Impact of international climate policies on CO2 capture and storage deployment Illustrated in the Dutch energy system

Abstract

A greenhouse gas emission trading system is considered an important policy measure for the deployment of CCS at large scale. However, more insights are needed whether such a trading system leads to a sufficient high CO2 price and stable investment environment for CCS deployment. To gain more insights, we combined WorldScan, an applied general equilibrium model for global policy analysis, and MARKAL-NL-UU, a techno-economic energy bottom-up model of the Dutch power generation sector and CO2 intensive industry. WorldScan results show that in 2020, CO2 prices may vary between 20 €/tCO2 in a Grand Coalition scenario, in which all countries accept greenhouse gas targets from 2020, to 47 €/tCO2 in an Impasse scenario, in which EU-27 continues its one-sided emission trading system without the possibility to use the Clean Development Mechanism. MARKAL-NL-UU model results show that an emission trading system in combination with uncertainty does not advance the application of CCS in an early stage, the rates at which different CO2 abatement technologies (including CCS) develop are less crucial for introduction of CCS than the CO2 price development, and the combination of biomass (co-)firing and CCS seems an important option to realise deep CO2 emission reductions.