Carbon Capture Usage and Storage the new driver of the EU Decarbonization Plan?
Nowadays, there is a growing focus on Carbon Capture, Use and Storage (CCUS) in the European Union (EU) in the context of reaching its targets set out in the EU Climate Law. According to modelling by the Commission and the International Panel on Climate Change (IPCC), in order to meet its climate objectives, the EU will need to capture and store at least 450 Mt/y of CO2, including direct air capture as well as industrial CO2, by 2050. Indeed, the IPCC in its recent report, made clear that carbon capture and storage is a critical decarbonization strategy in most mitigation pathways.
Until recently, aside from financing a handful of CCUS projects under the ETS Innovation Fund, the Commission has taken a rather passive role on this technology compared to others, arguing that the ETS alone should drive the decarbonization development plan. However, a number of recent actions demonstrate an important political change in direction in recent months: the Commission has upscaled the CCUS Forum and has committed to accelerate the work on CCUS at EU level. It has further highlighted the need to create an internal market for CCUS and has committed to adopting – similar to the Hydrogen Strategy – a CCUS Strategy before the end of 2023 that will accelerate the development of CCUS.
To answer the question whether CCUS will become the new driver of the EU decarbonization plan this energy comment first will look at the key political and economic drivers for CCUS, then consider the current and upcoming regulatory framework for the capture, transport and storage of CO2 and, finally, highlight the funding of CCUS projects at EU and national level.