3.5 Outlook

Over the coming 12 months it is expected that, with recent progress made towards selecting projects under both NER300 and the UK funding competition, there will be a number of projects in a position where an FID can be made. Early indications are that these projects will comprise a range of pre-combustion, post-combustion and industrial projects.

In North America, a mixture of pre-combustion (Texas Clean Energy Project), post-combustion (NRG Energy Parish Project), and industrial (North West Sturgeon Refinery CO2 Project) projects are also in a position where a FID can be made over the course of the next 12 months. All of these projects will rely strongly on EOR or other utilisation opportunities as a key component of the business case. This reflects the growing importance of utilisation of CO2, syngas and/or urea to provide an operating period bridge.

In addition, utilisation of CO2 for EOR will continue to be an important driver of CCS activity in regions like China, the Middle East and North Africa when conditions are suitable.

Apart from these developments CCS projects are likely to continue to focus on the ‘low-hanging fruit’ of natural gas extraction and natural gas, hydrogen and synfuels production where CO2 is produced as part of the process and can be captured at low cost.

Ultimately demonstration projects need to be underpinned by climate policy, CCS-specific policy and an effective regulatory environment. The rate of project development to date suggests that the absence of policy support creates uncertainty and impedes project progress.