CCS Europe March Newsletter

HEADLINE NEWS

🏭Habemus IAA! After months of delays and multiple changes to the text itself, including its very name, it is finally here – the Industrial Accelerator Act. Well...was it worth the wait? If you ask us - not really. While the explanatory memorandum (rightly) recognises carbon capture and other net-zero technologies, the proposal itself fails to explicitly recognise CCS – including CO₂ transport and storage – as a strategic industrial decarbonisation solution. The IAA might be here, but the real work starts now. Read what Europe must do to drive forward industrial decarbonisation in Bergur's latest blog here.

Unfortunately, the current version of the text puts industrial competitiveness at the forefront, while almost completely ignoring industrial decarbonisation. This sentiment is perfectly encapsulated by the fact that the word "decarbonisation" was dropped from the official name. This is further reflected in the lack of measures to support decarbonisation – especially those aimed at creating lead markets for low-carbon products. While the IAA includes green public procurement provisions, these are not enough on their own. What is still missing is a mandatory EU labelling scheme for low-carbon products to provide clarity, comparability and market pull. You can access the full proposal here.

🚢All aboard the ship towards decarbonisation. On the same day the IAA was published, the Commission also unveiled two strategies regarding maritime – the EU Industrial Maritime Strategy and EU Ports Strategy. These two strategies will serve as a roadmap for strengthening the European maritime sector’s competitiveness, sustainability, security and resilience. The strategies focus on ports, shipping and shipbuilding.

But what about CCS? The EU Industrial Maritime Strategy recognises CCS as a readily-available technology for decarbonising maritime transport while the EU Ports Strategy states that the Commission will hold a series of targeted workshops to address key issues such as the deployment of offshore and net-zero technologies, including CO₂ management and storage. To be honest, not much, but it's better than nothing. You can read both strategies here.

⚠️ETS comes under pressure. In February, the EU ETS came under fire from multiple directions. First, at the The Antwerp Declaration anniversary, the EU industry called on policymakers to rethink the EU ETS, arguing today’s carbon price trajectory hurts competitiveness versus the US and China. Following that, At the 12 February leaders’ retreat, Germany’s Chancellor Friedrich Merz floated revising or even postponing elements of the ETS, while France’s Emmanuel Macron defended it, but warned the carbon price may be too high. Belgium’s Bart De Wever backed "intelligent adjustments" to the EU ETS. A group of Member States is also pushing to slow the phase-out of free allowances and curb price volatility.

Italy went even further: alongside a proposed national scheme to compensate gas-fired power producers for EU ETS costs (pitched as a way to lower electricity prices), Italian Industry Minister Adolfo Urso called to freeze the EU ETS altogether, dismissing it as "nothing more than a tax”"on energy-intensive companies. Critics warn the plan would effectively subsidise gas, socialise carbon costs across all electricity suppliers (including renewables), and offer only marginal bill relief given many renewable prices are set via fixed contracts.

OUR ACTIVITIES

✍️Bergur's writes on CO₂ transport infrastructure. In an opinion piece for The European Files, our Director, Bergur Løkke Rasmussen, warns that industrial decarbonisation risks stalling without a robust CO₂ transport network. With transport as a core pillar of CCS – alongside capture and storage – Europe now needs to scale interoperable, cross-border CO₂ infrastructure to meet climate targets and connect emitters to storage. Read Bergur's article here.

📢How the IAA should have looked. Ahead of the IAA's publication, CCS Europe teamed-up with 40 organisations in a joint statement urging the Commission to strengthen demand measures in the IAA. The message: the current approach risks underdelivering by relying too heavily on public procurement and keeping low-carbon requirements optional – when Europe needs clear, mandatory market-creating tools to scale low-carbon industrial production. Read the joint statement here.

🇱🇹 We talked CCS with some Lithuanians. CCS Europe was represented by our Governing Board member Rodolphe Nicolle (EuLA) at "Bringing Industrial Decarbonization into Action – From Challenges to Opportunities”, organised by the the Lithuanian Permanent Representation. Rodolphe told the gathered crowd that CCS scale-up is being held back by uneven rules and a lack of leadership just when investment depends on confidence. His key point: combine instruments – no single law will deliver CCS at pace.

CCS DEVELOPMENTS FROM AROUND THE BLOC