CCS to be included under CDM

This entry was posted by Friday, 7 January, 2011
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The 6th conference of parties serving as the meeting of the parties to the Kyoto protocol (CMP) concluded in the Mexican city of Cancun in the 2nd week of December. The much awaited announcement of including CCS projects under Clean Development Mechanism (CDM) was made in the penultimate session of the conference. The ministers backed the proposal to award carbon credits under CDM to those CCS projects that capture and trap emissions from factories and power plants before burying them underground.  The members were requested to frame the rules and other modalities of implementation before the Durban conference next year.

This is a significant move with regard to curbing CO2 emissions from industrial sources. Under the CDM, the industrialized countries that have obligations under Kyoto protocol to reduce carbon dioxide emissions can invest in carbon reduction projects in developing nations and claim carbon credits which are tradable in the open market. By including CCS under CDM, the developing countries receive direct financial incentives for developing and deployment of CCS technologies.

Countries like Australia, UK and UAE, who have a tremendous interest in making CCS commercial, were instrumental in getting CCS projects included under the CDM. For achieving an ambitious long term global target of reducing greenhouse gases emissions at 450 parts per million (ppm) or lower will require adoption of low carbon emission technologies by both developed and developing countries. Inclusion now will send out a positive signal to all countries and businesses interested in deployment of CCS technology. CDM provides incentives for technology cooperation between developed and developing countries for making CCS projects commercially viable. CCS under CDM provides a level playing field for CCS technologies along with other emission reduction technologies that are qualified under CDM for carbon credits.

The costs associated with the operation and maintenance of these installations is very high. This cost can be offset by the sale of Certified Emission Reductions (CERs) used within CDM. A look at the economics would help us in understanding the merits of CCS under CDM. The price of carbon under CERs ranges between $10.4 and $43 (8 Euros to 33 Euros) per tonne of carbon. As per recent findings, 14 giga tonnes of CO2 is emitted annually into the atmosphere from the power plants. Assuming all these CO2 are captured and qualify for carbon credits under CDM, the CCS projects that qualify for carbon credits can generate an income of $240 billion.

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To read more: Carbon Capture and Storage , CDM

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