Alongside its 2040 climate objective of 90% reduction in greenhouse gas emissions relative to 1990 levels, the Commission published an EU industrial carbon management strategy, underlining the necessity to capture around 280 million tonnes of CO2 by 2040 and 450 million tonnes by 2050 to reach carbon neutrality. These ambitious objectives aim to make carbon management a real lever for the energy transition, thus ending 15 years of policy uncertainty on CCS.
The framework proposed by the European Commission to accelerate the deployment of CCS across the EU
In its communication “Towards an ambitious Industrial Carbon Management for the EU” (February 2024), the European Commission presents various avenues for the deployment of the whole carbon value chain and as a means to further the Union’s current policy framework.
CO2 transport infrastructure: The Commission projects a need for 7300km of grids by 2030 for CO2 transport, and thus considers proposing a regulatory package to reduce the investment costs related to the retrofit or to the construction of new transportation infrastructure. This new framework would also encourage technical harmonisation at the European scale, with the appointment of European coordinators tasked with supporting the rollout of the first cross-border transport infrastructure projects. The Commission also aims to establish a network code setting minimum quality standards for CO2 flows, addressing composition, purity, pressure, and temperature of CO2.
Access to information regarding CO2 projects: In order to facilitate the relation between CO2 suppliers and storage service providers, the European Commission proposes to develop a platform for demand assessment and aggregation by 2026. The Commission also seeks to improve access to information associated with the carbon sector by implementing the following policy instruments:
- A knowledge-sharing platform to discuss lessons learnt from industrial CCUS projects;
- An investment atlas of potential CO2 storage sites in Europe;
- A step-by-step guide for permitting procedures of strategic “net zero” CO2 storage projects.
Atmospheric CO2 Removal: Negative emissions that result from CO2 absorption in the atmosphere are not covered by the current legislative framework. The Commission intends to revise the Emission Trading System to incorporate absorbed CO2. It also aims to promote research and innovation in new industrial technologies for biogenic and atmospheric CO2 removal through the Horizon Europe and the Innovation Fund programmes.
Utilisation of captured CO2: With industries, the Commission proposes to elaborate sectorial roadmaps on CCU activities, along with a European framework to facilitate the deployment of industrial activities in CCU. It will also continue its regulatory work on products permanently chemically bound initiated in the framework of the delegated regulation of October 4th 2024 on the requirements for considering that greenhouse gases have become permanently chemically bound in a product Yet, the content of these roadmaps or the methods for their development remains to be specified.
Supporting investments: To mobilise public funding, the Commission plans to collaborate with the European Investment Bank to create tailored financing opportunities for CCS and CCU projects in Europe. It is also considering launching an Important Project of Common European Interest (IPCEI) for CO2 transport and storage infrastructure within the European Forum for IPCEIs.
The economic and political challenges faced by the CCUS sector
The deployment of carbon management faces a major economic challenge: the implementation of the CCUS value chain and its uptake by energy-intensive industries represent significant investments that will need to be supported at European level. The inclusion of energy-intensive sectors, the aviation and the maritime transport sectors in the European Emissions Trading System (EU-ETS) under the 2023 carbon market reform – and thus the elimination of free allowances for these sectors – is expected to gradually increase the price of carbon allowances and thereby provide incentives for carbon-intensive sectors to invest in decarbonisation solutions, such as CCUS.
With current carbon prices approximating €63 per ton, investing in CCUS technologies remains more expensive than purchasing carbon allowances. Raising carbon prices, whether through quota reductions or additional measures to stabilise prices at higher levels, will be a critical challenge in the next legislative term.
Whilst the European Commission and most Member States have recently taken a more proactive stance on carbon management, stakeholders – particularly environmental organisations – remain sceptical or outright opposed to industrial carbon management. In the context of the Industrial Carbon Management Forum hosted in Pau in October 2024, 43 organisations signed an open letter calling for an end to EU support for CCS projects, which they deemed too expensive and risky. Major NGOs, such as Greenpeace, have echoed these concerns, in their September 2024 report questioning CCS’s potential to contribute to achieving carbon neutrality.
To overcome these challenges, the EU must succeed in making carbon management an integral part of its climate efforts. As underlined by Mario Draghi in his report on EU competitiveness, the EU must transform its technological leadership in CCUS innovation into commercial success and economic opportunities.
