World Bank announces support for CCUS in Nigeria despite criticisms it reinforces fossil fuel dependence

6 April 2022

Fossil fuel infrastructure in Edo State, Nigeria. Credit: Ikechi Ugwoeje/Shutterstock.

The World Bank announced on 10 February that it will work to develop a domestic market for carbon capture, utilisation and storage (CCUS) in Nigeria in its latest embrace of the controversial technology, which has been criticised as an ineffective ‘techno-fix’ to the climate crisis by civil society.

A February press release by the International Finance Corporation (IFC), the World Bank’s private investment arm, stated, “IFC will work with the [Nigerian] government to identify the most promising sectors and private companies that can pilot new technologies for capturing, using, and storing carbon.…In parallel, the World Bank will collaborate with the Nigerian Government to outline policies and regulations that can accelerate the technologies’ uptake while helping the local CCUS industry meet international standards.”

The release added that, “The project is funded by the World Bank’s CCS [Carbon Capture and Storage] Trust Fund under the Energy Sector Management Assistance Program (ESMAP),” which is supported by the UK and Norway.

No amount of investment in CCS can accelerate the needed transition to a fossil-free futureNikki Reisch, Center for International Environmental Law

According to the US-based Center for International Environmental Law (CIEL), CCUS technologies, “refer to processes that collect or ‘capture’ carbon dioxide generated by high-emitting activities – such as coal- and gas-fired power production or plastics manufacturing – and then transport those captured emissions to sites where they are either used for industrial processes or stored underground.”

CIEL noted in a July 2021 briefing that, “The unproven scalability of CCS technologies and their prohibitive costs mean they cannot play any significant role in the rapid reduction of global emissions necessary to limit warming to 1.5°C.…The 28 CCS facilities currently operating globally have a capacity to capture only 0.1 percent of fossil fuel emissions.” The briefing also points out that a significant proportion of CCUS operations to date are focused on ‘utilising’ fossil fuel waste products by injecting them into underground oil reservoirs, in an effort to increase oil production. The briefing laments that, “waste products from a fossil fuel-burning activity are used to generate more fossil fuels, propping up the unsustainable fossil fuel energy system.”

World Bank and its MDB peers keep the faith in false CCUS solutions

The World Bank announcement comes as CCUS continues to be widely promoted by the fossil fuel industry as a way to bring its activities in line with global climate goals, with multilateral development banks (MDBs) and wealthy governments – including the UK – supporting these efforts.

Despite claims that CCUS largely reinforces the fossil fuel energy status quo, the updated joint MDBs methodology for tracking finance for climate change mitigation, released in October 2021, continues to classify CCUS as climate finance, noting, “In addition to post-combustion capture, financing provided specifically to enable pre-combustion capture or separation of oxygen from air for oxyfuel is eligible [to be classified as MDBs climate mitigation finance].”

This raises the possibility that CCUS could form a pillar of the MDBs’ efforts to align their activities with the Paris Agreement going forward, despite the lack of credible evidence that CCUS represents a durable solution to averting catastrophic climate change. The World Bank has pledged to align most of its financing and other activities with the Paris Agreement by 1 July 2023 (see Observer Summer 2021), while the IFC’s press release for the Nigeria CCUS project claims the initiative, “could accelerate the energy transition and help Nigeria reach its emissions targets.”

Meanwhile, the UK – which, as the host of the UN Framework Convention on Climate Change’s 26th Conference of Parties (COP26) in Glasgow in November 2021 (see Observer Winter 2021), has been keen to project an image as a global leader on climate issues – is the largest financier of the multilateral CCUS agenda. The UK funds efforts at both the World Bank and Asian Development Bank, via the UK Department for Business, Energy and Industrial Strategy’s (BEIS) £70 million international CCUS programme, and counts this programme as part of its international climate finance commitments.

However, a 2021 review of the UK’s CCUS programme, which has focused on Indonesia, South Africa, China and Mexico since 2012, found it, “does not represent good value-for-money,” due to ongoing setbacks with CCUS pilot projects.

As the BEIS review sets out, the programme’s struggles are indicative of a broader global trend, with CCUS failing to deliver on the high hopes its advocates have placed on it. The review notes, “Global progress on CCUS is well off-track to reach the expectations set out in the IEA’s [International Energy Agency] Sustainable Development Scenario, with the IEA describing the story of CCUS as ‘one of unmet expectations’.”

Civil society advocates argue that this demonstrates the need to rapidly shift beyond CCUS to fossil fuel alternatives. “No amount of investment in CCS can accelerate the needed transition to a fossil-free future,” said Nikki Reisch of CIEL. “CCS locks in place polluting industries and compounds their harms to communities, prolonging the use of fossil fuels precisely when we need to be replacing them with renewables.”