Grantham Institute: Extend green subsidies to carbon capture

The UK and other EU countries should extend green subsidies, such as the Contracts for Difference scheme, to carbon capture and storage (CCS) technology, an influential think-tank has claimed.

The Grantham Institute today (16 June) released a policy brief on CCS, which it claims is vital in limiting global warming to 2C.

However, while the US already has 13 CCS installations in operation and six under construction, there are no commercial scale CCS installations operating in the EU.

The biggest barrier to the uptake of the technology is its cost. Between €18bn and €35bn is needed for the installation of 11GW of CCS-equipped power generation – the amount recommended by the European Commission’s ‘Energy Roadmap’.

Subsidy support

The report says that government and EU-level support is needed to catch up with the US.

“Member States should design and implement financial incentives, such as feed-in tariffs or ‘contracts-for-difference’, to provide a reliable and steady stream of revenue,” said the report.

The Grantham Institute estimates that the strike price of CCS, i.e. the cost of producing electricity, would be €140-190/MWh2 (for coal and gas CCS respectively) in the early 2020s, similar to the current strike price of offshore wind.

The policy brief also calls for a much higher carbon price across the EU to level the playing field between high- and low-carbon technologies and to stimulate private investment in CCS.

Finally, the Institute urged the EU to establish mandatory emissions intensity targets on power generators, and provide financial support from public financial institutions, such as the European Investment Bank.


In March, a report from the Green Alliance also argued that CCS was the most cost-effective way of reducing decarbonising the power sector, adding that ‘clusters’ of CCS could reduce costs by up to two thirds.

However, the technology continues to be controversial in the UK, with less than a quarter of Britons supporting it, compared to the 80 % in favour of renewables. 

Green Party MP Caroline Lucas recently told edie: “I worry about CCS in Europe because I think that essentially it will delay the transition that we need to make to a sustainable energy source. 

“With CCS your still not clear about leakage issues, or even the technology itself, it has still yet to be properly proved. 

“I would prefer to see resources going into tried and tested green energy sources. Let’s get them up to commercial speed rather than necessarily hoping that CCS will dig us out of a problem.”

Nearly half of edie readers think CCS is delaying a switch to ‘truly clean energy’, while less than a third think the Government should be spending more on the technology.

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Brad Allen

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