The new EU political cycle must renew the momentum for CCU techs

2024 is said to be the year in history where the most important number of elections ever recorded are taking place in the world. In Europe, it has been quite a ride, with 27 EU countries electing 720 Members of the European Parliament.

Europeans are now wondering: what will the EU do to deliver on climate objectives now? Will it water down climate targets? Will it reinforce them?

Some answers have started to emerge from Ursula von der Leyen – now re-elected at the helm of the European Commission for 5 years (2024-2029). In the programme she presented to the Parliament on 18 July, she committed to “stick[ing] to the targets of the European Green Deal” and doubled down on the 90% GHG emissions reduction target in 2040 compared to 1990, as announced on 6 February in the Climate target 2040 Communication. As detailed in that communication and in the Industrial Carbon Management Communication, Carbon Capture and Utilisation (CCU) technologies will play a key role in decreasing emissions as 33% of captured CO₂ are projected to be used in CCU products in 2040 (amounting to about 90Mt CO₂) and 45% in 2050 (amounting to about 200Mt CO₂). Ms. von der Leyen also announced a Clean Industrial Deal in the first 100 days of her new Presidency, aiming to reshore key industries in the EU and support the local development of net zero industries – among which CCU technologies.

At CO₂ Value Europe, we aim to be the voice of Carbon Capture and Utilisation. The principle is straightforward: capture carbon from point sources or directly from the air, and convert it into useful materials, for example, chemicals, sustainable fuels or mineralisation products. CCU is about defossilising the EU economy, meaning replacing fossil resources with available carbon feedstock, rather than extracting more fossil carbon from the ground (i.e. coal, oil or gas). CCU techs are mature and ready to use. They are a must for decreasing emissions, as shown in the 2022 IPCC report on the Mitigation of Climate Change. They can help in particular the hard to abate sectors like cement, steel, aviation, shipping, or construction to reduce their carbon footprint. But in Europe, the missing piece of the puzzle is an enabling policy framework that helps CCU deploy at a large scale.

With contributions from 30 expert stakeholders, scientists and researchers, CO₂ Value Europe published a quantitative analysis of the role of CCU in 2050, which shows that to reach climate neutrality, the EU will need CCU technologies for at least 8% (244Mt CO₂eq) of overall emission reductions – which is about 1/5 of emission reductions to be reached through technology as a whole. In industry, CCU can reduce by at least 20% GHG emissions by respectively using captured carbon as feedstock in the chemical industry (11%), using CCU fuels (7%) and capturing CO₂ permanently in building materials via mineralisation (2%). In transport, 11% of emission reductions will be coming from the use of CCU fuels reducing emissions from maritime, aviation and inland transports by 35%, 38% and 2% respectively.

We face 3 main policy issues right now:

• For some CCU pathways, there are literally no rules or incentives: for example, using captured carbon to make chemicals is not rewarded under EU law. Meaning a company may rather continue to use more oil and gas to make textiles or plastics or cosmetics, since there is no stick to disincentivise the use of fossil resources, nor any carrot to reward the use of alternative feedstock.
• For others, the rules are either too stringent or too complex or both: for example, the rules to produce CCU fuels are extremely composite and not fit-for-purpose (e.g. ETS accounting rules, EU rules on renewable hydrogen and CCU fuels, EU rules on low carbon fuels).
• Finally, there is still no overall consistency in how CCU is tackled in EU instruments: some rules incentivise mineralisation, but they are yet to be completed. Some definitions almost disregard CCU (e.g. Taxonomy), others include it partly (e.g. Net Zero Industry Act), and others fully (e.g. Industrial Carbon Management Communication)

In a nutshell: we lack ambitious rules; we lack fit-for-purpose rules; and we lack consistent rules.

Of course, CCU is only one part of the solution. And specific EU rules on CCU are but a symptom of what Europe is doing on the climate transition. The EU sets the right ambition and the right objectives but it needs to deliver further and faster. For CCU (and for climate policies in general), we need policy-makers in the next 5 years to be much closer to provisions that can deliver. CCU will deliver, with the right incentives and rules. The EU can lead on climate change mitigation efforts by striking the right balance between climate ambitions and economic realities.

This is why we have been calling on EU policymakers – in Parliament, Council, and Commission, to table as soon as possible a Sustainable Carbon Policy Package, supported by more than 10 EU countries throughout 2024. What is it about? Creating market-pull mechanisms by setting mandatory targets for sustainable carbon in daily products (e.g. in chemicals); setting up clear accounting mechanisms rewarding financially the use of captured carbon rather than virgin fossil carbon; supporting innovation funding for CCU projects; creating exemptions for state-aid schemes boosting defossilisation projects; or setting objectives for substituting the use of virgin fossil carbon overall. In other words, encourage start-ups, scale-ups, SMEs, and large companies to invest in CCU and renewable and low carbon energy derivatives to finally make fossil-free alternatives mainstream.

In recent months, we have seen CCU projects launched, we have seen others scrapped. What this shows is that we need clearer, simpler and more ambitious policies to allow those projects to flourish, and finally accelerate the climate transition and rebuild the EU energy and industrial sovereignty. Time is running out. We need action, now.