CCUS Forum 2023 – stocktake & where to go from here?

Publish date: December 20, 2023

The third annual edition of the CCUS Forum was organised in Aalborg on the 27th and 28th of November. The forum was organised by the European Commission together with the Danish Ministry of Climate, Energy, and Utilities. In light of the European momentum for CCS as a decarbonisation pathway, there has been an observed shift in the discourse and discussion surrounding CCS. Now focused firmly on working out the details of how to create an optimal environment – regulatory, economic, as well as in terms of a collaborative infrastructure – to achieve the rapid deployment we need for reaching our 2050 climate goals. 

While some were disappointed that the planned publication of the Carbon Management Strategy (ICMS) was pushed from during the forum to early next year, the forum provided an opportunity to contribute to and highlight what should be part of the ICMS. During the forum it was apparent that there is ongoing coordination between several Member State governments and the European Commission on CCS, as exemplified also by the European Commission’s recommendation to establish the role of CCS in Member States’ decarbonisation strategies in their National Energy and Climate Plans. 

Several big announcements were made at the CCUS Forum 2023: 

  • The Aalborg Declaration was drawn up and signed by Denmark, France, Germany, the Netherlands, and Sweden – recognising the role of CCS in achieving emission reductions in hard-to-abate sectors. The declaration also recognized that cross-border cooperation is essential to meet this shared goal. The declaration is of particularly significance as it seeks to firmly dispel any notion and prevent that CCS is to be applied to prolong the fossil fuel age. 
  • The Project of Common Interest status was awarded to 14 CO2 transport and storage projects across Europe from the 1st Union list of candidate projects.1 These projects, in addition to facing fewer administrative hurdles and benefitting from faster permitting procedures, can now apply for funding from the Connecting Europe Facility (CEF) that has a ∼ 480 million EUR budget earmarked for CCS projects.i 
  • An Industrial Carbon Management Knowledge Sharing Network will be established, to function as a knowledge sharing platform for CCS and CCU projects supported by the EU. More on the mission and structure of the Network will be published in the upcoming ICMS. 
  • A CCS Observatory will start its work next year, monitoring, reporting, and verifying the CO2 captured from two harder-to-abate industries: cement and waste incineration.  

These announcements are welcome, and while we look forward to learning further details, they already offer valuable insight into the positive direction the EU is taking regarding CCS deployment. The NZIA’s 50 Mt CO2 storage injection capacity target to be developed by EU oil and gas producers by 2030, is another welcome development showing just how serious the EU is about CCS deployment for climate action. Providing positive market signals and much needed predictability for a European market in need for reducing investment risk.  

The discussions at the Forum centred around a number of key topics: market development and the commercialisation of CCS technologies, the role of national governments and the EU, CO2 transport and storage development, as well as public perception and community engagement. Different approaches to evolve carbon markets to self-sufficiency were highlighted. Mechanisms ranged from subsidy schemes in the Netherlands, tax credits in the United States to direct funding in Denmark. Whichever shape it takes, one thing was made clear: public support is indispensable to stimulate innovation and achieve economies of scale, which in return drive down costs of technologies and kick-start carbon markets. 

There is a clear case for public support of CO2 infrastructure, given significant upfront costs, and the lack of a sufficient business case due to inadequately priced CO2 emissions. Public support should serve to mitigate investment risks until a market can function on its own and should ensure public oversight in line with public interests. It is evident from the discussions of the forum, that CCS stakeholders view targets as crucial, providing clear investment horizons which accelerate CCS deployment throughout Europe. 

Due to geographic dispersity in location of storage sites and emitters, CCS carries with it a cross-border characteristic in a European context. As such, there is a need for collaboration among CCS stakeholders across Europe. The European Commission was during the forum identified as the best positioned to provide a platform for such collaboration. As well as to coordinate among market players and stakeholders, bringing together emitters, transmission system operators, and storage capacity developers/providers. The establishment of a robust legal framework was highlighted as a crucial factor in instilling market confidence and ensuring a timely roll-out of CCS initiatives and projects. Given that such a framework must be harmonised among Member States, it falls upon the EU to regulate and set the standards for a CO2 transport infrastructure – a piece of legislation many CCS stakeholders took the opportunity to call for. The upcoming ICMS will hopefully provide clarity on the expected timeline for this regulatory framework. 

