Report: Carbon capture may pay for itself by 2030

BRUSSELS, Belgium — An expensive technology that promises to slash carbon emissions from coal-burning power plants could pay for itself by 2030, management consultants McKinsey & Co said in a report published Monday.

Energy company Vattenfall called for government subsidies to help kick-start carbon capture and storage, saying much-needed investment in low-carbon power will not happen without hefty European Union support.

Swedish-based Vattenfall relies heavily on polluting coal and lignite to generate power in one of its major markets, Germany, but wants to cut emissions, opening its first trial carbon capture plant this month.

It contributed data to the report, which McKinsey says it paid for and prepared on its own initiative to fuel a European debate on curbing climate change.

“There’s no board that will allow billions of euros of losses,” Vattenfall CEO Lars Josefsson said at the launch of the report. “It’s totally uneconomical and there would be absolutely no return.”

EU lawmakers are debating a call for Europe to build up to 12 carbon-capture and storage projects by 2015. Chris Davies, a member of the European Parliament, told reporters that he favored funding subsidies for these projects with 10 billion euros ($14 billion) that could be taken from some of the money governments raise by selling carbon permits to major polluters.

The European Commission has pinned some of Europe’s ambitious hopes of fighting climate change on capturing greenhouse gas as it is burned in coal- or oil-fired power stations and pumping it into empty gas and oil wells under the North Sea.

Just 30 coal plants contribute a tenth of the EU’s yearly carbon dioxide emissions.

Carbon capture will be key to its goal by reducing emissions from electricity generation and other major polluting industries such as steel, cement and oil refining, according to the McKinsey report.

The report said the technology could help Europe become more self-sufficient because it could rely on burning its own coal reserves instead of importing natural gas from Russia and elsewhere.

It calculates that the extra cost of carbon capture would come down to 30 euros ($44) to 45 euros ($66) per metric ton of CO2 by 2030.

For power companies, this would be cost-effective because it would be the same price level for pollution permits sold on the EU’s carbon trading program, the report said — canceling out the 50 percent extra cost of building ’clean coal’ plants.

Carbon capture still has to win over environmentalists such as Greenpeace who claim that it as a largely unproven and potentially dangerous technology that serves as an excuse to avoid the effort of shifting to more expensive renewable power.

Critics also warn that storage sites may not be safe and the gas could leak out, mixing with sea water to form a light acid that could harm marine life.