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Recommendations for the EU Industrial Carbon Management Strategy

January 26, 2024 Category: Industry, Policy, Technology Work Area: Carbon Capture

About this report

Carbon capture and storage is essential to achieve climate neutrality by 2050, in accordance with the European Climate Law, as shown by nearly all energy system modelling scenarios. Carbon capture and storage is required both to rapidly reduce CO2 emissions as well as to permanently remove CO2 from the atmosphere.

This report provides recommendations from Clean Air Task Force (CATF) for the large-scale deployment of carbon capture and storage technologies within the EU. CATF would like to reiterate that a clear distinction be made at all times between emissions reductions and removals. Part 1 covers the role of carbon capture and storage and carbon capture and utilisation which involves the capture of CO2 from process emissions and/or fossil fuels. Part 2 covers the role of industrial carbon removals which can achieve the permanent removal of CO2 from the atmosphere, namely bioenergy with carbon capture and storage (BECCS) and direct air capture with carbon storage (DACCS).

Ultimately, the advancement of carbon management will require the large-scale development of CO2 infrastructure across Europe both in the effort to reduce and remove CO2 emissions. This report provides guidance on how best the EU can advance carbon management to achieve Europe’s climate goals.

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Key Recommendations

  • Implement deployment targets for CCS and industrial CDR and establish a mechanism for the setting of future targets.
  • Develop a strategic plan for achieving a distribution of large-scale storage basins across the region by 2035, including development of an EU CO2 storage atlas.
  • Address the funding gap for capture plants in key sectors by coordinating existing funding and establishing a dedicated tender for capture projects.
  • Establish an EU and/or regional platforms for aggregating CO2 capture and storage project capacities to optimise source-sink matching and inform infrastructure build-out.
  • Provide funding and regulatory support to promote the build-out of appropriately sized ‘forward looking’ transport infrastructure, including cross-border CO2 transport PCIs and PMIs.
  • Establish a dedicated regulatory framework and network standards for CO2 transport.
  • Target the elimination of barriers to CO2 transport for storage within Europe, particularly with the UK.
  • Identify and address future challenges associated with the optimal exploitation of storage at the basin scale.
  • Establish Best Available Technology (BAT) guidelines to promote the most environmentally and climate beneficial design and operation of CCS projects.
  • Set out a long-term strategy for deployment beyond subsidies, based on market and regulatory drivers:
    • Use product standards and purchase targets to grow demand for near-zero carbon products and services, with a focus on kickstarting demand for high-abatement projects.
    • Explore the further use of producer responsibility measures as a long-term regulatory driver.
  • Plan for future infrastructure requirements and policy needs associated with the application of CCS as an enabler of clean firm power.
  • Set indicative EU-wide deployment targets for DACCS and BECCS and establish a mechanism for setting future targets, which could be supported by a distinct pillar for permanent industrial carbon removals alongside existing frameworks like the ETS, ESR, and LULUCF.
  • Prioritise CCS-based carbon removals (DACCS and BECCS) as part of the industrial carbon management strategy.
  • Ensure the strategic deployment of DACCS by considering the current and future emissions intensity of the grid, as well as geological storage to ensure the most effective deployment scenario.
  • Ensure the strategic and sustainable deployment of BECCS by ensuring coordination of the entire supply chain and assessing the effects of any direct and indirect land use change.
  • Support R&D for industrial carbon removal technologies, supporting pilot and demonstration projects, creating a separate track for industrial carbon removals within the Innovation Fund.
  • Establish long-term policy supports to address the multiple barriers hindering industrial carbon removals in the EU, including low technology readiness, high cost, insufficient demand, lack of regulation and inadequate deployment support.
  • Explore the integration of industrial carbon removals into compliance carbon markets based on robust principles that prioritise emission reductions whilst being based on solid foundation of accounting, standards and MRV.
  • Create commercial incentives to stimulate deployment and promote government procurement through contracts for difference (CfDs) and reverse auctions.

Clean Air Task Force (CATF) warmly welcomes the development of an Industrial Carbon Management Strategy

We wish to emphasise that a European Carbon Management Strategy is strongly supported by a diverse coalition of European industrial producers, technology providers and environmental organisations from across the Union. This coalition have repeatedly called on the Commission to develop a strategy to aimed at expediting the large-scale deployment of carbon capture and storage (CCS) technologies within the EU.1

CATF also commends the continued success of the CCUS Forum, particularly its working groups on Vision2 and Infrastructure.3 These working groups have provided invaluable resources that should aid and inform the development of the Industrial Carbon Management Strategy.

The development of an Industrial Carbon Management Strategy presents a pivotal opportunity to catalyse the large-scale deployment of CCS in the EU. Additionally, CATF expressly welcomes the Commission proposal for a Net Zero Industry Act4 (NZIA) and recognizes the continued efforts of the co-legislators to accelerate the development of CO2 storage capacity as a means to rapidly decarbonise the EU’s industrial base.5

In this paper, CATF sets out recommendations for what should be considered in the development of the EU Industrial Carbon Management Strategy. CATF would like to reiterate that a clear distinction be made at all times between emissions reductions and removals. Hence, the structure of this paper is as follows:

Part 1 covers the role of carbon capture and storage (CCS) and carbon capture and utilisation (CCU) which involves the capture of CO2 from process emissions and/or fossil fuels.

Part 2 covers the role of industrial carbon removals which can achieve the permanent removal of CO2 from the atmosphere, namely bioenergy with carbon capture and storage (BECCS) and direct air capture with carbon storage (DACCS).

Ultimately, the advancement of carbon management will require the large-scale development of CO2 infrastructure across Europe both in the effort to reduce and remove CO2 emissions. This paper therefore provides guidance on how best the EU can advance carbon management to achieve Europe’s climate goals.

The Case for Carbon Capture and Storage

Carbon capture and storage (CCS) is essential to achieve climate neutrality by 2050, in accordance with the European Climate Law,6 as shown by nearly all energy system modelling scenarios (Figure 1).7 CCS is required both to rapidly reduce CO2 emissions as well as to permanently remove CO2 from the atmosphere. In all scenarios highlighted by the European Scientific Advisory Board on Climate Change (Advisory Board),8 CCS provides carbon removals and plays a significant role in reducing emissions from industrial processes and fossil fuels. Their analysis finds that up to 490 million tonnes of CO2 may need to be captured and stored by 2050, with 417 million tonnes captured and stored in the ‘Mixed Options’ Iconic Pathway, which yields the lowest cumulative emissions.9 The European Commission’s own analysis10 estimates that the EU could need to capture up to 600 million tonnes of CO2 annually by 2050, which is in line with several other expert bodies. In sum, there is no path to climate neutrality in Europe without CCS.

As it stands, rates of CCS deployment are far below those in modelled pathways limiting global warming to 1.5°C or 2°C.16 Crucially, there are no operational CO2 storage sites in the EU.17 Thus, there is an urgent need for tailored policy and financial incentives to accelerate the development of CCS technologies to a scale capable of significantly reducing overall emissions.18 This is particularly crucial in the decade from 2030 to 2040, when deployment should be at its most rapid, as delineated in the International Energy Agency’s pathway to net zero.19

European CCS deployment is key to reduce global carbon pollution

The latest contribution from IPCC Working Group III’ to the Sixth Assessment Report (AR6)20 identifies carbon capture and storage as a critical technology in nearly all mitigation pathways compatible with a 1.5°C scenario. While there are pathways that don’t necessitate CCS, these are predicated on impractical assumptions, such as halving global energy demand within the next three decades The IPCC also emphasised that the current rate of CCS deployment is alarmingly lower than what is depicted in modelled pathways aiming to limit global warming to 1.5°C or 2°C, and that this shortfall is partially attributable to a lack of supportive policies.21 Importantly, while CCS will be necessary globally, ambitious climate policy in regions like Europe has the potential to reduce costs through early deployment, thereby making these technologies more accessible for developing economies in the future.

A climate solution ready to scale

Carbon capture technologies have been employed safely and effectively for nearly a century, while CO2 storage has been practiced for over fifty years.22 Currently, there are more than twenty commercial-scale carbon capture and storage facilities operating globally, which collectively capture and permanently store approximately 40 Mt of CO2 annually.23 In addition, dozens of other facilities capture large volumes of CO2 (thousands of tonnes per year) as part of standard industrial processes such as in fertiliser production, or to provide CO2 for other commercial uses. According to 2019 data from the International Energy Agency, nearly 200 million tonnes of CO2 were captured and utilised.24 While carbon capture and storage is effective at scale, its wider deployment has been hampered by a lack of adequate policies or regulatory measures such as an effective carbon price.25

A climate solution with diverse applications

Modelling of the transition to climate neutrality shows carbon capture and storage is an essential and versatile tool to decarbonise sectors like steel, cement, lime and chemicals production, as well as waste-to-energy. Scaling carbon capture, removal, and storage is also crucial for the transformation towards a hydrogen economy, and may also provide a source of clean, dispatchable power to complement the role of renewables in electricity systems.26

As the IPCC has outlined, one of the main reasons CCS is lagging behind is the lack of appropriate policy support.27 More must be done to design the financial and policy incentives and regulatory measures to advance carbon capture and storage technologies at the scale needed to make an impact on total emissions. The following recommendations can help to advance carbon capture within the framework of the EU’s Industrial Carbon Management Strategy.

Recommendations Part 1: Carbon Capture in the EU

1. Set appropriate targets for CCS

CCS encompasses various industrial processes, including capturing, transporting, and storing CO2 in geological formations, necessitating a high degree of co-operation and co-ordination from different actors across the value chain. This poses a significant challenge to developing CCS, since it requires each requisite part to develop in sync.

As outlined in the Vision Working Group paper, a key action item for the Industrial Carbon Management Strategy is the setting of targets for the EU and its Member States in terms of storage capacity, transport infrastructure and amounts stored or utilised up to 2050. Following the example set by the selection of targets for hydrogen production, these would provide industry with an important political signal to promote investment and catalyse action at Member State level. Furthermore, a mechanism for introducing new milestone targets should be implemented. This mechanism should be based on rigorous analysis of viable decarbonisation pathways, the scale of industrial emissions requiring CCS and expected residual emissions at net zero, as well as existing Member State plans for CO2 capture and storage demand. This could also be directly informed by Member State NECPs and individual bids into an ‘aggregation platform for CO2 capture’ described below.

The inclusion of a CO2 injection capacity target of 50 million tons per year by 2030 in the NZIA is a vital initial measure. It would assist in removing a major bottleneck and ensure decarbonisation is not delayed by an avoidable coordination failure. As CATF highlighted in 2022, there is currently a significant gap in the availability of CO2 storage compared with capture, exacerbated by the extended timeframes required to operationalise storage projects.28 This poses serious risks for industries in Europe, who will need access to CO2 storage within the coming decades if they are to decarbonise.

Inevitably, some level of uncertainty exists regarding the extent to which each decarbonisation tool, including carbon management, will be deployed in the EU, especially in the long term. This variability is reflected in different decarbonization scenarios presented by Integrated Assessment Models (IAMs) and energy system models. The Commission’s own published modelling of 1.5°C-compatible scenarios has indicated that up to 600 Mt/year of CO2 may need to be captured by 2050, of which around 300 Mt/year would be geologically stored (Figure 2). However, a 2020 review of IAMs and other modelling for Europe noted that the Commission’s scenario is at the lower end of CO2 storage demand projected for 2050 and includes a higher proportion of CO2 conversion to fuels than many IAMs (Figure 2).29

Of the 1.5°C-compatible models reviewed, annual CO2 storage ranges as high as 2500 Mt/year, but most are in the range 500-1000 Mt/year.

