In its latest report, the Intergovernmental Panel on Climate Change made abundantly clear that carbon capture and storage – from capturing CO2 in industrial facilities to achieving negative emissions through permanent carbon removal technologies – is a crucial option for global decarbonisation.
In the near term, carbon capture and storage technologies can help us transform assets that have already been built and thus contain locked in emissions, future-proofing Europe’s manufacturing and associated jobs for a carbon constrained world. Cement, iron and steel making, chemical manufacture and waste management add up to about one-fifth of total emissions and will likely require a portfolio of emissions reductions options that includes capturing and permanently storing their process emissions. These sectors are foundational for our economy as they handle the building blocks for so many other sectors.
Most notably, creating the clean energy system of 2050 inevitably involves a boom in new infrastructure; infrastructure that will be constructed using materials these industries create. For example, each new megawatt of onshore wind power requires around 120 tons of iron and steel and 1700 tons of concrete, while a megawatt of offshore wind can use over 500 tons of iron and steel. Without cleaning up the building blocks of the economy, all this new infrastructure will come embedded with needless additional emissions, pushing European climate goals further away.
Carbon capture and storage technologies are proven and well established, but more must be done to design the financial and policy incentives for actually constructing them at the scale needed to make an impact on total emissions. Luckily, political recognition and policy are flowing from the mounting scientific evidence that highlights the need for carbon capture and storage deployment. Carbon capture and storage technologies are touched on in various parts of the Fit For 55 proposals and the European Commission has also launched a CCUS Forum to bring expertise on this topic to the highest level of European policymaking. Of seven large-scale projects selected by the EU’s Innovation Fund for low-carbon technologies, four involve carbon capture and storage. Many national governments are also drawing up policy options, often based on forms of ‘carbon contracts for difference’ that provide a stronger and more dependable carbon price signal than the market price. The Netherlands SDE++ scheme is enabling carbon capture and storage projects in the Port of Rotterdam to progress, while similar incentives are now proposed in the U.K., Denmark, and Germany. In Norway, direct government support for the Longship project – based on the flexible collection of CO2 by ship – has catalyzed the development of other CO2 capture plans around Northern Europe. Yet, with more than 50 carbon capture and storage projects in planning across the bloc, many of which involve the cross-border transport and storage of CO2, a more strategic policy framework at the EU level will help us move from demonstration to large-scale deployment more efficiently.
Furthermore, a key issue is the lack of development of CO2 storage sites. With the current policy framework, CATF analysis has shown that by 2030 the available storage capacity will amount to around half the volume of captured CO2, and Europe will face a cumulative €10 billion gap in funding. The investment in carbon capture and storage technologies has lagged far behind investments in other climate technology areas, underscoring Europe’s long negligence of industrial decarbonisation as a climate priority. Through a European carbon capture and storage strategy, the European Commission can lay out a roadmap for growth of this set of climate technologies in relation to the timescales required by the EU’s net zero target. This document would provide a clear signal to those industries and member states intending to use carbon capture and storage that their efforts will be supported. It would also encourage the expansion of carbon management solutions to parts of the bloc that are currently reticent to make investments, unlocking new decarbonisation pathways for countries beyond the early movers around the North Sea.
Not only will this be crucial for hitting Europe’s climate targets, it will push carbon capture and storage technologies along the learning curve, which will help reduce costs, shorten deployment timelines, enable CO2 transport and storage infrastructure, and catalyze standardization. This will have knock on benefits for countries all over the world, particularly emerging economies seeking to establish climate friendly industrial and power sectors of their own. As the RePowerEU Communication showed us, Europe has a vested interest in pushing decarbonisation options in its neighbors and energy partners as it mitigates the geopolitical risks associated with over-reliance on fossil fuel producers. Furthermore, the EU has already committed in its External Energy Engagement Strategy to “develop CO2 sequestration and storage techniques to market maturity” in collaboration with non-EU member states like Norway.
Europe has led the world in establishing functional markets for clean technology in the past, with offshore wind and solar now leading the charge to decarbonize energy systems around the world. But the energy system is not just about electricity.
It is high time that Europe extended these climate innovation successes to the industrial sector with a new carbon capture and storage strategy. CATF has outlined what a comprehensive policy framework for carbon capture and storage in Europe would look like here. Capitalizing on the marked growth in efforts to deploy these technologies across Europe is the major focus of our European team, and we are working closely with NGOs, industry groups, academics and policymakers to drive this idea forward.
This report identifies nine fundamental challenges that need to be overcome for carbon capture and storage to fulfill its potential as an enabler of rapid decarbonisation. Closing the funding gap for first-mover projects will require greater use of mechanisms that provide long-term, investable carbon price guarantees. Accelerating the deployment of much-needed storage capacity can be achieved through streamlined permitting, improved acquisition and sharing of geological data, and direct government support that can help bring strategically located sites to maturity. While some of this work is already underway in North Sea countries, it is vital to spread successful policy and technical approaches to the rest of Europe. As the technology sees greater adoption, it will move towards more market-based drivers that will differ according to sector; there will be a role for policy in creating demand and establishing clear and ambitious specifications for outputs such as low-carbon steel, cement, and hydrogen, as well as permanent geological removals. However, successful policy must ensure public support beyond these industries – this must start with clearer messaging from governments that carbon capture will be part of a net zero future.
Creating new CO2 transport and storage infrastructure for Europe is a fundamentally international task, requiring a clear coordinating Strategy from the European Commission that can optimize deployment, encourage technical and regulatory alignment, and resolve cross-border issues.
A carbon capture and storage strategy should:
- Set clear milestone targets for industrial capture and technology-based CO2 removals based on scientifically sound long-term modelling and a climate risk minimization approach
- Develop a plan to identify and develop strategically placed storage sites, based on Member State submissions of prospective capture and storage volumes
- Coordinate relevant EU legislation and EU funding with Member State initiatives
- Establish a position on the appropriate manner of regulation for CO2 storage to avoid monopoly power, stimulate competition and expansion
- Develop an overarching plan for the development of optimized cross-border CO2 transport infrastructure, including solutions for dispersed emitters
- Establish a Europe-wide regulatory platform for CO2 transport infrastructure
- Encourage relevant Member States to ratify the London Protocol amendment and address any regulatory gaps on CO2 storage
- Create a regional coalition to ensure the North Sea Basin is developed on schedule to deliver on the order of 1 Gt of storage by 2050
- Provide guidelines on how to collaborate and trade CO2 with non-EU countries
- Establish a dedicated European forum on carbon capture and storage for coordination between industry and other stakeholders, knowledge transfer and commercial engagement