Carbon capture and storage (CCS) projects have been accepted for the Clean Development Mechanism (CDM) in COP 17 Durban, 2011 (FCCC/KP/CMP/2011/10/Add.2 Decision 10/CMP.7). Yet, there are many reasons to believe that this political statement is not going to be followed soon by any CCS CDM projects.

The rules for CDM are still very burdensome. The liability for leakage is transferred to the host country. It is going to be LOT of paperwork and spit to convince a developing country administration to take liability for these risks. A 5% "project reserve" to account for leakage risks means that a fraction of certificate of emission reductions (CER) has to be set aside for 20 years. This looks more like a tax to me. Who believes in the value of a CER in 20 years ?

For that matters, who believes in the value of a CER today in 2012 ? Market prices are around €4 per ton of CO2. That's way below production costs for CCS, even for an already pure and clean CO2 streamflows. And one can imagine where the already oversupplied market would go if a CCS project started to offer an additional million of CER per year.

Anyway, the European Commission --and therefore Australia, which is linking with the European Trading System-- is only going to accept CER from less developped countries. Brazil, China or other middle income economies, where CCS-scale projects are more accessible, are excluded.

Finally, the Kyoto Protocol ends this year, its continuation is not negociated yet, and key countries such as US and Japan left. There are doubt about the future of the CDM. Isn't it practically done for already?

In conclusion, the agreement on CCS in CDM provides a useful starting points for countries which have not yet written the laws regulating CCS. Otherwise, it looks successfully delayed to insignificance. The real question is how to fit CCS in new mechanisms such as NAMAs, the Green Climate Fund, and other bi/multilateral agreements.

See also: Carbon Capture Journal (2012-03) CCS included under the CDM at COP17 .