Figure 2 highlights that a number of leading analyses of ‘net zero by 2050’ or 1.5°C-compatible scenarios for Europe have identified a CO2 storage demand by 2050 in the range 400-600 Mt/year. Assessments at the higher end of this range (e.g., DNV’s Pathway to Net Zero and the IPCC AR6) typically cover a broader region, including some non-EU Member States. As noted above, the European Scientific Advisory Board reviewed a number of 1.5°C-compatible scenarios for the EU, estimating CO2 storage in 2050 ranging from 127 to 490 Mt/year with the ‘Mixed Options’ Iconic Pathway at 417 Mt/year.

Alternatively, a bottom-up analysis of CCS-relevant emissions can be adopted, as shown in Table 1. 90% deployment of CCS in high-dependence sectors would amount to 215 Mt/year. If we estimate 30% deployment in other sectors (refineries, steel, pulp and paper, chemicals), this brings the total to roughly 320 Mt/year. This is in line with analyses by Rystad Energy and Carbon Limits, which both identify around 320 Mt/year of emissions (Europe-wide) with a strong dependence on CCS to decarbonise.30

SectorCO2 emissions (Mt)Of which biogenic (Mt)CCS relevance
Total industry and waste management670130
Ethylene Oxide140High
Ammonia170High (potential replacement via green H2)
Hydrogen (merchant)50.015High (potential replacement via green H2)
Undefined chemicals470.002Uncertain
Refineries1180.17Most likley for FCC and SMR: up to ~50% of emissions
Iron and Steel1080.13Uncertain due to growing focus on H2 – DRI
Pulp and Paper9676Many processes can be electrified, but potential BECCS demand

Greater uncertainty exists regarding the role of CCS in sectors like low-carbon hydrogen production, power sector decarbonisation, and CO2 removals. These sectors are less linked to existing assets and subject to uncertainty over policy choices. ‘Blue hydrogen’ using CCS is expected to contribute to hydrogen demand, particularly in the near term, with sources such as the JRC, DNV, and the IEA projecting in the range of 3-7 Mt of annual hydrogen production in 2050, and the EU hydrogen strategy citing 5 Mt in 2030.32 This would represent roughly 40 Mt/year of additional CO2 capture and storage. The potential role of CCS in the fossil power sector is discussed further below, but analyses from Wind Europe and Ember suggest it could approach 100 Mt/year.33

Atmospheric CO2 removal (CDR), discussed in section 13, typically represents a large proportion of CO2 storage projections in decarbonisation modelling, with varying contributions from bio-energy CCS (BECCS) and direct air capture and storage (DACS). DNV’s Pathway to Net Zero for the wider region includes 115 Mt/year of BECCS and 200 Mt/year of DACS,34 while DAC and biogenic CO2 represent 80% of the CO2 captured in the Commission’s ‘1.5Tech’ scenario.35 It is worth noting that current biogenic point source emissions in the EU are around 180 Mt/year (or 130 Mt from industry and waste) (Table 1). CDR demand in the EU will depend on a number of factors including the pace at which emissions are reduced to net zero, the scale of emissions that are residual (or more costly to abate by other means), and the ongoing relative contribution of the EU in delivering negative emissions towards a global effort.

Near-term and medium-term targets for CCS deployment should account for the range of uncertainty surrounding the expected requirements in a net-zero EU. The region should aim to retain the option of reaching the higher end of projections (>500 Mt/year), should such levels become necessary – for instance, due to slower than expected action on other decarbonisation levers or a failure to curb demand growth. It is therefore likely that an interim target on the order of 200 Mt/year of CO2 storage in 2035 (EEA only) would be a prudent ‘no regrets’ approach, keeping these higher projections within feasible reach. Moreover, CO2 emissions reductions have greater climate impact if made earlier, and delayed cuts only increases the scale of the CO2 removal challenge in the long term.

2. Ensure CO2 storage develops across the EU

A key challenge for storage development in the EU is the current regional imbalance in storage project development. According to CATF’s project tracker,37 proposed storage sites in non-North Sea regions (Mediterranean, Black Sea, Croatia, South-West France) accounts for only around 12 Mt/year of storage by 2030, compared to over 100 Mt/year across projects in the North Sea (including Norway, but not the UK) (Figure 4). This imbalance ultimately stems from the North Sea’s status as the dominant centre of oil and gas production in the region, along with its accrued expertise in CO2 storage. Consequently, companies and governments in the North Sea area see a clear opportunity to reuse existing assets and repurpose subsurface expertise and data.

Building beyond the North Sea

The growing imbalance in CO2 storage development in Europe presents a significant risk to European industries, particularly those in Central, Eastern and Southern Europe. As CATF’s recent report on CO2 storage development in Europe shows (Figure 5), there is significant theoretical capacity to store CO2 across the region. However, as outlined in Figure 6, the vast majority of planned CO2 storage projects in Europe are located offshore, particularly in the North Sea. If industrial facilities have to rely on the few (largely offshore) storage sites currently under development, CO2 will need to be transported considerable distances across the region and some areas will face capacity constraints (Figure 7, left).

This stands in stark contrast to an alternative scenario, where more storage sites are developed by more EU member states (Figure 7, right). As CATF’s analysis demonstrates, the overall costs of developing less storage sites in fewer EU Member States will be significantly higher – up to 3x greater – which will ultimately mean higher costs for European industrial manufacturers and their consumers.41 Ensuring access to CO2 storage at reasonable cost for all European industries that need CCS to decarbonise will be essential for preserving
a level playing field, enabling a low-carbon future for domestic industry, and ultimately to maintain broad political support for the energy transition as industry is increasingly exposed to the ETS.

The Net Zero Industry Act can be a key instrument for encouraging storage developers and Member States in other parts of Europe to accelerate their progress. This can build on and accelerate the growing industry interest in developing non-North Sea storage sites: Four of the current candidate projects for CO2 network Projects of Common Interest are associated with storage in Southern Europe, and three CCS projects selected under the Innovation Fund’s first three calls for large-scale projects explicitly include storage in Southern or Eastern Europe.43

The importance of the Net Zero Industry Act and producer responsibility

CATF supports the principle of producer obligation laid out in the NZIA proposal, which would require oil and gas production licence holders to contribute towards the EU-wide storage target. The oil and sector has the expertise, data, and resources to kickstart storage development at scale in the EU. The Strategy should lay out a long-term mechanism for how such producer obligations can best be applied beyond 2030, including clarification on what constitutes ‘operating capacity’, the potential for extension to fossil fuel importers, and steps that must be taken by obligated entities in the event of non-compliance. There may be a longer-term role for a ramping producer obligation mechanism to provide an enduring driver for CCS that complements the ETS and ensures climate neutrality is achieved.44

However, for these obligations and targets to achieve an optimal storage distribution across the region, the Strategy should also help put in place a number of enabling frameworks.

In the event that the capacity of storage projects proposed as ‘strategic projects’ under the NZIA exceeds the 50 Mt/year target, CATF has proposed that the Commission apply a methodology to ensure a balanced distribution of projects that must be considered part of the obligation. This would be based on establishing key regional hubs and assessing the location of industry demand. The Industrial Carbon Management Strategy could introduce further provisions to ensure a balanced distribution by proposing appropriate regional storage sub-targets for key storage basins.

Making geological data available

The early development of new storage capacity in many parts of Europe is also inhibited by poor availability of geological data, often exacerbated by overly restricted access to data held within the private sector. Some countries have developed CO2 storage atlases which provide detailed open-access information on which areas are most suitable for geological storage, fostering a more competitive environment for storage developers and helping inform capture projects. The Strategy should extend this approach to develop a consistent storage atlas for the whole of the EU, assisted by bringing data access regulations to a common standard and driving new data acquisition where necessary.

Informed by Member State plans for capture and storage projects and best available geological data, the Strategy should also call for the identification and development
of a series of strategically located, high-capacity storage basins around the EU. In close cooperation with local stakeholders, a suitable regional entity could then work to help progress sites within these areas through the characterisation, pilot injection and permitting phases, in a similar approach to the CarbonSAFE program in the U.S.45 Government supported research projects such as Strategy CCUS46 and CO2-Spicer47 have indicated the potential for storage pilot development in many locations throughout the Union. However, these projects have so far been slow to progress to CO2 injection. Through this approach, the Strategy should ensure such pre-commercial exploration and piloting efforts are appropriately funded and supported to fruition.

The role of the Member States

Finally, any Member State wishing to develop its CO2 storage resource should be assisted in setting up a clear framework and schedule for the release of storage areas for exploration licence bids, following the example of several North Sea countries. These licensing rounds should be as open as possible, allowing bids from companies outside the oil and gas sector. For some Member States this will require capacity building within the relevant competent authorities, which should be facilitated through knowledge sharing platforms such as the CCUS Forum, the Net-Zero Europe Platform, or a new dedicated entity.

3. Closing the funding gap

The upwards trajectory of the carbon price under the ETS will increasingly drive investment in CO2 capture at industrial sites – particularly as CO2 transport and storage infrastructure becomes available. However, based on current projections for the ETS price to 2030 and analysis of full-chain CCS costs, many emitters will still face an economic shortfall in the investment case for CCS deployment.48 These will include emitters with more costly transport routes to storage, including many cement and waste-to-energy plants which have no other decarbonisation options. Assuming storage site locations are restricted to currently proposed projects, the CCS cost tool developed by CATF estimates that 66-100% of cement and lime plants could face full-value chain costs of over 100 EUR/tCO2, and 62-100% of waste-to-energy plants. Even at carbon prices of 130 EUR/tCO2, up to 90% of both sector’s facilities could see higher CCS costs under our ‘high estimate’ case. Importantly, the total costs of decarbonisation will be significantly higher if deployment of carbon capture and storage is delayed until EU ETS prices are high enough to support early-mover projects: Cumulative CO2 emitted during this delay will ultimately require more costly removal from the atmosphere.

Providing supportive policy for CCS

It is therefore essential to ensure that additional policies are in place at either the Member State or EU level to cover this cost gap in the period at least to 2030, while also building out the infrastructure required to bring down the currently significant contribution from transport costs. Several Member States have introduced or proposed schemes based on carbon contracts for difference, where the annual subsidy covers the difference between the project abatement cost and the carbon price.49

The Innovation Fund is also supporting several CCS and CCU projects across the EU, highlighting the potential for carbon management to deliver large-scale abatement at relatively competitive costs. Some Member States, such as Denmark and the Netherlands, are driving action through carbon price augmentation, capital funding, and adopting appropriate proportions of project risk.

A key element of any new CCS funding scheme must be a thorough treatment of project risks, particularly cross-chain risks, where there is likely to be a near-term, clearly defined role for the state as ‘insurer of last resort’ for events such as shortfalls in storage or CO2 availability.

In addition, enduring project support mechanisms should be designed to require a minimum level of operational performance and encourage projects to maximise their performance, for example, in terms of capture rate.

The Industrial Carbon Management Strategy must clarify and expand the best means to help support and accelerate these efforts to close the funding gap, thereby maximising the success rate of proposed projects in the period to 2030. Current EU projects are often reliant on a patchwork of support across different schemes, requiring multiple applications. The Strategy could seek to reduce this complexity and/or facilitate the transfer of promising proposals between various funding opportunities at the EU and national level. New dedicated, funding instruments may also be necessary to ensure the CO2 capture project pipeline progresses in step with the 2030 target for storage capacity.

