Global Coverage of Gasication Projects and Associated Technologies

zeus

SYNGAS REFINING
Client Letter Defense Contractors Developing Deployable Gasification Units............................................................ 2 Industry Analysis

report

Analysis: EPA Reduces Renewable Fuel Standard Mandate for First Time............................................ 3
Interview

Interview: R3 Sciences working to commercialize modular gas-to-methanol units. ............................. 5

Feature Story

Lanzatech prepares low-carbon fuel for take-off. ..................................................................... 8

News Briefs

Africa........................................................................ 9
Qatar sees increasing promise in GTL fuels.

Americas................................................................ 10

OCI plans largest methanol plant in the US. Marcellus GTL construction start delayed until 2014. Northern Plains Nitrogen reaches agreement with Chinese engineering firm. CF Industries on track with US$1.7 billion fertilizer expansion project. Northern Iron working to arbitrage NA DRI/HBI market . Louisiana on verge of construction boom on industrial plans. EIU investigating alternative, sustainable biomass sources. Middlebury biomass plant passes important milestone. Cirque Energy, Northrop Grumman to develop deployable gasification unit. PyroGenesis secures contract with multinational oil and gas company. EPA considers GHG emission limits on new coal power plants. Sandia Lab researching biocatalyst technologies for transport fuel production.

Asia......................................................................... 16

Lanzatech jet fuel certified ahead of partnership with Virgin Atlantic. Biomass gasification unit proposed for Kathmandu. Indian government to revoke coal licenses on development delays. MagneGas announces gasification equipment sale to Astana TechCom.

Europe....................................................................17

Danish firms investigating alternatives to costly fertilizer. Poland experimenting with coal gasification processes. IEA: Global GHG emissions to rise 20 percent by 2035. Europes enthusiasm for CCS wanes.

Vol. IX, No. 22

A Zeus IntelligenceTM Publication

November 22, 2013

zeus

SYNGAS REFINING

Client Letter

report

Technical and Market Analysis of Syngas Production & Applications via MultipleFeedstock Gasication Technologies ZEUS SYNGAS REFINING REPORT is published semi-monthly by Zeus Development Corporation. Editorial Oce 2424 Wilcrest Dr., Suite 100 Houston, TX 77042 Phone: 713-952-9500 Fax: 713-952-9526 editorial@zeusintel.com Zeus Syngas Rening Reports objective is to collect, analyze, and disseminate information concerning the emerging markets for products manufactured from syngas. Subscriptions are $949/year by rst-class mail in the U.S. or $899/year electronic PDF. (Texas residents, add 8.25% sales tax.) To inquire about a subscription or for information on advertising rates, please contact Zeus at (713) 952-9500 or via e-mail: customerservice@zeusintel.com Zeus Development Corporation is a central source of expertise and critical analysis on technologies to develop remote reserves. Zeus is dedicated to bolstering emerging industries by providing publishing, conference, and market research services. 2012 Zeus Development Corporation ISSN# 1552-7255 Reproduction by any means is illegal and punishable by nes up to $50,000 per violation. To acquire reproduction authorization, please contact: Zeus Development Corp. 2424 Wilcrest Drive, Suite 100 Houston, Texas 77042 713-952-9500 www.ZeusIntel.com/Gasication

Defense Contractors Developing Deployable Gasification Units

Dear Client, Lockheed Martin and Northrup Grumman, the largest and fth-largest U.S. defense contractors, respectively, have individually entered into agreements with separate gasication technology suppliers to address waste disposal needs, energy security and climate control issues. The goals of both are to develop advanced waste conversion systems that can be deployed worldwide for landll diversion, in both private communities and military installations. With the global population surpassing 7 billion people, there is an increased need to reduce dependence on landlls. There was an estimated 2 billion tonnes of municipal solid waste generated in 2012 alone. This is expected to rise along with population growth, urbanization and improved living standards. Landlls, though currently the primary method of disposing of municipal waste globally, are increasingly seen as an option to be avoided, particularly as landlls emit methane, a greenhouse gas which has twice the environmental impact as CO2. Gasication systems can produce syngas, electricity, liquid fuels and hydrogen, along with by-products such as biochar, water, ash, and heat, while addressing the issue of where to send a communitys waste, and simultaneously reduce the need for fossil fuels in power generation. Although waste gasication has been commercially proven in several countries, the technology is not widespread, and conventional incineration is the primary waste-to-energy method in use worldwide. Lockheed Martin and Concord Blue reached an agreement in October to develop an advanced waste conversion system to address these issues. The solution would address the current burden on landlls, conventional incineration and fossil fuels, as well as provide green baseload energy. Lockheed Martin will provide its engineering, program management, procurement, manufacturing and integration experience to apply Concord Blues patented technology globally in the expanding waste-to-energy arena. Concord Blue opened its rst Concord Blue Reformer in 2002 in Izumo, Japan. Meanwhile, Northrop Gruman Corporation and Cirque Energy have entered an agreement for the development of deployable gasication units. The units will be designed to convert wastes generated at military installations, natural disaster locations, or commercial or industrial sites into electricity and recoverable heat. These units utilize low temperature, starved air gasication technology coupled with conventional reciprocating engine technology. The companies plan to produce a working prototype in 2014. Thus, some very large rms have entered into the waste gasication space in recent weeks, representing some US$70 billion in market capital. For providers of waste gasication technologies, partnerships like these may provide the necessary impetus for waste gasication technologies to take o worldwide. We look forward to keeping you informed and alert as this market segment grows. Yours sincerely, Zeus Syngas Rening Report

