Last February, the European Commission announced in its “Europe’s 2040 climate target” communication that the current legislative framework would allow to reduce GHG emissions by 88% by 2040. In this document, the Commission explains that the additional 2% needed to reach the -90% GHG emissions by 2040 compared to 1990 levels could come from the development of Carbon Capture, Utilisation and Storage (CCUS). Simultaneously, another communication entitled “Towards an ambitious Industrial Carbon Management for the EU” was published by the European Commission in which it recommends capturing 280 million tons of CO2 by 2040, and 450 million tons by 2050 in order to achieve carbon neutrality. In this context, there has been growing interest in the contribution of industrial carbon management to decarbonisation processes.
Industrial Carbon management, or CCUS: What is it?
Industrial Carbon Management, also known as CCUS (Carbon Capture, Utilisation and Storage), involves capturing carbon emissions (CO2), in order to either inject and store them into deep geological formation (Carbon Capture and Storage – CCS), or use them as a resource in manufacturing processes (Carbon Capture and Utilisation – CCU).
Industrial carbon management can be broken down into various stages, which form the CO2 value chain:
- CO2 capture, usually on industrial sites. Various technologies, at different stages of technological maturity, exist (see our study on carbon capture, storage and utilisation).
- Carbon transport to storage or utilisation sites by pipelines, boats, or more rarely by train or trucks (for limited quantities).
- Carbon storage, with CO2 being injected in sedimentary basins or in old, depleted hydrocarbon deposits.
- Use of CO2 for manufacturing goods (synthetic fuels, plastic, cement, etc).
The communication “Towards an ambitious Industrial Carbon management for the EU” focuses on the following technologies:
- Capture and storage of industrial CO2 (CCS).
- Capture of atmospheric CO2 through biogenic CO2 storage, (BioCCS), or through direct air capture (DACCS).
- Carbon Capture and Utilisation to produce synthetic fuels.
CCUS, a lever for decarbonisation
Considered for a long time as a secondary decarbonisation lever in European strategies, industrial carbon management has attracted new interest since 2021, first with the creation of the Carbon Industrial Management Forum, then the creation of an expert group on geological carbon storage in September 2023, and finally the publication of the Carbon Industrial Management strategy in February 2024.
Within academia and European politics, the potential of industrial carbon management for decarbonisation is now recognised, notably for the decarbonisation of energy-intensive industrial processes with unavoidable residual emissions, such as in the cement sector.
The European framework
The 2009/31/CE directive regarding CO2 geological storage, also known as the “CCS directive”, is one of the first European initiatives on carbon management. It establishes a legal framework for the geological storage of CO2 and implements permit-granting rules to ensure the safety and environmental integrity of carbon storage.
This framework was complemented by the regulation “establishing a Union certification framework for carbon removals”, setting out a Union voluntary framework for carbon removals, and soil’s emissions reduction.
Simultaneously, the EU adopted measures to directly or indirectly encourage CCUS projects, including:
- The NZIA regulation (May 2024), which facilitates and supports the deployment of 19 clean technology categories, including Carbon Capture and Storage (CCS) technologies, and CO2 transport and utilisation technologies.
- The Carbon Emissions Trading System (2023), which indirectly incentivises carbon management activities, especially following the broadening of its scope to include high-energy consumption sectors as a means to encourage investments in decarbonisation solutions. However, the current price of carbon quotas, about 63€/t of CO2 in September 2024, remains insufficient to make it more attractive for heavy industries to invest in CCS than to purchase quotas.
The European framework for the development of CCUS remains insufficient considering the expected contribution of these technologies to the Union’s goal for GHG emissions reduction. In its communication “Towards an ambitious Industrial Carbon Management for the EU”, the Commission plans to further this framework in the coming five years, detailing different measures to support the deployment of the carbon value-chain -capture, transport, storage and utilisation-and to address the industrial and financial barriers to its deployment.
Those discussions and negotiations with the Council and the Parliament to identify and adopt the appropriate measures will undoubtedly be a key part of the new European mandate.
