ERU, Alm.del - 2022-23 (2. samling) - Bilag 272: Henvendelse af 22/9-23 fra European Energy om anbefalinger til at understøtte udviklingen af et marked for Carbon Capture, Utilisation & Storage (CCUS) i EU

Erhvervsudvalget 2022-23 (2. samling)
ERU Alm.del Bilag 272
Offentligt

10 Recommendations for

Scaling Up Carbon Capture

European Union

31 August 2023

Utilisation and Storage in the

[Insert address or cover page text

–

delete if not needed - change color to the text if picture is light]

ERU, Alm.del - 2022-23 (2. samling) - Bilag 272: Henvendelse af 22/9-23 fra European Energy om anbefalinger til at understøtte udviklingen af et marked for Carbon Capture, Utilisation & Storage (CCUS) i EU

10 Recommendations for Scaling Up Carbon Capture Utilisation and Storage in the European Union

Table of contents

Introduction ........................................................................................................................................ 3

Secure CO

availability for Utilisation and storage ................................................................... 4

Set EU targets for carbon capture towards 2050

........................................................ 4

Require carbon capture on new installations

.............................................................. 4

Phase-in carbon capture for existing installations

.................................................... 4

Establish an EU-wide CO

infrastructure .................................................................................... 5

Analyse infrastructure needs

........................................................................................... 5

Allow multimodal transportation

.................................................................................... 5

Develop a European certification system for CO

sources

....................................... 5

Support both CCU and CCS with a Technology neutral approach ....................................... 6

Apply an open competition approach

............................................................................. 6

Grant support across the CCUS value chain

................................................................. 6

Promote utilisation of biogenic and atmospheric CO

............................................................. 6

Regulate a prioritised use of biogenic and atmospheric CO

................................... 7

10.

Set out an EU definition of biogenic CO

...................................................................... 7

Page 2

10 Recommendations for Scaling Up Carbon Capture Utilisation and Storage in the European Union

Introduction

Another record-breaking hot summer underlines that we need to drastically reduce CO2

emissions in order to meet our global commitments in the Paris Agreement limiting global

temperature increases to 1.5 degrees.

All available technologies must be deployed if the EU is to reach its goal of climate neutrality

by 2050. Carbon capture, utilisation and storage (CCUS) will play a significant role in

achieving this. It is of vital importance that the European Commission works to promote

both utilisation and storage technologies on an equal footing in a new European CCUS

Strategy and in future initiatives and legislation.

It will be essential to store CO

permanently underground using carbon capture and storage

technologies (CCS), which can contribute to significant emission reductions. However, CO

is also an important feedstock in carbon capture and utilisation (CCU) technologies, which

are crucial for the green transition of a number of hard-to-abate sectors. Thus, it is

necessary to create incentives for CCU for off-takers as well as CO

emitters. This will

stimulate demand which CCU operators are ready to fulfil.

As a leading company in Power-to-X, European Energy will contribute significantly to CCU

with the world’s first large-scale

e-methanol plant in Kassø, Denmark. By early 2024, the

plant will produce up to 42.000 tons of e-methanol annually. The e-methanol, derived from

renewable hydrogen and biogenic CO

captured from a biogas plant, will serve as a

sustainable fuel for shipping and a raw material for plastic production.

In this position paper, European Energy proposes key policy and regulatory measures for the

European Commission to consider when formulating a strategic vision for CCUS deployment

in the EU. The following 10 recommendations will support the creation of a single market for

, which is the fundamental first step for a thriving European CCUS industry. Unlocking

the full climate potential of CCUS requires the establishment of a comprehensive

framework, including targets for carbon capture securing access to CO

, the development of

a European CO

infrastructure, and support targeting both CCU and CCS.

Page 3

10 Recommendations for Scaling Up Carbon Capture Utilisation and Storage in the European Union

Secure CO

availability for

Utilisation and storage

Both CCU and CCS technologies can only fulfil their full potential if sufficient CO

available in a single market for CO

. European Energy recommends the following measures

that will boost the access to CO

across the EU:

Set EU targets for carbon capture towards 2050

The European Commission should set EU targets for carbon capture by 2050, including

short-term targets to act as clear milestones towards 2050. In addition, Member States

should be required to include carbon capture targets in their National Energy and Climate

Action Plans (NECPs), along with measures for transport, use, and storage development.

However, carbon capture should be seen as a transitional technology and must not become

an excuse for new fossil fuel investments. Instead, carbon capture should be limited to point

sources necessary for society such as waste-to-energy plants, combined heat and power

plants, and cement production, as well as biogenic sources meeting EU sustainability

requirements.

Require carbon capture on new installations

New installations producing or combusting biofuels and biomass as well as installations

providing heating and/or electricity through waste incineration should be required to be

equipped with carbon capture. The entry into force of such a requirement must be based

on an assessment of technology maturity and expectations for the development of an EU-

wide CO

infrastructure.

Phase-in carbon capture for existing installations

Existing biomass and waste-to-energy installations should also be required to install carbon

capture. However, the requirement should be phased in concurrent with the development

of a European CO

infrastructure and technology maturity.

