Last week, the B20 took place in Italy where, in his first speech as the U.S. Special Presidential Envoy for Climate, John Kerry highlighted the great opportunities and ongoing projects for industrial decarbonisation in Europe. In particular, Kerry looked to the Norwegian Longship project. His specific words: “A zero-emissions future offers huge opportunity for business, for clean, green jobs and economic growth and, to use the President’s words, to ‘build back better’ from the global economic crisis. A few examples tell the story: …, Heidelberg Cement is working on a plant in Norway that anticipates capturing all its CO2 from concrete by 2030, ….”.
That a high-level US official mentioned the project at a global forum, is evidence of its importance to world-wide efforts in reducing emissions. But while the great decarbonisation potential of carbon capture and storage is recognized across the Atlantic, EU’s ongoing revision of the TEN-E regulation risks missing the chance to build on the success of TEN-E, jeopardising unprecedented opportunities facilitating EU reaching 2030 and 2050 climate targets outlined in the European Green Deal.
CCS and funding opportunities
Longship, the Northern Lights project, is in fact partly funded by the EU through the Connecting Europe Facility (CEF). It is eligible for EU funding because it has been designated a Project of Common Interest (PCI) through the TEN-E Regulation (the legislative part of CEF). PCI status does not only provide potential funding through CEF but additional benefits highlighting the importance of selected projects in the context of European policy objectives. It is a good example to show the potential of the CEF and TEN-E Regulation to actively contribute to the decarbonisation of industry, especially areas that are hard to abate.
While the TEN-E has already helped further industrial decarbonisation since its creation in 2013, particularly projects taking place in Rotterdam and Ireland, the EU has the potential to do more. From all the different steps across the carbon capture and storage (CCS) value chain, only CO2 transport infrastructure is currently eligible for CEF funding. This means missing a great opportunity as investments in CO2 infrastructure such as storage and all transport modalities could be one way to incentivize industry to accelerate decarbonization efforts. The EU can play an important role in this and help enable significant emission reductions as industry accounts for 19% of the EU’s emissions.
The EU should build on the success of TEN-E to further industrial decarbonization. The current review of the TEN-E regulation provides opportunities to expand CCS-related activities eligible for CEF funding to include transport by ships, barge, truck and train and storage of CO2. Although specifically mentioned in the European Green Deal as one of the main justifications for revising the TEN-E, criteria for projects relating to carbon dioxide networks have not been amended at all in the European Commission’s revised proposal for TEN-E, published in December 2020.
CO2 infrastructure and storage connecting European industrial clusters is needed, particularly as geological storage sites are not evenly distributed amongst Member States. Such investments and infrastructure would also create jobs and maintain competitiveness in a low-carbon world. The cross-border benefit of CO2 storage is further significantly increased through the use of additional transport modalities in addition to pipelines – currently not included in the revised TEN-E proposal.
CCS, the full value chain including both transport and storage, plays an important role in many net-zero by 2050 scenario’s as shown by the Commission’s “A clean planet for all” (2018). Kerry also recognized this stating that it is important to invest in “capturing and storing emissions from the atmosphere and from polluting plants”. The Special Presidential Envoy for Climate also recognized the important role of governments and cooperation with the private sector. This is especially true for carbon dioxide transport and storage. By funding more segments of the CCS value chain and contribute to market developments, the EU can incentivize more private funding for such projects – further incentivizing rapid decarbonization. The EU has a long history of co-financing environmental and climate-related projects, e.g. through the LIFE programme and Horizon. And by co-financing Northern Lights, the EU has set a further step towards the deep decarbonisation of industries. Europe is moving in the right direction and now it is time to realize Europe’s full potential. Including the full CCS value chain in the TEN-E Regulation is an opportunity we cannot afford to miss on the pathway to net-zero by 2050.