At a meeting discussing the World Bank’s stronger focus on climate, Russia has also urged the lender to extend its support for gas projects.
Saudi Arabia and Russia have called on the World Bank to ramp up its financial support for carbon capture and storage.
Speaking at a meeting of the World Bank’s steering committee, Saudi Finance Minister Mohammed Al-Jadaan urged the World Bank to “take on a prominent role in promoting CCUS [carbon capture utilisation and storage]”.
At the same meeting in Washington DC, Russia’s deputy prime minister Alexey Overchuk said CCUS was “of utmost importance to the green agenda”.
The technology is meant to suck carbon out of the atmosphere, usually from a particularly polluting source like a fossil fuel power station’s smokestack, and either use it or put it back in the ground. But it remains very expensive and largely unproven at scale.
Brownen Tucker from the campaigning group Oil Change International said more World Bank support for carbon capture and storage would be “beyond ridiculous”.
“The World Bank prioritising carbon capture and storage would just be a way to greenwash its long-time role as a piggy bank for the fossil fuel industry,” she told Climate Home.
Saudi’s CCUS pitch
At this week’s spring meeting of the World Bank, Al-Jadaan said the bank’s support for CCUS has been “insignificant” so far.
He added that the technology has “great potential to serve the climate mitigation agenda while contributing to affordable universal energy access”.
At the World Bank Group Development Committee meeting in Washington DC, I stressed the importance of continuing the Group’s commitment to ending extreme poverty and boosting shared prosperity and the Sustainable Development Goals of the United Nations.#WorldBank #SpringMeetings
— محمد عبدالله عبدالعزيز الجدعان | Mohammed Aljadaan (@MAAljadaan) April 12, 2023
Saudi Arabia is a major proponent of CCUS and has a history of promoting it in international summits, including talks over the IPCC scientific reports and UN climate talks.
‘Costly distraction’
Carbon capture and storage remains expensive and unproven at large scale.
According to the IPCC’s scientists, stopping a tonne of carbon dioxide with CCUS costs between $50 and $200. Replacing fossil fuels with renewables usually saves money.
There are currently only 35 commercial facilities applying CCUS with a total annual capture capacity of 45 Mt CO2, according to the International Energy Agency (IEA). Most are in North America and in the gas processing industry.
Many climate campaigners have called it a “distraction” that gives fossil fuel companies a licence to keep extracting more climate-harming coal, oil and gas.
But the IEA’s head Fatih Birol disagrees, calling it “critical for ensuring our transitions to clean energy are secure and sustainable”.
‘Absolutely essential’
In its current climate change action plan, the World Bank says CCUS “may be an important lever for decarbonization”.
In 2009 the World Bank set up a dedicated trust fund looking to support developing countries exploring CCUS potential.
Supported by the UK and Norwegian governments, the fund has provided grants worth a few million dollars.
It has supported technical assistance for the development of technology in Mexico, South Africa, Botswana, and, most recently, Nigeria.
Speaking at a seminar last year, World Bank specialist Natalia Kulichenko said the trust fund would be closed in December 2023.
But she added the support was “absolutely essential to continue” in other forms, as the World Bank had been receiving more interest on CCUS from developing countries.
Kulichenko talked about the possibility of providing loans to governments and guarantees to the private sector as part of existing programs.
Russian backing
Alongside CCUS, Russia’s Overchuk listed gas, nuclear energy and measures to reduce the burning of gas as a by-product of pumping it up, known as flaring, as important green projects.
Russia is the second world’s largest gas producer, accounting for 18% of the world’s gas output in 2021.
Following Russia’s invasion of Ukraine, countries, especially in the European Union, have dramatically cut imports of Russian gas.
Russia is also the eighth biggest shareholder of the World Bank, where voting rights are linked to financial contributions.
The World Bank has provided over $1.5 billion in support for gas projects since 2020, according to an analysis from the campaigning group Oil Change International.
Gas commitments
In 2017, the bank said it would end its financial support for oil and gas extraction within the following two years.
But at Cop26 in Glasgow, it did not join five fellow development banks and 20 countries in signing up to a commitment to halt any new financing for oil and gas projects internationally by the end of 2022.
Russian Deputy prime minister Overchuk also urged the international community, including the World Bank, to find a common solution to ensure energy access and tackle poverty in Africa.
“Developing natural gas projects in African countries, abundant with natural gas, is a part of this solution,” he said. Several African leaders have said the same, criticising the West for stopping gas finance.
Overchuk opposed “additional reiteration and redistribution of resources” towards tackling climate change. Those efforts, he believes, are already well funded by the World Bank.
The World Bank has committed to aligning all its operations with the Paris Agreement by July 2023.
However, the draft methodology to be used for this process indicates that some support for Paris-unaligned oil and gas projects will continue, according to the National Resources Defence Council.
The lender claims to be the world’s largest provider of climate finance to developing countries. It says in 2022 it delivered $31.7 billion for climate-related investments, taking up 36% of its overall lending.