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Industry Analysis

EPA Reduces Renewable Fuel Standard Mandate for First Time

The U.S. Environmental Protection Agency (EPA) has lowered the ethanol blending mandate known as the Renewable Fuels Standard (RFS) in response to the slower-than-anticipated growth of cellulosic ethanol. Although the move is supported by the oil and auto industries, corngrowers and developers of cellulosic ethanol technologies, which are at the cusp of commercialization in the U.S., stand to lose by the development. The EPA has thus acknowledged that the current mandate is not feasible. The EPA wants to cut the amount of corn-based ethanol and other biofuels required in 2014 to be blended with gasoline to 15.21 billion gallons. This is nearly 3 billion gallons less than the previous target for 2014 of 18.5 billion gallons. The law also proposes a range of 2 billion to 2.51 billion gallons for advanced biofuels with a recommended target of 2.2 billion gallons, far below the proposed target of 3.75 billion gallons under the Energy Security and Independence Act of 2007, which rst established the mandate. The law, In response to concerns about the use of corn-based ethanol, set a cap on corn-based ethanol capacity, expecting blenders to increasingly rely on sourcing ethanol from cellulosic projects, or non-food-biomass projects. And although enzymatic cellulosic ethanol processes are now ready to commercialize, thermochemical approaches to cellulosic ethanol development have lagged far behind, and several ventures have failed or been cancelled despite limits on corn-based ethanol capacity. When proposed in 2007, government forecasts expected U.S. gasoline consumption would continue to rise, corresponding to increasing demand for ethanol. Instead, gasoline demand has attened due to fuel-eciency gains in cars, a weaker economy and higher gasoline prices. The mandates were set to require an exact amount of gallons rather than a percentage of total fuel produced, and therefore a reduction in gasoline consumption aects the supply to which the mandated volumes can be applied. The American Petroleum Institute (API), which represents the oil industry, has called on EPA to end the program completely. The industry is joined by groups aected by higher corn prices. The Advanced Biofuels Association (ABA) believes that reducing the EPA standards will pull the rug out from underneath the growing advanced biofuel industry. Advanced biofuel companies have invested a collective US$14 billion in the development of advanced and cellulosic biofuels, the ABA states, and further reduction of mandates will reduce incentives for investment for advanced biofuels necessary to produce large-scale quantities of renewable fuels. The Blend Wall Most gas station fuel contains a 10 percent blend of ethanol and 90 percent gasoline. With the higher mandates, which are irrespective of total gasoline consumption, reners hit a blend wall, potentially requiring the production of 15 percent ethanol blends. The blend wall is the upper limit of how much corn-based ethanol can be blended into gasoline. For most cases the wall is set at 10 percent. Auto makers have argued that E15 blends could dam-

November 22, 2013

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age engines, and although they took a case regarding the issue to the Supreme Court in June, the court declined to hear the case. Nevertheless, some automakers have started to certify vehicles to use E15, including GM and Ford. Chrysler, on the other hand, does not approve of the fuel and says that it can void existing warranties, as more than 90 percent of vehicles on the road are not approved to use E15. E15 is roughly 10 to 15 cents per gallon cheaper than E10 but is less energy-intensive, resulting in less mileage per gallon performance. RFS Compliance RFS compliance is tracked by assigning Renewable Identication Numbers (RINs) for each ethanol-equivalent gallon of biofuel. The RFA estimates that its industry will generate at least 3.5 billion RINs in 2013 that qualify as advanced biofuels, exceeding the target of 2.75 billion gallons for 2013. Anything less would be a step backward for the industry, the RFA argues. Each gallon of renewable fuel is given a number to monitor trading and track its use. Reners that fail to supply enough renewable fuels to the blenders who mix ethanol and gasoline must buy extra RIN certicates. If there is insucient renewable fuels overall, RIN prices rise, providing an incentive to produce more ethanol, but these costs are passed along to customers at the pump. Ultimately, the API feels, the RIN system punishes reners for biofuel producers failing to commercialize cellulosic ethanol. The oil industry has suggested that the EPA keep the 10 percent limit on ethanol, further reducing corn ethanols share and increasing the cellulosic quota, thereby continuing to incentivize cellulosic ethanol development. Because cellulosic ethanol production has lower GHG emissions than corn ethanol production, the eects on the climate would be reduced, the industry adds. The ongoing battle between EPA and industry associations comes amid the start of cellulosic ethanols commercialization. In the next year, three major cellulosic ethanol plants are slated to come online: POETs 20 million gallons per year (gpy) project, Duponts 30 million gpy project and Abengoas 25 million gpy project. Even still, the three plants would altogether produce just 5,000 barrels per day of cellulosic ethanol, less than 0.06 percent of U.S. consumption. The companies building the plants hope to replicate them to ultimately capture 10 percent of the U.S. motor fuel market. Cellulosic ethanol projects using the thermochemical route have been even slower to materialize, yet companies such as Ineos Bio and Enerkem are developing projects to produce ethanol using waste feedstocks processed in gasiers. The incentives for thermochemical approaches to cellulosic ethanol development appear to be waning. The oil industry sees the mandates as unfair, as they rely on production capacity that is only now starting to commercialize. Limits on corn-based ethanol production simultaneous with rising expectations of ethanol supply was supposed to stimulate cellulosic ethanol developers to commercialize, but this has largely not occurred, particularly for thermochemical approaches. While the ethanol industry contends that the oil industry is merely unwilling to give up further market share to ethanol, particularly as gasoline consumption peaked in 2005 and has been falling as a result of higher-eciency vehicles, advances in technology will have to occur before cellulosic ethanol can approach the scale of contributions to the energy mix that corn-based ethanol has made.

Cellulosic Ethanol Development

Conclusion

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Industry Interview

Interview: R3 Sciences working to commercialize modular gas-to-methanol units

R3 Sciences have successfully produced commercial grade methanol in a continuous flow pilot system using a liquid, homogenous catalytic process. Advances in homogenous catalysis developed by R3 Sciences will allow the production of methanol from air-derived syngas with only trace levels of catalyst residual. The company is looking to license its technology for deployment in transportable, modular units to process natural gas at the source, providing opportunities for oil field operators to commercialize stranded and flared gas into methanol. R3 Sciences is a unit of Enersciences Holdings, which through other units provides drilling fluids and services, frac and coil chemicals and power generation technologies for upstream operators. Flared Gas is a Growing Problem/ Opportunity The Bakken shale formation of North Dakota in particular has seen a huge surge in natural gas aring. This is primarily driven by economics, as companies nd it more cost-eective to are the gas than build the infrastructure to collect and use it, particularly in remote locations. Despite the economics, the practice of aring may be subject to increased regulatory pressure. Resource owners as well may demand value from the gas ared from their properties, as oil companies are largely focused on producing oil. High oil prices and low gas prices are further inducing producers to are gas. The latest version of the EPAs New Source Performance Standards (NSPS) would require that by January 2015, green completions will apply to all new Bakken wells to capture, rather than are, the gas. Flaring would be permitted only as a temporary measure. North Dakota regulators will ultimately make the call. According to the World Bank, U.S. gas aring has grown signicantly over the last ve years, from 78 billion cubic feet (bcf ) in 2007 to 251 bcf in 2011, a 223 percent increase, a rate of growth faster than all other major gas-aring nations. Still, this represents only a small percentage of total oil production. Zeus Syngas Rening Report editor Chris Cothran recently spoke with members of R3 Sciences team to learn more about the companys catalyst breakthrough and plans for commercialization of its technology. David Trahan, R3 Sciences President and Chief Innovation Ocer and Dr. Richard Sapienza, R3 Sciences Senior Research Advisor provided an overview of their technology and perspectives on the growing opportunity for gas conversion systems for oil eld applications. ZSRR: Could you discuss the latest development on pilot production of methanol from natural gas, and what will this enable you to do now in term of next steps?