In summary, the Strategy should consider the following actions on funding:

  • Work with Member States to better quantify the cost gap facing key sectors and facilities that will rely on carbon management to decarbonise.
  • Coordinate existing funding mechanisms relevant to carbon management projects.
  • Direct growing revenue from the sale of ETS allowances to fund a dedicated tender for CO2 capture capacity, which could be coordinated with storage capacity under development to meet the 2030 target.
  • Support Member States in the rapid development of support schemes such as carbon contracts for difference, through knowledge sharing initiatives.
  • Design funding mechanisms to promote high-performance CCS projects with the greatest climate benefit
  • Enable access to low-cost finance for carbon management projects, for example, through the European Investment Bank.
  • Broaden the ability of the Innovation Fund to support projects, going beyond first-of-a-kind technologies to help drive cost reductions and broader application of existing technologies.
  • Make additional funding available for cross-border CO2 transport networks proposed by successful candidates as PCIs for CO2 networks.

4. Coordinating CO2 sources and sinks: A Carbon Capture and Storage Platform

While ensuring CO2 storage capacity is available by 2030 is critical, it is just as important that this capacity is efficiently used. Based on CATF tracking of proposed projects, there is nearly 70 million tonnes of capture potential per year by 2030, while currently proposed CO2 storage projects in the EU already amount to over 80 million tonnes per year by 2030.50

However, current capture project plans are largely limited to emitters with potential links to storage, and demand is likely to grow as more storage plans are made.51 At the same time, there is a need for new storage sites to have access to sufficient adequate captured volumes of CO2 and to ensure coordination between project developers. Storage projects that can contribute towards targets, such as the storage capacity target proposed in the NZIA, should be required to demonstrate transport links to captured industrial emissions of at least equivalent magnitude – effectively constituting transport and storage hubs.

A European Carbon Capture and Storage Aggregation Platform

To help ensure new storage sites have access to adequate captured volumes of CO2 and to ensure coordination between project developers across the CO2 value chain, the Commission should create an aggregation platform for CO2 capture and storage projects.

With the creation of an aggregation platform, any industry planning to capture or store CO2 could join this platform, stating their planned volumes, timeline for development, and any transport infrastructure associated with the projects. This would stimulate the entry of additional storage providers, provide assurance to storage developers of the scale of future volumes of CO2 will be available, and give capture projects maximum visibility on the most cost-effective storage options they can access. In regions with more than one storage operator available, the pool could also be used to aggregate bids for storage services. Such a platform could ultimately evolve into a competitive marketplace for matching CO2 supply to demand, and in the near term, provide the basis for EU-wide or regional funding tenders for volumes of captured CO2. More broadly, this platform could enable the Commission and European policymakers to identify if there is enough planned capture and storage volumes to match the EU pathway to climate neutrality in 2050. This platform could be established under the existing EU Energy Platform,52 the proposed Net-Zero Europe Platform53 or as a separate entity.

5. Ensuring CO2 infrastructure access

CCS is undoubtedly most needed as an abatement solution for very hard-to-abate sectors, such as cement, lime, waste-to-energy, and some petrochemical processes, where CO2 emissions are not related to fossil fuel combustion. There is currently no other means to fully decarbonise these sectors. Some other sectors with process emissions, including hydrogen production, fertilisers, and steel could eventually be replaced with alternative processes using green hydrogen. However, the climate impacts of allowing these sources to continue to emit carbon pollution until sufficient low-carbon electricity and hydrogen is available would be too severe. As such, CCS should be deployed on these sources today. The additional renewable and other low-carbon generation that is added over the next decade should be prioritised for decarbonising existing electricity demand, new electricity demand from the transportation and building sectors, and, to the extent sufficient new clean generation is available, to industrial processes that can be directly electrified. Some sources of hard-to-abate process emissions (such as fluid catalytic cracking in refineries) may decline as demand for fossil fuel-based products diminish, but these sources will also require CCS for abatement in the near and medium-term. The relative potential of existing facilities to deliver negative emissions through BECCS will also play a role in their suitability for the application of CCS.

Tackling the ‘CCS Application Dilemma’

As outlined, some sectors will require CCS to a greater extent than others, due to a variety of factors such as the generation of process emissions or availability of clean energy. Assessing the sectors where the use of CCS is most required raises a significant challenge for policymakers in designing a framework which sufficiently addresses the need to decarbonise the hardest-to-abate sectors, without undermining broader efforts to decarbonise by other means such as direct electrification. Some have attempted to design a framework to quantify the ‘climate value’ of various CCS applications.54 This approach could restrict access to CO2 infrastructure to certain sources perceived to have the most long-term climate value; however, many of the sectors most in need of the technology consist of isolated facilities, closer to raw materials and local customers, rather than as part of heavy industry hubs or clusters. This is evident in sectors like cement, lime, waste-to-energy, which are relatively high-cost applications, with higher capture costs and often challenging locations for CO2 transport.

Connecting these sites to CO2 storage will often benefit from the initial development of CO2 infrastructure for other ‘low-hanging fruit’ sectors in industrial clusters and ports. The early development of CO2 capture in industrial clusters, on lower-cost sources such as hydrogen production or petrochemicals, can help catalyse the development of CO2 networks and export hubs that other hard-to-abate industries can later utilise. This process has already begun in planned CO2 networks, including the Delta Rhine Corridor and Fluxys CO2 network,56 that will feed into CO2 capture hubs associated with the chemical and refining industries of Antwerp (Antwerp@C)57 and Rotterdam (Porthos).58 In many cases, investments in these infrastructure projects will be limited, delayed or not occur if restrictions on acceptable applications for CCS are imposed.

6. Scaling up infrastructure to bring costs down

The cost of CCS varies from facility to facility and hinges upon many factors, especially the availability of CO2 infrastructure and sufficient storage capacity.
In Europe, the key barrier to CCS development has been the development of storage sites, which has been recognized in NZIA proposal.59

CATF’s CCS cost tool examines a range of scenarios including current storage site developments in Europe (the majority of which are in the North Sea), an expansion of storage development to areas which are suitable for CO2 storage, and the availability of new CO2 pipelines (Figure 9). Ultimately, European industries will only be able to equitably utilise CCS at lower cost if Europe achieves widespread availability of both CO2 transport and storage infrastructure.

Oversizing CO2 infrastructure as a least-risk measure

CCS often suffers from a ‘chicken and egg’ problem: Developers are reluctant to invest in large infrastructure without some certainty that it will be filled with captured CO2, while emitters will not invest in CO2 capture without certainty that they will have access to an off-taker for their emissions (Figure 10). To firmly break this bottleneck, large scale investments in transport and storage infrastructure with surplus capacity are needed, as demonstrated by the catalytic effect of the Northern Lights transport and storage project. However, developers of network-based transport infrastructure such as pipelines face an investment risk associated with the uncertainty in projecting future network demand, and will tend to undersize projects in a strictly competitive environment. To maximise the decarbonisation potential and economies of scale of infrastructure projects, the Industrial Carbon Management Strategy should take steps to favour the development of ‘oversized’, forward-looking transport networks that can meet future demand and avoid the collective risk of slower decarbonisation.61

As noted, strong policy signals at the EU and national level, such as setting clear targets for CCS deployment in 2030, 2040 and 2050 are critical to provide confidence to potential infrastructure developers of the scale which CCS can expect to reach in the coming decades. Assisted by Member State NECPs, current project plans, and JRC network modelling, the Strategy can also lay out a vision for key CO2 transport corridors – a ‘CO2 backbone’ analogous to that adopted for hydrogen.

At the level of individual clusters or regional networks, developers of pipeline networks and related transport infrastructure will likely rely on a minimum quantity of CO2 to be provided by large emitting sources, known as an ‘anchor load’, i.e., the proven demand emanating from creditworthy early infrastructure adopters.63

On the other hand, sizing infrastructure to accommodate projected expansion to other potential users in the area creates a risk of investing in capacity which may ultimately be underused. Analysis of a cluster expansion case study has shown that a decision to oversize CO2 pipeline capacity can, in fact, reduce overall economic risk by a factor of three relative to sizing capacity for the ‘anchor load’ alone, due to the costs incurred by the delayed suboptimal build-out.64 Following the model of Norway’s Longship project65 or the UK’s CCS cluster development,66 funding support for ‘full value chain’ or cluster-based CCS projects can therefore have more impact if linked to the provision of surplus capacity to meet expected demand growth.

Enabling CO2 Infrastructure Financing

Network developers can also be encouraged to invest in meeting future demand by favourable access to finance and direct capital support. As part of the Infrastructure Investment and Jobs Act of 2021, the United States adopted a mechanism designed to provide government funding to increase the capacity of carbon dioxide pipelines in anticipation of future CO2 transport needs. This provision, known as the Carbon Dioxide Transportation Infrastructure Finance and Innovation Act, allocates $2.1 billion in loans and grant-based funding.67

In the EU, policy support for CCS such as the Innovation Fund today focus primarily on supporting CO2 capture and generating demand for CO2 transport and storage services, but with little specific funding for those parts of the value chain. To date, only limited support has been made available to CO2 transport network PCIs through the EU’s Connecting Europe Facility.68 Greater efforts are needed at the EU and Member State level, to promote oversizing of CO2 infrastructure, especially pipelines, and emphasising the need to generate an infrastructure push.

At the EU level, the proposed measures in the NZIA such as the streamlining of permitting processes for storage sites and proposed obligation on oil and gas producers to provide CO2 storage capacity could aid in addressing the chicken and egg problem. However, as a natural monopoly in most areas, CO2 pipeline networks will require some form of regulation, which must be carefully designed and overseen in order to encourage investment in economies of scale and rapid decarbonisation while avoiding wasteful overinvestment.69

7. Establish a regulatory framework for cross-border CO2 transport

A key goal of the Industrial Carbon Management Strategy should be to establish a common regulatory framework for CO2 transport, which is currently developing in a fragmented manner in various Member States and even at a regional level. Following the example set by the framework developed for hydrogen,70 a robust, predictable and transparent regulatory framework for future CO2 infrastructure should take into account the specific characteristics of this emerging industry. This would seek to avoid monopoly power and ensure non-discriminatory, open access to essential infrastructure, while stimulating market competition and expansion. As laid out by the CCUS Forum’s Working Group on CO2 infrastructure, different levels of regulatory intensity will likely be applied at a regional level and will continue to evolve as the network develops. However, an EU framework should establish a baseline set of principles and ensure interoperability of the cross-border network. Above all, it will provide predictability for long-term infrastructure investments in the EU, such as the cross-border CO2 network PCIs. Given that the current PCI candidates (and other planned infrastructure such as the Fluxys CO2 network in Belgium) intend to become operational in the period 2025 to 2030, this regulatory framework is urgently needed.

Following the guidance of the CCUS Forum’s Infrastructure Working Group, a regulatory framework for CO2 transport should include:

  • The creation of a CO2 infrastructure network operator, analogous to ENTSO-E and ENTSO-G.
  • A regulatory and stakeholder forum for CO2 networks, which could operate under the existing CCUS Forum.
  • Integrated network planning including a ten-year network development plan.
  • Best practices for public engagement.
  • Sufficient flexibility to adapt to the rapidly evolving market.

A carefully designed approach to tariffs

As noted above, CO2 pipeline infrastructure will typically be a natural monopoly that will benefit from a regulated tariff approach to ensure economically reasonable access to all emitters. This element of the regulation may vary between Member States and evolve as the network matures, but where present, should be carefully designed and regulated to promote investment in forward-looking infrastructure that can serve future demand. This will require regulators with sufficient technical expertise to assess whether operators are making appropriate investments in their networks.71

The need for standardisation

The regulatory framework would also be complemented by implementation of technical standards and network codes which can ensure interoperability and cost-optimised infrastructure and projects. For example, there is currently an emerging risk that overly onerous specifications on CO2 purity may lead to excessive cost increases for developers of capture projects. There is also great climate and economic value in a flexible network in which captured CO2 can easily be diverted to different storage sites, for instance, in the event that the usual destination is unavailable. Standards can also help ensure safe and reliable operation of transport and storage networks. Such standards would include elements such as acceptable temperatures, pressure and impurity levels for CO2 transport by various modalities, as well as appropriate design and materials for the various components. This should draw on existing International Organization for Standardization (ISO) standards and the recommendations of the expert group established by the Commission.

