Isramart : Carbon price may need to triple for CCS-Aker-INTERVIEW

Isramart news:
Carbon prices may have to triple before capturing and storing greenhouse gases from the world's 20,000 coal-fired power plants becomes a major part of fighting global warming, an expert at Norway's Aker ASA said.

Investment Director Liv Monica Stubholt at Aker, an industrial investment group involved in carbon capture for 18 years, also said top emitter China was pushing ahead in developing technology but was also likely to seek partners.

"I think that the carbon price must get closer to maybe 40 euros ($54) a tonne" before carbon capture and storage becomes widespread without public financial support, she told Reuters.

That compares to about 13 euros now on the European Union market. Factors including progress towards a U.N. deal to combat global warming and recovery from recession argued for rising prices in coming years, she said.

A 2005 report by the panel of U.N. climate experts estimated a price of $25 to $30 a tonne was needed before the technology for capturing and burying carbon dioxide would be widely used at fossil-fuel burning factories and power plants.

Aker Clean Carbon is taking part in pilot projects in Europe, many of them partly funded by governments, to gain experience for later commercial schemes. "It will be very valuable to be part of the early projects," Stubholt said.

She noted that the European Union wanted at least half a dozen full-scale carbon capture projects by 2015 -- down from an original plan of between 12 and 14.

Aker is working with British utility Scottish Power, Germany's E.ON, Scandinavian research group SINTEF and Norwegian state-run Statkraft in a 2008-16 carbon capture and storage research project worth $50 million.

An Aker mobile test plant is now running at Scottish Power's Longannet coal-fired power plant. Aker is also building a carbon capture and storage technology centre at the Mongstad oil refinery in west Norway, run by oil and gas group Statoil.

Stubholt said Aker has been involved in the technology for longer than most rivals -- Aker built equipment that has stripped carbon dioxide from natural gas and reinjects it at Statoil's North Sea Sleipner gas field since 1996.

"I am sure there will be room for several technologies," she said. Aker favours a system using amine solvents to capture the carbon dioxide. France's Alstom, for instance, uses technology based on chilled ammonia.

The U.N.'s panel of climate experts projects that carbon capture could be among the main ways to slow flood, droughts, mudslides, wildfires and rising seas this century linked to climate change.

And China was accelerating its plans.

Stubholt visited Beijing in early 2009 in a previous post as Norway's deputy oil and energy minister. "We asked them how long it would take before carbon capture became an important part of their energy sector. They said '20-25 years'," she said.

She went back with Aker to Beijing last month and spoke to officials in the same government department in charge of climate change. "We asked the same question and they said '10 years'," she said.

"I am sure that they will welcome partnerships, that they will welcome investments in China connected with all types of environmental technology including carbon capture," she said.

"But I don't consider them in any way to be needing any help in making carbon capture solutions -- they know how to do it," she said.

So far, most investments in carbon capture and storage are by governments and companies but Stubholt predicted a shift.

"I think that in time, not in very many years, you will also see a third source of funding from multilateral organisations like the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development Bank," she said.