Experts say the bloc’s 2030 carbon capture target strikes a reasonable balance, as Net Zero Industry Act fleshes out storage strategy.
Increased clarity on the European Commission’s carbon capture utilisation and storage (CCUS) plans has failed to dispel concerns that expectations for the technology’s development by 2040 are unrealistic.
The Net Zero Industry Act (NZIA) has set a target of 50 million tonnes (mt) of annual CO2 storage capacity by 2030. However, the draft national energy and climate plans of 20 member states project that only up to 34.1mt of CO2 will be captured annually over this period.
As per modelling results, that number would need to go up to 280mt by 2040, and to around 450mt by 2050 in order to achieve climate neutrality – an increase which many suggest is unachievable.
“Given the small scale achieved globally so far, some might think the [2030 target] is too optimistic, but it strikes a reasonable balance in terms of ambition,” contended Mark Fulton, Energy Transitions Advisor at Inevitable Policy Response. “It represents a further shift by policymakers towards a recognition of the growing role of negative emissions technologies.”
As of October 2023, there were 119 commercial-scale CCUS facilities at various stages of development in Europe, representing a 61% increase from 2022. However, only four of these projects are now operational.
Richard Folland, Head of Policy and Engagement at Carbon Tracker, argued that while the 2030 CCUS target was reasonable, the 2040 goal implied that much progress would need to be made on emissions reductions this decade.
The Commission itself has noted that the EU had to “significantly scale-up” efforts to manage and mitigate carbon emissions to achieve a 90% reduction by 2040, and reach climate neutrality by 2050.
According to the International Energy Agency (IEA), CCUS technology currently helps to capture more than 45mt of CO2 globally per year – roughly 0.1% of worldwide emissions.
“We would argue that given where the technology remains at present, there still have to be some doubts about the NZIA approach,” said Folland. “Some of those technologies remain expensive and have not been commercialised properly or at scale.”
The IEA’s November ‘Oil and Gas Industry in Net Zero Transitions‘ report estimated that in a 1.5°C-by-2050 world, approximately 30% of the energy consumed would need to come from clean technologies. Roughly US$4 billion was invested in CCUS in 2022, but US$3.5 trillion per year are needed to align emissions with current climate targets.
Since 2020, the Commission’s Innovation Fund has supported 26 industrial carbon management projects with more than €3.3 billion (US$3.55 billion). The Commission estimates that capturing 360-790mt of CO2 could generate between €45-100 billion in economic value, and help to create up to 170,000 “green” jobs.
Protecting public money
Others, however, have welcomed the approach taken in the NZIA. Domien Vangenechten, Senior Policy Advisor at think tank E3G, praised it for only committing to provide storage space for CCUS, as that placed the responsibility to capture the carbon on oil and gas firms, as opposed to the “public purse”.
“I think it’s right there’s no public financing commitment, because the technology is unproven and not ready,” said Arjun Flora, Director for Europe at the Institute for Energy Economics and Financial Analysis. “I think the EU needs to be careful about how much of its own taxpayer funds it’s spending on these projects, especially as [they] have history of going over budget.”
The oil and gas industry has invested or been a project partner in more than 90% of operational CCUS capacity to date. In December, oil and gas giant ExxonMobil’s CEO Darren Woods defended CCUS technology, following criticisms from the IEA.
“The industry talks about the importance of CCUS, but then there’s seemingly reluctance to come forward and back it up with adequate commercial investment,” said Folland. “From a governmental point of view, resources and finances are limited, and the vast amount of financing for the transition is going to come from the private sector.”
Earlier this month, Exxon’s CEO acknowledged that the company’s business had faced technology and cost challenges, and that expenses were too high for the technology to be expanded beyond heavy industries.