Addressing barriers to a Europe-wide market for CO2

Other potential barriers to cross-border transport of CO2 include international agreements on the offshore disposal of waste, including the London Protocol,72 the Barcelona Convention,73 and the Helsinki Convention.74 Although the Commission has indicated that transport for offshore storage between European Economic Area (EEA) countries should not be formally restricted by the London Protocol,75 further clarity is required from the International Maritime Organisation (IMO) and relevant EU Member States should be encouraged to ratify the 2009 amendment which allows cross-border transport of CO2 for offshore storage.76

A greater barrier is presented by the fact that EU industries are not currently able to avoid the surrender of emissions allowances through CO2 storage in the UK, owing to the separation of the UK and EU ETS. Given the huge potential of UK storage, and its relative proximity to many industries in North-West Europe, the Strategy should clearly set out an ambition to work towards a unified European market for CO2 transport and storage.

8. Planning for basin-scale management of storage resources

The near-term priority for the Industrial Carbon Management Strategy should be to ensure the progress of storage projects that can deliver by 2030. However, as this industry is scaled up, the EU and Member States should consider how to best optimise the development of large-scale storage reservoirs and pre-empt any challenges that may arise. For example, as CO2 storage projects enter development across Europe the need for cross-border coordination and coordination between individual projects within the same storage formation is becoming more pronounced. This means that storage projects within the same basin compete for a finite amount of useful subsurface pore space (or pressure differential) for storage.77 This may potentially result in operational and regulatory challenges that are not encountered in one-off projects, such as the demonstration projects conducted to date. These challenges include:

  • Subsurface characterisation, including the need to perform reservoir characterisation for large numbers of injection sites at single industrial facilities and across numerous areas of potential CO2 plume migration in a basin.
  • Reservoir fluid pressure, including fluid pressure response issues and pressure management strategies (e.g., brine production).
  • Plume migration, including potential interaction between plumes and pressure fronts at adjacent injection sites.
  • Competing subsurface resources, subsurface infrastructure complexity issues, including siting of CO2 transportation (pipeline) and injection equipment and facilities.

Developing approaches to address these challenges can help make the most efficient use of the available storage resources.

The case for regional coordination on storage regulation and planning

Scaling CO2 storage projects to industrial levels is, ultimately, a resource optimisation problem. The development and operation of multiple large-scale storage projects within a region without regard to overall management of the storage resource runs the risk of inefficient use of the pore space. Therefore, storage sites in a region must be developed in a coordinated fashion to maximise the use of the storage resource under various constraints. Uncoordinated development could lead to a “tragedy of the commons” scenario in which different EU Member States and neighbouring countries will license and regulate storage projects in ways that may be favorable to their specific jurisdiction but potentially restrict access to the total available volume of CO2 storage in the region.

This concept is not unknown in energy project development. Rather, regional coordination and oversight by an organization tasked with the goal of resource optimization is common in fields as diverse as oil and gas production (e.g., unitisation of oil fields by state and federal regulators), electricity generation (e.g., regional power grid operators), and natural gas storage and distribution utilities. In all cases, the goal of the management organisation is to coordinate operations between multiple parties, both private and public, to ensure optimised service, minimise disruptions and risks, and maximise utilisation of the resource.

Currently, at the early stage of CCS development in Europe, no entity is responsible for CO2 storage resource optimisation with a regional, large-scale, non-project-specific focus. Currently, the disparate components of the CCS value chain are likely to be regulated by distinct organisations in each EU Member State, each with differing structures, areas of influence, and goals. To allow the development and management of CO2 storage operations at the regional or basin scale to accept large volumes of CO2, which would mitigate several uncertainties and facilitate the development of more carbon capture projects, a new oversight entity or entities could be established at the EU or regional level. Such an entity would have a mandate to guide the optimal development of storage resources – particularly of a cross-border nature – and coordinate between different storage projects.

A European Storage Task Force

A European-wide or Regional Storage Task Forces could catalyse the scaling-up of capture projects and the optimal management of CO2 at the regional level. This could be achieved through various measures including:

  • Strategic basin-scale storage assessment and planning.
  • Guidance during site characterisation and licencing procedures for CO2 storage projects, particularly for Member States with less expertise on storage development and regulation.
  • Oversight in the development and implementation of Measurement, Monitoring and Verification plans, particularly in the case of multiple projects being planned in the same geological formation.
  • Transparent oversight for CO2 storage projects on pressure and plume management for cross-border basins, which could be dealt with specifically by regional entities such as the North Sea Basin Task Force.
  • Guidance for national competent authorities in preparing sites for closure, post-closure and transfer of responsibility.

9. Developing market demand for low-carbon products and services

In the longer term, industrial decarbonisation will need to be driven not by subsidies to individual facilities, but by market demand for low-carbon products and services that can support pass through of the ‘green premium’ incurred by decarbonised processes. The relative cost increase in the production of low-carbon raw materials such as steel and cement is much less significant – and therefore easier for consumer to absorb – when considered in the context of end-use products such as cars or buildings.78

The need for government intervention

There are a number of ways in which governments, companies, and other actors can work to establish demand drivers for decarbonised products, some of which have been implemented by emerging initiatives. First, governments can use their power as a major purchaser of raw materials for public infrastructure projects to seed demand for low-carbon products. Second, governments or other entities can create product or sectoral carbon standards that define the level of embedded carbon necessary to qualify as a low or near-zero carbon product. These standards can then form the basis of voluntary or compliance-based purchase obligations on private sector buyers or final consumers.

Several companies have already made voluntary commitments to purchase a proportion of low or near-zero-carbon materials, through bilateral arrangements with specific suppliers, or through coalitions such as the First Movers Coalition or the Industrial Deep Decarbonisation Initiative.79

Creating demand-side drivers for CCS

To date, many low-carbon standards and purchase commitments have primarily driven relatively incremental decarbonisation, for example, such as the increased use of fly ash in cement. The key to linking such demand side drivers to real deployment of industrial decarbonisation projects is to focus on creating an initial small-scale demand for near-zero carbon materials, in addition to the more incremental decarbonisation driven by existing standards. In essence, demand-side drivers need to move from a technology-following role towards helping to drive deployment of deep decarbonisation technologies. An effective low-carbon product standard would require that a growing portion of specified product sales within the EU must qualify as having near-zero embodied carbon, alongside larger targets for products with a lower level of decarbonisation. This two-track approach follows the example set by the Industrial Deep Decarbonisation Initiative – a voluntary international initiative coordinated by UNIDO.81

Targets could variously be applied to raw materials or key end-use sectors, such as automobiles or buildings. Applied across a whole sector, producers would have the option to either invest in near-zero-carbon production or buy credits from producers who have already made such investments.

The Industrial Carbon Management Strategy could identify how new or existing EU legislation (such as the Construction Product Regulation82 and proposal for an Ecodesign for Sustainable Products Regulation)83 could best be directed towards stimulating such demand. Measures should aim to better standardise the approach to embodied carbon measurement across the bloc, set appropriately ambitious near-zero carbon thresholds, and grow both public and private sector demand through regulatory drivers. Given the limited political appetite for long-term sector subsidies, it is essential that the EU and Member States start planning for a future based on a combination of such market and regulatory drivers.

10. Establish Best Available Technology (BAT) Guidelines

The Industrial Carbon Management Strategy can help ensure the deployment of CO2 capture and transport technologies with optimised environmental, energetic, and climate performance by calling for the creation of BAT guidelines for the sector. Such guidelines are already in place for post-combustion capture facilities in the UK, where they are intended to help inform project developers in preparing environmental permit applications, regulatory staff in setting environmental permit conditions, and any other stakeholders who wish to better understand how regulations are applied.84

Areas covered by the guidelines should include:

  • Capture rates (for example, 95% is required by the UK guidelines for power plants).83
  • Expected energy efficiency for the capture plant and appropriate sources of energy.
  • Appropriate solvent selection, and guidelines on minimising absorber emissions and reclaimer waste.
  • Appropriate reductions in other emissions (SOx, NOx, aerosols).
  • Emissions abatement options for the absorber.
  • Appropriate monitoring of emissions and CO2 mass balance.
  • Best available plant cooling options.

The guidelines should be supported by a comprehensive technical review which assesses the state of the art in various commercially available capture technologies and for key sectors.

11. Enable a solution for clean, dispatchable power generation

Once the primary focus of CCS deployment strategy in the EU, there is now very limited political interest in using the technology to decarbonise fossil fuel-fired power plants. Most Member States have now implemented coal power phase out policies, and coal’s share of electricity generation has mostly declined since 2012, save for an increase in 2022.85 However, the share from gas-fired power has steadily increased since 2014, reaching nearly 20% last year. Nearly 10 GW of gas power have been commissioned in the past ten years and another 6.5 GW is estimated to be under construction.86 In 2022, the coal power sector emitted 456 Mt CO2e, while the gas power sector contributed 170 Mt; combined, this amounts to almost as much as the emissions from heavy industry and waste-to-energy plants.87

Emissions standards for fossil generation

It is clear that many Member States continue to see a role for gas-fired power plants to help meet the demands of an electrifying economy, particularly as flexible and dependable backup to intermittent wind and solar power. For example, the German government has outlined plans to tender up to 15 GW of power plants which will initially run on fossil gas, and is preparing a subsidy scheme to support this development.88 Power generated by gas power plants is therefore expected to increase slightly before levelling off and only declining in the late 2030s.89 Coal power plants may also continue to contribute significant emissions over the next twenty-five years, given the number of recently built assets and delayed coal phase out deadlines in some Member States.

Even assuming a steep decline in coal generation to 2035 and a peak in gas generation in 2025, there would still be a cumulative contribution of around 7 Gt of CO2 that will ultimately need to be removed from the atmosphere, at a greater cost than point-source CCS.90

The EU and its Member States should therefore give serious consideration to the climate value of applying CCS to power plants, particularly for larger facilities which will continue to operate for a significant time period and at significant capacity factors, i.e., those which represent the most cumulative emissions. In the US, the Environmental Protection Agency (EPA) recently proposed new standards for coal and gas power plants that would set carbon pollution emission limits for new and existing coal and gas plants.91 The proposed rule would require that coal plants that operate as baseload facilities must implement CCS (90% capture rate) from 2030, with separate requirements proposed for coal plants that will retire in the near term to operate at a limited capacity factor and co-fire with gas. New and existing baseload gas plants must either apply CCS (from 2035) or co-fire with at least 96% of low-carbon hydrogen (from 2038). In the EU, the ETS will provide the regulatory push to drive the phase out of unabated fossil power generation, but this process could be further accelerated and ensured through the application of standards of this type.

Gas-fired power plants are likely to continue to play some role in the EU’s power grids, even as climate neutrality is reached, as they provide valuable dispatchable output. Modelling carried out for the UK’s Net Zero Strategy determined that 10 GW of CCS-equipped gas plants could be required to deliver a decarbonised grid by 2035.92 The UK has developed a specific power contract model to incentivise the development of this capacity.93 While a conversion to hydrogen firing represents a potential alternative decarbonisation option for gas units, this relies on a future supply of very large volumes of low-carbon hydrogen and can achieve relatively low abatement levels for co-firing ratios below 90%.94 If hydrogen is sourced from electrolysis, this approach is equivalent to a long-term energy storage solution with a very low ‘roundtrip’ efficiency of 19%.95 There is therefore a climate risk associated with relying on hydrogen alone to achieve complete decarbonisation of the EU’s growing gas power fleet.

