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Germany Unveils the Key Points of its Carbon Management Strategy, Marking a Crucial Step in the Country’s Decarbonisation Pathway
28th February 2024
On 26 February, the German Federal Ministry for Economic Affairs and Climate Action announced the key points of its upcoming carbon management strategy, highlighting the important role CCS and CCU technologies are expected to play in meeting the country’s ambition to reach carbon neutrality by 2045.
Alongside the key points of the carbon management strategy, the federal government also presented the draft bill to amend the Carbon Dioxide Storage Act, which was adopted in 2012 to transpose the EU CCS Directive into German national law and regulate CCS exploration and demonstration projects.
In the announcement, the federal government recognised that decarbonising certain CO2-intensive industrial sectors, like lime, cement and waste incineration, as well as preserving the competitiveness of the German industry will be impossible without the deployment of CCS and CCU technologies.
The government’s announcement builds on the results of the evaluation report on the Carbon Dioxide Storage Act, which was published by the German Federal Ministry of Economics and Climate Protection at the end of 2022, as well as a broad stakeholder dialogue undertaken by the federal government from March to August 2023.
In addition, this move comes at a critical time for the deployment of CCS in Europe, following the recent release of the EU industrial Carbon Management Strategy by the European Commission, which proposes a comprehensive approach to address all aspects of the CO2 value chain and create an enabling environment for the deployment of carbon management technologies in the EU.
As Germany represents Europe’s largest economy and CO2 emitter, the announcement continues to build the momentum for CCS across Europe.
With the carbon management strategy and the proposed changes to the current legal framework, the federal government aims to set the scene to enable CO2 capture, transport, utilisation and offshore storage in the country.
In particular, the federal government intends to remove barriers to the application of CCS/CCU in sectors responsible for generating difficult or unavoidable emissions, including those where the switch to electrification or hydrogen can't yet be conducted in a cost-effective way.
State funding for CCS/CCU will be restricted to hard-to-abate sectors with limited or no alternative options to decarbonise. If certain conditions are met, CCS/CCU projects delivering significant reduction of unavoidable process emissions can also be eligible for Carbon Contracts for Difference.
The Carbon Dioxide Storage Act will be updated to remove legal uncertainties and establish a state regulatory framework applicable to the construction of privately owned CO2 pipelines.
Offshore storage sites will be explored in the German Exclusive Economic Zone (EEZ) or continental shelf, considering safety standards and ecological criteria. However, permanent onshore CO2 storage in Germany remains unauthorised.
Other actions that the federal government intends to take towards the deployment of CCS and CCU in the country include:
- Enabling the cross-border transport of CO2 for the purpose of offshore storage by ratifying the amendment to the London Protocol;
- Potentially creating a legal basis in the CO 2 Storage Act that would allow individual federal states to opt-in to permanent onshore CO 2 storage in Germany, should they be interested in exploring this option and request it during the legislative vote.
The key points of the carbon management strategy and the draft bill for the amendment to the Carbon Dioxide Storage Act will now need to be adopted by the federal cabinet.
Read more here.