Insights and Commentaries
2024 Europe Forum on Carbon Capture and Storage: Recap
31st May 2024
On 17 April 2024, the Global CCS Institute held its annual Europe Forum on Carbon Capture and Storage in Rotterdam, the Netherlands, where one of the biggest decarbonisation projects in the country and Europe - the Porthos CCS project - reached Final Investment Decision (FID) towards the end of last year and has just entered the construction phase.
With more than 250 participants in attendance, the event gathered a wide range of CCS stakeholders representing governments, the European Commission, NGOs, industries, think tanks, academia, the financial sector and the general public to unpack the status of CCUS in the region.
This year's forum hosted insightful presentations, conversations and panel discussions delving into CCS project development in Europe, policy mechanisms supporting the scale-up of the technology, CCS business models, and the progress of carbon dioxide removal (CDR) technologies in Europe.
The Status of CCS in Europe and Globally
To set the scene for the different insightful discussions planned throughout the day, the Institute’s CEO Jarad Daniels welcomed the audience and provided an overview of CCS progress in Europe and globally.
Mr Daniels highlighted how interest and activities in CCS have been growing exponentially around the world, driven by strong policies and financial incentives. In Europe, the Institute is now tracking more than 150 CCS facilities in various stages of development.
While this positive trend is expected to continue, CCS deployment worldwide will need to get to gigaton scale by 2030 and reach multiple gigatons by 2050, if we want to stay on track with our shared ambitious climate neutrality targets.
Supportive CCS Policies and Climate Strategies in Europe and Beyond
Various countries in Europe and beyond are taking different steps and approaches to accelerate CCS deployment.
Matthew Taylor, Deputy Director for Transport and Storage at the UK’s Department of Energy Security and Net Zero, talked about the industry specific business models underpinned by intensive legislative processes that have been developed in the UK to manage the allocation of different CCS risks through the whole value chain. The first CCS projects in the country could reach FID by the end of the year. With the release of the recent UK’s CCUS vision at the end of 2023, the government also set its ambition to continue developing carbon business models after 2030.
Given that CCS is gaining momentum globally, there is an opportunity for the UK and other countries in Europe to learn from other approaches that proved to be effective in moving CCS deployment in other regions outside Europe.
Matt Antes, Management & Program Analyst, at the US Department of Energy‘s Office of Fossil Energy and Carbon Management f explained how the US has put in place financial incentives and a robust regulatory framework with the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), which are meant to boost CCS deployment across all the components of the value chain, its various applications, as well as the different phases of CCUS projects. The US approach also ensures strong community engagement and information provisions in the early stages of project development, including the economic benefits that the community can expect from the project. Even though CCS has been gaining momentum, much more needs to be done to keep our ambitious climate targets within reach.
According to Carl Greenfield from the IEA, we need more CCS projects to materialize and move from the announcement phase to FIDs and, ultimately, reaching operations as soon as possible. Reducing the lead time of the projects will also be crucial to enable the potential of CCS as a climate mitigation solution. In addition, we need more CCS projects focused on capturing emissions from hard to abate industries, as well as carbon removals.
Pavan Chilukuri from Holcim noted how the company is currently championing the development of CCS in the cement sector, with more than 35 cement plants in Europe spread across 20 countries. Each CCS project will face a unique situation, including different modes of transport and different distances that CO2 will need to be transported for storage.
The development of a shared infrastructure for CO2 transport and storage, accessible on the basis of fair and reasonable commercial terms, represents a crucial element to enable the widescale deployment of CCS in the region. Mr. Chilukuri stressed that to decarbonise Western and Eastern Europe and ensure a just energy transition across the region, access to storage sites should be made available both offshore and onshore.
In addition, the speakers noted the importance of collaboration, not only at the project level between different actors of the value chain, but also at the state level between countries to unlock the transport and storage infrastructure.
Cross-border cooperation around CCS has been an important focus for countries like Norway. Ane Gjengeda from the Norwegian Government’s Ministry of Energy pointed out how, over the last years, the country has been entering into different first-of-a-kind MoUs and bilateral agreements, setting the necessary regulatory frameworks and conditions to enable the cross-border transport of CO2.