While the need for such a market legislation is evident, there was also a notable emphasis on the importance of legislators avoiding excessive regulation that could hinder market development. Instead, the recommendation is to establish a flexible framework that offers clarity to the market. As far as CO2 transport infrastructure development goes, the objective should be to ‘oversize’ it initially, capitalizing on economies of scale to make it more cost-effective in the long run. The most optimal location for the development of this infrastructure within the EU was modelled and presented and will be further refined by the European Commission’s Joint Research Center. 

Public perception was as a recurring theme not only in the one dedicated panel to this topic. It was stressed that even if other challenges in CCS deployment are effectively addressed, a negative public perception could ultimately undermine CCS projects. Hence, the importance of community engagement took centre stage this year, with discussions surrounding the strategies for effective engagement, the timing of such initiatives, and the question of who should be responsible for the engagement process. Bellona Europa would however have liked to see even more focus on public perception, and in particular the important link to a Just Transition as highlighted in our webinar held the week before the CCUS Forum on this topic.  

In terms of public engagement, to an extent the US’ approach can provide a notable example, obliging CCS project developers to formulate a Community Benefit Plan. This mandates that companies seeking funding for CCS projects must outline plans for community engagement, diversity and inclusion, environmental justice, and workforce development. This approach can serve as an inspiration for the European Commission as it addresses the need for robust public engagement in its upcoming ICMS. 

Beyond the need for project developers’ engagement with communities directly affected by prospective CCS projects, CCS stakeholders also emphasised the need for a broader EU-wide discussion. Such wider discussion and debate could provide the public with a greater general understanding of the technologies, the EU’s approach to them, their targeted applications, and the underlying reasons for their strategic deployment: climate action. Particular emphasis was placed on the need for the European Commission to clearly communicate that public support for the application of CCS is intended solely for where they have proven climate impact, such as in harder-to-abate sectors. Such sectors where there are no viable alternatives for decarbonization by other means such as direct electrification. Importantly, it should be made clear that the EU does not endorse or intend the application of CCS to prolong the fossil fuel age, addressing a common fear in parts of the public. 

It was also mentioned that direct engagement with communities should be conducted before final decisions are taken on whether to go ahead with the deployment of a CCS project. This engagement must include both informing and consulting the community and taking their feedback into account when making final decisions. This is key to fostering a trust-based relationship with the community which in return can provide positive public sentiments toward the project. 

Finally, and critically, there is a need for ‘winners’—positive examples of effective and successful CCS projects deployed in Europe. These success stories can inspire and provide reassurance to communities where similar projects are planned for development. Which is also why it’s imperative to get these first few CCS projects right and emphasizes the need for collaborative efforts from all stakeholders. Successfully executing these first projects is crucial, as they set a positive example and can create a ripple effect catalysing widespread CCS deployment across Europe. 

According to the IEA’s recently published report announced projects in the EU make up about third of the CCS capacity we need by 2030 to meet our 2050 net-zero goals. If, however, projects continue to be announced at the current pace, these projects deliver, and lead times are reduced as our pool of knowledge and experience widens and economies of scale take effect, the necessary scale up is within reach.  

In order to achieve this acceleration of CCS deployment Bellona Europa recommends: 

  • To extend and strengthen public support from the EU as well as Member State governments. This support can take different shapes (grants, tax credits, loans, state-owned enterprises, carbon pricing and leakage policy, public procurement, Carbon Contracts for Difference) based on what works best in the economic, social and political context of each country, but in every case it is necessary to create a business case for CCS deployment until a functioning market is ready to take off and to de-risk private investments into the technology and get CCS projects off the ground. 
  • To establish the legal frameworks necessary particularly in the case of CO2 transport infrastructure deployment, to provide clarity to the market as to the frameworks within which it must operate. 

To implement measures that reduce lead times, such as  

  • capacity building on all levels of government to meet the needs for public engagement and processing permits, 
  • clear and faster permit approval timelines, 
  • establish platform(s) for collaboration and knowledge sharing among CCS stakeholders. 

  • To provide additional support for deployment of CCS for emitters and communities located in just transition territories, often located further away from hubs and large ports. 
  • To address the challenge of public perception by creating clear obligations on CCS project developers to conduct engagement activities extending to both providing accurate information on risks, challenges and benefits of the project to the community and the wider society as a whole and consulting them with the aim to address concerns and incorporate the public sentiment into the final decision-making process.  
  • To address the challenge of public perception by conducting wider information campaigns on the technology creating a general awareness of CCS and introduce it into the public consciousness/debates. 
  • To expand the proposed CCS Observatory to harder-to-abate emitters other than cement and waste incineration.

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