On Tuesday 6 February, the European Commission presented its strategy for Industrial Carbon Management in the European Union, in line with the EU’s ambitious commitment to achieve climate neutrality by 2050.
This initiative, part of a legislative package centred around the Communication on the EU’s 2040 climate target (see other news), details how the use of advanced carbon capture and management technologies could help to reduce greenhouse gas emissions by 90% by 2040 and thus make a significant contribution to achieving the goal of climate neutrality.
Main objectives and implementation plans. The EU therefore intends to make a firm commitment to a future of “net-emissions” of CO2, focusing primarily on reducing current emissions, while incorporating innovative technologies for carbon capture, utilisation and storage. These technologies will be targeted in particular at sectors where reducing emissions is particularly difficult or costly, such as cement production processes or waste-to-energy conversion.
The European Commissioner for Energy, Kadri Simson, stressed to the press, however, that carbon capture will not replace efforts to promote renewable energies, but rather will serve as a complementary technology to achieve the 2040 target.
The European Commission’s proposal focuses on establishing a “single market for industrial carbon management”. This initiative aims to capture, transport, store and use carbon in order to offset residual greenhouse gas emissions.
One of the major objectives is the capture of at least 50 million tonnes (Mt) of CO2 per year by 2030, with a gradual increase to 200 million tonnes per year between 2030 and 2040 and an ultimate storage objective of 450 Mt per year by 2050. Direct Air Capture (DAC) is also envisaged to remove between 100 and 200 Mt of CO2 directly from the atmosphere.
Role of CCS and CCU. The strategy makes a clear distinction between Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU). CCS involves capturing emissions from various sources for permanent storage, while CCU focuses on reusing the captured CO2 in synthetic products or fuels. A crucial aspect of this strategy is the development of a cross-border transport infrastructure for CO2, requiring substantial investment and close coordination between Member States.
Question of financing. To finance this ambitious strategy, the European Commission estimates that an investment of €3 billion will be needed for storage capacity, with an additional cost of around €10 billion for transport infrastructure.
These investments will be financed in particular by using the money collected via the EU Emissions Trading System (ETS), reinvested in the ‘Innovation Fund’ and ‘Carbon Contracts for Difference’ (CCfD).
In addition, the Commission recognises the need for public funding in addition to industry funding, especially in the early stages, to ensure the profitability of the overall project. Moreover, CCS is also included in the EU’s European taxonomy for sustainable finance and the ‘NZIA’, which was the subject of an European Parliament/EU Council agreement on the same day (see other news), as Kadri Simson pointed out. The Commissioner also indicated that some funding “is already available”.
Maroš Šefčovič, Executive Vice-President of the Commission in charge of the European Green Deal, stressed that these investments are essential to reduce the future costs of damage caused by climate change, which have been estimated at €170 billion over the last 5 years. He put forward a global perspective, stressing the importance of seizing every opportunity to include companies in the Green Deal.
In addition, calls for funding for cross-border carbon dioxide transport infrastructure as part of the ‘Connecting Europe Facility’ (CEF) programme for energy are being discussed.
While this strategy represents a major step towards decarbonising Europe’s industrial sector, it raises questions about the future integration of carbon capture into the ‘ETS’, the sustainability of the technologies used and the coordination needed at European level to achieve these ambitious objectives.
To see the Communication: https://aeur.eu/f/aqc (Original version in French by Nithya Paquiry)