Case Study Technology & Innovation – Flue Gas Desulphurisation Technologies in the United States


This second case study looks at the development and deployment of flue gas desulphurisation technologies in the US.

Flue gas desulphurisation (FGD) describes a range of technologies employed to remove SO2 from exhaust flue gases in coal-fired electricity generators. Between the 1950s and the 1990s, the U.S. government employed a number of policy instruments that provided technology-push and demand-pull incentives for the development of FGD technologies in the U.S. The result of these initiatives was to significantly drive the development and deployment of FGD technologies; between 1972 and 2004 the cumulative installed capacity of wet scrubbers had risen from almost zero to more than 200GW around the world – 110GW of that in the U.S.


Research and Development – The US government, via the TVA and the Department of Health, Education, and Welfare (DHEW), began investing in R&D on scrubber technologies in the 1950s. That early R&D focused upon bench and pilot work addressing the cost-effectiveness of different sorbents for wet and dry scrubbing technologies. Federal funding for R&D increased significantly in the 1970s and as a result the TVA, the National Air Pollution Control Administration (NAPCA), the Environmental Protection Agency (EPA) and the DOE all played a role in funding a series of full-scale demonstration projects .  In 1971, the TVA built a 1 MW test unit for wet limestone FGD at the Colbert facility in Alabama. In 1972, the EPA funded the construction by Bechtel of three 10 MW prototype scrubbers as the “Alkali Wet Scrubbing Test Facility” at TVA’s Shawnee Steam Plant, which was to become the starting-point for the FGD technology in use today around the world. In addition, the EPA also began funding SO2 control technology evaluations and engaged in cooperative research with both the utilities and the vendors with the aim of addressing concerns amongst these sectors over the reliability and effectiveness of the technologies. The EPA founded the SO2 Control Symposium, which began in 1973, and is widely credited with a crucial role in bringing together the different stakeholders to coordinate work and share information that enhanced the development and commercialization of SO2 technologies.

Federal government funding of SO2 R&D peaked in 1975 at just under US$90 million as the EPA increased its effort to demonstrate conclusively the technical and economic feasibility of wet limestone scrubbers. In the 1980s the OFE initiated the Clean Coal Technology Demonstration Program, a $2.5 billion government-industry cost-sharing program established to demonstrate advanced “clean” coal technologies, including FGD, at a commercially relevant scale.

These various public-private initiatives, combined with the learning gained from the installation of commercial equipment, have helped to drive down capital costs by a factor of two over the last twenty years, and improve the efficiency and reliability of FGD technology.

Regulatory Performance Standards – In parallel with the public support programs described above, the U.S. government introduced a number of demand pull initiatives. The 1970 Clean Air Act (CAA) required the newly formed EPA to establish national ambient air-quality standards for SO2 from all sources without consideration of economic or technical feasibility. Each state was required to develop a state implementation plan (SIP) for controlling existing stationary sources. Almost all of the SIPs submitted in 1972 called for reduction of SO2 emissions requiring utilities to use low sulfur fuels, pre-combustion treatment, or FGD systems. Further government regulation in the form of the 1971 and 1979 New Source Performance Standards (NSPS), and 1977 CAA Amendments led to the introduction of increasingly tighter performance standards for SO2 for both new and existing power stations – all based upon “best available performance” standards. The CAA and NSPS’s strong enforcement powers, national standards-based market signals, and technological flexibility, as well as legal backing from the Supreme court, were all critical to creating an FGD market in the U.S.

Emissions Trading –  In 1990 a further round of CAA Amendments established a cap and trade emission allowance trading scheme. The emission limits are not particularly stringent once they are aggregated across a liable party’s installations, and so could be met through the use of low sulfur fuels and pre-combustion cleaning, with limited FGD systems. This effectively killed-off the expectation of a large market for dry FGD, and resulted in a smaller-than-expected market for wet FGD. Consequently, the evidence of innovation in SO2 control technology does not support the superiority of the 1990 CAA and the SO2 trading scheme as an inducement to technological innovation. Repeated demand-pull instruments, in the form of national performance-based standards, along with technology-push efforts, via public R&D funding, had already clearly facilitated the rapid maturation of FGD technology.


  • The US government used a combination of technology push and demand pull measures to encourage the development and deployment of FGD technologies over more than four decades.
  • Public support for R&D was crucial to addressing issues surrounding the efficiency, cost and reliability of FGD technologies and in demonstrating FGD technologies at a commercial scale.
  • Public R&D was directed at solving specific operational problems with the technology, such as fouling, etc, etc. and this, combined with the support for demonstration scale plant was crucial to reducing capital and operating costs of the new technology and building confidence amongst utilities and vendors.
  • The operational experience obtained by utilities also played a vital role in driving down the operating cost of FGD technologies and the SO2 symposium put in place by the EPA was an important conduit for the sharing of knowledge and information amongst stakeholdersHowever, technology-push, as measured by R&D expenditures, was not as important as demand-pull as an inducement of innovation in FGD technology. Without the demand stimulated by government regulation FGD development and deployment would have remained low.The uptake of FGD technology depended critically upon the introduction of the Clean Air Act Amendments, which imposed (at the time) stringent emissions standards on existing and new power stations.
  • The 1990 CAA and the creation of the SO2 emissions trading scheme did not accelerate the development or deployment of FGD technologies – this had already occurred prior to the introduction of the trading scheme.
  • Indeed, the SO2 trading scheme undermined demand for FGD technologies due in part to the design of the scheme (in particular the way in which the emission caps could be aggregated across a utility’s plant) and the lower cost of alternative abatement options (in particular switching to low-sulphur coals).

[1] Taylor, M. R., Rubin, E. S. and Hounshell, D. A. (2005) ‘Regulation as the mother of innovation: The case of SO2 control’, Law & Policy, 27(2): 348-378.


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