Interview with R3 Sciences Team Members

November 22, 2013

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R3 Sciences: In a homogeneous system, running a pilot plant is equivalent to running a commercial plant as a homogeneous system is easy to scale up or scale down production. Typical methanol production methods involve passing syngas over a heterogeneous catalyst, usually a solid with a small number of active sites, where the reaction process occurs. Our catalyst is completely active, with every portion in liquid state, making it easier to ow in, out, regenerate, recirculate, much easier than a heterogeneous catalyst. Homogeneous catalysts tend to be more active, which is why we are also able to pass large inerts through the system. Because the catalyst can accept nitrogen without a problem, syngas production can be conducted at a lower capital cost, as the system can use air instead of an oxygen plant. High activity enables high single pass syngas production, allowing for smaller plant sizes and a lower need for catalyst. Heterogeneous catalysts require higher temperature and pressure than homogeneous catalysts. For a traditional Fischer-Tropsch (FT) process, 250-750 pounds per square inch (psi) of pressure is required. With most methanol production processes, including methanol-to-gasoline processes, require up to 750 psi, while FT uses 250-300 psi at much higher temperatures (250-300 degrees Celsius). Our catalyst can run at temperatures as low as 100 degrees Celsius. Also, the conversion eciency per pass is over 93 percent, compared to an eciency of 30 percent per pass with heterogeneous catalysts. The lower eciency of heterogeneous catalysts requires the gas to be reconditioned, recompressed and recycled into the system for another pass. The high conversion eciency of the homogeneous catalyst is possible as the catalyst is 100 percent active. With the homogeneous liquid catalyst, gas is bubbled through the catalyst material, granting immediate contact of the gas with the catalyst, reacting the CO and H2 immediately to produce methanol. In heterogeneous catalyst systems, gas needs to sit on the surface of the metal that is there to be reacted. In the R3 Sciences process, synthesis gas undergoes gas conditioning steps to remove certain unwanted gas elements, preventing those elements from interfering with the catalytic reaction. The conditioned synthesis gas enters the R3 G2M reactor where it immediately undergoes a chemical conversion into methanol. The synthesis gas is consumed in the reactor with the remaining nitrogen leaving the reactor as a major component of the tail gas. The nitrogen is the residual inert gas from the air component used in producing the synthesis gas via the auto thermal reformer. ZSRR: What is the catalyst composed of? Will you manufacture the catalyst for customers yourself? R3 Sciences: Yes, we will produce the catalyst ourselves. All the materials are commercially available, with no noble metals. The materials are put together in a unique way. The catalyst residuals are non-toxic. The tailgas from our process will be trace hydrogen and the balance nitrogen. The catalyst structure is liquid and is blended in a plant and stabilized and delivered to the eld, already prepared. Because it is liquid, the catalyst can be regenerated on-site, maintaining a high level of activity for the units.

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ZSRR: What are the target applications for the technology? R3 Sciences: Flared gas in the U.S. is often ared because it has no market, no pipeline, or the gas may need special conditioning or there is no consumption for it locally. Our plan is to go to local sites, install our modular units to convert the ared gas to dispatchable liquid. Target size range of 1 million cubic feet per day (MMcf/d), with the option of incorporating two or three modules. Above 5 MMcf/d, an operator is more than likely going to have a pipeline running to the well. At 1 MMcf/d, an operator can produce 10,000 gallons per day of methanol per location. If syngas cleanup technologies can be improved on further, there might be a way to scale the facility even smaller. With a homogeneous catalyst it is easier to scale down. In the U.S., we see as many as 75,000 sites with this range of gas production. There is enough room for everybody. ZSRR: When will you be able to move into commercial development? R3 Sciences: We want to ensure durability of the catalyst. We have spent some US$5 million on catalyst research in the last three years. We plan to put these out as standard modular units, working with distributed production rather than centralized production. The systems will be skid-mounted and assembled on small concrete pads. First stage dimensions will be approximately 30 feet by 50 feet, consisting of half a dozen modules interconnected. Two large advantages beyond the catalyst is that syngas can be made with air and not oxygen and no distillation of product is needed. Also, once collected, the methanol product has no water in it. Most other methanol processes produce a residual of water requiring a secondary process. The methanol could also be used by the oil and gas operator to fuel its eet of trucks, compressors and rigs, allowing the operators to consume what they were wasting at the same site, replacing diesel. By the rst half of 2014, we expect to have a commercial unit in the eld to make methanol from natural gas. ZSRR: Could you discuss why methanol is such an attractive product for stranded gas monetization, and provide some economics on that consideration? R3 Sciences: Methanol is such a versatile chemical in terms of what can be done with it. Methanol is possibly the best vehicle to produce jet fuel and diesel via MTG dehydration reaction. Methanol is a good starting material for valuable materials, such as dimethyl ether (DME), which is popular in China as a diesel substitute or additive, acetic acid, metal formate. There are so many advantages to taking on methanol. Methanol is easily reformed into hydrogen for use in hydrogen applications, such as fuel cells. In fact, the best hydrogen carrying material is methanol itself. Everybody struggles with how to move to the hydrogen economy, but hydrogen is dicult to handle. Methanol becomes the ideal transmission form for hydrogen. Flared gas has no value, in fact, it has a cost: you must buy a are, manage and monitor that. If gas was at a price of US$4/thousand cubic feet (Mcf ), and methanol is currently sold for US$1.80 a gallon, we are making US$18 worth of product per US$4/Mcf of gas. With a total feed cost of US$7 to make US$18 worth of product, the economics makes sense.

