IEA Workshop Urges Private Funds for Carbon Capture
More than 50 senior representatives from government, industry and financial institutions recently gathered at the IEA’s headquarters in Paris to discuss how to leverage lending and investment from the private sector for carbon capture, utilisation and storage (CCUS) projects.
Organised as a special thematic event on the margins of the regular meeting of the IEA’s Committee on Energy Research and Technology (CERT), the workshop convened major banks, project developers and policy makers to offer insights on the bankability of CCUS projects – considering what has worked to date to secure final investment decisions (FIDs), as well as what is needed from a policy perspective to reduce risks and unlock private capital.
A recent update of the IEA CCUS Projects Database shows continued global momentum for CCUS as developers around the world move projects forward. In fact, the amount of carbon dioxide (CO2) capture capacity under construction is roughly equivalent to the amount currently operating. As a result, as projects are completed in the coming years, operational capacity could double.
Public funding has played a crucial role in project development so far, and over the past two years, governments have earmarked around $50 billion in support. However, it appears unlikely this historically high level of public funding will continue, leaving a greater role for private capital – though investors and lenders have remained cautious as perceived offtake, policy, technology and market risks remain high.
In this context, the workshop focused on two areas where governments can play a role in mitigating risks and spurring private sector involvement:
The Committee on Energy Research and Technology (CERT) coordinates and promotes the development, demonstration and deployment of important energy technologies. Previous workshops held alongside CERT meetings have covered topics such as the impacts of energy innovation policies; challenges and opportunities associated with direct air capture technologies; and the state of play of fusion energy and its future prospects.
https://www.iea.org/news/iea-workshop-on-carbon-capture-utilisation-and-storage-highlights-need-to-unlock-private-capital-for-next-generation-projects