The addition of CCS to biomass-fired power plants, as well as waste-to-energy facilities (which also burn a significant proportion of biogenic carbon), has the potential to provide net CO2 removal from the atmosphere. Notably, the only two large-scale CCS projects to have taken a final investment decision in the EU are Ørsted’s biomass-fired combined heat and power units in Denmark,96 assisted in part by voluntary demand for CDR.97 Further considerations for ensuring climate benefit from this technology are considered in Part 2 of this response.

For the above reasons, the Industrial Carbon Management Strategy should set out a strategy for ensuring the availability of CCS as a viable option for those power plants that may require it: either to limit the climate damage from significant cumulative emissions, to provide a long-term solution for low-carbon dispatchable power, or as a means of generating CDR.

Specific policy steps could therefore include:

  • Consideration of a regulatory requirement that sets a maximum CO2 emission rate for new and existing fossil power plants which reflects the application of CCS (with high capture rates as ‘BAT’ standard).
  • Development of additional electricity market mechanisms to support the viability of low-carbon, dispatchable power generation and ensure priority dispatch over higher carbon intensity sources.
  • Identification of biomass-fired or fossil-fired assets which could be usefully repurposed for delivering BECCS.

12. Ensure that CCU provides a positive climate contribution

Carbon capture and utilisation (CCU) is a broad term which covers a range of different applications where CO2 is captured from point sources or ambient air and is subsequently used in or as a product.98 CCU could contribute to climate change mitigation if it replaces fossil feedstocks, avoids upstream emissions, or isolates CO2 from the atmosphere over a climate-beneficial time-scale.99 The extent of the climate change mitigation contribution depends primarily on:

  1. the source of the CO2 used (fossil, biogenic, or atmospheric);
  2. the converted form of the CO2 and the lifecycle of that product;
  3. the process and inputs required for the conversion; and
  4. the counterfactual scenario in the absence of the CO2-derived product.100

The potential role for CCU

Some CO2-derived materials can act as a relatively stable long-term sink for CO2 and can therefore provide a similar function to geological storage. In particular, this includes the formation of mineral carbonates in concrete or synthetic aggregates for building materials. CO2 can also be converted to polymers for materials – in this case, CO2 may ultimately be re-emitted if incinerated without CO2 capture. Many proposed uses of captured fossil CO2, including applications in fertiliser and fuels, result in the re-release of CO2 when the product is used. In these cases, the potential climate benefit is relative to a counterfactual scenario in which fossil carbon is used for both applications. Accurately assessing this carbon abatement requires a life cycle analysis of both systems, taking into account the carbon intensity of energy inputs. A key challenge for many CCU processes is the availability of low-carbon hydrogen required for the conversion of CO2 to hydrocarbons such as methanol.

The EU will continue to require a supply of carbon feedstock for a range of sectors, including chemical, pharmaceuticals, and potentially some hard-to-abate fuel applications such as aviation fuel. This will be partly met through the conversion of climate-beneficial biomass, but the conversion of CO2 captured from direct air capture and biomass-fired point sources is likely to also play some role in meeting society’s ongoing carbon demand, as fossil CO2 becomes too costly to emit.101

Ensuring CCU provides a climate benefit

The EU ETS recognises that processes involving the utilisation of CO2 which can yield a climate-benefit can count towards emissions reductions of installations. These can be achieved “only where captured CO2 is permanently chemically bound in a product so that they do not enter the atmosphere under normal use and disposal”.102 This provision should help ensure a progressive transition from the use of fossil CO2 for non-permanent uses, towards carbon sourced from biomass or the atmosphere. However, the methodology to define ‘permanently bound’ has yet to be implemented. Furthermore, the use of fossil CO2 is subsidised under various EU mechanisms, such as the Renewable Energy Directive103 and the Innovation Fund,104 where there may be a need for greater scrutiny of the climate benefit provided.

The Industrial Carbon Management Strategy should seek to better define the future role of carbon capture and utilisation in the transition to a climate neutral Europe. Many current plans for CCU at industrial sites are in part driven by poor access to CO2 transport and storage infrastructure. Addressing these constraints through accelerated build-out of long-distance infrastructure and more distributed storage resources, as outlined above, can help achieve greater levels of abatement through permanent storage. The Commission’s energy system modelling is often characterised by relatively high levels of conversion of atmospheric or biogenic CO2 to synfuels – this trajectory should also be assessed for resilience against scenarios such as the potential slower build-out of direct air capture or reduced availability of climate beneficial biomass.

Recommendations Part 2: Industrial Carbon Removals

1. Outline the role of ‘Industrial Carbon Removals’ in EU Climate Policy

CATF welcomes the inclusion of ‘industrial carbon removals’ within the scope of the consultation on industrial carbon management. Removing significant amounts of CO2 from the atmosphere through ‘industrial’ carbon removal methods will be unavoidable if the EU is to achieve its climate targets under the Paris Agreement and the EU Climate Law. Carbon dioxide removal (CDR) enables the ‘neutrality’ in the EU’s 2050 ‘climate neutrality’ target and is the only way to achieve net-negative emissions thereafter. CATF also welcomes the recent initiatives by the European Commission to certify carbon removals through the proposal for a Carbon Removal Certification Framework (CRCF) as well as the proposal for an EU wide storage target of 50Mt within the Net Zero Industry Act (NZIA). These interlocking policies can help to enable the deployment of industrial carbon removals in the EU. While CDR is often viewed as a measure which will have to be relied upon in the future, achieving necessary deployment at the scales required will require appropriate CO2 transport and storage infrastructure, consistent policy frameworks, support for research and development and reliable incentive schemes to be created now to meet expected demand at net-zero.

The role of industrial carbon removals in reaching climate neutrality

Currently, the two most technologically advanced industrial removal CDR methods are bioenergy with carbon capture and storage (BECCS) and direct air capture with carbon storage (DACCS). The geological storage of CO2 derived from either of these processes offers a means of permanently removing large volumes of carbon from the atmosphere. Decarbonisation modelling suggests that the large-scale deployment of both DACCS and BECCS will be required for the wider region to reach net zero, with DNV’s Pathway to Net Zero105 projecting 115 Mt/year of BECCS and 200 Mt/year of DACCS and the median IPCC106 figure being 304 Mt/year of BECCS. The Advisory Board also outlined the role of carbon removals from BECCS and DACCS will be in the range of 50-200 Mt/year in the EU in 2040.107 It must be noted that within this modelling, the role of DACCS is variable between 0-7 Mt/year of removals in 2040.

The advantage of both DACCS and BECCS, compared to many other removal methods, is that they can provide permanent carbon removals by durably isolating atmospheric carbon, either directly or via the biosphere and storing it in geological formations deep in the earth’s surface for millennia or longer. The deployment of these removal methods will depend on the availability of storage sites and a developed CO2 transport network to deal with the likely large volumes requiring to be transported and stored in 2050 and beyond. As such, consideration for their unique needs is required within the broader scope of the Industrial Carbon Management Strategy to ensure that CCS-based industrial carbon removals can play their necessary role in 2050.

Prioritising emissions reductions over removals

While the need for industrial carbon removals is clear, it is fundamentally easier, cheaper, and more effective to prevent an emission than to subsequently remove it, given the immediate climate impact of atmospheric CO2 and the energy requirements of industrial carbon removals. Industrial carbon removals must be complementary to emissions reductions; prioritising deeper emission cuts reduces Europe’s reliance on carbon removals in the future. Overreliance on any one CDR method poses significant risks, due to the uncertainties surrounding the deliverability, availability, scalability, mitigation potential, monitoring reporting and verification (MRV) challenges, possible negative externalities, as well as the uncertainty around the duration of carbon storage and high risk of reversal associated with certain CDR pathways – such as biochar and enhanced weathering.108

Identifying the amount of industrial carbon removals likely to be required at net-zero will require an assessment of the quantities of residual emissions on a sectoral and national level across the EU. Modelling by the European Scientific Advisory Board on Climate Change estimates between 390 and 1,165 Mt CO2e of residual gross emissions in the EU in 2050.110 As emissions reductions solutions develop, it will be necessary to regularly re-evaluate how much carbon emission are likely to remain at net-zero.

A vision for permanence: The need to prioritise CCS-based carbon removals (DACCS and BECCS) as part of the Industrial Carbon Management Strategy

DACCS and BECCS have emerged as leading carbon removal technologies due to their comparably high mitigation potentials and TRLs. Additionally, a range of other ‘industrial’ carbon removal methods are under development, including enhanced weathering, biochar and various ocean-based approaches such as ocean alkalinisation and fertilisation. While these methods may be able to contribute to negative emissions targets, they will require in-depth research into their respective mitigation potentials, durability of carbon stored, land, water, and energy uses, costs, as well as other impacts, before being deployed at scale.

The Industrial Carbon Management Strategy should prioritise industrial carbon removal methods that incorporate geologic storage of CO2. This emphasis is due to their inherent need for comprehensive CO2 transport and storage networks to operate. In contrast, the processes of other carbon removal techniques such as biochar and enhanced weathering differ fundamentally from DACCS and BECCS. These other methods are still in the very early stages of technological readiness, present challenges in monitoring, reporting, and verification (MRV), and have uncertainties regarding the longevity of carbon storage. Given these distinctions, such methods should be addressed within a separate framework. Meanwhile, this strategy should focus on enabling carbon removals centred on CO2 capture and permanent storage via CCS.

2. Ensuring effective deployment of industrial carbon removals across the EU

Strategic Deployment of DACCS in the EU

Direct air capture with carbon storage (DACCS) is a process that captures CO2 directly from the atmosphere, concentrating it for permanent storage in geological formations, providing immediate carbon removal. There is a wide portfolio of technologies within the category of DAC, including absorption with liquid solvents, solid sorbents, membrane separation cryogenic separation, and combinations of these approaches, all with varying levels of cost and TRL. While it is one of the leading carbon removal methods and holds significant potential, it is at a nascent stage, with operational plants currently capturing on the order of 0.01 Mt CO2/yr globally.111 Currently, there exist large uncertainties the technology’s future deployment potential and costs. DACCS offers operational advantages when compared to other CDR methods, including flexibility, scalability and modularity. Furthermore, negative emissions from DACCS can also be more easily verified and monitored than ecosystem-based CDR methods and can mitigate emissions from dispersed and mobile sources.

However, not all EU countries have the available resources to make efficient use of DACCS. DAC processes require substantial amounts of energy, heat and water.112 Due to these energy requirements, as well as material inputs, DACCS may not always lead to net negative emissions, highlighting the need for robust life cycle assessments.113 Siting DACCS near grids with low carbon intensity is crucial for determining whether the process is efficient from a net-negativity standpoint, which will mean certain regions within the EU will be better suited for DACCS deployment than others.114

The trade-off between using limited low-carbon energy for DACCS, rather than lowering the emissions intensity of the grid requires careful consideration. Utilising waste heat may also prove to be an economically competitive input to release the captured CO2 from certain solvents or sorbents, however, it is tethered to specific locations and, as the EU nears a net-zero energy system, might face escalating competition for usage. Renewable heat sources like solar thermal, geothermal, or biomass present alternatives, however, their applicability is also geographically constrained. Biomass also faces limitations due to land use restrictions and the availability of sustainable biomass. The EU could facilitate the most effective deployment of DACCS by either establishing a dedicated task force or conducting research through the Joint Research Centre (JRC). This research would explore these key factors and could inform target setting for DACCS.

