With today’s €1.1bn Innovation Fund decision, the EU moves the goalpost for climate action in industry – to where it needs to be 

As a European NGO that has worked ceaselessly toward such a development for decades, Bellona is very pleased to see the European Commission today moving the goal post for industrial decarbonisation in a number of EU countries including France, Italy and the Nordic countries, across a number of key industry sectors.  

Bellona would like to congratulate the Commission on today’s decision on the first Innovation Fund Call for Large-Scale projects, which includes funds for large-scale decarbonisation of major emitters in the steel, cement, chemicals and CHP sectors, at a scale unseen for all those sectors.

Notably, a scale that occurs with a timeline that induces hope for the rapid, scalable industrial decarbonisation Europe needs, to stay within its carbon budget. This decision is a crucial signal to industry and its employees that climate ambition does not mean tens of thousands of jobs lost; that the EU is prepared to enable the operation of key economic activities in a carbon-constrained world.

Once those projects become operational, there is nowhere left to hide for those who fail to act.

For years, Bellona has worked, in particular, to get the first CO₂ stores deployed in Europe, with the argument that the prospect of CO₂ storage availability is what will enable investments into large-scale decarbonisation efforts, create a new dynamic and drive industry climate action innovation into a far higher gear. Following Norway’s approval of the Longship project a year ago, we have been proven correct – the project’s initial storage capacity is already oversubscribed by various European industries; many are now looking to the Netherlands and beyond. In short, a development at a scale previously assumed to occur only in the 2040s is now becoming possible in the 2020s. 

Strategic, large-scale renewable energy investments for Europe 

• PV mega factory for Europe in Italy, producing high-efficiency PV cells to meet the need of rapid renewable deployment. This will help covering the needs for direct electrification and hydrogen production, as well as fostering European leadership in the new generation of PV technology. 

Industrial decarbonisation with CCS is possible now. The space for excuses is rapidly shrinking for carbon-intensive industries to continue dumping CO2 into our atmosphere.

Four CCS projects were announced in Cement (France), Chemicals (Belgium),Grey to Green & Blue H₂ (Finland), CO₂ removals (Sweden).  All four projects have flexible CO₂ transport and storage in the North Sea: the Northern Lights CO₂ transport and storage project funded by the Norwegian state, with shipping as a flexible transport solution, has enabled others to engage in decarbonising industrial production   

• Cement – Europe will now have two low carbon cement plants under construction simultaneously. One in Norway (Norcem) and now in France (Dunkirk). For a sector responsible for 7% of global emission we cannot move fast enough. We are moving from a world where until recently, low carbon Portland cement was an impossibility, to one where only low carbon building products may have a future.

• BASF, a large chemicals producer, has stepped up, showing that chemicals have a substantial carbon footprint but are also now willing to use the tools available to reduce it. Reducing emissions from primary chemical production is essential. When combined with full product carbon accounting, recycling and no emission end of life treatment, we begin the path to a low-carbon sector.  

• Fossil natural gas is now emitting more than coal in the EU. Rapidly reducing unabated fossil gas and directly electrifying heating and transport is critical. H₂ can play a role where direct electrification is not possible. Green H₂ from renewable electricity is the ultimate goal; however, we cannot continue to let unabated fossil gas fill the gap until we have the capacity in place to supply the hydrogen we need. The combined Green & Blue H₂ production in Finland will aid the scaling and cost reduction of Green H₂ while making Blue H₂ available at scale for targeted use.   

• Permanently removing CO₂ form the atmosphere (CDR) will be a necessity of limiting warming 1.5° C warming Removing CO₂ from the atmosphere is often difficult and limited in potential and thus can in no way replace or reduce efforts to deeply cut emissions year on year. Developing robust carbon accounting and sustainability criteria for CDR is a critical first step and for this Europe need high quality front-runner projects. Capturing and storing biogenic CO₂ from an existing biomass district heating plant in Stockholm provides an ideal test case for Europe to develop an understanding of the potential and limitations of CDR.  

Future zero fossil industrial production will become a reality  

• Steel with green H₂ in Sweden, using local low-carbon electricity and high-quality iron ore to mark a world first in primary low carbon steel production. Producing steel with hydrogen will allow the sector to break free from fossil feedstocks (coal) and emissions. The hydrogen if produced with renewable electricity is almost zero carbon – and in turns allows very low emissions intensity steel. The scale of hydrogen required is large, thus Sweden is the perfect choice for a first of a kind project due to its high renewable potential and exceptionally low carbon electricity mix. Average electricity in Sweden emits only 3% the CO₂ as the average electricity supply in Germany and as such, the HYBRIT project sets the ideal benchmark for Green hydrogen use in European industry.