November 22, 2013

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Feature Article

Lanzatech prepares low-carbon fuel for take-off

LanzaTech is a New Zealand-based firm, with offices in the U.S., China and India, that is commercializing a process that converts carbon rich gases and residues from industry into fuels and chemicals. By capturing the carbon from the gas, LanzaTech is able to reuse it as a fuel or sequester it into chemical intermediates that can be used in the manufacture of new products such as plastics, nylon and rubber. The companys technology uses microorganisms to ferment gas, such as steel mill off-gas, syngas and steam-reformed methane into fuels. The company recently announced certification of its jet fuel by an independent organization, moving forward its partnership with Virgin Atlantic for the supply of jet fuel to Virgin Atlantics operations from 2014. Approaching Commercial Development LanzaTech has operated a pilot scale plant since 2008. Built at the BlueScope Steel mill in New Zealand with a capacity of 15,000 gallons/year, the pilot plant is linked directly to the mills o-gas exhaust. The pilot plant is fully automated. In November 2012, LanzaTech announced completion of the rst phase of a multi-phase partnership with Baosteel, Chinas largest steel producer: A 100,000 gal/year demonstration facility that converts waste carbon monoxide gas from Baosteels production facility into ethanol via LanzaTechs gas fermentation technology. The successful completion serves as a pre-cursor to a commercial facility targeted for 2014. Also in 2012 LanzaTechs second demonstration facility using steel mill waste gases was constructed near Beijing with Capital Steel: the fourth largest steel producer in China.Later that year, Lanzatech acquired Freedom Pines Biorenery, located in Soperton, Georgia through its acquisition of the former Range Fuels biorenery. LanzaTech plans to utilize the existing gasication technology at the facility alongside its gas fermentation technology to produce fuels and chemicals biomass. LanzaTechs process uses microorganisms to convert gases into alcohols. The process can convert carbon monoxide containing gases produced by industries such as steel manufacturing, oil rening and chemical production, as well as gases generated by the gasication of forestry and agricultural residues, municipal waste, and coal into valuable fuel and chemical products. The process is exible to the hydrogen content in the input gas and tolerant of typical gas contaminants. The carbon monoxide containing gas enters the process at the bottom of the bioreactor, and is dispersed into the liquid medium where it is consumed by LanzaTechs proprietary microbes as the reactor contents move upward in the reactor vessel. The net product is withdrawn and sent to the product recovery section. The product recovery section makes use of an advanced hybrid separation system to recover the valuable products and co-products from the fermentation broth. The water is recovered and returned to the reactor system, minimizing water discharge from the process. The products and co-products are collected for downstream use. In some cases, these products can be used directlyas fuel or chemical products. In many cases it is also possible to convert products from the LanzaTech process into common

LanzaTech Gas Fermentation Technology

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chemicalsor drop-in fuels that are normally derived from petroleum. The LanzaTech process thus provides a route from waste gases and solids to valuable fuel and chemical products, reusing carbon along the way to minimize environmental impact. LanzaTechs process can use hydrogen-free gases for the production of ethanol, as the companys microbes can produce hydrogen for carbon and water, reducing the need for thermochemical water gas shift, improving overall C balance, allowing the use of any CO:H2 ratio, and enabling an ecient, low-energy route to carbon capture and sequestration or utilization operations. Additionally, the company sees production opportunities beyond ethanol, including the production of specialty chemicals, such as isoprene, MEK, isopropanol, diesel, jet fuel, olens and plastics. At the heart of the LanzaTech process is its patented microbe that uses gas feeds as its sole source of carbon and energy for fuel and chemical production. Because the companys microbe is feedstock agnostic and completely tolerant to the extreme levels of contaminants found in steel mill and other industrial o gases, the company feels its technology has multiple opportunities for deployment worldwide. The microbe is naturally occurring and is categorized as a WHO-risk 1 organism (same as bakers yeast). Company Background LanzaTech was founded in early 2005 to develop and commercialize proprietary technologies for the production of low-carbon fuels that do not compromise food or land resources. Throughout 2005 and 2006, the company raised funding through New Zealand-based Angel investors and secured grants. Soon thereafter, the company attracted Series A investment from an investor consortium led by Khosla Ventures; the Series B nancing was led by Qiming Ventures. LanzaTech closed its Series C investment in 2012 led by the Malaysian Life Sciences Capital Fund. New investors included PETRONAS Technology Ventures Sdn Bhd, the venture arm of PETRONAS, the national oil company of Malaysia, and Dialog Group, a Malaysian integrated specialist technical services provider to the oil, gas and petrochemical industry.

News Briefs

Africa/Middle East
1. Qatar sees increasing promise in GTL fuels Qatar International Petroleum Marketing Company (Tasweeq) is actively promoting GTL jet fuel, a 50/50 blend of kerosene and conventional crude oil-derived jet fuel, manufactured at the Pearl GTL facility, BQ Magazine reported. The move towards GTL and other value-added production comes as Qatars energy sector has reached a plateau, with limited expansion expected in the gas segment for some years to come, at least until the moratorium on the development of the North Field is lifted, said a Tasweeq ocial. Qatar is expected to experience an average decline in oil production of 6 percent from 2013-16, according to Standard & Poors. Although oil exploration campaigns are underway, additional production is unlikely. The development of GTL also limits Qatars exposure to gas prices, which are trending downward as they become increasingly decoupled from oil prices and new production techniques have lowered costs. This in turn has boosted the commercial viability of processed gas products, including GTL, the ocial said. Sasol Qatar president Marjo Louw says the future of GTL will be dependent on the

November 22, 2013

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market for gas. While there is signicant demand for gas, the prospect of major gas discoveries in Asia and Africa could have a further impact on prices. For markets that can supply large amounts of natural gas at low cost, GTL represents a viable alternative, Louw said. The US is a key opportunity for GTL for that reason. Sasol has plans for a GTL plant in Louisiana. Shell has plans for its own facility in the state as well, along with other smaller operators that intend to build plants to produce diesel, gasoline and jet fuel. Large-scale GTL projects are under construction in Nigeria and Uzbekistan. Such developments could signicantly alter the market, said Louw. Current worldwide GTL production, in countries such as Qatar, South Africa and Malaysia, produce 200,000 b/d of fuels and lubricants, accounting for just 1 percent of global diesel production.

Americas
1. OCI plans largest methanol plant in the US OCI N.V.announced that Natgasoline LLC, a wholly owned subsidiary, plans to build a newgreeneld world scale methanol plant in Beaumont, Texas. The plant is expected to have a capacity of up to 5,000 metric tons per day (tpd), equivalent to approximately 1.75 million metric tons per annum (mtpa), and is expected to start production in late 2016. It will be the rst methanol facility of this scale in the United States and will be the countrys largest methanol production facility based on nameplate capacity. Natgasoline LLC submitted applications for environmental approvals at both state and federal levels in February 2013. The plant will take up a portion of a 514 acre plot of land recently acquired by OCI. The project has been awarded a grant of US$2.1 million from the Texas Enterprise Fund, as well as incentive commitments from local entities, including the city of Beaumont, Jeerson County, the Beaumont Independent School District, the Port of Beaumont and the Sabine-Neches Navigation District. OCI estimates that the project will create approximately 3,000 construction jobs over the next three years and has committed to create 240 permanent jobs. This is OCI N.Vs third natural gas monetization project in the US following the refurbishment of OCI Beaumonts integrated methanol and ammonia facility in Beaumont, Texasand the construction of a US$1.8 billion nitrogen fertilizer complex in Weaver, Iowa by the Iowa Fertilizer Company, a wholly-owned subsidiary of OCI N.V. OCI NV owns the general partner of, and a 78.3 percent limited partner interest in, OCI Partners LP, which operates an integrated methanol and ammonia production facility in Beaumont, Texas. Construction ofMarcellus GTLsmethanol-to-gasoline facility has been delayed until 2014, Marcellus Drilling News reported. Plans for the facility were rst announced in March, when the company expected construction to begin by the end of the year. That was typical project optimism. We had hoped to get all of the supporting contracts in place. It has taken longer than we envisioned. We are nalizing the contracts and getting the nancing in place, said Paul Hamilton, Marcellus GTL executive vice president. The company expects to begin construction in April to June in 2014. Starting then will coincide with drier weather, and it will be easier to do the ground work, Hamilton said. We expect the project to take about two years of construction. We hope to be up and running in the rst quarter of 2016. The facility is planned to be located on land that straddles the Allegheny and Blair townships in Pennsylvania. The facility will utilize natural gas to produce about 84,000 gallons per day