The energy costs of DAC currently lead to significant costs per tonne of CO2 removed, and further energy costs are incurred in the compression for storage.116 While these costs are expected to fall as deployment expands, the cost of DAC will always be much greater than capture of CO2 from a point source.117

The proximity of geological storage locations is also a crucial consideration for DACCS deployment. DACCS would be best deployed in countries with ample geological CO2 storage capacities, or those located near neighbouring countries with geological storage capacities. Hence, the widespread deployment of geologic storage, coupled with availability of clean electricity is essential for the deployment of DACCS.

Strategic Deployment of BECCS

BECCS combines bioenergy production with CCS, which can result in negative emissions as biomass absorbs CO2 during growth. As such, it could deliver immediate, relatively affordable, and permanent carbon removal. To properly quantify if the process has delivered negative emissions, the entire value chain must be evaluated by a comprehensive lifecycle analysis.118 One of the key benefits of BECCS is that the biomass can provide additional uses, such as heat, electricity, biofuels, or paper. However, it requires a substantial land area for the cultivation of biomass, which can present potential conflicts with food production and biodiversity preservation.119

It is also highly dependent on the availability of sustainable biomass, of which there is a limited amount available globally, particularly in Europe. These concerns could, to an extent, be mitigated when waste biomass is used and siting biomass facilities within industrial clusters can help leverage economies of scale and aggregation.120 Nonetheless, deployment of BECCS at scale will require coordinated development of each component of the supply chain, from biomass sourcing to CO2 transport and storage, as well as a thorough analysis of the effects of any direct and indirect land use change. Whether BECCS is climate beneficial will depend on the full lifecycle carbon accounting of a project and is especially dependent on the bioenergy feedstock.

Feedstocks that are truly wastes or do not induce land use change, and BECCS facilities that capture current biogenic point sources are likely climate beneficial and other environmental risks are likely limited. Strict sustainable sourcing criteria for biomass feedstock and traceability and oversight across the supply chain is needed to ensure utilisation of biomass does not result in environmental consequences.

Near-term opportunities for BECCS can be found by leveraging existing biogenic point sources exist which have the potential to deliver negative emissions from current processes. Such opportunities include applying CCS in the pulp and paper, bioenergy, and waste-to-energy sectors, which are associated with significant biogenic emissions (>100 Mt collectively). Certain biogenic point sources have high-purity streams of CO2, which lowers the capture costs considerably, such as in ethanol production. These low-cost CCS applications, if executed sustainably and efficiently, could potentially provide negative emissions, reductions in the emissions intensity of the products as well as enabling the build-out of essential CO2 transport and storage infrastructure. As with DACCS, the EU could help to optimise the deployment of BECCS by either forming a specialized task force or undertaking research via the Joint Research Centre (JRC).

3. Policy interventions for scaling industrial carbon removals in the EU

Successful deployment of both DACCS and BECCS at the necessary scale will require a clear EU vision for deployment, accompanied by a set of dedicated policies and financing tools, as well as a concerted effort to address significant challenges and uncertainties. The Industrial Carbon Management Strategy is a critical opportunity for the Commission to outline the path forward for these industrial carbon removal methods. It will also be important to set out the role for these removal technologies in meeting climate targets at both the EU and Member State levels, to ensure that policy interventions are tailored and effective.

Overcoming the barriers facing both DACCS and BECCS will require robust policy interventions and financial incentives to catalyse deployment and reduce costs. As these technologies transition from the pilot stage to commercial deployment, they could experience a “valley of death” where securing capital becomes challenging.122 This is characterized by a funding gap that arises as projects lose access to innovation and research grants while not yet having access to permanent carbon pricing instruments or benefit from regulatory benefits. To bridge this gap, time-limited, mitigation-focused subsidies are essential, serving as a temporary measure until long-term financial mechanisms become available. Project-specific supports will also be required on the supply side to drive the at-scale deployment of these technologies. Ensuring there is demand for permanent removals will also play an important role in de-risking project investments. Streamlining permitting for both CO2 infrastructure development and project construction would aid in reducing project lead times.

Creating long-term policy supports for industrial carbon removals in the EU

The lack of long-term policies for industrial carbon removals is a major barrier to the necessary deployment of industrial carbon removals in the EU. A limited patchwork of policies exist in EU Member States to support industrial carbon removals, notably Sweden’s support scheme for BECCS123 and Denmark’s NECCS Fund.124

Policy supports should include a suite of policy tools tailored to each stage of development, commercialization, and deployment, that aims to spur innovation, create demand-pull in the short-to-medium term, while bringing together governments, industrial carbon removal developers, and financiers. To scale permanent removals with sufficient speed, various legal and regulatory measures should be considered at the EU and Member State levels, to ensure that legislation creates a business case for investment in industrial carbon removals.

Industrial carbon removals face a range of barriers, including low TRL, high costs, lack of demand and long lead times, among others. Policy interventions will be crucial to overcoming these barriers. For example, standards, permitting, accounting, and other regulations are necessary to structure the industry, and numerous kinds of incentives and supports for research, development, demonstration, and deployment can help scale the field. These interventions may be applicable to one or more stages of technology development, commercialization, and deployment (see figure 16).

Policy support for industrial carbon should provide revenue certainty, providing clear signals for private sector investment and de-risking the first set of projects. This should all be underpinned by robust framework of standards and MRV, while ensuring value for money for the public. Policies must be crafted with an awareness of their possibility to create unintended market imbalances and/or distortions, as well as their potential to create perverse incentives and outcomes, including mitigation deterrence. These policies should strive to create a robust market for CDR with a clear pathway for the sector to gradually move from a model of public support to one which can stand on its own two feet. Policy interventions should also seek to promote innovation, learning-by-doing and cost reductions, with the aim of fostering a competitive and diverse market for industrial carbon removals in the EU.

Set indicative EU-wide targets for DACCS and BECCS

The Industrial Carbon Management strategy should set indicative targets for both BECCS and DACCS to set out the deployment trajectory for these technologies. These targets should be based on reliable scientific models that prioritise risk mitigation. The European Commission’s current aspirational goal, as mentioned in the Communication on Sustainable Carbon Cycles, sets out the aim to remove 5 Mt of CO2 by 2030 through industrial carbon removals.125 However this target would not put the EU on track to meet projected demand
for industrial removals approaching and at net zero, requiring a 900% increase in supply in just 10 years to meet even the lower bound of the Advisory Board modelling for 2040.126

In support of these targets, a distinct pillar for permanent industrial carbon removal should be created which stands alongside existing frameworks like the ETS, ESR, and LULUCF. This pillar’s foundation should be an in-depth analysis, pinpointing the likely quantities required to achieve net-zero at the EU level, considering both sector-specific and national residual emissions. EU-wide targets can ensure that Member States which do not have the capacities to deploy these technologies can avail of removals located in other Member States.

Support research and development of industrial carbon removal technologies

As the industrial carbon removal sector is nascent, both in terms of projects currently operating and the technological readiness of various approaches, successful deployment will hinge on supporting research and development efforts. Before large-scale deployments, pilot projects and demonstration facilities can serve as tangible evidence of feasibility, effectiveness, and challenges likely to be faced as projects scale-up. The EU should, therefore, invest in and support a range of these projects across EU member states, leveraging existing capabilities within research institutions and with private actors. Analyses on BECCS and DAC show that initiating deployments sooner can significantly curtail the overall expenses linked to the EU’s climate targets.

These R&D efforts can aid in developing novel removal technologies, as well as answering critical questions around the measurability, cost and mitigation potential of different methods. This will be crucial for advancing CDR technologies through the research and development stage and into large-scale deployment. These efforts also play a necessary role in assessing commercial viability, ensuring that different technologies127 can be scaled cost-effectively. Creating a supportive environment for innovation can help drive the development of emerging industrial carbon removal technologies and ensure a diverse range of solutions are available and ready on time for net-zero. As the CDR sector grows globally, creating a base of EU technology providers can ensure that this future industry has European market players.

An example of a near-term policy to drive deployment of both BECCS and DACCS would be the establishment of a dedicated funding stream within the Innovation Fund for permanent carbon removals. Such a funding stream could fund demonstration projects for innovative CCS-based removal technologies, whilst also making funding available for scale-up, allowing for pilot projects to scale while other regulatory and policy measures are being put in place at the national or EU level. Such funding could be awarded through a carbon contract for difference model, potentially supported by EU ETS revenues.

Create commercial incentives to stimulate deployment

Current policies are insufficient to deploy BECCS and DACCS to match the trajectory required to meet the EU’s climate targets. Presently, the value for removals is derived solely from voluntary markets with insufficient and uncertain demand. In the case of biogenic CO2 from existing biogenic point sources, there is no incentive, nor requirement for these emissions to be captured, despite their potential for negative emissions, as well as the negative climate impact of these emissions reaching the atmosphere.

Targeted policy interventions are required, such as demonstration project funding followed by a move towards a compliance market for industrial carbon removals. During the initial deployment phase, this could involve establishing dedicated business models that can operate in parallel with voluntary markets, helping to fill the funding gap between first-mover costs and existing revenues. A cornerstone of early-stage policy should be to mitigate risks for potential investors, providing them with a clearer vision of return on investment. A dual approach will be required to stimulate the sector through both demand-driven strategies (fostering demand for industrial carbon removals) and supply-side interventions (supporting individual projects).

Within the policy toolkit, the EU and its member states should consider a number of supportive policy options including:

  • Investment tax credits,
  • Tax-advantaged financing structures, and cash grants;
  • Implementing government financing and loan guarantees;
  • Offering operations support through production tax credits,
  • Regressive subsidies (i.e., higher for early offtake and lower for later offtake), and direct payments;
  • Promoting government procurement through contracts for difference (CfDs) and reverse auctions.

Regulatory measures can also significantly advance industrial carbon removal development and deployment in the EU. In the absence of a compelling business case for CDR, regulations can help to establish this value through carbon pricing.

Regulatory policy options available to the EU and Member States include:

  • Carbon taxes/fees (making pollution economically unattractive).128
  • Potentially integrating removals into emissions cap-and-trade systems (limiting total emissions and allowing trading).129
  • Net zero mandates (requiring polluters to offset their emissions with removals), carbon takeback obligations (making fossil fuel extractors and importers accountable for removing a gradually increasing % of the CO2 they generate).130

4. Integrating industrial carbon removals into compliance markets

In the longer term, the value of industrial carbon removals could be linked to a new market for removal certificates linked to sectoral, national, or regional targets, or potentially to the EU ETS. This should be addressed carefully and gradually to avoid compromising the prioritisation of emissions reductions.

When considering integrating industrial carbon removals into compliance markets, it is necessary to acknowledge and address potential issues such as trading frictions, illiquidity issues, and the diminished efficacy of cap-and-trade as the cap approaches zero. These potential obstacles should be thoroughly investigated to avoid hindrances to market efficiency and effectiveness.

Any integration of industrial carbon removals into the EU ETS must be based on a solid foundation of standards, and MRV. An effective Carbon Removal Certification Framework (CRCF) can provide the necessary certainty in this respect. Critically, before integrating industrial carbon removals into the EU ETS, there should be a suite of policy tools in place that are working to drive currently expensive, but highly scalable industrial carbon removal technologies down the cost curve and up the TRL ladder.

This should include support for early innovation, pilot, and demonstration projects, as well as competitively awarded demand drivers such as contract for differences or subsidies. Cost is particularly important in this context, as the cost of these permanent removal methods must be low enough for them to benefit from the carbon price.

