How carbon capture tech can boost Europe's industrial competitiveness

While carbon capture, a sector in its infancy, is recognised as a solution to aid decarbonisation and industrial competitiveness in Europe, there is much debate about where it will prove most useful and when it will become commercially viable.

During a candid panel discussion at Enlit Europe in Milan, industry experts provided in-depth insights into the pros and cons of the carbon capture technology.

Joop Hazenberg, EU Director of CCSA, said the market is still in its infancy and "needs some child support" in terms of funding, regulatory frameworks and technology scale-up.

Hazenberg suggested, in fact, that the sector will only be able to stand on its own feet in a decade from now.

A realistic perspective

Lorenzo Sani, Analyst, Power & Utilities at Carbon Tracker, was also of the opinion that CCS still has a long way to go before it's a truly viable solution.

He candidly highlighted that while CCS is not a new technology, there have been many project failures and the sector has failed to advance and scale up significantly - something that is needed urgently.

Sani explained that CCS projects are engineering-heavy and highly customised, which is why they are so expensive.

"The reality is that CCS works but it is still very difficult. It's still very costly and it is still not a very mature technology.

"For now, we need to invest in CCS in sectors where there are no alternatives, in no regret sectors. For example, the cement sector or chemical industries that truly need these technologies because if we cannot decarbonise them, we risk losing a lot of industry in Europe."

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Lagging policy support and funding gap

Panellists agreed that the slow market growth is the direct result of policy and investment shortfalls.

Lucia Verardi, Senior Policy Advisor at Eurogas, emphasised that progress has been good despite the challenges. However, "there is a part of the regulatory framework that is not clear and that still might delay some of the key decisions when it comes to creating a CO2 single market."

According to Verardi, developing CCS is high on the agenda for many governments but a comprehensive framework that tackles the entire value chain under the ETS is missing, and there are too few discussions around the storage and safety liability issues.

She warned, however, that waiting for policy can be a slippery slope, adding: "Do you want a perfect regulation for CO2 or do you want market growth..."

Verardi stressed that another reason to encourage investment is to develop the necessary infrastructure.

"Infrastructure will either make or break CCS, it's that extreme," she said, referring to the transport pipelines and storage facilities needed to reach carbon removal targets.

Hazenberg agreed that we "need the right regulatory framework conditions and the right market conditions because the market is still in its infancy."

A sentiment echoed by Sani who highlighted the important role of government subsidies and recommended governments address lagging carbon markets, market volatility and uncertainty urgently. This will give investors the confidence they need to financially back infrastructure and project development, he said.

The fact is though that CCS is proving itself through successful projects, said Paolo Testini, Director CCS and Carbon Removal at SNAM. He referenced the Northern Lights project which will receive its first CO2 cargo next year, the Portos project in the Netherlands which is at final investment decision (FID), and the pilot phase project being delivered by SNAM and ENI in Ravenna Italy.

Testini suggested that the focus should be on bringing projects to FID, to ensure permissions, consent and long term visibility. "It's costly, but we need it. It just needs some incentive," he added.

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Industrial competitiveness

The panellists agreed that the CCS technology's claim to fame would be the decarbonisation of hard-to-abate sectors.

And not only for the purpose of decarbonisation but ultimately as a key contributor to boosting European industrial competitiveness.

Verardi suggested that the role CCS can play in boosting European industrial competitiveness can't be overstated.

In fact, Verardi suggested that CCUS has gained momentum because it can help with competitiveness, and Testini suggested: "there are great expectations from the industry," because industries want to avoid disrupting industrial processes and need to maintain performance, something CCS can offer.

Hazenberg concluded that he believes CCUS will help keep European industries alive.

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He recommended an EU-wide CO2 transport network that includes the UK, as well as home-grown carbon-free products and services.

"This could be the unique selling point for Europe to really specialise in these high-quality, clean products that we can produce partly thanks to CCS.

"Europe's industries need to move or die...if they want to have a future," he added, implying they need to move to CCS to enhance competitive advantage.