Carbon Capture in the EU: Strategic Imperative for a Sustainable Future

Carbon Capture, Utilization, and Storage (CCUS), a process of capturing carbon dioxide (CO2) emissions from industrial sources and either reusing or storing it to prevent its release into the atmosphere, is becoming a key element of the EU’s strategic agenda for a carbon-neutral future, as highlighted in the European Green Deal.

To meet its climate objective, the European Commission and the UN’s Intergovernmental Panel on Climate Change (IPCC) project the EU will need to capture and store at least 150 Mt of CO2 annually by 2050. In this article, Petar Murginski explores the growing importance of CCUS within the broader context of Europe’s decarbonization initiatives. The analysis highlights the new policies, the driving forces behind CCUS adoption, and its role in transforming Europe’s industrial sectors. For those seeking detailed information and advisory services on the spectrum of financial support, including grants and incentives related to CCUS initiatives, Dimitar Ganev is a useful contact. 

Introduction

Climate change is an existential challenge that requires a concerted effort by countries around the world. At the heart of this challenge lies the EU’s bold commitment to achieve climate neutrality by 2050, an ambition set out in the European Climate Law. According to the IPPC’s 6th Assessment Report, CCUS has been identified as a crucial decarbonization strategy. Without CCUS, the EU is projected to fall significantly short of its targets, confirming the technology’s critical role in reducing emissions. This analysis aims to clarify the complex functioning of CCUS in Europe, examining its current trajectory, the evolving regulatory environment, and the horizon of opportunities it presents, all through the prism of recent analytical insights and policy frameworks.

The Current Landscape of CCUS in Europe

Europe is taking a lead role in the implementation of CCUS technologies as a means to tackle the challenges of climate change. The initiatives currently underway, though in the early stages, provide insight into the potential of CCUS to contribute to Europe’s environmental objectives. There is an observable increase in innovation and strategic investment within the EU, indicating a supportive climate for the growth of CCUS. Studies and analyses conducted at the behest of the European Commission highlight the evolving regulatory frameworks that are pivotal for managing CO2 transport and storage. To achieve the substantial CO2 reduction required, Europe is focusing
on developing geological storage capabilities, which are essential for capturing CO2 from the atmosphere or from bioenergy sources. These
frameworks, although complex, are fundamental to Europe’s progression toward a sustainable and greener future, emphasizing the need for a solid infrastructure to support widespread adoption of CCUS.

Economic and Political Drivers for CCUS

Acknowledging the indispensable role of CCUS for key sectors like Cement, Steel, and Chemicals outlined in the Vision for Carbon Capture, Utilization and Storage, the EU has intesified its commitment to these technologies. The Oxford Institute for Energy Studies notes the growing recognition within the EU for CCUS, prompting the European Commission to enhance the CCUS Forum and fast-track integration efforts at the EU level. The Commission is aligning this with the example set by the EU Hydrogen Strategy and is on track to release a dedicated CCUS Strategy by the end of 2023. President Ursula von der Leyen, reinforcing this direction, stated in her speech that to achieve climate neutrality, the EU must industrially store around 300 Mt of CO2 annually by 2050. In line with this goal, the proposed Net-Zero Industry Act aims for an annual CO2 injection capacity of at least 50 Mt by 2030 within the EU. These steps highlight the merging of political determination with economic planning that is driving the CCUS forward.

Best Practices and Policy Pathways for CCUS

Identifying and implementing best practices is crucial for the advancement of CCUS in Europe. This includes fostering an ecosystem where robust regulatory frameworks are recognized for their role in ensuring safety, environmental integrity, and public acceptance of CCUS technologies. Creating a policy environment conducive to the deployment and scaling of these technologies is paramount. Infrastructure developers are encouraged to establish equitable CO2 transportation networks proactively. This will form the backbone of a successful integration of CCUS in Europe’s transition to a low-carbon economy. It is also vital to adopt standardized methodologies for lifecycle assessment and performance benchmarking to ensure the effectiveness and sustainability of CCUS projects. Member States have the responsibility to incorporate CCUS into their national energy and climate strategies, promoting a consistent and unified approach to standards and coordinated network planning. Additionally, the cultivation of public-private partnerships and active stakeholder engagement is essential in building the momentum for CCUS adoption, aligning it with broader socio-economic goals. These collective efforts are fundamental in establishing a resilient CCUS market, clarifying the path forward, and guiding Europe towards its goal of climate neutrality.

