As Europe strives to reach its ambitious goal of climate neutrality by 2050, there is growing recognition that carbon capture and storage will be crucial to cutting emissions at the necessary speed and scale. In October 2022, the European Commission announced that it would formally launch a communication on a strategic vision for carbon capture in Europe in 2023.
Carbon capture and storage is a decarbonisation tool for many of the hundreds of large sources of CO2, including heavy industrial sites and power plants, which contribute around half of the region’s total CO2 emissions. How can we determine which sites could be potentially ‘low-hanging fruit’ for carbon capture and storage – where large volumes can be eliminated for the lowest cost? And how big is the cost barrier faced by those facilities that are expected to need carbon capture and storage to decarbonise?
A new interactive tool developed for CATF by Carbon Limits aims to help answer these questions and more by visualising the cost of capturing, transporting, and storing CO2 from 2,170 industrial and energy generation facilities located across the European Economic Area and the UK. These sites each emit at least 100,000 tonnes of carbon pollution each per year and together amount to over 1.2 billion tonnes of capturable emissions. Over three separate dashboards, the tool also allows the user to explore how greater CO2 infrastructure development might help bring those costs down.
The total cost at each emitter is a combination of two main factors: the ‘capture cost’ determined by the relative difficulty of separating the CO2 from other gases; and the cost of transporting and permanently storing the CO2 underground. To reflect the degree of uncertainty and variability in both these costs, the tool gives a choice of high and low estimates based on research literature: the higher value is likely to be more representative of first-mover projects with poor economies of scale, and the low value indicative of more optimised processes and shared infrastructure.
A heatmap of transport and storage costs
- Announced projects leave some inland regions with poor access to CO2 storage, particularly in Central and Eastern Europe.
- Developing other areas with suitable geology could provide most of Europe with low-cost access, at a maximum of €60 per tonne of CO2.
- New CO2 pipelines are another route to significantly lowering transport costs.
The first dashboard of the tool focuses on how CO2 transport costs vary over the region, shown in the form of a heat map where darker colours represent higher costs. These transport cost estimates represent a combination of the distance to the nearest suitable CO2 storage site, and the mode of CO2 transport that is most accessible to the emitter, which could be rail, pipeline, river barge, or sea-going ship. Considering only those storage sites that have currently been announced – most of which are found in the North Sea – there are many parts of inland and Eastern Europe where the current lack of infrastructure and limited access to local storage makes transport costs prohibitively high.
However, Europe is blessed with large areas of suitable geology for CO2 storage. Selecting the ‘long term’ scenario reveals how transport costs could be dramatically reduced if storage sites can be developed in areas where the geology and current regulations allow, with now nearly the entire region showing costs below €60 per tonne (even at the high estimate). These sites may not be available today, but many could be ready by 2030 if planning begins soon. The mapping tool also allows the user to let the model build new pipelines , which further reduces the cost for most sites and eliminates any remaining zones of excessive cost. This could be an important option for areas that do not manage or choose to develop storage sites nearby.
Mapping the cost at each source
- The total cost across all sources ranges from around €70-250 per tonne of CO2 (low estimate) based on using currently planned storage sites alone.
- If all areas with suitable geology can store CO2, and new pipelines are possible, 98% of facilities have a total cost below €120 per tonne (low estimate). At the high estimate, 60% of facilities come in below €150 per tonne.
- In the non-metallic minerals sector, allowing more storage site development could allow over five times as many facilities to meet a €90 per tonne cost, covering 70% of Europe’s sites.
Turning to the second dashboard of the tool, the emitting plants are now introduced to this underlying landscape of varying transport costs, with the size of each circle representing the volume of emissions and darker colours again indicating higher costs. The cost of capturing the CO2 is now added to the total for each source, based on typical cost ranges characteristic to each sector. Each source is also ranked by cost in a marginal abatement cost curve which – in the low estimate – spans from around €70 per tonne to around €250 per tonne if we are limited to those storage sites under development today. At current carbon prices of nearly €100 per tonne, it can already make economic sense for emitters on the lower end of this range to use carbon capture and storage. This is in part why industry carbon capture plans have rocketed in the past year (as tracked by our carbon capture project map), although these early projects generally also require more targeted incentives to proceed. Setting the ‘total carbon capture and storage cost’ slider to a slightly more conservative €90 per tonne limits the selection to those sites which can meet this benchmark, which are mainly offshore oil and gas production sites, refineries, and power plants, clustered around the North Sea and the few storage sites proposed in Southern Europe.
