Insights and Commentaries
CCS and Reaching Climate Targets in Europe: Reflections from Industry Experts and EU Officials
5th March 2021
EU Industry Week 2021 – an initiative hosted by the EU Commission – was not short of compelling insights as event organisers launched dialogues on industrial challenges and opportunities.
On 25 February, both the Global CCS Institute and the Clean Energy Ministerial CCUS Initiative (CEM CCUS Initiative) held back-to-back discussions on carbon capture and storage (CCS) and industrial decarbonisation in Europe, which included input from EU policy makers and industry leaders are alike. Below are key takeaways from both events.
1. The EU does not subscribe to an ‘either-or’ approach to climate mitigation
Renewable energy or CCS?
For EU policy makers, an either-or dialogue to tackling climate change is not a productive one. To reach climate neutrality by 2050, a comprehensive approach is required – something which the EU Green Deal has given way to.
As part of its low-carbon transition, the EU is looking to scale up low-carbon technologies across the continent to tackle industrial emissions. This scale-up will come in a number of forms: from emissions abatement through CCS technology to low-carbon energy and power production through renewables. The EU Innovation Fund aims to do just that.
Established in 2019, the Innovation Fund provides grant revenue based on the price of 450 million carbon allowances; initially set at 10 billion, that figure has nearly doubled due to increasing allowance price in the EU Emissions Trading System (EU ETS). “We’ve received applications from all sectors and all member states. One of good things of the fund is the diversity of projects”, said EU policy officer Maria Velkova during EU Industry Week. When asked about overcrowding concerns of climate technology, Velkova noted that the EU’s 2050 climate targets are only achievable if all effective climate technologies are considered, utilised and play a role.
To effectively address industrial decarbonisation and reach climate neutrality, carbon capture and storage must be in adopted. EU climate policy has acknowledged this and is in the process of implementing programs to support CCS.
2. Industry sees a need to bolster supportive regulatory measures to meet ambitious climate targets
Europe is ahead of the curve when it comes to setting ambitious climate targets. With a goal to reduce emissions by 55% in under 10 years, Europe is on its way to becoming the first continent in the world to achieve climate neutrality by 2050. But do the regulatory frameworks in place help shore up those targets? Some industry experts argue there is a lot more regulatory ground to cover if climate goals are to be met.
While several jurisdictions in Europe are keen to tackle industrial emissions through CCS climate technology, slow regulatory developments in the EU can hinder that progress. Stijn Santen, a senior adviser with Netherlands based energy company EBN, points to transport and infrastructure policy as an area that need to be strengthened. “There are countries with a lot of energy intensive industries but they don’t much have storage potential for captured carbon”, Santen said during the Institute’s live EU Industry Week session. “We need transport mechanisms between regions where there is a lot of storage potential, like the Netherlands”, added Santen.
Although the EU has made amendments to its infrastructure and transport policy, including to the Trans-European Networks for Energy (TEN-E)– which aims to link cross border energy infrastructure, including carbon dioxide networks – modes of CO2 transport is limited. “The point on why shipping is not eligible under TEN-E is because TEN-E is about cross-border infrastructure. Mobile assets, such as ships and trucks, do not fulfil this definition”, said EU senior policy officer Katrien Prins during the CEM CCUS Initiative webinar.
As of now, pipelines remain the primary method of CO2 transport in Europe. A reliable approach but some say more is needed to keep up with ambitious 2030 and 2050 climate goals.
3. When it comes to CCS adoption, timing matters
Dialogue around carbon capture and storage has taken off over the last year, and numbers show that the technology’s popularity is slowly on the rise. But to meet Europe’s climate targets, a slow and steady growth will not cut it – a rapid acceleration of CCS is required if we want to sufficiently reduce industrial emissions. By mid-century, CCS facilities will need to grow from 65 CCS facilities (13 of which are in Europe) to 2,000. A challenging task but not an impossible one.
Some industry experts say that governments will need to develop favourable conditions to allow a CCS market to develop and grow. “It’s so important to accelerate this market, and there must be a willingness to fund CCS projects in the early stages”, said Valborg Lundegaard, CEO of Aker Carbon Capture and panel participant of EU Industry Week. “Industry will do what it can to reduce costs, but we need the EU to be willing to move fast”, noted Lundegaard, adding further that the EU can support this by creating predictable regulations, taxation and incentives.
During the CEM CCUS Initiative webinar, EU Commission officials acknowledged that urgency around CCS deployment has increased. Moving forward, the EU anticipates CCS will be accessible not only to large scale projects, but to small scale efforts, particularly as the market grows and a new approach to storage – such as hubs and clusters – begin to take effect.
EU and the Future of CCS
EU Industry Week discussions affirmed that the EU continues to make its mark as an emerging leader in industrial decarbonisation and CCS climate action. Initiatives like the EU Innovation fund – where 20% of funding application requests included a CCUS component – will undoubtedly help to scale-up the technology in Europe. To reach climate neutrality by 2050, however, a mature CCS market, supported by consistent and supportive regulatory policies, will need to emerge.
To watch the Global CCS Institute’s EU Industry Week event click here.
To watch the CEM CCUS Initiative webinar click here.
This piece was written by Ruth Gebremedhin, the Institute's London-based Senior Advocacy and Communications Adviser, in close collaboration with Coordinator of the Clean Energy Ministerial Initiative, Juho Lipponen.