By Valerie Volcovici
WASHINGTON, Oct 10 (Reuters) - The number of projects that capture carbon dioxide emissions from power plants and industrial facilities - seen as a crucial tool for coal-reliant countries shifting toward a lower-emitting economy - is losing momentum, dropping from 75 to 65 worldwide since 2012, according to a new study released Thursday.
The Global CCS Institute, an Australian-funded research group supporting the deployment of carbon capture and storage technology worldwide, said in its annual survey that despite four new large-scale projects coming online this year, the rate of new projects entering the pipeline has slowed.
The institute's CEO Brad Page said while the number of operational CCS plants increased 50 percent since 2012, no new projects have been proposed outside of China - a worrying trend that will keep the technology from playing a role in curbing global emissions growth.
"Ongoing uncertainty about the timing, nature, extent and durability of emissions reduction policies, as well as a lack of sufficient incentives and funding support for more CCS projects, are limiting investment in the technology," he said.
Since 2012, the number of large-scale CCS projects identified by the institute fell to 65 from 75 but the number of operational projects rose to 12 from eight.
With 20 projects in various stages of development, the United States tops the list of countries in terms of CCS development, followed by China, the world's largest emitter of greenhouse gas emissions, which now has 12 projects.
But China is the only country in this year's report to have projects in the "identify" phase of development in its pipeline, indicating that replenishment of the project pipeline has stalled elsewhere in the world.
"China is well positioned to influence the future success of CCS," the report said, noting that the Chinese government included CCS development in its latest five-year plan.
CCS may also get a policy boost in the United States in the coming years. Last month, the Environmental Protection Agency (EPA) proposed a new set of carbon emission performance standards for future fossil fuel plants.
For a new coal-fired power plant to be built in the country, it would need to install CCS technology to capture at least 60 percent of its emissions to achieve an emissions rate of 1,110 lbs of carbon dioxide per megawatt hour.
EPA Administrator Gina McCarthy countered complaints by the electric utility industry that CCS technology is unproven and not ready for full-scale use when introducing the new rules on Sept. 20.
Of the 12 CCS projects that are currently operational worldwide, seven of those are located in North America, where projects have focused on using carbon emissions from facilities as part of a process of recovering oil from underground.
Two new projects that are slated to start operating in 2014 in Kemper County, Mississippi and Saskatchewan, Canada will become the first coal-fired power plants with CCS technology installed.
McCarthy had pointed to the Kemper project as an example of a viable project to demonstrate that it is not too early for the United States to require CCS for new power plants.
For CCS to be able to grow at the levels needed to achieve emissions cuts that scientists said are needed to prevent catastrophic climate change, the number of new proposals for projects must increase sharply, the report said.
It said 70 per cent of the cumulative mass of captured CO2 will need to occur in non-OECD countries.
This year, three new projects were identified in Brazil and Saudi Arabia - their first CCS projects - and one in China. Meanwhile five projects were canceled, seven were put on hold and one was downscaled, the report said.
The report said that since 2009, financial support for CCS fell by more than $7 billion from earlier commitments.
While projects continue to get a financial boost from revenue generated by the projects that recover oil with captured carbon dioxide, more support is needed.
"An urgent policy response is required to ensure the successful global large-scale demonstration of CCS in the next five to 10 years," the report said. (Reporting By Valerie Volcovici; Editing by Chris Reese)