal industrial procedure, signaling that the world has a ways to go before it broadly tackles a major source of CO2 emissions: coal-fired power plants.

There still are no carbon capture projects operating in the power sector, and there is little movement toward implementing the technology on big industrial emitters like cement manufacturers. Since last year's report, 12 projects were either canceled or put on hold, largely because of the high cost of the technology.

"While CCS projects are progressing, the pace is well below the level required for CCS to make a substantial contribution to climate change mitigation," said the report, which was released late last night in Seoul, South Korea. The institute also released a shorter summary of its analysis.

Developing countries make little headway

The report noted, for example, that the current CO2 pipeline network will need to be expanded 100 times to carry enough captured greenhouse gas to hold global temperatures to 2 degrees Celsius above preindustrial levels by the end of the century. Countries that are not members of the Organisation for Economic Co-operation and Development (OECD) will account for most of the growth in primary energy demand through 2035, according to the IEA, but there are few projects far along in the planning stage in many of those countries.

"To achieve global emission targets, 70 percent of the cumulative mass of captured CO2 by 2050 will need to occur in non-OECD countries," the report stated.

Meanwhile, funding support for CCS globally has fallen by more than $7 billion from 2009, "reflecting either changing government priorities or a reliance on carbon price support that has subsequently collapsed," the institute said. In Europe, there have not been new operational projects since 2008.

Cost is not the only challenge. Siting new pipelines to carry CO2 is a "phenomenally difficult" task in many countries, including India, said Jonathan Pershing, Department of Energy deputy assistant secretary for climate change policy and technology, at an event sponsored by the Atlantic Council last month. India emits roughly 6 percent of the world's carbon dioxide, according to U.S. EPA.

One bright spot, according to the institute, is China, which has moved into second place behind the United States in terms of total projects, although none in China are under construction. The incorporation of CCS into China's most recent five-year plan has provided an incentive, the institute said.

Sinopec and PetroChina, for instance, are planning three projects and plan "to own the full CCS chain, from CO2 source to sink." That should allow them move swiftly, the institute said. Additionally, there are few countries outside of China that are identifying new projects, even though countries like Canada and the United States are building long-planned ones.

Three of the new projects are in the United States: the Coffeyville gasification plant in Kansas, the Lost Cabin gas plant in Wyoming and the Air Products Steam Methane Reformer EOR Project, part of a capture process at a Valero refinery in Texas. All strip CO2 as part of byproduct of the manufacturing process.

They join a roster of existing projects, including the 17-year-old Sleipner CO2 project in the North Sea, where CO2 is injected underneath the seafloor after capture from a natural gas processing plant.

Cost remains a daunting problem

There are eight projects under construction, including two -- Southern Co.'s Kemper County Energy Facility in Mississippi and SaskPower's Boundary Dam Project near Estevan, Saskatchewan -- that could change the dynamic for coal and the power sector in general. If all eight are built, all global projects could block 38 million metric tons of annual greenhouse gases from reaching the atmosphere, a 52 percent increase from today, according to the institute.

"The bottom line in terms of Kemper is that it allows us to do things better, faster, cheaper," said Victor Der, general manager for North America of the Global CCS Institute, at an event in Washington, D.C.

With power generation, the capture component constitutes more than 90 percent of the cost of a full CCS operation, from the smokestack to storage spot. The hope with the $4.75 billion Kemper facility and Canada's Boundary Dam is that they will bring costs down for the next generation of projects.

Mississippi Power, a Southern Co. subsidiary, announced last week that the project would not meet its planned May 2014 deadline and would lose $133 million in federal tax credits (ClimateWire, Oct. 4).

The projects under construction also include the first-ever large CO2 capture system in Canada's oil sands (ClimateWire, Sept. 6, 2012).

To boost the number of projects, the report recommends additional financial support for both construction and research, to reduce the cost of CO2 capture. It says there is no one-size-fits-all option -- capital grants, subsidies and ratepayer cost recovery agreements all have been used effectively to boost the technology.

It also calls for new large CO2 "trunk lines" that connect one or more large projects to reduce costs. The Alberta Carbon Trunk Line, for instance, is a 149-mile pipeline that will eventually carry CO2 from various Alberta emitters for use in enhanced oil recovery operations.

"Urgent action is required to limit, alleviate and, where possible, reverse the damaging effects of the rise in the temperature of our planet," said Global CCS Institute CEO Brad Page.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC., 202-628-6500