2. Marcellus GTL construction start delayed until 2014

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of gasoline and propane to be marketed locally for transportation fuel and for heating use. The facility will require about 30 workers during commercial operations. The company continues to talk with natural gas companies about connecting the facility to an existing gas pipelines, as well as trucking companies about transportation of the facilitys products via tanker trucks. 3. Northern Plains Nitrogen reaches agreement with Chinese engineering firm Northern Plains Nitrogen (NPN), which is planning a US$1.7 billion nitrogen fertilizer plant in Grand Forks, North Dakota, has reached an agreement with Chinas Chengda Engineering Corp, Prairie Business reported. The companies will form a relationship as investor and provider of technology for the fertilizer plant. Chengda, an engineering company which is owned by the Chinese government, has experience in fertilizer production and is looking to expand into foreign project opportunities. The agreement is tentative and is not a guarantee of commitment to partnership, but NPN CEO Don Pottinger says that Chengda is taking such a possibility seriously. The NPN fertilizer plans started when the North Dakota Corn Growers Association sought to provide a large source of nitrogen fertilizer in the region. In May, the group announced plans for the facility, which is planned to begin construction in 2015 or 2016 and begin operations as soon as 2017. NPN plans to nance the project with US$1 billion in debt and US$700 million in equity investment. NPN is seeking investment from farmers and farm associations in particular, but looks to Chengda as a potential source of a large portion of the debt nancing. CF Industries, which is developing a US$1.7 billion fertilizerexpansion project near Sergeant Blu, Iowa, is entering the preliminary stages of construction after breaking ground in October, KTIV.COM reported. The project will take three years to complete. The project will produce ammonia and urea from a new production unit and will have a new warehouse capable of storing up to 154,000 tonnes of product. The warehouse will be one of the largest in North America. The urea and ammonia production unit will be tied into the companys Donaldsonville facility, which already produces ammonia fertilizer. The expansion will create the capacity to produce nearly 4,000 tonnes per day of urea granular fertilizer a day. The project will need between 1,500 and 2,000 workers during construction and an additional 100 long-term workers during operations of the expansion. The company expects the expansion facility to come online in 2016. Northern Iron Corp. is developing its mine properties to arbitrage the opportunities for its HBI and DRI products amid projected increases in industrial development in North America, which will increase the demand for steel. The advent of the shale gas revolution in North America is sparking the resurgence of industrial development in a variety of industries and in particular the demand for metallics (HBI/DRI). The past producing Grith mine is well placed to take advantage of these developments. said Basil Botha, President and CEO of Northern Iron. The company plans to attract a large industry partner into the project to provide expertise and capital to advance the project. Voestalpine recently announced the construction of a US$661 million 2 million tonne per year Hot Briquetting Plant (HBI) in Texas to supply their Austrian steel mills, along with Nucors announcement that they are soon to open a US$750 million plant in a Louisiana bayou that will produce 2.5 million tonnes of direct reduced iron per year. DRI and HBI plants have steadily been shuttered over the last 20 years as they became less competitive against imported product. With the advent of shale gas development in

4. CF Industries on track with US$1.7 billion fertilizer expansion project

5. Northern Iron working to arbitrage NA DRI/HBI market

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North America, this has changed the dynamics, whereby industrial manufactures are now energy competitive. The projects are jumbo-sized examples of a steady expansion of cheap natural gas use by a wide range of manufacturers, from chemicals and steel to glass and fertilizers. The comparatively cheap price of North American natural gas compared to European and Asian prices is currently a huge advantage for U.S. rms that depend on it and one of the reasons foreign investment is coming back to North America. Natural gas in North America, sells for approximately 30 percent of what it fetches in China. The real ramp-up in industrys demands for gas has already started in 2013 and goes through 2018, said Bentek Energy senior analyst Darrell Proctor. There are hundreds of new industrial projects that are proposed for that period. As a result of the abundance of shale gas, there is a clear indication that by 2020 the United States will require, for internal use, in the order of 9 to 10 million tonnes of DRI/HBI. DRI and HBI save energy in the production of steel and also provide steel plants with a more consistent raw material than scrap steel, the company said. These facts enable Electric Arc Furnace operators, the predominant steel production process in North America to produce ever-improving quality steels. The company estimates that, following nearly twenty years of mining operations at the past producing Grith mine, that there are approximately one hundred million tonnes of waste rock on site. 6. Louisiana on verge of construction boom on industrial plans Louisiana is on the brink of a construction boom due to a number of multi-billion-dollar industrial projects in the Lake Charles area and elsewhere in the state readying for construction, The Daily Advertiser reported. According to forecasts, the state will need some 86,000 workers in coming years as these projects start construction. Sasol will need 5,000 construction workers to build its ethane cracker and GTL plant in Westlake, near Lake Charles, and another 550 to work in its ethylene unit. The company will invest a total of US$25 billion in developing the projects. Shell recently announced plans for a GTL facility of its own in Louisiana as well. Cheniere Energy is already constructing its LNG export facility in Cameron Parish. Other LNG export plants are planned for the state also.These massive LNG facilities are expected to create 100,000 jobs in the exploration and production sector as well as construction jobs. Chenieres investment is expected to exceed US$6 billion. New projects and expansions announced in the Lakes Charles area total US$46.6 billion, according to economist Loren Scott, with another US$25.1 billion planned in Baton Rouge and US$8.3 billion in St. James Parish. Louisiana will also see a number of petrochemical plants developed in the area, which, like Sasols GTL plant and the LNG facilities, will need natural gas as feedstock. The demand from these projects will help oset the rise in natural gas supply from increased production of Louisiana shales. If the price of natural gas gets too low to drill or frack, it hurts us and it hurts them, said Gregg Gothreaux, president and CEO of the Lafayette Economic Development Authority. By them being a ready, local user of natural gastheres a very symbiotic relationship there. Eastern Illinois University (EIU) researchers are conducting research to improve biomassbased fuel applications, The Daily Eastern News reported. Peter Ping Liu, the director of the universitys Center for Clean Energy Research and Education, said that the university has been awarded three grants to further biomass research, including the investigation of plant materials and animal waste for use in fuels production. The students will evaluate dierent biomass options to gure out what will be the best for the universitys Renewable Energy Center to use, based on resources readily available in the Midwest region.

