CCS and public-private cooperation

Minister – distinguished participants – Ladies and gentlemen,

I very much appreciate the opportunity provided here at the Third CSLF Ministerial meeting, to bring together governments and stakeholders to a frank and open discussion on how to accelerate carbon capture and storage.

What connects us is our ambition to succeed in deploying CCS globally. We will not achieve this without commitment and determination, and there is no doubt that you – the stakeholders – and we the governments – need to work in partnership to reach our common goal.

How do we meet energy demands and the call for CO2 reductions at the same time? How can these two needs be reconciled?  Massive investments in renewables and energy efficiency must be made. Yet, when current analysis predicts that fossil fuels will continue to dominate our energy-mix in 2030 and beyond, we must also decarbonise the production and use of fossil fuels. CCS is the only option in this respect.

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Technically, we know it works. All steps in the CCS value chain have been proven. But we need to lower the costs and risks of CCS. We must push CCS beyond the pre-commercial phase of today.

You have rightly concluded that our ambition requires the building of commercial-scale demonstration projects. Let me now pick up on three key issues,
• financing and regulation,  • knowledge sharing • and  public acceptance.
They concern both governments and stakeholders, and need our full attention.

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The first issue is that of financing and regulation. It is no doubt the governments’ responsibility to establish a predictable and commercially attractive framework for CCS deployment. We recognise that such a policy framework is necessary to facilitate investments.

Creating this framework requires international cooperation. CCS must be included in a financing mechanism in a comprehensive international climate change agreement, and we need to put a global price on carbon. Furthermore, we must establish long-term legal and regulatory regimes for safe transport and storage. I believe we are making progress on many of these areas, but there is still much to be done.

Further to the question of financing --- As the responsible minister on CCS issues in Norway, I will be the first to admit that it’s the governments’ responsibility also to bridge the funding gap during the current demonstration phase. Without public financing, we will not get there. There simply will be no early demonstration projects!

Therefore, I am happy to announce that my Government’s funding pledges for CCS in 2010 will be substantially higher than the 440 million US dollars we spend this year. The budget is not official until tomorrow, but I can tell you that we will be spending over 1 billion US dollars on CCS in 2009 and 2010 combined.

In Norway, the Government together with StatoilHydro and Shell has started construction of the CCS Technology Centre at Mongstad, to be operational in 2011. Total cost is estimated to about 1 billion US dollars, and the Government is funding close to 80% of it. The primary goal is to gain knowledge that will reduce cost and risk. More private companies are welcome to join this effort.

Furthermore, the Government has – through a written agreement with StatoilHydro – committed to the realisation of a commercial-scale CCS plant. It will capture 1.2 million tons of CO2 from power generation when operational. The facility is now being planned.

I am happy to see that many other governments are following the same line and are announcing funding and project support. We are – as you can see – taking steps to address the funding gap.

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The second issue I want to raise is the need for knowledge sharing. Comprehensive knowledge sharing is crucial for the acceleration of CCS deployment. Information activities must be substantially increased to limit possible failures and problems in an early demonstration phase, and not least to assist developing countries in the introduction of CCS technologies.

Knowledge sharing will be crucial if we are to build confidence and understanding of CCS and thereby contribute to its deployment. Governments will help create arenas for knowledge sharing, but you - as stakeholders - must commit to actively sharing knowledge from your CCS involvements.

Along the way, it is important to sufficiently protect Intellectual Property Rights. Failure to protect drivers of technology innovation may obstruct investments in CCS.

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The environmental impact and safety issues related to CO2 storage are public concerns that must be properly addressed. This is the third issue I want to highlight. Large-scale deployment of CCS will ultimately be subject to public acceptance. Political leadership is necessary to generate public support for CCS.

However, the sharing of experiences from early projects will play an important role in building confidence in the technology. Here, industry and civil society stakeholders have a particular role to play. Together, we have a collective responsibility in communicating to the public the emission reductions potential offered by CCS.

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Having highlighted three vital issues which need the full attention of both public and private actors, I would like to stress that stakeholders, particularly in industry, have a vital role to play in searching for and finding long-term business opportunities within the CCS value chain.

We also need stakeholders to visualize value creation, so as to attract private investments in CCS projects. And we need industry to take ownership of the processes.

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Distinguished participants – we encounter challenges on the road to wide-spread CCS deployment. Some will be for governments to solve. Others belong to you.

I strongly believe in combining our efforts and keep strengthening our public-private cooperation. The CSLF enables us to do this, and I sincerely hope our discussions tomorrow will bring more clarity to what both sides ought to do.

Having read your communiqué, I look forward to learn more about how you as stakeholders assess your own role, and how you think you can contribute.

Thank you for your attention.