The last major regulatory hurdle for the capture and storage of CO2 emissions in Europe is expected to be cleared by the end of the year, when the law of the sea relating to the north-east Atlantic is expected to be amended to allow storage under the sea bed.
If and when it happens, it will open the way to a major new business market for the potential prime players in Europe - the UK and Norway - and could give them an edge over possible rivals in the US, where similar legal changes could be slower to arrive. The world market in carbon capture and storage (CCS) has been estimated at £150bn a year by Edinburgh University.
At the moment, storage under the sea is banned in the north-east Atlantic - one of the biggest potential sites in the world - but the Ospar Commission, the intergovernmental body that protects the sea in this region, is expected to lift the prohibition by the end of 2007. 'Ospar is moving as fast as possible, but in a measured way,' says its executive secretary, Professor David Johnson. A provisional date for the change is expected to be agreed this month and the European Commission and the 15 participating governments of Ospar will make the final decision in June.
The four governments with the most to gain - UK, Norway, France and the Netherlands - have proposed the change. A report from the UK and Norway concludes that CCS is 'technically feasible' and could deal with up to 40 per cent of carbon emissions by 2050. It says Europe has such significant storage capacity that it could cope with most of Europe's C02 emissions for perhaps hundreds of years.
CCS has been identified by the Intergovernmental Panel on Climate Change and other groups as potentially the best response to climate change in the short and medium term. By capturing emissions and burying them, BP, Centrica and other energy producers planning such schemes would dramatically cut back the release of CO2
Old oil and gas fields and aquifers (natural underground reservoirs) under the sea provide the biggest opportunities for Europe. The US could access old subterranean oil and gas fields on land. It costs less to pump CO2 underground than under the sea, so the US has a competitive edge in that area. However, there are legal problems with CO2 being pumped across state boundaries and US lawyers are trying to resolve the situation.
Experts believe the nations and companies that develop CCS first will have a major advantage over those that follow. 'Commercially, this could be huge,' says Harry Audus, general manager of the International Energy Agency's greenhouse gas research programme. 'It's a parallel industry to the whole fossil fuel industry.' Once the legal issues are removed, the final practical barrier will be finance. The UK government will launch a competition this month under which it will fund a CCS pilot plant, but the Treasury needs to announce a capital funding structure for other schemes and a system for guaranteeing revenue to energy companies that use CCS.
Safety is a major issue; there are parallels with the nuclear disposal industry. Carbon dioxide will need to be stored for thousands of years and a major leak could be disastrous. If Ospar grants permission for the change, it would prefer that rigorous monitoring requirements on future CCS sites are introduced at the same time. 'The Commission would like to see these two developments happening in one package,' says Johnson. Another safety measure would be to prohibit release of CO2 into the ocean itself, as this could increase sea temperatures.
Some CCS projects have already begun. Norway buries CO2 in the massive Sleipner gas field under the North Sea, which is permissible under current rules because CO2 can be buried in the same location as it is generated. This has provided Norway with useful experience - but not with the commercial opportunities that would come from piping carbon dioxide from elsewhere.
