The world needs a massive ramping up of carbon capture and storage, or CCS, technology across heavy industry and fuel processing in addition to electricity generation to cut emissions and prevent global temperatures from rising more than 2 degrees Celsius, the International Energy Agency said Tuesday.
In a new report setting out a roadmap for CCS, the Paris-based energy watchdog said the world would need 3,400 large-scale CCS projects to be in operation by 2050 to prevent dangerous climate change.
Most of these projects will be in the developing world, where economies are rapidly growing along with demand for electricity.
"It's a huge challenge," IEA senior energy analyst and author of the report Tom Kerr told Dow Jones Newswires in an interview.
"In the first decade, OECD [Organization for Economic Cooperation & Development] countries lead because they already have plans under way, then that shifts rapidly so by 2050, 65% of CCS will be in non-OECD countries like Brazil, China, India, South Africa and Russia," Kerr said.
Those 3,400 projects would require an additional $2.5 trillion-$3 trillion global investment over the agency's business-as-usual scenario.
On the path to 2050, the world would need 100 CCS projects in operation by 2020 at an additional cost of $42 billion. A little more than half of these CCS projects would be in the power sector, with industries such as cement, iron, steel, chemicals, pulp and paper, and upstream fuel processing contributing the rest.
"This could be doable with the G8 [Group of Eight leading nations] 2010 framework," Kerr said, referring to a G8 goal to have 20 CCS projects up and running by 2010 and broad deployment of the technology by 2020.
Currently, there are only a handful of small pilot projects around the world.
Critics of the process say it hasn't been deployed on a larger scale because it is simply too expensive, adding an estimated GBP1 billion to the cost of building a power plant. They also point to the weak carbon price, now trading around EUR13 a metric ton, compared with the EUR50/ton to EUR70/ton price needed over the next four decades for CCS.
Kerr estimated costs could be reduced over time but only by around 10%, based on learning and increased efficiency, unless there is a breakthrough in a new technology.
CCS involves separating out the carbon dioxide produced by power plants, oil refineries and cement factories, and pumping it under pressure into porous rock. Oil companies have used the technology for decades, injecting carbon dioxide into the ground to improve oil recovery.
The European Union is now backing a rollout of carbon-capture technology with a plan to build between 10 and 12 CCS demonstration projects by 2015. In the U.S., the Obama administration has set aside $2.4 billion for CCS projects.