Launching a separate carbon removals pillar under EU climate policy, alongside the ETS, LULUCF and ESR could also lead to greater deployment in the EU, through mechanisms such as auctions for specific removal targets, with the aim of eventually incorporating industrial carbon removals into wider emissions trading schemes. This pillar’s foundation should be an in-depth analysis, pinpointing the likely quantities required to achieve net-zero at the EU level, taking into account both sector-specific and national residual emissions.

Enabling carbon removal certificates to be generated by permanent industrial carbon removals could prove to be a powerful driver to boost removals, even for presently costly technologies such as DACCS, due to future cost decrease prospects and anticipated high carbon prices. It is important to bear in mind that regulatory uncertainties concerning future removal goals, prices, as well as the timing and regulations around removals-ETS integration, could potentially elevate both risks and costs associated with scaling these technologies. Additionally, several risks exist when considering integrating industrial carbon removals into compliance markets:131

  1. Considering emissions reductions and removals as completely interchangeable can lead to unfavourable substitutions, and determining equivalence between a negative emissions unit and a positive emissions unit abated is scientifically challenging. This risk is heightened if policymakers incorporate intertemporal flexibility mechanisms, such as banking or borrowing to reduce costs, which may lead to over emissions during the current trading period.
  2. Carbon markets will likely not offer adequate demand to economically scale up more expensive carbon removals, such as DACCS.
  3. Prematurely introducing cheaper, less-durable carbon removal methods, such as biochar to the carbon market could decrease the market-based carbon price.

As emissions trading schemes approach net-zero, market structures are likely to undergo dramatic changes.132 This is particularly true when contemplating the addition of carbon removal certificates, leading to a transition from a single public entity selling positive emission allowances to multiple private entities offering negative emission certificates. An option proposed to mitigate possible risks posed by the inclusion of carbon removals into the EU ETS is that of a ‘Carbon Central Bank.’133 This institution could act as a regulatory authority to manage the integration of Carbon Removal Certificates (CRCs), enabling the implementation of a gradual integration of DACCS and BECCS into the EU ETS. A phased approach could give time for removals to mature and become more cost-effective, as well as allowing time to address emerging issues. With a Carbon Central Bank, verified carbon removals would already be purchased well before mid-century, converted into CRCs, and booked in a corresponding reserve, so that they can then be auctioned as necessary.

As the EU’s primary climate instrument, incorporating DACCS and BECCS into the EU ETS could significantly accelerate carbon removals in the EU by providing long-term demand. However, such integration will be complex and necessitate a comprehensive revision of the existing ETS Directive. This process must proceed cautiously to avoid undermining mitigation efforts and destabilising the market, it should also align with the broader evolution of the EU ETS considering future climate targets, all while carefully managing both known and unforeseen risks.


As the EU has already recognised, fighting climate change is imperative for the future of Europe and the world. Despite the commendable efforts made under the banner of the European Green Deal, particularly aiming to cut emissions by at least 55% by 2030, we are not yet on track to achieve net zero emissions by 2050. As such, the implementation of climate actions must remain a priority for policymakers and the 2040 target must be ambitious enough to enable the ultimate goal – climate neutrality.

As it stands, rates of CCS deployment are far below those in modelled pathways limiting global warming to 1.5°C or 2°C. Crucially, there are no operational CO2 storage sites in the EU. Therefore, more must be done to design policy and financial incentives to advance CCS technologies to the scale needed to make an impact on total emissions. This is particularly crucial in the 2030-2040 period, when the deployment should be at its fastest.

CDR technologies, particularly those which store CO2 geologically, will also require dedicated incentives for deployment. However, developing these technologies presents its own set of challenges due to competing land and resource requirements, energy consumption and costs, among others. Developing CO2 transport and storage infrastructure across the EU is a critical element which can contribute to both reducing emissions and carbon removals in the future.

With the Industrial Carbon Management Strategy, the EU has an opportunity to set a course and become a true climate leader by accelerating a critical set of technologies which can make a significant impact in tackling climate change at low cost. Building a European CO2 transport and storage infrastructure network is a no-regrets option to significantly reduce the emissions Europe produces currently, and in the future, while also paving the way for negative emissions to reverse our historical CO2 emissions. Policymakers at the EU and Member State level have an opportunity to transform European industries, put them on the pathway to climate neutrality and deploy a technology which will also be crucial for the rest of the planet.


