EU 2030 framework poised to propel CCS

Publish date: January 22, 2014

The European Commission today presented its much anticipated White Paper on the EU’s 2030 Framework for Climate and Energy Policies (read more here). Although it includes strong wording on CO2 Capture and Storage (CCS), the EU executive has scaled back its ambitions dramatically in the name of “cost-effective” decarbonisation. Proposed measures include an unambitious greenhouse gas emission reduction target of 40% by 2030 driven by an increase in the linear reduction factor of the ETS from 1.74% to 2.2% in 2020. A modest, but binding, renewables target of 27% is also proposed.

“It is now up to Member States and Parliament to strengthen these suggestions and put the package on track to deliver the ambition we need to keep below the 2°C limit in global temperature increases,” states Jonas Helseth, Director of Bellona Europa. “In particular, we need a tighter CO2 emissions target and a clear EU commitment to set the tone for Paris 2015.”

CCS toward 2030

In line made with suggestions by EU Climate Commissioner Connie Hedegaard, latest at the January plenary vote of the European Parliament on the CCS implementation report (read more here), the white paper includes strong wording on CCS. According to the communication:

Greenhouse gas emissions from the EU’s energy and carbon-intensive industries must come down significantly to be compatible with the EU’s long term GHG objective. As theoretical limits of efficiency are being reached and process-related emissions are unavoidable in some sectors, CCS may be the only option available to reduce direct emission from industrial processes at the large scale needed in the longer term. Increased R&D efforts and commercial demonstration of CCS are, therefore, essential over the next decade so that it can be deployed in the 2030 timeframe. A supportive EU framework will be necessary through continued and strengthened use of auctioning revenues.

In the power sector, CCS could be a key technology for fossil fuel-based generation that can provide both base-load and balancing capacity in an electricity system with increasing shares of variable renewable energy.

However, the Commission stops short of explicitly proposing EU-level support mechanisms for the time being, calling instead on Member States to take the lead.

Member States with fossil reserves and/or high shares of fossil fuels in their energy mix should support CCS through the pre-commercialisation stage in order to bring down costs and enable commercial deployment by the middle of the next decade. This must include the development of an adequate CO2 storage and transport infrastructure that could benefit from EU funding such as the Connecting Europe Facility and any potential successor.

The European Parliament’s own draft report on the 2030 framework also includes strong wording on CCS. When this was voted through the joint ITRE/ENVI committee two weeks ago it called on the Commission to ‘propose appropriate measures within the 2030 framework in order to mobilise stakeholders and the necessary funding’. The Parliament report is due for plenary vote on 4 February.

Such acknowledgement by both the Commission and Parliament that CCS is central to decarbonizing Europe is welcome, but must now be followed up with concrete plans of action. The Parliament’s CCS implementation report includes several such options to be thoroughly considered, including a comprehensive review of the CCS Directive and new funding mechanisms such as an ‘industrial innovation investment’, another policy option mooted in the Communication released today:

In line with the Union’s innovation and industrial policies, the concept of an expanded NER300 system will, therefore, be explored as a means of directing revenues from the ETS towards the demonstration of innovative low carbon technologies in the industry and power generation sectors.

It now falls to the Commission and Member States to decide whether this scheme can be made to drive CCS deployment in the Union, as well as whether other measures, such as a possible EU-wide CCS certificate scheme or CCS target, will make it into the final package to be launched in 2020. Bellona has worked hard to promote these policies over the past year. More information can be found in our CCS Market Incentives report (downloadable here) and the ZEP report on CCS in energy intensive industries (available here).

Member states split

There has been disagreement between EU Member States on the need for three versus one targets. Ministers of eight Member States recently sent a joint letter to the Commission expressing their support for a renewables target. Germany, France, Italy, Austria, Belgium, Denmark, Ireland and Portugal view a specific, if not binding, renewables target as essential to provide stability and predictability to investors, to create both much needed green energy as well as jobs.

In the one target camp we find the UK and Norway, who view renewables targets as an unnecessary reigning in of Member States’ flexibility to choose thieir own best past to greenhouse gas emission reductions. The UK intends to do so by investing in nuclear power, while Norway and state-owned petroleum company Statoil intends to export gas (which has lower greenhouse gas emissions than coal) to the European continent.

Read more about the 2030 White Paper here