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Singapore, 7 April 2011 2


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Financing CCS at the Commercial Scale requires to solve the

following issues Long term liability.

Risks and Benefits

Public agreement

Finding Credit (Banks, Insurance Companies, Lawyers,)

Financial issues

Singapore, 7 April 2011


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This meeting is an opportunity to discuss thespecific case of Asian countries

1. CCS technology has been analyzed in depth by CSLF

technical group

2. Australian Global CCS Institute has done important work tocoordinate CCS efforts around the world

3. Strong interest in China and Japan

4. ADB has analyzed key policy issues and barriers

5. European Investment Bank will contribute to the financingofEU projects

6. Worldbank is developing an action plan

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Financing CCS is a key issue

1) Today, CO2 price is too low.

2) CCS costs are considerable. Subsidies are not sufficient.

3) Financing Commercial-scale projects with CCS focuses key risks.

4) High risks (technical, market, policy): All risks must be

addressed. Public-private negotiation on risk coverage is

paramount.

5) Rewards not clear. How to recover capital andmake profit?

6) Long-term liability is a major issue; Development is opportunity.

7) Market uncertainties, emissions regulations and subsurface

rules must be addressed as well, to mobilize private debt and

equity.



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8From Sandra Locke, Alberta, CanadaSingapore, 7 April 2011


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RISKS

Technical, market, regulatory, risk costs and uncertainties

need to be addressed:

capital subsidies and loan guarantees for the additional equipment

costs;

operating subsidies (as feed-in tariffs or tax benefits or long-term off-

take agreements) for capture and storage;

early co-funding of engineering;

insurance;

performance standards for old and new units;

clear regulatory guidance for land use, injection, storage,

groundwater protection, and stewardship and liability.

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CSLF Financing Task Force:

2010Roundtables on Finance achieved a fruitful dialog betweenpublic and private sectors

The dialog must be taken to a deeper level to resolve issues forfinancing projects with CCS at commercial scale an order of

magnitude in funding over demonstrations or pilot efforts.

IEA believes that energy financing challenge to 2030 is in $Trillions not a government budget call, but debt financingneeded.

Exploration of elements in several Funding Models is needed:

Differences between power sector, other energy-intensive sectors

Differences of low-growth OECD vs. high growth Developing Nations

Differences among market factors and regional features, industrialcapacity

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CSLF Member Countries represent58% of world population

70% of world energy production

75% of world energy consumption

76% of world CO2 emissions76% of world GDP

Sources: IMF (GDP 2005 data) and EIA (2004 data)



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The CSLF advances technological capacity through

collaborative efforts with all the stakeholders to address

key technical, economic, regulatory and environmentalobstacles to CCS development and deployment.

This implies to find a clear legal and regulatory framework

for CCS, accelerate the development of the demonstration

phase and understand how to reach the commercial scale.

The CSLF has strong links with IEA and GCSSI

Singapore, 7 April 2011

CSLF Goals


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Upcoming CSLF Meetings

CSLF Technical Group MeetingEdmonton, Alberta, Canada

May 18-20, 2011

2011 CSLF Ministerial

MeetingBeijing, China

September 20-23, 2011

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Thanks to ADB

for organizing this meeting

Thank you for participating in this

importantR

oundtable.

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frois introduction 2

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