Carbon capture: Can a new Commission strategy revive CCUS?

An EU Industrial Carbon Management Strategy published alongside the 2040 EU emissions target recommendation holds great promise for CCUS. Not everyone is happy about that.

Carbon capture, use and storage has been one of the most keenly-watched technologies in efforts to fight climate change. But despite significant efforts by both the public and private sector to get demonstration projects off the ground, making carbon capture, use, and storage (CCUS) a widespread reality has been an uphill battle.

In the past, several rounds of EU financing calls for CCUS projects have gone unused because private investors weren’t willing to match the public funds.

Earlier this month, the European Commission aimed to change that with the release of a Industrial Carbon Management Strategy along with its recommendation for a 2040 emissions reduction target of 90% below 1990 levels. It calls for a simplified regulatory environment in order to rapidly deploy CCUS demonstration projects and scale them up to commercial success.

The strategy aims at promoting investments in the production capacity of products that are key in meeting the EU’s climate neutrality goals, setting a target of 50 million tonnes of annual CO2 storage capacity by 2030.

Scale, transport infrastructure

“We need scale,” Ruud Kempener, Team Leader for Industrial Decarbonisation at the European Commission, told a recent Euractiv event. By 2040, that 50 million tonnes of annual CO2 storage will be need to be increased five-fold, he said. “We are thinking about around 280 million tonnes. To do that, we really need the creation of a single market for CO2 in Europe because we need to have an industry that can carry this.”

He added: “We need easily-available carbon management technologies. In order to get to this European market, we will need a CO2 transport infrastructure.”

Industry stakeholders have long argued that while the EU has set CCUS objectives, the deficiency in transport and storage infrastructure remains an issue in the absence of substantial policy support. Hard-to-abate industries such as cement, steel, chemicals, are in particular need of additional technology options as they chart their transition and make investment decisions.

“Today the sector’s really quite small, there’s about 57 million tonnes of capacity globally and almost all of that is capturing natural gas processing CO2 emissions,” Claire Curry from the think-tank Bloomberg New Energy Finance said at the event.

“We need to show that we can scale, both in terms of volume captured but also in terms of industries that we can apply CCS to. Bloomberg NEF is tracking 417 million tonnes of CO2 storage capacity planned to come online globally by 2035.”

She explained that’s a seven-fold increase over what’s currently online. Curry said she believes the exciting thing in the next ten years is that these will be applied to oil refineries, gas power plants, coal power plants, cement plants, but also things like hydrogen, ammonia, ethanol and steel mills.

The trick is to get all of those new facilities connected in a grid. That will require significant infrastructure investment.

Value chain solutions

Maria João Duarte from Mitubishi Heavy Industries, which has been active in the carbon capture space for thirty years and is currently responsible for about two-thirds of the world’s carbon capture market, said at the event that infrastructure is the significant hurdle that must now be overcome. She said. “The issue is not a technology one, we have developed custom carbon capture technology and we have supplied roughly 16 commercial carbon capture plants globally.”

“We’ve seen a drastic increase in the number of projects under development recently worldwide, including in Europe,” added Duarte, “But beyond carbon capture technologies, MHI has also been active along the value chain with solutions like CO2 compressors, transport with liquefied CO2 carriers and CO2 utilisation by injecting financing into smaller companies that are developing very innovative technologies.”

Transition phase

This is what has put CCUS in a ‘transition phase’ at the moment. The technology, its proponents say, is now entering a phase of maturity where attracting financing for the projects themselves won’t be so difficult. But if the accompanying infrastructure isn’t developed at the same time, it could leave them unconnected.

“We see missing pieces in this value chain, so we are extremely happy that the Commission has recognised the role of carbon capture to achieve the carbon neutrality targets,” said Duarte. But are the targets set in the strategy realistic? “We hope so, but we need this kind of visability towards the future to understand how to better plan our activities. We’re really talking about a massive-scale up, with a supply chain that is not necessarily available today.”

However not everyone agrees that CCUS is now a mature technology. When the strategy came out, some climate campaigners accused the Commission of encouraging a technology that is being used as an excuse to continue burning fossil fuels.

Carbon management

Lili Fuhr from the Washington, DC-based Center for International Environmental Law has accused the Commission of supporting “the fossil fuel industry’s favourite delay tactic,” adding, “carbon management’ is a new code word for climate inaction and fossil fuel subsidies.”

Linda Kalcher, executive director of the consultancy Strategic Perspectives, said the Commission is “betting on the wrong horse” by “proposing such heavy reliance on abatement technologies.”

But Kempener said the Commission does not agree that the technology is unproven, and he insisted that it is not a delaying tactic for fossil fuels. “With [the 90% target] comes the essentially the conclusion that the capture of CO2 will be needed to achieve any of the scenarios that we looked at – there’s no doubt about it any more,” he said.

“The capturing of CO2 is of course related to fossil fuels but actually if you look at our analysis, the storage of CO2 from fossil fuel sources will actually be the minority in 2040. So the CCS strategy is not a replacement for renewables or energy efficiency, it compliments it. After 2040 the use of fossil fuels will be very limited,” remarked Kempener.

Carbon capture should be used for remaining process emissions, such as that used by energy-intensive industries, in order to reach the EU’s goal of net zero emissions by 2050. That means any remaining emissions are either captured by CCUS or made up for by planting carbon sinks like forests.

Both the 2040 target recommendation and the carbon management strategy are not legislative proposals and therefor do not need to be passed by the European Parliament and national governments – although they are likely to give their opinion.

It will be up to the next European Commission, which will take office at the end of this year, to act on both strategies with legislative proposals.

Cover photo: CCUS - Carbon Capture needs a new game plan. [Shutterstock / David Autumns Photography]