Clean Air Task Force’s (CATF) Europe Carbon Capture Project and Activity Map shows more than 40 carbon capture projects have been announced across 13 different European countries. These announcements signal unprecedented industry interest in developing and deploying carbon capture and storage facilities for a climate-neutral Europe. This should be a wake-up call for policymakers as the projects’ realisation will hinge on policy support. Progress toward climate neutrality includes commercialising carbon capture and storage technologies, and political will, policy design, and public investment are urgently necessary.
According to the International Energy Agency, it will likely be “impossible” to decarbonise without carbon capture and storage. The Intergovernmental Panel on Climate Change (IPCC) has highlighted similar conclusions. The IEA’s latest net-zero compliant scenario shows 8.6 GT of CO2 capture in 2050, almost 1.5 times as much as the Paris Agreement compliant Sustainable Development Scenario that achieves net-zero in 2070, indicating that the importance of carbon capture and storage increases with higher climate ambition.
Building a decarbonisation industry for climate neutrality: Key trends
The open-access map and spreadsheet show new carbon capture and storage industry trends that constitute significant progress towards the development of the industry. This includes projects planned in a variety of industrial carbon capture applications. Several projects also focus on separate parts of the carbon capture, transport, and storage value chain and new business models. Moreover, there is carbon capture and storage activity in 13 different European countries. Policymakers must now build on this industry interest and help make these projects a reality through implementing supportive policy.
Interest in carbon capture and storage now spans multiple countries, including Italy, Greece, Belgium, Iceland, Sweden, Germany, Poland, and Denmark, following first movers Norway, the Netherlands, and the UK. The applications focus on industrial decarbonization, including cement production, where carbon capture and storage technologies are one of the few cost-effective decarbonization options for process emissions, steel, and waste-to-energy production. In addition, at least eight projects aim to capture and store CO2 from existing and planned hydrogen production facilities, inspired by Europe’s strong push to commercialise hydrogen as a clean energy vector for a carbon-constrained world.
Most of Europe’s carbon capture facilities are connected to manufacturing and emissions clusters seeking to become state-of-the-art decarbonization and CO2 storage hubs such as the Northern Lights project, the Porthos project, the Teesside and Humber clusters in the UK, and the C4 project in Denmark. These also function as essential anchor projects for technology diffusion. For example, at least three projects and one industrial cluster project cite the Northern Lights Project as a potential storage location. Similarly, at least four announcements are connected to the Port of Rotterdam Porthos Project. Both Northern Lights and Porthos have been granted policy and funding support. The Norwegian government provided €1.7 billion in funding for the Northern Lights Project to cover both the upfront cost for the CO2 Network and the retrofitting of the Norcem Cement Facility, along with ten years of operating expenses. The Dutch government agreed to provide a 15-year contract for difference with the SDE++ to the Porthos Project, bridging the gap between the EU ETS and actual project cost, worth some €2 billion. Technology-specific policy is also being discussed in further countries such as Denmark, Sweden, the UK, and Germany.
The map shows further CO2 storage and infrastructure projects that have been proposed, including the Greensands project off the coast of Denmark, the Ravenna CO2 Storage Hub in Italy, and the North Sea Port CO2 Transports project connecting the Ports of Rotterdam, Antwerp, and the North Sea Port. The current Projects of Common Interest (PCI) candidate list includes CO2 pipeline transport and storage projects in seven countries and multiple projects include CO2 shipping. Investment in CO2 transport and storage is crucial to alleviating infrastructure roadblocks to CO2 capture deployment and solve a chicken-and-egg problem: We need the infrastructure for emitters to capture their CO2, and we need emitters capturing their CO2 to have an investment rationale for CO2 transport and storage infrastructure, as my colleague Olivia Azadegan explains. Our map also incorporates data from CO2Stop to show Europe’s CO2 storage capacities in saline aquifers and depleted oil and gas reservoirs. Europe has sufficient storage capacity to store at least 100 years of current emissions.