7. EIU investigating alternative, sustainable biomass sources

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 Currently, the Renewable Energy Center runs on wood chips. Corn stover, switch grass and miscanthus are also being examined as alternatives. These products are all native to the Illinois area. The research is looking to improve on woodchips as a biomass feedstock. Further research will examine biomass options better suited to other regions, such as distilled grain for Alaska. The research will also study potential further uses for the ash by-product of biomass gasication, including the possibility of replacing some or all of the cement in concrete as well as replacing some or all of the shale in brick. The concrete and bricks produced would need to be comparable or stronger than currently available concrete and bricks. Another study will focus on pellet manufacturing using switch grass, miscanthus, big bluestem prairie grass or cord grass as base material. 8. Middlebury biomass plant passes important milestone The biomass gasication plant at the Middlebury College in Vermont has entered its 16thweek of uninterrupted operation, The Middlebury Campus reported. The plant is a core component of the Colleges goal of achieving carbon neutrality by 2016. The school relies on the plant to reduce 40 percent of its greenhouse gas emissions. It is painful for us to use oil. No one wants to be the guy that breaks the streak, said Manager of the Central Heating Plant Kelly Boe. The plant has experienced just four weeks of shutdown since it began operations in 2009. Since 2009, the college has decreased the use of fuel oil from 2.1 million gallons annually to 634,000 gallons last year. In September, the school only utilized 3,000 gallons of fuel oil. This corresponds to a 66 percent drop in carbon emissions from heating and cooling since 2007. Plans are to limit shutdowns to a short period during the spring and the fall for maintenance. The College saves roughly US$840,000 a year in fuel costs due to biomass gasication. Such costs are oset by the annual cost of obtaining wood chips, a cost which totals approximately US$800,000 annually. Cirque Energy has entered into a Joint Development Agreement withNorthrop Grumman Corporationfor the development of a Deployable Gasication Unit. Northrop GrummanandCirque Energy, previously working as a subcontractor, created a conceptual Deployable Gasication Unit (DGU) on behalf ofNorthrop Grumman. The DGU is capable of converting byproducts or wastes generated at military installations, natural disaster locations, or commercial or industrial sites into electricity and recoverable heat. These units utilize low temperature, starved air gasication technology coupled with conventional reciprocating engine technology. The companies plan to continue technology development for the DGU towards commercialization. They plan to produce the rst DGU prototype for testing and demonstration for military, government, and commercial customers. They anticipate the DGU unit prototype to be completed during 2014. Under the agreement, Cirque Energy will lead development, manufacturing, and testing of the initial demonstration DGU, with input from Northrop Grumman. Upon successful demonstration,Northrop Grummanwill manufacture DGUs for exclusive sale byNorthrop Grummanand Cirque Energy. The units are intended for the disposal of wastes, particularly at military bases and foreign deployment sites, simultaneously achieving reduced fossil fuel dependence and lower energy costs. Output from the units can be used in combined heat and power applications. The companies also see opportunities to deploy the DGU in commercial and industrial settings to provide customers with ready access to waste feedstocks with energy independence.Cirque Energy CEO Joseph Durant sees the potential market for the technology exceeding several billion dollars in the U.S. alone.

9. Cirque Energy, Northrop Grumman to develop deployable gasification unit

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10. PyroGenesis secures contract with multinational oil and gas company

Pyrogenesis has been awarded a follow-on contract from a Multinational Oil and Gas Company, which has requested that its name, as well as the details of the process be withheld for competitive reasons. The positive ndings from a recently completed techno-economic study has resulted in PyroGenesis being contracted by the Client to carry out engineering, testing and fabrication of a novel plasma based process that could revolutionize the oil and gas industry. Under this contract PyroGenesis will design, deliver and test a high temperature plasma based process which eventually would be integrated into the Clients existing oil and gas process. The total value of this contract is over US$0.5 million and will be completed in approximately 6 months. Plasma gasication processes allow the attainment of extremely high temperatures without the use of fossil fuels, PyroGenesis said. Once the company proves the process at pilot scale it will work to develop an on-site commercial demonstration at the clients industrial operation. PyroGenesis expects the contract to generate revenues in excess of US$100 million through the development of the commercial application. The U.S. Environmental Protection Agencys (EPA) proposed rule to impose limits on greenhouse gas emissions on newly constructed power plants may have a signicant impact on the coal industry, Energybiz reported. The proposed rule would allow such plants to emit only 1,300-1,400 pounds of CO2 per megawatt hour. Coal-based power plants would need to implement carbon capture and sequestration (CCS) technology to meet these standards. Implementing CCS would increase electricity prices, putting coal-based power generation at a disadvantage. In June 2013, President Barack Obama stated that reducing emissions from coal is an important component of his climate action plan. In response, the coal industry called the presidents plans a war on coal. Despite the administrations plans, however, coal will continue to be a key component of the U.S. energy mix for some time to come. In aReutersinterview, Energy Secretary Ernest Moniz stated that Obama expects fossil fuels, and coal specically, to remain a signicant contributor for some time. This statement is supported by recent Energy Information Administration estimates, which clearly point to coal as a dominant energy resource in the U.S. and across the world even until the middle part of the current century. If the administrations plans are implemented, the coal industry would have to adapt. CCS technology would need to advance in order for many generators, particularly those that produce a majority of their power from coal, to survive. According to EIA estimates, the current state of CCS technology would mean that building a new coal plant with CCS would take 30 percent more capital expenditure. Operating expenditure would be aected too due to the energy cost of capturing carbon. The increased cost may make the construction of new coal power plants economically infeasible, according to the coal industry. A recent analysis by the Journal of Environmental Studies and Sciences states that fossil fuels, including coal, are becoming increasingly economically unviable for power generation, due to regulation. If coal-based power generation has a future, it is clean coal. Investing in improving CCS technology may make clean coal a broader reality. Thus far, no commercial application of coal-based power generation integrating CCS has come online. This may change in 2014, when Mississippi Powers IGCC facility in Kemper County, Mississippi comes online. That facility is designed to capture 65 percent of carbon emissions, utilizing them in enhanced oil recovery operations in the region. Without CCS, coal-based power generation may become obsolete in the U.S., particularly as cleaner sources of power, such as natural gas and renewables, progressively lter into the power generation markets at increasingly competitive prices versus coal.