Page 4

10 Recommendations for Scaling Up Carbon Capture Utilisation and Storage in the European Union

Establish an EU-wide CO

infrastructure

Establishing a European CO

infrastructure enabling the trade of CO

is essential to creating

a competitive and profitable single market for CO

. The establishment should go hand in

hand with hydrogen infrastructure and the deployment of renewable energy in order for

CCUS to contribute as much as possible to achieve the European climate goals. As an

example, climate benefits green fuels such as e-methanol depend heavily on the

combination of biogenic CO

and hydrogen produced by renewable energy. European Energy

recommends the following measures to support the establishment of an EU-wide CO

infrastructure:

Analyse infrastructure needs

The European Commission should analyse European infrastructure needs considering key

point sources and possible infrastructure connections across borders. Publishing these

findings will benefit all CCUS actors across Member States.

Allow multimodal transportation

To ensure a certain degree of predictability for investments, it is crucial that the regulatory

framework supports multimodal CO

transportation. Cross-border and domestic CCUS

projects rely on different modalities for the transport of CO

such as pipelines, rail, ships,

and trucks depending on the location of the CO

source and the CCUS technology used.

Develop a European certification system for CO

sources

A certification system is central to a cost-effective deployment of a European CO

infrastructure and to ensure the free trade of CO

across the continent as well as import

from non-EU countries. Uniform standards for CO

in terms of composition, purity and

pressure, as well as standards for the transport value chain will ease connections between

countries. Furthermore, the rules for trading CO

removals certificates are of great

importance for the pricing of CO

in the current immature market. Hence, it is important for

the establishment of a single market for CO

that the current work on the EU carbon removal

certification framework is accelerated, which will create greater clarity for the CCUS

industry.

Page 5

10 Recommendations for Scaling Up Carbon Capture Utilisation and Storage in the European Union

Support both CCU and CCS with a

Technology neutral approach

Support schemes favouring CCS may distort the market and affect CCU actors

disproportionately. Subsidising storage only will have a particularly severe impact on

availability and the price of biogenic CO

to be used in CCU products, ultimately delaying

the green transition of hard-to-abate sectors. Thus, European and national support

schemes for CCUS technology should not favour either CCS or CCU. European Energy

recommends the following measures to support both technologies:

Apply an open competition approach

Only the market conditions and the CO

price should determine whether CO

is stored or

utilised. An open competition approach in support schemes equals the access to biogenic

resources in particular, while favouring one technology will lead to an inappropriate

distortion of the CO

market. If support schemes only subsidise CCS, prices on biogenic CO

will increase resulting in disproportionately high end-user prices on CCU products such as

e-fuels and chemicals that are crucial for decarbonising sectors such as shipping, aviation

and industry.

Grant support across the CCUS value chain

Support schemes should target the synergies between CCUS technologies by ensuring a level

playing field for support among actors across the CCUS value chain. When subsidies are not

exclusively targeted CO

emitters, the investment risks are spread across the value chain

benefitting the entire CCUS industry.

Promote utilisation of biogenic and

atmospheric CO

The climate benefits associated with CCU largely depend on the CO

source used and the

carbon intensity of the energy used in processes. In order to gain maximum positive climate

effects, CCU products should substitute similar products on the market made from fossil

feedstock with a more sustainable alternative. However, is expected that biogenic CO

will

become a scarce resource in the future for which CCUS players will have to compete,

especially if the political and regulatory focus is directed towards underground storage only.

At the same time, Direct Air Capture technologies are currently at a very early stage of

maturity. Therefore, European Energy recommends the following measures to ensure the

positive contribution of CCU technology to achieving net zero:

Page 6

10 Recommendations for Scaling Up Carbon Capture Utilisation and Storage in the European Union

Regulate a prioritised use of biogenic and atmospheric CO

The EU regulation must provide incentives for the use of biogenic and atmospheric CO

replace fossil CO

in sectors that are dependent on carbon feedstock or that cannot be

electrified directly. This applies, for example, to long distance aviation and shipping, where

the use of non-carbon-based fuels is not foreseen in the near future. Therefore, European

Commission should propose higher and binding targets for the uptake of renewable fuels of

non-biological origin (RFNBOs) in future revisions of relevant legislation such as FuelEU

Maritime and ReFuelEU Aviation. This will target CCU towards hard-to-abate sectors and

incentivise a prioritisation of biogenic CO

that leads to replacement of fossil CO

Set out an EU definition of biogenic CO

The European Commission should set out an EU definition of biogenic CO

along with

appropriate sustainability requirements. The recently adopted delegated acts on RFNBOs

regulates that e-fuels such as e-methanol can only be based on sustainable CO

sources in

the future. However, what is considered biogenic CO

sources in the long run is not clearly

defined. Biogenic CO

is expected to become a scarce resource in the future. Therefore, a

clear definition of biogenic CO

sources is of great importance for all CCU operators in the

long run. A definition will not only be central for a European certification system to

distinguish the origin of CO

sources through documentation. This will also enable the use

of biogenic fractions of mixed CO

sources, provided that the biogenic origin can be

documented and the fossil share is stored.

For more information please contact Signe Albers, Regulatory Affairs Manager

[email protected]

T: +45 31 34 76 55

Page 7