At the same time, Europe is also witnessing the development of new industry partnerships and business models. The first-movers Porthos and Northern Lights have been able to attract significant attention from industrial facilities. Northern Lights and the Polaris project are both planning to offer CO2 storage as a service. With CO2 transport and storage solutions evolving, many more facilities are motivated to capture their CO2. The decoupling of the different parts of the value chain enables each entity to concentrate on its expertise, reducing cross-chain risk. It also implies market creation supplying CO2 storage in response to anticipated demand. Heidelberg Cement recently announced the intention to build the first carbon-neutral cement plant, a significant development on the CO2 capture side at facilities.
The three challenges stopping these projects from becoming reality
While these are highly positive developments in the private sector, more needs to be done to realize these planned projects and deliver European CO2 transport and storage infrastructure. Carbon capture and storage projects are large infrastructure projects involving not widely deployed technologies, nascent policy frameworks, large capital investments, and perceived risk. Companies pressed for CCS deployment, many of them in trade-exposed industries, may struggle with these capital investments, risks, and the higher operating costs. Policymakers should also consider that carbon pricing and carbon border adjustments are not a substitute for innovation policy.
There are plenty of blueprints on how we have commercialized clean energy technologies. For example, take Denmark’s leadership on offshore wind and Germany’s feed-in-tariff reducing the cost of solar. These blueprints included deployment incentives that reduced cost, enabled learning-by-doing, and supportive infrastructure. There are three steps policymakers can take.
- First, a carbon capture and storage strategy is needed on the European level that signals political will and commitment. The strategy needs to enable the near-term, efficient deployment, learning-by-doing, and cost reductions. Its mechanisms need to support the deployment of CO2 capture at industrial facilities while fostering European CO2 transport and storage development. A European strategy also needs to coordinate with member-state policy.
- Second, across Europe, a coordinated build-out of CO2 transport and storage is crucial, as CO2 storage is inequitably distributed. We will also need to solve the chicken-and-egg problem outlined above. A near-term step would be to include all CO₂ transport options and the geologic storage of CO₂ in the Trans-European Energy Networks Regulation, which is critical for transboundary CO₂ networks and establishing cross-border CO₂ infrastructure in Europe, as outlined in CATF’s and our partner NGO Bellona’s #TenETuesday brief. TEN-E inclusion would make CO2 transport and storage projects eligible for Connecting Europe Facilities funding, which has provided support for front-end-engineering design studies and feasibility evaluations in the past, lowering the barrier to entry for these companies. It would also signal important political recognition, thereby reducing perceived risk. Further policy options constitute government-backed loans and grants for developing and supersizing CO2 transport and storage infrastructure.
- Third, at the same time as we are investing in CO2 transport and storage infrastructure, incentives are needed for more emitters to capture their CO2, thereby creating demand for CO2 transport and storage infrastructure. For first-of-a-kind project applications, grants will be required to cover at least some of the capital investment of the demonstration projects. The EU Innovation Fund’s first round of large-scale project results is expected soon, with a few carbon capture projects anticipated to win support. The Fund will provide 60% of capital investments. However, oversubscribed 20 times, the Fund is too small for the challenge at hand. For beyond first-of-a-kind, mechanisms that bridge the gap between actual operating costs of carbon capture, removal, and storage and the current price of the European Emission Trading System offer flexibility and incentives to invest in CO2 capture in the near term. An example of this kind of policy would be carbon contracts for difference (CCfD), which have successfully supported the commercialization of renewable energy technologies in the form of a feed-in tariff, like the Dutch SDE++.
This unprecedented industry interest and activity in carbon capture and storage should be a wake-up call for policymakers. Act now to support the realization of these projects with targeted policy strategies and funding, and the technologies are likely to see a breakthrough for industrial decarbonization and carbon removal. Failure to act, however, might jeopardize our ability to reach climate goals altogether.
A Collaborative Effort
Clean Air Task Force created this map based on our open-access spreadsheet to track and visualize the unprecedented commercial interest in carbon capture and storage technologies in Europe. We also wanted to highlight storage availability and resources, along with the variety of carbon capture applications under development. CATF envisions this map as a living document with regular updates. If you would like to be included or see information that needs updating, please contact Marc Jaruzel at [email protected].