11. EPA considers GHG emission limits on new coal power plants

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12. Sandia Lab researching biocatalyst technologies for transport fuel production

Researchers at Sandia National Laboratories will use theirexpertisein protein expression, enzyme engineering and high-throughput assays as part of a multi-project, US$34 million eort by the Advanced Research Projects Agency-Energy (ARPA-E) aimed at developing advanced biocatalyst technologies that can convert natural gas to liquid fuel for transportation. The ARPA-E program is Reducing Emissions using Methanotrophic Organisms for Transportation Energy, REMOTE, and involves 15 dierent projects. Sandia is a part of a two-year award led byMOgene Green Chemicals, a wholly owned subsidiary of St. Louis-based MOgene, LC, and will work toward sunlight-assisted conversion of methane to butanol. Using enzyme engineering and other capabilities, Sandia National Laboratories will work to engineer pathways from methanotroph organisms into another microbial host that can generate butanol. Butanol has long been considered one of the best biofuel options for transportation energy.The broad goal is to have another source of energy in the U.S. that doesnt have to be imported and could lead to lower carbon monoxide emissions than conventional fossil fuels. Methanotrophs are microbes that can metabolize methane. Sandias Blake Simmons, manager of the labs biofuels and biomaterial science and technology group, calls this microbe the poster child of organisms that are capable of metabolizing and converting methane. The goal of the project is to engineer pathways from these organisms into another microbial host that can generate butanol. Butanol can be used as a fuel in an internal combustion engine and, along with ethanol, has long been considered one of the best biofuel options for transportation energy. The need for hydrocarbons that are nonpetroleum in origin is still growing, including applications such as aviation and diesel engines, said Simmons. But in its natural state, youre not going to readily burn natural gas in those types of engines, and the same goes for some combustion engines. Natural gas, he explains, requires a special modication to be used eectively as a liquid fuel in vehicles, much like biomass needs to be converted before it can be used as a drop-in fuel. With biomass, we are essentially taking something that exists in nature and converting it into a low-cost, low-carbon, domestically-sourced fuel. With this project, were using natural gas as the input rather than biomass, said Simmons. Natural gas extracted from the ground is not renewable, he pointed out, but it is playing an increasingly important role for theDepartment of Energyand the nations energy supply. Using organisms to convert natural gas into liquid transportation fuels isnt a new objective for the research community, Simmons said. There have been plenty of investigations into this in the past, since there are plenty of organisms in nature that thrive and survive and multiply o of natural gas metabolism. The problem, though, is that they exist in unique, tailored environments and are typically very slow at what they do, he said. ARPAEs projects, he said, are hoping to improve upon what nature has given us and develop new, more ecient pathways to speed up the process and convert gaseous feedstocks at a pace and scale that is commercially viable. Currently, there are no proven biological methods for converting gaseous inputs such as natural gas into butanol. What we and others are doing is looking at the core metabolism of these microbes, Simmons said. Then, we can either engineer it to make it faster in native organisms or we can take the metabolism out of those organisms and put it in something more industrially relevant.

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Asia
1. Lanzatech jet fuel certified ahead of partnership with Virgin Atlantic LanzaTech has had its jet fuel certied by the Roundtable on Sustainable Biomass (RSB), moving its partnership with airlineVirgin Atlantic forward, Environmental Leader reported. Lanzatech earned the RSBs sustainability certication for the joint venture facility that converts waste steel mill gases to biofuel using the companys gas fermentation technology. This is the rst facility to use steel mill o gases for biofuel production in China. The technology uses carbon as a key component of its process, eectively acting as a carbon capture and utilization solution. The process can also utilize methane and syngas as feedstock. Lanzatech and Virgin Atlantic teamed up in 2011 to produce low-carbon aviation fuel with at least half the carbon footprint of conventional aviation fuels, such as kerosene. One of Virgin Atlantics priorities is to achieve a 30 percent carbon reduction per revenue metric tonne kilometer by 2020. The Lanzatech technology uses microbes to convert waste carbon monoxide gases from steel mills into ethanol. The alcohol produced is then converted to jet fuel through a second stage process. Through this process, gases that would otherwise be ared o into the atmosphere are recycled as part of the production process of jet fuel instead. Lanzatech states that such a process could be applied to as much as 65 percent of steel mills worldwide. Virgin Atlantic hopes the process can be tied-in to European facilities especially. If all current steel mills were so tted, they could provide 19 percent of current worldwide jet fuel demand. Virgin Atlantic hopes to have planes powered by the fuel beginning in 2014. Nepals Department of Electricity Development (DoED) has issued a survey license to a biomass plant developer for a feasibility study on a biomass gasication power project, Republica reported. The project will have a designed capacity of 5.1 MW. Gold Rush Company Limited, the developer, wants to use municipal solid waste from Pokhara to process 90 tonnes per day of garbage for the production of electricity. The government is actively supporting such environmentally friendly projects. Electricity produced from the facility will be just a fraction of the cost of electricity produced from the countrys hydropower facilities. The facility will utilize pyrolysis gasication and produce bio-char as a by-product. The facility will produce about 750 tonnes of bio-char annually, which can be used as a soil amendment. The plant will also be capable of producing 200,000 liters of biodiesel annually, which can be used in industrial settings. As the city of Pokhara has only one active landll, the municipal authority is concerned that the landll will be incapable of accepting additional garbage within seven or eight years. The project will cost approximately US$20 million, or $4 million per MW. Though the project is costlier than an average hydropower project, it is important from the environmental perspective, said Puja Chand Thakuri, Gold Rush Companys managing director. We have sent a proposal to the World Bank and Alternative Energy Promotion Center for nancial assistance, said Thakuri. The company will also approach foreign investors for the project after the completion of the feasibility study, which is expected to be completed within two years. The Indian government is planning to revoke as many as a dozen coal licenses, held by such companies as Tata, Jindal, Birla and Monnet Ispat & Energy, for delaying development of the blocks, Business Times reported. The licenses contain a combined 4.5 billion tonnes of reserves and are located in Orissa, Chhattisgarh, Jharkhand, Madhya Pradesh and Maharashtra. The panel has recommended de-allocating three coal blocks of Jindal Steel & Power and two coal blocks of Monnet Ispat for unsatisfactory progress. Two big blocks allocated to Jindal

