6 February 2024

A word on page 7 of the Communication is likely to be repeated many times over in future debates about climate policy; the European Commission states that carbon capture technologies are "indispensable" to achieve climate neutrality. The official Commission position now is that net-zero emissions cannot be achieved without carbon capture.

Some CCS-critical environmentalists should perhaps adjust their views.

This is not about sustaining the use of fossil fuels; the Commission is clear that their role will be very limited. Instead, the main focus will be on capturing CO2 from industry's process emissions as well as from biogenic CO2 sources. The technology is necessary to counter hard to abate emissions and achieve negative emissions thereafter.

By 2040, capturing hard to abate CO2 emissions in industrial sectors should become the norm, states the Communication

The estimates suggested are that 280 million tonnes of CO2 should be captured annually in the EU by 2040, and 450MT by 2050.  Close to half this latter amount must come from biogenic sources or from direct air capture, with up to a third of captured CO2 being put to use, for example in the production of aviation fuel. In fact, by 2040, biogenic or atmospheric CO2 should become the main source for carbon-based industrial processes or transport operations.

(Perhaps it is worth mentioning that the CO2 Storage Directive became law 15 years ago but no CO2 is currently being stored commercially under its terms. The target year of 2040 mentioned often in the Communication is almost the same period of time in the future. The scale up and acceleration of activity required is formidable).

As for the safety of CO2 storage, the Communication is unequivocal that it is "low-risk", especially when compared to methane storage which is almost universally accepted. The Commission says that Member States should take account of this when requiring financial security from storage operators.

The Net Zero Industry Act calls for 50MT of annual CO2 storage capacity to be made available within the EU by 2030. The Communication says that 250MT of capacity will be needed within the broader EEA by 2040.  The U.K. cannot expect to become part of the Europe-wide picture unless its approach conforms with that of EU ETS requirements.

The Commission will "kickstart" work to create by 2026 an EU investor atlas of potential CO2 storage sites and their readiness level.  (The European Parliament will surely welcome this as it called for just such a thing ten years ago).

The Commission points out that it is devoting significant sums to carbon capture development through the Innovation Fund and other sources. But most support money will have to come from Member States, and, despite attempts to present the situation positively, the Commission admits that "In general, governments across the EU still need to recognise CCS as legitimate and necessary...."

Indeed, only four Member States have an active application process for licensing CO2 storage sites, and only eight have indicated that they intend to operate or develop CCS deployment support strategies. 

Ambitious national policies, and strategic infrastructure planned at EU level, will be needed, says the Communication.

National Energy and Climate Plans are due to be finalised in June . The Communication follows up the guidance already issued by the Commission and says that Member States should assess their carbon capture needs and CO2 storage capabilities, and should support capture, transport and storage as net-zero strategic projects. It suggests that the prices of EU ETS allowances should make CCS investments commercially viable after 2030, and that in the meantime Member States should consider introducing Carbon Contracts For Difference to support first movers.

Removing CO2 from the atmosphere is very necessary, says the Commission, but direct air capture is hugely expensive at present and bio-CCS raises concerns about the sustainability of the organic sources. A compliance mechanism needs to be developed that can be connected to the EU ETS, but although the Communication states that by 2040 "a strong business case for negative emissions would be in place" it does not indicate when those responsible can expect to receive financial rewards to encourage investment.  Whether waste-to-energy should be included within the EU ETS will be considered in the 2026 review of the EU ETS.

Recognition is paid to the fact that CO2 can be permanently stored within materials (mineralisation &c) and that the EU ETS should take account of this in future so that emission allowances do not have to be purchased. 

There is no current regulation for providing cross-border CO2 transportation. The Commission says that a dedicated policy and regulatory framework will be needed, with specific solutions found for industries located far from the hubs where activity will be concentrated. More than 7,000km of CO2 transportation routes served mostly by shipping or pipelines will be needed within six years, and 19,000km by 2040. A fleet of CO2 carrying ships will be required if the 2030 needs are to be met.

An aggregation platform should be established by 2026 to match emitters with storage availability, promoting transparency and protecting smaller players.

The Commission states that it currently lacks a complete picture of the physical and chemical behaviour of impure CO2. Research is needed and standards prepared by European standardisation bodies (CEN).  (The Communication makes no reference to the possibility that the need for such standards might have been evident since the Storage Directive became law in 2009).

An interesting idea is introduced, but not properly explained, by the statement that the Commission will consider nominating European "co-ordinators" ("envoys"?) to address issues such as particular difficulties or delays and promote cross-border projects.

The proposal is made for establishment of a knowledge-sharing platform to promote best practice for industrial carbon capture developers.

Reference is made to investment decisions being dependent on the development of markets for low- or zero-carbon products, but no mention is made of a legislative initiative to introduce these.

The Communication makes a number of proposals for policy development work that needs to be undertaken, and suggests the need for legislative acts, but its proposals are neither specific nor do they embrace every matter touched upon in the Communication.

It is a very welcome document, and hugely ambitious in considerations both of time and of scale, but it is far from being an Action Plan. It is entirely dependent upon the endorsement of Member States that must develop national policies and be prepared to provide financial support, initially at least.

In its final paragraph the Communication stresses the importance of an industrial carbon management strategy: "Concerted efforts ... will be essential to its swift implementation."

Chris Davies

Director for CCS Europe