Switching to the long-term scenario completely changes the picture. At a carbon price of €90 per tonne, it could make sense for nearly half the facilities to install carbon capture, as they are now able to access storage sites in many locations where the geology allows.
The tool also allows a closer look at those sectors that will be in particular need of carbon capture to decarbonise, such as cement and lime (designated ‘non-metallic minerals’), for which no other viable options exist. These sites can often be located far from coasts and access to CO2 shipping. Of over 343 cement and lime facilities, only 42 are well enough located to meet the €90 per tonne mark based on existing storage and transport, but this increases to 238 locations if we assume more widespread storage development. The picture is more challenging if we look at the high end of literature cost estimates for this sector; under those estimates carbon costs would need to increase to €150 per tonne for the same number of locations to find carbon capture viable. In reality, a combination of these factors will be needed to align for Europe’s cement sector to be able to decarbonise: CO2 capture and transport processes that are cost optimised, more widely deployed storage sites, a strong and rising carbon price signal, and other incentives to bridge the prevailing cost gap and de-risk investment for first-mover projects.
Focus on Germany
The tool also allows the user to select an individual Member State, which provides a clearer picture of the cost distribution across different sectors, and also shows which sites may have better access to storage in the near- and long-term. The graphics below focus on Germany and three sectors that are likely to require carbon capture and storage to decarbonise: non-metallic minerals, waste to energy, and chemicals and petrochemicals. 173 such sites are quite evenly distributed across the country, with costs ranging from €88 to €205 per tonne in the low estimate case, and it is clear that sectoral capture costs are not the main cause of this variation (although chemicals are much more competitive in the higher cost case). Setting the cost slider to €120 per tonne zooms in on those sites at the lower end of the range, which are located close to transport options such as the North Sea coast, the Rhine River, or existing pipelines which could potentially be reused for CO2.
How much CO2 can be abated?
- Power and heat generation has the most capturable CO2, followed by the cement sector.
- The oil and gas production and refining sectors have the lowest average total costs at 82 and 101 € per tonne of CO2 respectively (low estimate, planned storage sites).
- Based on current storage site plans, North Sea countries offer lowest average costs, but Poland and Germany are large emitters with relatively high average costs.
The last dashboard helps visualise the total volumes of CO2 that can be captured at a given cost for each country and sector. Although the power sector is by far the biggest contributor here, most of these emissions should be eliminated as Europe transitions to renewables and non-fossil forms of energy. The cement sector is the next biggest target, with 136 Mt per year of capturable emissions; hovering the mouse over this square also shows average costs for this sector of €136 and €206 per tonne in the low and high cases. Looking at the country breakdown, the lower near-term costs offered by the North Sea states, such as the UK, Belgium, and the Netherlands, can be seen particularly clearly in the high cost case. However, the two biggest emitters – Germany and Poland – urgently need better access to storage if their polluting industries are to be able to decarbonise on a level playing field for cost.
The real costs of carbon capture, transport, and storage will vary significantly according to site-specific factors, technology developments, relative access to finance, and economies of scale that might be achieved through shared infrastructure. This tool aims to give an indication of where the greatest potential might lie for this abatement technology, identify priority areas for infrastructure, and highlight the role which policy can play in accelerating cost-optimised deployment; for instance, through support for more widespread, open-access CO2 infrastructure and through strong carbon pricing or more targeted forms of support. With carbon prices clearly still below the levels needed to drive deployment in several key sectors which will need carbon capture, additional incentives such as carbon contracts for difference will be vital in helping close this cost gap – driving innovation and avoiding lost development time and accumulating emissions. Many of these challenges will need to be tackled at an EU level and should be carefully addressed by an EU strategy on carbon capture, as outlined by CATF’s report, A European Strategy for Carbon Capture and Storage.
CATF will continue updating and refining the tool as Europe’s CO2 infrastructure plans develop and new projects begin to provide greater clarity on sectoral costs.