Looking at CCS from a system perspective
Last week's postponement of the Heidelberg Materials Edmonton CCS investment decision got me thinking.
Not so much about the decision itself, but about what the CCS ecosystem is trying to tell us. Viewed through a systems lens, the postponement of one project may be less important than the signal it sends about the readiness of the wider system.
One thing my journey into systems coaching has changed is how I look at challenges like these. I try to listen to all the voices, especially the system's voice.
Where are we today? The industry needed to prove that CCS was technically feasible. Policy makers stepped in with grants, incentives and tax credits.
Geologists assessed storage potential. Infrastructure developers worked on transport and storage solutions. May be imperfect but everyone has been working hard on their piece of the puzzle.
Yet we all know that a CCS project depends on an ecosystem of:
• Customers willing to pay for lower-carbon products
• Procurement systems that value carbon performance
• Investors prepared to commit long-term capital
• Banks willing to take technology, market and policy risk
• Transport and storage infrastructure
• Stable and predictable regulation
• Value chains able to share costs, risks and benefits
If one of these elements is missing, a project may be technically viable yet remain economically unbankable. And yes, today many projects struggle to reach Final Investment Decision.
We have increasingly been asking ourselves:
• How do we create stronger demand signals?
• How do we distribute risk across the value chain?
• How do we use public finance to crowd in private capital?
• How do we ensure markets recognise the value of deep decarbonisation?
These are all important questions. And yet we seem to be stuck.
Which makes me wonder what if this is not a failure? What if it is system feedback?
Because the real test is not whether one project reaches FID. The real test is whether we are building an ecosystem in which many projects can.
What do you think is the biggest missing piece in today's CCS ecosystem?
Is the CCS ecosystem giving us a warning, or an invitation to redesign how the system works?