Another example of collaboration between governments is the Carbon Management Challenge, an international initiative joined by 21 countries and the European Commission recognising that carbon management is essential for reaching the 1.5C target and willing to take action to develop CCS at the necessary scale.
Perspectives from the Dutch Experience
The Netherlands is among the countries leading the CCS charge in Europe. Dr Michel Heijdra, Director-General for Climate and Energy at the Dutch Ministry of Economic Affairs and Climate delivered the opening keynote address by sharing CCS insights from the Dutch perspective and lessons learned from the deployment of the technology in the country.
Dr Heijdra highlighted how the geographical closeness of the Netherlands to the sea and other countries in Northwestern Europe, combined with the presence of depleted gas fields and the availability of oil and gas players experienced in the transport and storage of gas, created the right condition to start exploring CCS in the country.
Dr Heijdra further outlined the main tools and steps that helped the Netherlands in its CCS journey, highlighting how the country put in place the necessary legal framework and market regulation by following a business-to-business approach. Subsidies for CCS have been provided through a Contract for Difference scheme with a competitive element, to ensure a level playing field between CCS and other technologies. In addition, the government adopted a full value chain approach to the projects, bringing all the key actors together, and played a strong role in the coordination of the licenses and the management of the ultimate storage.
Through the CCS experience and knowledge gained by the Netherlands over the last decade, Mr Heijdra stressed the importance of public support for the success of the technology’s deployment. Another important lesson to take away is that a business case is needed for each part of the value chain.
CCS Project Development: Insights on Transport and Storage Efforts
With new projects announced on a weekly basis, we are witnessing a very momentous period in the evolution of carbon management in Europe.
Exciting CCS developments are undergoing in the Netherlands, where the Porthos project is currently developing a transport and storage network for CO2 in the port of Rotterdam, paving the way for future CCS projects in the country and across the region.
Dorus Bakker from Porthos mentioned that the project started as an idea in 2017 to decarbonise the industrial cluster in Rotterdam and retain the local industries established in the area while also complying with the Paris Agreement and the climate targets set by the Netherlands. Between its announcement in 2017 and the recent beginning of the construction phase, the project had to overcome some challenges linked to the lack of a feasible business case for CCS and a dedicated legal framework in place.
Nick Richardson from the North Sea Transition Authority echoed the observation regarding lengthy timeframes that are required to get CCS projects off the ground. The UK has also set ambitious climate targets that require the deployment of CCS, and as of today is the European country issuing the largest set of CO2 storage licenses.
In particular, Mr. Richardson talked about the government decision to add more licences to its portfolio in order to fill in the gap between the amount of CO2 to be stored to meet the country’s climate goals and the storage capacity offered by the projects in the pipeline. As a result of this, the country can now count 28 licences across the UK offshore area. In order to have as many projects as possible off the ground to meet 2030 and 2050 targets, it is essential to anticipate potential problems before they occur and have mitigation plans in place, Mr Richardson added.
CCS momentum is also growing in other parts of the world, including the APAC region. Sakura Nishioka from JOGMEC mentioned that in Japan 7 demonstration projects were selected to kickstart the country’s CCS value chain and establish a CO2 network for the development of a low-carbon industry across Japan. According to Mrs Nishioka, countries in the APAC region like Japan would also benefit from the establishment of bilateral and multilateral forms of cooperation (similar to those signed in Europe) in order to harmonise different aspects of the regulatory framework, such as the CO2 leakage responsibility, specifications, accounting methodology, and so on.
The APAC region also represents the main producer of steel, an industry where around ¾ of the production still comes from blast furnaces, generating CO2 emissions. Andrew Purvis from World Steel affirmed that there are different options to decarbonise the steel sector in short, medium and long term, and CCS is going to be part of the mix.
Although the use of blast furnaces is expected to decline earlier in Europe, China, India and South-East Asia host young blast furnaces that will likely continue to operate in the near future, therefore requiring CCS to mitigate the associated CO2 emissions.
To decarbonise its operations with CCS, the steel industry needs to work with stakeholders it has not engaged with in the past, including the oil and gas sector that plays a crucial role in developing the storage infrastructure.
