Technology to cut CO2 not seen adopted before 2020

LONDON (Reuters) - Clean energy technologies that could dramatically cut carbon emissions are unlikely to be widely adopted before 2020, and even then only if western governments offer big financial incentives at home and abroad.

Most scientists believe man-made CO2 emissions, largely caused by burning hydrocarbons, are the primary cause of climate change in the half century

A draft report by the United Nations climate panel is expected to this week again call on nations to cut their CO2 emissions to avoid a climate catastrophe.

However, even the greenest developed nations are struggling to curb rises in CO2 production and emissions from developing nations like China and India are rocketing, as their booming economies require more and more energy.

New technologies are seen as the only way for mankind to cut CO2 emissions to acceptable levels, and still enjoy a decent standard of living.

Many scientists believe CO2 capture and storage (CCS) -- burying CO2 in underground reservoirs -- is the most politically acceptable, technologically feasible and economically viable way to make big CO2 cuts, followed by advanced biofuels.

Steve Koonin, scientist at oil major BP, said these technologies could realistically allow developed nations to reduce CO2 emissions from around 2015 and developing countries to cut from between 2030 and 2040.

However, government-sponsored financial incentives would be needed, he added. BP itself has applied for government help to build a CCS and power generation plant in Scotland.

CARBON CAPTURE

Around 40 percent of man-made CO2 emissions are caused by electricity generation, so scientists say it is key to focus on this source.

While some environmentalists advocate wind power, its capacity to replace coal and gas-fired power plants is limited by the intermittent nature of gusts and a shortage of suitable sites.

Solar and wave technology require unforeseen technological breakthroughs before they could play anything more than a tiny role in meeting power needs.

Nuclear could make a big impact but high build cost, long construction lead time and public hostility, mean even replacing existing plants is a struggle.

CCS, which involves storing CO2 in depleted offshore oil fields or in aquifers, porous rock beneath the seabed, is seen as offering a realistic prospect of material CO2 cuts.

"We've got several hundred years of storage for the whole European Union in the saltwater aquifers in the North Sea," Professor Stuart Haszeldine, Professor of geology at the University of Edinburgh, said.

The UK has promised a one-off subsidy that could help bring the first commercial-scale power generation and CCS facility online in 2011 or 2012.

The EU plans 12 CCS projects by 2015, and wants the technology to be installed in all new EU power plants after 2020, Haszeldine said, adding he does not expect more than a handful of projects to be operating globally before 2020.

However, firm frameworks of long-term incentives must be in place before companies will invest in CCS technology on a large scale.

Incentives could involve charges for emitting CO2 or rewards for storing it. Both strategies would inevitably lead to higher taxes or higher energy bills.

This may be tolerable in western countries, but developing nations are not keen to limit their growth with such measures.

"I keep asking the question who's going to pay for CCS in China and India, given their other development needs, and nobody's got any credible answer except 'the developed countries'," Koonin said.

SECOND-GENERATION BIOFUELS

Road, rail and air transport fuels account for around 20 percent of global emissions, making this another key focus.

Biofuels -- transport fuels made from crops -- have been touted as the solution and the EU has said it hopes that by 2030, biofuels will account for 25 percent of transport fuels.

However, biofuels do not always cut CO2 use. Environmental groups have said forests are being cleared in Brazil, Malaysia and Indonesia to make way for plantations that will produce palm oil, a key feedstock in some biofuels.

Also, inefficient production methods mean a liter of fossil fuel is sometimes consumed in the production and distribution of a liter of biofuel, Professor Nick Syred, UK representative on a panel which advises the EU on implementing measures to cut CO2 emissions, said.

A new generation of biofuels is needed to yield big CO2 cuts, Syred said. The aim is for biodiesel and gasoline substitute ethanol, to be produced from non-food crops and waste biomass. This would allow fuel to be produced with much less land and energy than is needed for current generation fuels.

Western oil majors including Royal Dutch Shell Plc and BP Plc are sinking hundreds of millions of dollars into second generation biofuels such as cellullosic ethanol, but only test production facilities have been built so far.

Analysts do not expect large-scale manufacturing until 2020 at the earliest.

"These technologies can deliver but it's not going to be a quick fix ... coal and oil are simply too cheap," Syred said.