Environmental Sustainability: Case Studies

Contribution to UK GHG emissions targets

Meeting Targets

The UK is committed under the Kyoto Protocol to reduce greenhouse gas emissions by 12.5% by 2008-12 compared with emissions in 1990. On top of this, the UK has set its own additional target to reduce CO2 emissions by 20% between 1990 and 2010.

Figure 35: UK Emissions of Greenhouse Gases

The UK is currently meeting the Kyoto target of greenhouse gas emissions, with recent years 4%-8% below 1990. The reduction in emissions has been substantially assisted by the switch from coal and oil to gas, which is the country's largest source of primary energy and provides some 40% of total power generation. New gas fired power stations emit around 50% of the CO2 of conventional coal fired stations per unit of energy. So, despite an increase in UK energy demand of 10% since 1990, CO2 emissions have been declining and are projected to drop further.

Emissions Trading Schemes

In Europe, emissions trading represents a response by industry and government to the challenge of global climate change. The advantage of emissions trading is that it offers the potential to deliver the greatest reductions in the most economical fashion. The EU Emissions Trading Scheme (ETS) came into effect on 1st January 2005 and is mandatory for all installations with thermal input greater than 20 MW. The scheme is initially in two phases: 2005-7, for CO2 emissions only, and 2008-12, the Kyoto period, possibly for all six greenhouse gases.

This followed an earlier pilot scheme, the UK ETS, which started in 2002 with 34 participating organisations, including some UKOOA members. Two of the deliveries of this pilot were enhancing the measurement, reporting and forecasting of emissions and increasing awareness of emissions reduction methods and the mechanisms of trading.

The upstream oil and gas industry emits 20-25 million tonnes of CO2 per annum mainly from power generation and flaring (although flaring will not be in phase one, it may be considered for inclusion in phase two). UKOOA's projections show that, in the short to medium term, offshore emissions will rise slightly, with more energy being consumed in recovering remaining reserves as fields mature, before commencing a sustained decline as installations are decommissioned.

The EU ETS is a 'cap and trade' system, with allowances awarded free to qualifying installations each year. The awarded allowances decline over time in line with national targets for reducing emissions. Installation owners face the choice of investing in abatement measures, creating the option to sell excess allowances, or to purchase additional allowances to meet shortfalls.

Penalties for failure to comply are severe: 140/tonne of CO2 in phase one, rising to 1100/tonne in phase two. The cost of buying allowances in the market is significantly below these penalties (currently about 12030/tonne), thus encouraging trading.

Carbon Capture and Storage

Carbon Capture and Storage (CCS) is an emerging technology which captures the CO2 from large industrial or power generation sources using a combination of physical and chemical process. The CO2 is then transported and stored in a geological structure such as a saline aquifer or an old oil or gas field.

Europe is estimated to have extensive CO2 storage capacity, predominately located in and around the North Sea. The British Geological Society estimates the potential storage capacity under the North Sea at around 20 billion tonnes of CO2 in oil and gas fi elds, with an additional 20 – 70 billion tonnes in confi ned aquifers. This compares with current UK CO2 emissions of around 580 million tonnes per annum.

Todate, CCS has not been employed in the North Sea and its use raises significant issues:

• Environmental: Public acceptability of to this providing a safe and responsible approach
• Technical: CO2 is highly corrosive. Many of the existing platforms, processing facilities and pipelines were not initially designed to transport and store CO2. CCS will require very large investment in new infrastructure both onshore and offshore
• Legal: The legality of CCS offshore is currently in question. CO2 is officially designated a waste product and re-injection offshore is not allowed under current international law (OSPAR and the London Convention)
• Commercial: Current estimates for the cost of CO2 capture, transport and storage range from 160-100 per tonne. CCS may require fi scal incentives to be economic

Further research is required to address the costs, prevailing technologies and the implications of long term geological storage. The UK North Sea is a mature province, with many fields now approaching the latter stages of their economic lives. CCS may yet have a role to play in its future development. However, viable individual field applications have yet to be identifi ed, although BP and its partners have begun detailed studies of a project to combine CCS with clean power generation, using the Miller field offshore and Peterhead power station in N.E. Scotland.