While the implementation of projects is sometimes accompanied by challenges, the speakers highlighted that the deployment of projects can move faster if the necessary infrastructure is in place and the right policy and financial incentives are made available, including f carbon pricing. During the project implementation, it is also important to allocate clear roles and responsibilities between the partners in the consortium and leverage each other strengths to speed up the project deployment.
How to enable industrial CDR adoption through policy
CDR is one of the tools that will be needed in the future to neutralise residual emissions.
Oscar Rueda, Senior Managing Consultant at South Pole and CCS+ delved into the topic of Carbon Dioxide Removals (CDR), describing how policy can enable the responsible adoption of technology-based removals and scale up the market.
According to Mr Rueda, it is possible to deploy carbon removals responsibly by following three main principles:
- As there is no replacement for emission reduction, it should be prioritised over removals.
- However, as it will not be possible to reach our shared climate goals without CDR, we will need to proactively plan and develop a diversified portfolio of removals to ensure the timely deployment of the technology.
- Finally, during the process we need to ensure that the steps taken to advance CDR deployment are compliant with the highest quality and environmental integrity.
The role of CCS in the European Union's climate goals
Carbon management technologies like CCS and CDR are instrumental to reach EU’s ambitious climate targets.
During his closing keynote address, Daniel Mes, Member of Cabinet of Commissioner Wopke Hoekstra at DG CLIMA, outlined the role CCS is expected to play in the European Union, as well as the latest policy developments that are expected to drive the widescale development of the technology in the region.
As a result of the positive momentum around CCS in Europe, marked by the opening of the first storage sites and the signing of the first contracts for the transport of the CO2 between companies, the European Commission recently release the Industrial Carbon Management (ICM) Strategy. The latter represents not only a crucial milestone for the scale-up of carbon management technologies in the EU, but also sends a strong political message legitimising CCS as part of the climate mitigation solutions that will be needed to support the EU’s transition to carbon neutrality.
The Commission believes that CCS is an essential part of the energy mix that could be used by the EU industries to decarbonise their operations and intends to take a leading role in the CCS space by becoming an ambassador of the technology. It is important, however, that EU member states also share the same vision, and the Commission hopes that more countries will include CCS in their final National Energy and Climate Plans (NECPs) due by the end of June 2024.
Deploying CCS at scale will also require bringing people together in the community to get the projects off the ground, as well as making financial instruments available to bridge the financial gap and share the risks of the projects in the long term.
Key Insights from the Breakout Sessions
During the event, the Institute also actively engaged with its attendees and with the support of partner organisations addressed a number of issues including funding mechanisms available to CCS in Europe, job market readiness, the evolution of CO2 storage in the region, as well as Carbon Dioxide Removals and the Carbon Removal Certification Framework (CRCF).
As part of the last session, the breakout session’s facilitators from ZEP, CATF, CCSA and Imperial College London shared with the audience the main points discussed in each breakout group, highlighting some of the insights that emerged during the conversations with the attendees.
In particular, the discussion held focused on the following topics, among others:
- How to make CCS projects more bankable and de-risk investments, considering that different geographies and locations might require different tools;
- How to move away from theoretical storage to actual deliverable targets, as well as better manage the risk of storage capacity;
- The difference between carbon offsets and removals and how to deploy CDR, considering that the portfolio of CDR deployed will vary by location and mechanisms for scale-up will not be uniform around the world;
- The challenges linked to the recruitment and training of the workforce needed to build the CCS value chain, as well as the need to better communicate the importance of CCS and the job opportunities offered by the sector, which are not always perceived as attractive by the young workforce. Certainty regarding future CCS projects and deployment rates would be important for boosting private entities’ confidence in investing in future workforces.
Conclusion
From the insights provided through the expert panel discussions to the breakout sessions that included the input of over 250+ CCS stakeholders from Europe and beyond, the 2024 Europe Forum on CCS was not just informative but provided a platform for project developers, policymakers, researchers and others to connect and move the dial on CCS further. With the Porthos project officially underway, Netherlands illustrates just that, and was an apt host for the forum. The Institute looks forward to building on the dialogues held in Rotterdam and develop additional CCS events and convenings in the months and years to come.
Watch the 2024 Europe Forum on CCS
This piece was primarily authored by Daniela Peta, Public Affairs Lead - EMEA