An implementation plan for CCS and CCU in Europe

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ZEP animation featured on BBC News at One. [ZEP]

2017 has seen a number of positive developments for Carbon Capture and Storage (CCS) in Europe. The EU now needs to put in place a long-term policy framework that incentivises this low-carbon technology in Europe, writes Graeme Sweeney.

Graeme Sweeney is Chairman of the European Zero Emission Technology and Innovation Platform (ZEP), a coalition of stakeholders united in their support for CO2 Capture and Storage (CCS) as a key technology for combating climate change.

Now that COP23 in Bonn has concluded, countries will be turning their attention to the mechanisms and technologies that will enable the achievement of the Paris Agreement. A number of CCS side events took place at COP, indicating that there is a growing realisation that delivering a 2°C scenario, (and particularly a “well-below 2°C” scenario) will be extremely challenging.

CCS will be vital to ensuring the lowest cost route to meeting this goal. Interestingly, Bioenergy with CCS (Bio-CCS or BECCS) emerged several times in the debate regarding negative emissions. It is clear that negative emissions technologies such as BECCS will become increasingly important, as they allow flexibility in harder-to-decarbonise sectors such as aviation.

There is a definite sense that momentum for CCS in Europe has been steadily building over the past year. At COP23, the UK and Canada led a historical alliance to phase out unabated coal across the world, highlighting the crucial role of CCS to meet the Paris Agreement and reduce emissions in a number of sectors.

Both the Netherlands and the UK have emphasised the importance of CCS in their recently published Dutch Coalition Agreement and Clean Growth Strategy respectively. And the Port of Rotterdam is competing with Norway to become the first European CCS cluster, able to capture carbon dioxide from a number of industrial sites to be transported to a permanent storage facility offshore.

At a high level, the European Commission has just published its third list of projects that have received the status of Project of Common Interest (PCI). It is encouraging to note that all four cross-border CO2 transport projects that were submitted to this list have been adopted. PCI projects are able to apply for funding under the Connecting Europe Facility, and this could provide an important source of funding for CCS.

The EU Emissions Trading Scheme (EU ETS) is one of the mechanisms that will enable Europe to decarbonise its industries while meeting its commitments under the Paris Agreement.

Although the EU ETS has so far been unsuccessful in incentivising developers of low-carbon technologies, it is likely to remain a core component of European climate change policy. It is therefore crucial that the current proposals to reform the EU ETS achieve the desired outcome; a higher carbon price that will act as a key driver for low carbon innovation.

Another key plank of the EU ETS reform proposal is the introduction of the Innovation Fund. This replaces previous low-carbon funds such as NER300 and will be an important driver to deliver a number of CCS projects across Europe.

However, on its own, such a fund is insufficient; Europe also needs a coordinated plan to deploy CCS that ensures the EU goal of reducing CO2 emissions by 80-95% by 2050 can be met. Such a plan must be driven by and coordinated between member states if it is to succeed.

Fortunately, a plan was published last week that could deliver the necessary momentum for CCS; the SET-Plan Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU) Implementation Plan.

The plan was released at a high-level SET-Plan conference that took place in Bratislava last week, and is the culmination of a working group comprised of eleven SET-Plan countries; the Czech Republic, France, Germany, Hungary, Italy, Norway, the Netherlands, Turkey, Spain, Sweden and the UK – as well as industrial stakeholders, non-governmental organisations and research institutions.

The overarching SET-Plan highlights areas where the EU needs to strengthen cooperation to bring new, efficient and cost-competitive low-carbon technologies to market faster while the CCS and CCU Implementation Plan sets out ten targets for CCS and CCU for 2020 (as agreed by the European Commission, SET-Plan countries and industry in the 2016 Declaration of Intent).

Each target is supported by a corresponding activity. These include actions such as delivery of a whole chain CCS power project, delivery of regional CCS and CCU clusters, and establishing a European Storage Atlas.

The publication of this Implementation Plan provides an important – and timely – opportunity to assess how both existing and planned sources of European funding should be designed to ensure the successful deployment of CCS in a number of key European regions. For example, the Innovation Fund and funding programmes under the new Multiannual Financial Framework (MFF) for after 2020.

2017 has seen a number of positive CCS developments in Europe. We now need to put in place a long-term policy framework that incentivises CO2 capture and storage, facilitating an environment in which follow-on projects and investments can take place.

Above all else, it is vital that Europe introduces the investment and financing models to realise the cross-border CO2 transport and storage infrastructure that will create CCS hubs. Such hubs will transform key European regions into sustainable industrial zones, aligning regional growth with cost-effective emissions reductions whilst safeguarding and boosting vital European industries.