CCS funding programs and GFC stimulus

In 2008 and 2009, many governments announced major public spending programs that focused on stimulating the economy in response to the GFC. During this time, there was significant support for increasing government spending to offset declines in private spending. Included in these large stimulus programs was government spending for clean energy, partly in anticipation of coordinated global policy action to reduce GHGs at COP 15 in 2009. The total funding for clean energy programs amounted to US$195 billion (Czajkowska and Munro 2012). Of this, US$9.3 billion was provided to CCS, approximately 5 per cent of the total global green stimulus package (Table 12).

TABLE 12 Stimulus funding for CCS

COUNTRY PROGRAM TITLE FUNDING FUNDING (IN US$)1
Australia CCS Flagships Program AU$4.0 bn US$4.1 bn
Canada Clean Energy Fund CA$0.6 bn US$ 0.6 bn
EU European Energy Programme for Recovery (EEPR) €1 bn US$1.2 bn
US ARRA – Clean Coal Power Initiative US$3.4 bn US$3.4 bn
ARRA – FutureGen
ARRA – Industrial Carbon Capture and Storage
    Total US$9.3 billion

1 Based on July 2012 exchange rates. As the US dollar has appreciated relative to most currencies since the GFC, the US dollar values reported here are lower than would have been the case at the time the programs were announced

 

Funds from stimulus programs form a major part of the total funding for CCS developments, representing 40 per cent of the total global funding (Figure 46).

FIGURE 46 CCS funding programs by stimulus funding

Stimulus spending programs were designed to be ‘timely, targeted, and temporary’ and most had legislated deadlines for commitment of the funds to specific projects. For example, funds in the American Recovery and Reinvestment Act (ARRA) were required to be allocated to projects by 30 September 2010, while EEPR funds were required to be committed by 31 December 2010.

Where funds in these programs formerly committed to projects were subsequently returned to governments due to project cancellations or suspensions, that money is not currently available to other CCS projects. Over the past 15 months, US$1.4 billion has been returned associated with project suspensions in the US (AEP Mountaineer), Canada (Project Pioneer), and Europe (Vattenfall Jänschwalde).

Australia’s CCS Flagships program has been repurposed away from stimulus funding and is now considered an integral part of Australia’s clean energy initiative in response to climate change risks. Nonetheless, since the program was announced in 2009, funding has been reduced by more than US$600 million in response to other budget priorities of the Australian Government.

The bulk of the project-level funding allocated to date has been awarded to 19 projects receiving US$200 million or more each. In total, these LSIPs have been allocated US$8.6 billion, accounting for 64 per cent of total CCS project funding awarded. FutureGen 2.0 is the largest single project recipient receiving US$1.048 billion. See Section 3.3 for the full breakdown.