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European Scenarios of CO2 Infrastructure Investment until 2050

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  • Pao-Yu Oei and Roman Mendelevitch

Abstract

Based on a review of the current state of the Carbon Capture, Transport and Storage (CCTS) technology, this paper analyzes the layout and costs of a potential CO2 infrastructure in Europe at the horizon of 2050. We apply the mixed-integer model CCTS-Mod to compute a CCTS infrastructure network for Europe, examining the effects of different CO2 price paths with different regional foci. Scenarios assuming low CO2 certificate prices lead to hardly any CCTS development in Europe. The iron and steel sector starts deployment once the CO2 certificate prices exceed 50 €/tCO2. The cement sector starts investing at a threshold of 75 €/tCO2, followed by the electricity sector when prices exceed 100 €/tCO2. The degree of CCTS deployment is found to be more sensitive to variable costs of CO2 capture than to investment costs. Additional revenues generated from utilizing CO2 for enhanced oil recovery (CO2-EOR) in the North Sea would lead to an earlier adoption of CCTS, independent of the CO2 certificate price; this case may become especially relevant for the UK, Norway and the Netherlands. However, scattered CCTS deployment increases unit cost of transport and storage infrastructure by 30% or more.

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  • Pao-Yu Oei and Roman Mendelevitch, 2016. "European Scenarios of CO2 Infrastructure Investment until 2050," The Energy Journal, International Association for Energy Economics, vol. 0(Sustainab).
    • Handle: RePEc:aen:journl:ej37-si3-mendelevitch
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    Cited by:

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    4. Holz, Franziska & Scherwath, Tim & Crespo del Granado, Pedro & Skar, Christian & Olmos, Luis & Ploussard, Quentin & Ramos, Andrés & Herbst, Andrea, 2021. "A 2050 perspective on the role for carbon capture and storage in the European power system and industry sector," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 104, pages 1-18.
    5. Fan, Jing-Li & Xu, Mao & Li, Fengyu & Yang, Lin & Zhang, Xian, 2018. "Carbon capture and storage (CCS) retrofit potential of coal-fired power plants in China: The technology lock-in and cost optimization perspective," Applied Energy, Elsevier, vol. 229(C), pages 326-334.
    6. Michele Fioretti & Alessandro Iaria & Aljoscha Janssen & Robert K Perrons & Clément Mazet-Sonilhac, 2022. "Innovation Begets Innovation and Concentration: the Case of Upstream Oil & Gas in the North Sea," SciencePo Working papers hal-03791971, HAL.
    7. Ansari, Dawud & Holz, Franziska, 2020. "Between stranded assets and green transformation: Fossil-fuel-producing developing countries towards 2055," World Development, Elsevier, vol. 130(C).
    8. Massol, Olivier & Tchung-Ming, Stéphane & Banal-Estañol, Albert, 2018. "Capturing industrial CO2 emissions in Spain: Infrastructures, costs and break-even prices," Energy Policy, Elsevier, vol. 115(C), pages 545-560.
    9. Gerbaulet, C. & von Hirschhausen, C. & Kemfert, C. & Lorenz, C. & Oei, P.-Y., 2019. "European electricity sector decarbonization under different levels of foresight," Renewable Energy, Elsevier, vol. 141(C), pages 973-987.
    10. Ansari, Dawud & Holz, Franziska, 2019. "Anticipating global energy, climate and policy in 2055: Constructing qualitative and quantitative narratives," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 58, pages 1-23.
    11. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    12. Bartholdsen, Hans-Karl & Eidens, Anna & Löffler, Konstantin & Seehaus, Frederik & Wejda, Felix & Burandt, Thorsten & Oei, Pao-Yu & Kemfert, Claudia & Hirschhausen, Christian von, 2019. "Pathways for Germany's Low-Carbon Energy Transformation Towards 2050," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 12(15), pages 1-33.
    13. Janssen, Aljoscha, 2022. "Innovation Begets Innovation and Concentration: The Case of Upstream Oil & Gas in the North Sea," Working Paper Series 1431, Research Institute of Industrial Economics.
    14. Marzena Kramarz & Katarzyna Dohn & Edyta Przybylska & Lilla Knop, 2020. "Scenarios for the Development of Multimodal Transport in the TRITIA Cross-Border Area," Sustainability, MDPI, vol. 12(17), pages 1-41, August.
    15. Löffler, Konstantin & Burandt, Thorsten & Hainsch, Karlo & Oei, Pao-Yu, 2019. "Modeling the low-carbon transition of the European energy system - A quantitative assessment of the stranded assets problem," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26, pages 1-15.

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