2. Biomass gasification unit proposed for Kathmandu

3. Indian government to revoke coal licenses on development delays

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Steel & Power and Tata Sons for the countrys pilot coal-to-liquid projects are also proposed to be de-allocated since the companies have not done any work on the blocks, a senior coal ministry ocial said. The coal-to-liquids projects entail an investment of about US$10 billion each. The government made its recommendations via an inter-ministerial panel after reviewing the status of 30 blocks and hearing the companies respective explanations for delayed development. 4. MagneGas announces gasification equipment sale to Astana TechCom MagneGas has received US$276,000 towards the aggregate purchase price of US$499,000 for a gasication equipment sale to Astana TechCom, a company located in the capital of Kazakhstan. Astana has purchased a small Plasma Arc Flow gasication system on wheels, custom built to facilitate demonstrations of the MagneGas Technology to local energy industries, medical facilities and universities. Final payment and delivery is expected in February 2014. The equipment will be used in the industrial gas market and in liquid waste treatment in Kazakhstan. Since transportation of certain liquid wastes can be expensive and problematic, the units provide the capability to verify liquid sterilization or gasication on-site. This would be the rst deployment of MagneGas technology in Central Asia.

Europe
1. Danish firms investigating alternatives to costly fertilizer Danish rms Biomass DTU, Dong Energy and Bregentved Estate plan to demonstrate the use of agricultural waste biomass as a renewable energy source and as a substitute for conventionalderived fertilizers, Biofuels Digest reported. The companies will utilize biomass gasication to produce electricity and heating, exploiting 90-95 percent of the biomass energy in the process. The companies began a research collaboration in 2012 on thermal gasication and bio-ash production. Bregentved Estate is one of Denmarks largest farms. It uses straw for soil improvement and is therefore suited for alternative straw treatment. Dong Energy has acquired a gasication unit developed by Biomass DTU and has installed a demonstration facility in Kalundbord. The plant currently produces large volumes of bio-ash and electricity from straw. Poland is investigating methods of improving coal gasication, Euronews reported. Poland, one of Europes biggest coal pollution emitters, is looking to gasication for the extraction of syngas from coal, particularly through the use of underground coal gasication (UCG) processes. We are in the experimental corridor, which was built especially for coal gasication. Preparations for the gasication process are underway, so you can see that special supports are being built to hold a pipeline which will extract the productions from gasication. Behind us, they are working to drill outlets for the geo-reactor, where the coal will be burnt, said engineer Ryszard Gowarzewski from the site. Such gas can be used to power electric turbines as well as produce special chemicals in the chemicals industry. Poland looks to reduce its dependency on basic coal mining and imported natural gas, particularly as prices in Europe rise amid dwindling stocks of fuels. Renewables are expected to grow signicantly by 2035, but carbon capture and storage (CCS) is not expected to grow much at all during the same period, according to reports by the International Energy Agency (IEA), Power Magazine reported. According to the report, world energy demand is projected to rise by one-third over the period, driven particularly by Asian countries such as India and China, and especially Southeast Asian countries, which

2. Poland experimenting with coal gasification processes

3. IEA: Global GHG emissions to rise 20 percent by 2035

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are expected to experience the most rapid growth over the period. Several eorts to mitigate greenhouse gas emissions are underway, including the U.S. Climate Action Plan, Chinas plans to limit coal-red power generation, Europes debate on its 2030 energy and climate targets, and Japans new energy plan, which may or may not include nuclear power. Nevertheless, carbon emissions are expected to rise over the period by 20 percent. Renewables will play a role, eventually representing a 30 percent share of the global power mix, but coal is expected to remain dominant over the period, for coal is expected to remain the cheaper power generation for most regions, except those without ready access to low-cost natural gas, such as North America. Coal demand is expected to increase 17 percent to 2035, with two-thirds of that increase happening by the end of the current decade. While coal use declines in North America and Europe, India is expected to become the worlds largest importer of coal in the early part of the next decade. The U.S. is expected to become energy independent by 2035, according to the report. The report is pessimistic in its assumptions about the use of CCS in coal-red power generation, expecting only 1 percent of global fossil-fueled power generation capacity to be integrated with CCS by 2035. The projected massive increase in the use of renewables will likely create signicant challenges, the IEA foresees, raising questions about current market design and its ability to ensure adequate investment and long-term reliability of supply, the agency said. 4. Europes enthusiasm for CCS wanes CCSpolicy expertChris Davies believes the European Unions strategy for the development of carbon capture and sequestration (CCS) technology has fallen far short of its goals, The Parliament reported. CCS is seen as essential to meet Europes 2050 CO2 reduction goals, particularly as coal is expected to continue to play a dominant role in power generation in many European countries. Instead of playing the major role it anticipated, the lead is being taken by the U.S., Canada, and China, Davies argues. Although European heads of government planned to have as many as 12 CCS demonstration projects online by 2015, with as much as 1 billion euros proposed for a range of pilot projects sourced by the European Commission, now there appears to be little enthusiasm for such projects. Political support for such projects has apparently waned. At present, just one project, the UKs White Rose Project, appears to be in the running for nancial support. Most of the pilot projects never reached the stage of being approved for funding. The lack of support for CCS appears to stem from a lack of commitment to the technology, which is still considered uneconomical to develop, Davies said. In addition, there appears to be a lack of a business model that supports private investment. Renewable energy developers, in contrast, receive cash subsidies for developing their technologies. It was presumed that a model would become apparent if carbon allowances were priced high enough to force investors to invest in CCS technology to meet CO2 emission limits. As the carbon price scheme collapsed so did the nancial justication of CCS, Davies said. If CCS is to become viable, European countries must assess how to achieve their 2050 CO2 reduction goals, perhaps passing measures to require member states to publish a longterm CO2 reduction strategy to meet the goals. In order to support the drive to implement CCS, member countries must play an active role, providing nancial support mechanisms, facilitating the development of CO2 pipeline networks and storage sites, Davies recommends. Concerns on the long-term storage of CO2 must also be addressed for the technology to be seen as viable long-term. Important to the development of CCS is the development of agship CCS demonstration projects, which will provide knowledge of CCS for policymakers, potentially opening up a willingness to help fund additional projects, Davies said. Davies supports the creation of an EU innovation fund for the sale of carbon allowances. Davies sees nancial support coming from producers and importers, whose CO2 emissions CCS is intended to avoid. Legislation requiring them to purchase certicates, or make equivalent CCS investments, could help fund the further development of CCS technology.

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