The Way Forward: Strategic Imperative for CCUS in the EU

The future of CCUS in Europe represents an important milestone in the EU’s journey towards a sustainable, carbon-neutral future. As a strategic imperative, CCUS technologies are not only useful for reducing emissions, but also essential for achieving the EU’s ambitious climate targets.
To find a way forward, a comprehensive approach is need that includes policy innovation, technological advancement, and cross-sector collaboration. This perspective encourages the development of transformative business models and investment strategies that are aligned with EU’s sustainability objectives.

Moreover, as the way forward emerges, integrating Renewable Energy Sources (RES) with CCUS technologies becomes increasingly important. The symbiosis between renewable energy and carbon capture technologies can accelerate the decarbonization of energy-intensive industries which cannot be powered by renewables alone. RES can provide the clean energy needed for the energy-intensive process of carbon capture, ensuring that the operation of CCUS itself contributes to a net reduction in emissions.

EU Support for CCUS and RES Initiatives

The European Commission is actively supporting the development of CCUS projects in connection with the expansion of RES, taking into account the the synergistic potential of these technologies in achieving a carbon-neutral future. This combined approach enhances the sustainability and resilience of the Energy sector. Below is a breakdown of the multifaceted support being provided for these interlinked initiatives:

• Innovation Fund: A central pillar to the EU’s support mechanism is the Innovation Fund, which prioritizes large-scale projects that significantly reduce carbon emissions. The Fund encourages technology neutrality, ensuring diverse technological developments in carbon capture, renewable energy, and energy storage. In the first call for large-scale projects in November 2021, 4 out of 7 awarded projects incorporated elements of the CCUS value chain. The subsequent call in March 2023 saw the number of CCUS and RES projects more than double, highlighting the fund’s key role in the commercial scaling of innovative low-carbon technologies. Highlighting its geographical outreach, the Fund supports ventures like the ANRAV project in Bulgaria, aiming to create the first comprehensive CCUS value chain in Eastern Europe and potentially avoiding 7.8 Mt CO2 equivalent in emissions over its first decade. The 2023 Innovation Fund Auction is particularly noteworthy, with a budget of €800 million dedicated to renewable hydrogen production projects, reflecting the EU’s strong commitment to supporting clean energy transitions.
• Recovery and Resilience Facility: The Recovery and Resilience Facility, established to mitigate the economic and social impact of the COVID-19 pandemic, also includes opportunities for CCUS and RES projects. Member States have been encouraged to utilize these funds to support the green transition, with many incorporating CCUS and RES initiatives within their National Recovery and Resilience Plans.
• Connecting Europe Facility: Under the Connecting Europe Facility, substantial funding is provided for cross-border infrastructure projects that promote market integration and contribute to the EU’s energy and climate goals. This includes support for the development of CO2 transport infrastructure, which is crucial for the deployment of CCUS technologies.
• Horizon Europe: Horizon Europe, the EU’s framework program for research and innovation, allocates funds for CCUS and RES technologies. The Clean Hydrogen Partnership under Horizon Europe, for example, has dedicated calls for proposals addressing the production of clean hydrogen, which can be used to decarbonize industries and transport.

Conclusion

The CCUS pathway in Europe is a microcosm of the global fight against climate change – a mix of ambition, complexity, and determination. The insights drawn from recent reports and studies highlight the integral role of CCUS in the EU’s decarbonization strategy. It is incumbent upon policymakers, investors, and industry leaders to join forces, and move forward with this crucial technology. The narrative of CCUS, in line with the rise of RES, is unfolding, and Europe’s climate vision depends on the successful integration of these complementary strategies into an environmentally-friendly future.

For further insights and support regarding CCUS technologies and the associated EU funding landscape, interested parties are welcome to engage with the Gi3 team at Deloitte Bulgaria. The team’s expertise is available to assist innovators, strategic thinkers, and industry leaders in enhancing their sustainable initiatives.

Collaboratively, the path toward a sustainable, carbon-neutral future can be charted.

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