  1. Clean Air Task Force, ‘Open Letter: Support for the Publication of an Industrial Carbon Management Strategy’ (5 July 2023) <https://www.>; Clean Air Task Force, ‘Open Letter: NGOs Call for an EU Carbon Capture and Storage Strategy’ (20 December 2022) <>.
  2. CCUS Forum WG 2 on Vision, ‘A Vision for Carbon Capture, Utilisation, and Storage in the EU’ <>.
  3. CCUS Forum WG 1 on Infrastructure, ‘Towards a European Cross-Border CO2 Transport and Storage Infrastructure’ <https://circabc.europa. eu/ui/group/75b4ad48-262d-455d-997a-7d5b1f4cf69c/library/c5f959d7-ca7c-4cd5-a9cb-d8f0a7b82fd9/details>.
  4. Proposal for a Regulation of the European Parliament and of the Council on establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (“Net-Zero Industry Act”) 2023 (COM(2023) 161 final)).
  5. Clean Air Task Force, ‘Europe’s Net-Zero Industry Act: What does it mean for carbon capture and storage?’, 2022 <https://www.catf.
  6. Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) 2021 (L 243/1) art 1.
  7. International Energy Agency, ‘CCUS in Clean Energy Transitions’ (2020) <>; Intergovernmental Panel on Climate Change, ‘Working Group III Contribution to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change’ <>; European Commission, ‘In-Depth Analysis in Support on the COM(2018) 773: A Clean Planet for All – A European Strategic Long-Term Vision for a Prosperous, Modern, Competitive and Climate Neutral Economy’ <>; DNV, ‘Pathway to Net Zero Emissions – Energy Transition Outlook 2021’ (2021) <>.
  8. European Scientific Advisory Board on Climate Change., ‘Scientific Advice for the Determination of an EU-Wide 2040 Climate Target and a Greenhouse Gas Budget for 2030–2050’ <> accessed 29 August 2023.
  9. ibid 15.
  10. European Commission, ‘A Clean Planet for All’ (n 7).
  11. ibid.
  12. DNV (n 7).
  13. Intergovernmental Panel on Climate Change (n 7).
  14. International Energy Agency, ‘CCUS in Clean Energy Transitions’ (n 7).
  15. European Scientific Advisory Board on Climate Change. (n 8).
  16. Intergovernmental Panel on Climate Change (n 7).
  17. It is encouraging to note, however, that over 54 projects are in varying stages of development across the Union. See: Clean Air Task Force, ‘Global Carbon Capture Activity and Project Map’ <> accessed 7 August 2023.
  18. Toby Lockwood and Lee Beck, ‘Why Europe Needs a Comprehensive Carbon Capture and Storage Strategy’ (7 June 2022)
  19. International Energy Agency, ‘Net Zero by 2050 – A Roadmap for the Global Energy Sector’ (2021)
  20. Intergovernmental Panel on Climate Change (n 7).
  21. ibid 28.
  22. IEA Greenhouse Gas R&D Programme, ‘A Brief History of CCS and Current Status’ <>.
  23. Global CCS Institute, ‘The Global Status of CCS 2022’ <>.
  24. International Energy Agency, ‘Putting CO2 to Use’ (2019) <>. Note: of a total of 230
    Mt/year used, 70 Mt/year is for enhanced oil recovery, of which around 40-50 Mt/year is estimated to be derived from geological CO2 rather than captured CO2.
  25. Emma Martin-Roberts and others, ‘Carbon Capture and Storage at the End of a Lost Decade’ (2021) 4 One Earth 1569; Nan Wang, Keigo Akimoto and Gregory F Nemet, ‘What Went Wrong? Learning from Three Decades of Carbon Capture, Utilization and Sequestration (CCUS) Pilot and Demonstration Projects’ (2021) 158 Energy Policy 112546.
  26. UK Climate Change Committee, ‘Delivering a Reliable Decarbonised Power System’ (2023) <>.
  27. Intergovernmental Panel on Climate Change (n 7) 24.
  28. Clean Air Task Force and Carbon Limits, ‘The Gap between Carbon Storage Development and Capture Demand’ (2022) <>.
  29. Isabela Butnar, Jennifer Cronin and Steve Pye, ‘Review of Carbon Capture Utilisation and Carbon Capture and Storage in Future EU Decarbonisation Scenarios’ (2020) <>.
  30. Rystad Energy (2022) Available at:; Carbon Limits, Thema, The role of carbon capture and storage in a carbon neutral Europe (2020)
  31. Endrava, ‘Capture Map’ <>.
  32. DNV (2022) Energy Transition Outlook, JRC (2022) Global Energy and Climate Outlook; IEA (2022) Global hydrogen review; EC (2020)
    A hydrogen strategy for a climate-neutral Europe
  33. Wind Europe and ETIPWind, ‘Getting Fit for 55 and Set for 2050: Electrifying Europe with Wind Energy’ (2021) <> accessed 30 August 2023; Ember, ‘New Generation Building a Clean European Electricity System by 2035’ (2022) <> accessed 30 August 2023.
  34. DNV (n 7).
  35. European Commission, ‘A Clean Planet for All’ (n 7).
  36. CCUS Forum WG 2 on Vision (n 2).
  37. Clean Air Task Force, ‘Global Carbon Capture Activity and Project Map’ (n 17).
  38. ibid.
  39. Clean Air Task Force and Element Energy, ‘Unlocking Europe’s CO2 Storage Potential’ (2023) <>.
  40. Clean Air Task Force, ‘Global Carbon Capture Activity and Project Map’ (n 17).
  41. Clean Air Task Force and Element Energy (n 39) 9.
  42. ibid 39–40.
  43. Toby Lockwood, ‘Europe’s Cross-Border CO2 Networks Start to Take Shape’ (21 February 2023) <>.
  44. Jenkins S et al. (2021) Upstream Decarbonization through a Carbon Takeback Obligation: An Affordable Backstop Climate Policy; Kuijper M et al. (2022) Feasibility Study Phase 2, Final Report’; Jenkins S et al. (2023) Extended producer responsibility for fossil fuels
  45. U.S. DOE NETL (2023) CarbonSAFE Initiative. Available at:
  46. Strategy CCUS, ‘Strategy CCUS’ <>.
  47. CO2-SPICER, ‘CO2-SPICER – CO2 Storage Pilot in a Carbonate Reservoir’ <>.
  48. Clean Air Task Force and Carbon Limits, ‘The Cost of Carbon Capture and Storage in Europe’ <>;
    Andrei Marcu and others, ‘2022 State of the EU ETS Report’ 33.
  49. These include Germany, the Netherlands, Denmark and France. For more information on carbon contracts for difference, see: Jakob Petutschnig, ‘Why Are Carbon Contracts for Difference Gaining Popularity in Europe?’ (25 August 2022) <> accessed 7 August 2023.
  50. Clean Air Task Force, ‘Global Carbon Capture Activity and Project Map’ (n 17).
  51. For example, projects like the German CO2 Network project would connect inland emitters to export terminals or storage sites. See: Open Grid Europe, ‘German CO2 Network’ <>.
  52. European Commission, ‘EU Energy Platform’ <>.
  53. Net Zero Industry Act proposal art 28.
  54. E3G and Bellona Europe, ‘Carbon Capture and Storage Ladder Assessing the Climate Value of CCS Applications in Europe’
  55. Clean Air Task Force and Carbon Limits (n 48).
  56. Fluxys, ‘Fluxys CO2 Network Project’ <>.
  57. Port of Antwerp, ‘Antwerp@C Project’ <>.
  58. Porthos, ‘Porthos Project’ <>.
  59. Net Zero Industry Act proposal 7.
  60. Clean Air Task Force and Carbon Limits (n 48).
  61. Olivier Massol, Stéphane Tchung-Ming and Albert Banal-Estañol, ‘Joining the CCS Club! The Economics of CO2 Pipeline Projects’ (2015) 247 European Journal of Operational Research 259.
  62. Sam Uden, Robert Socolow and Chris Greig, ‘Bridging Capital Discipline and Energy Scenarios’ (2022) 15 Energy & Environmental Science 3114, fig 1
  63. Adrien Nicolle and Olivier Massol, ‘Build More and Regret Less: Oversizing H2 and CCS Pipeline Systems under Uncertainty’ (2023) 179 Energy Policy 113625.
  64. ibid.
  65. Northern Lights, ‘Longship Project’ <>.
  66. UK Government, ‘Cluster Sequencing for Carbon Capture, Usage and Storage (CCUS) Deployment: Phase-1’ <>.
  67. Infrastructure Investment and Jobs Act (HR 3684). For more information, see: U.S. Department of Energy Loan Programs Office,
    ‘Carbon Dioxide Transportation Infrastructure’ <>.
  68. European Commission, ‘Connecting Europe Facility’ <>.
  69. drien Nicolle and others, ‘Modelling CO2 Pipeline Systems: An Analytical Lens for CCS Regulation’ [2023] HAL Open Science
    <>; Nicolle and Massol (n 63).
  70. European Commission, ‘Hydrogen and Decarbonised Gas Market Package’ <>.euro
  71. Nicolle and Massol (n 63).
  72. 1996 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, 1972 1972 (1046 UNTS 120, [ATS] 1985 16, 11 ILM 1294 (1972), UKTS 43 (1976)).
  73. The Barcelona Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean, 1995 1976.
  74. Helsinki Convention on the Protection of the Marine Environment of the Baltic Sea Area 2000.
  75. European Commission, ‘The EU Legal Framework for Crossborder CO2 Transport and Storage in the Context of the Requirements of the London Protocol’ (2022) <>.
  76. Resolution LP.3(4) amending Article 6 of the London Protocol. For more information see: IEA Greenhouse Gas R&D Programme,
    ‘Exporting CO2 for Offshore Storage – The London Protocol’s Export Amendment and Associated Guidelines and Guidance’ 2021-TR02
  77. International Energy Agency, ‘CO2 Storage Resources and Their Development – An IEA CCUS Handbook’ <>.
  78. First Movers Coalition, ‘First Movers Coalition’ <>.
  79. UNIDO, ‘Industrial Deep Decarbonisation Initiative’ (2023) <>.
  80. Sai Gokul Subraveti and others, ‘Is Carbon Capture and Storage (CCS) Really So Expensive? An Analysis of Cascading Costs and CO2 Emissions Reduction of Industrial CCS Implementation on the Construction of a Bridge’ (2023) 57 Environmental Science & Technology 2595.
  81. UNIDO (n 79).
  82. Regulation (EU) No 305/2011 of the European Parliament and of the Council of 9 March 2011 laying down harmonised conditions for the marketing of construction products and repealing Council Directive 89/106/EEC (L 88/5).
  83. Proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements for sustainable products and repealing Directive 2009/125/EC 2022 (COM(2022) 142 final).
  84. UK Government, ‘Guidance: Post-Combustion Carbon Dioxide Capture: Best Available Techniques (BAT)’ <>.
  85. Ember, ‘European Electricity Review 2023’ (2023) <>.
  86. Platts (2023) World Electric Power Plant database.
  87. Ember, ‘Repeat Offenders: Coal Power Plants Top the EU Emitters List’ (2023) <>.
  88. Federal Ministry of Economic Affairs and Climate Action, ‘Explanatory Paper – Security of Power Supply until 2030’
    < pdf?__blob=publicationFile&v=4>; Federal Ministry of Economic Affairs and Climate Action, ‘Framework for Power Plant Strategy in Place – Important Progress Made in Discussions with European Commission on Hydrogen Power Plants’ (1 August 2023)
  89. DNV, ‘Energy Transition Outlook 2022’ <>.
  90. CATF analysis based on DNV (2022) and Ember (2023).
  91. US Environmental Protection Agency, ‘Greenhouse Gas Standards and Guidelines for Fossil Fuel-Fired Power Plants’
  92. UK Government, ‘Energy and Emissions Projections’ <>.
  93. UK Government, ‘Carbon Capture, Usage and Storage: Dispatchable Power Agreement Business Model Summary’
  94. Using green hydrogen, a blend of 90% hydrogen with natural gas achieves a 75% reduction in life cycle emissions.
  95. CATF own analysis.
  96. Ørsted, ‘Ørsted Awarded Contract – Will Capture and Store 430,000 Tonnes of Biogenic CO2’ (Ørsted, 15 May 2023)
  97. Will Mathis, ‘Microsoft Inks Deal to Pay for CO2 Stored Below the Sea’ [2023] Bloomberg <>.
  98. CCU processes can also be understood to include the conversion of CO, where it is emitted as an industrial by-product such as in blast furnace gas.
  99. Kiane de Kleijne and others, ‘Limits to Paris Compatibility of CO2 Capture and Utilization’ (2022) 5 One Earth 168; Nils Thonemann and Massimo Pizzol, ‘Consequential Life Cycle Assessment of Carbon Capture and Utilization Technologies within the Chemical Industry’ (2019) 12 Energy & Environmental Science 2253; Arne Kätelhön and others, ‘Climate Change Mitigation Potential of Carbon Capture and Utilization in the Chemical Industry’ (2019) 116 Proceedings of the National Academy of Sciences 11187; Cameron Hepburn and others,
    ‘The Technological and Economic Prospects for CO2 Utilization and Removal’ (2019) 575 Nature 87.
  100. de Kleijne and others (n 99); Kätelhön and others (n 99); Hepburn and others (n 99); Thonemann and Pizzol (n 99).
  101. International Energy Agency, ‘CCUS in Clean Energy Transitions’ (n 7).
  102. Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 Establishing a Scheme for Greenhouse Gas Emission Allowance Trading Within the Community and Amending Council Directive 96/61/EC 2003 (L 275/32) art 12 (3b).
  103. Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) (L 328/82).
  104. A number of projects are currently supported by the Innovation Fund. See: European Commission, ‘Innovation Fund Projects’
  105. DNV (n 7).
  106. Intergovernmental Panel on Climate Change (n 7)
  107. European Scientific Advisory Board on Climate Change. (n 8) 78–79.
  108. Solene Chiquier and others, ‘A Comparative Analysis of the Efficiency, Timing, and Permanence of CO2 Removal Pathways’ (2022) 15 Energy & Environmental Science 4389.
  109. ibid 79.
  110. European Scientific Advisory Board on Climate Change. (n 8) 79–80.
  111. International Energy Agency, Direct Air Capture: A Key Technology for Net Zero (OECD 2022) 3 <> accessed 31 August 2023.
  112. See, among others: Francesco Sabatino and others, ‘A Comparative Energy and Costs Assessment and Optimization for Direct Air Capture Technologies’ (2021) 5 Joule 2047; María Erans and others, ‘Direct Air Capture: Process Technology, Techno-Economic and Socio-Political Challenges’ (2022) 15 Energy & Environmental Science 1360; Rocio Gonzalez Sanchez and others, ‘The Role of Direct Air Capture in EU’s Decarbonisation and Associated Carbon Intensity for Synthetic Fuels Production’ (2023) 16 Energies 3881; David W Keith and others, ‘A Process for Capturing CO2 from the Atmosphere’ (2018) 2 Joule 1573.
  113. Samantha Eleanor Tanzer and Andrea Ramírez, ‘When Are Negative Emissions Negative Emissions?’ (2019) 12 Energy & Environmental Science 1210.
  114. Gonzalez Sanchez and others (n 112).
  115. ibid 15.
  116. Gonzalez Sanchez and others (n 112).
  117. Sabatino and others (n 112).
  118. Mathilde Fajardy and Niall Mac Dowell, ‘Can BECCS Deliver Sustainable and Resource Efficient Negative Emissions?’ (2017)
    10 Energy & Environmental Science 1389.
  119. Keigo Akimoto and others, ‘Climate Change Mitigation Measures for Global Net-Zero Emissions and the Roles of CO2 Capture and Utilization and Direct Air Capture’ (2021) 2 Energy and Climate Change 100057.
  120. Muir Freer and others, ‘Putting Bioenergy with Carbon Capture and Storage in a Spatial Context: What Should Go Where?’ (2022)
    4 Frontiers in Climate 826982.
  121. Lorenzo Rosa, Daniel L Sanchez and Marco Mazzotti, ‘Assessment of Carbon Dioxide Removal Potential via BECCS in a Carbon-Neutral Europe’ (2021) 14 Energy & Environmental Science 3086, 3089.
  122. Matthias Honegger and others, ‘Who Is Paying for Carbon Dioxide Removal? Designing Policy Instruments for Mobilizing Negative Emissions Technologies’ (2021) 3 Frontiers in Climate 672996.
  123. For details, see: Swedish Energy Agency, ‘State Aid for BECCS’ <> accessed 31 August 2023.
  124. For details, see: Danish Energy Agency, ‘The Danish Energy Agency Informs about Adjustments to the Fund for Negative Emissions via CCS (NECCS Fund)’ <> accessed 31 August 2023.
  125. COM (2021) 800, Commission staff working document accompanying the Communication on Sustainable Carbon Cycles.
  126. European Scientific Advisory Board on Climate Change. (n 8) 78–79.
  127. Raymond R Tan and others, ‘Optimizing Carbon Dioxide Removal Portfolios’ (2022) 2 Nature Computational Science 465.
  128. Jesper Werling, ‘Optimised Biomass Usage in Electricity and District Heat Production towards 2040’ (Concito 2021) <>.
  129. Wilfried Rickels and others, ‘Procure, Bank, Release: Carbon Removal Certificate Reserves to Manage Carbon Prices on the Path to Net-Zero’ (2022) 94 Energy Research & Social Science 102858.
  130. Stuart Jenkins and others, ‘Upstream Decarbonization through a Carbon Takeback Obligation: An Affordable Backstop Climate Policy’ (2021) 5 Joule 2777; Margriet Kuijper, Evert Holleman and Jan Paul van Soest, ‘A Carbon Takeback Obligation for Fossil Fuels – Policy Brief’ (2022)
    <>; Paul D Zakkour and others, ‘Progressive Supply-Side Policy under the Paris Agreement to Enhance Geological Carbon Storage’ (2021) 21 Climate Policy 63.
  131. Joshua Burke and Ajay Gambhir, ‘Policy Incentives for Greenhouse Gas Removal Techniques: The Risks of Premature Inclusion in Carbon Markets and the Need for a Multi-Pronged Policy Framework’ (2022) 3 Energy and Climate Change 100074.
  132. Michael Pahle and others, ‘The Emerging Endgame: The EU ETS on the Road Towards Climate Neutrality’ (2023) SSRN Electronic Journal <> accessed 31 August 2023.
  133. Wilfried Rickels and others (n 128).


Eadbhard Pernot, Policy Manager, Carbon Capture
Codie Rossi, Policy Associate, Carbon Capture
Toby Lockwood, Technology and Markets Director, Carbon Capture