9.5 Conclusions

CCS can learn from the industry development experience of LNG. The main lessons to be drawn are:

  • Early projects will experience disadvantages of small scale, single supply chain, one-to-one suppliers and off-takers, and needing to set up the entire value chain in a single project. Later projects will experience advantages of existing infrastructure, diverse range of suppliers and off-takers, mature competitive technology, and learning curve cost reductions.
  • A commercial framework is required to support predictable valuation of CCS, apportioning benefits to value chain stakeholders, providing the basis for long term contract commitments, and thus supporting bankability of projects.
  • Government intervention is required to both set up the needed commercial framework, and also to directly fund early projects or infrastructure so as to overcome the early project disadvantages.
  • Market pressures such as project cost escalations and product price competition can be expected to occur at any stage of maturity of the industry.
  • The target rate of CCS deployment to achieve GHG reduction targets requires growth rates and numbers of projects that seem to be unprecedented in the hydrocarbon and chemical process industries viewed from the perspective of recent buoyant LNG deployment.