Europe advances CCS but doubts over costs, viability remain
European countries continue to pursue carbon capture and storage (CCS) projects as part of wider climate change efforts, despite ongoing concerns about costs and viability.
In a coalition agreement, the German government lists CCS and carbon capture and utilisation (CCU) as key tools to decarbonise heavy industry, amid targets to achieve carbon neutrality by 2045.
The move is “not surprising given (Germany) is one of the largest emitters in Europe,” Catherine Horseman-Wilson, senior research manager in CCUS at Wood Mackenzie, told Gas Outlook.
In August, Germany’s cabinet adopted a draft law to allow and promote the large-scale buildup of carbon storage and transport infrastructure in Germany, meaning that certain projects would be considered “of overriding public interest”, simplifying planning, permitting and construction.
The move mirrors similar initiatives across Europe.
Italy’s first CCS project — Ravenna CCS — was launched by Eni and Snam in September 2024.
In the Netherlands, where CCS is identified in the Climate Agreement as central to the country’s climate strategy, Gasunie, EBN and the Port of Rotterdam are progressing the Porthos CCS project, set to become operational in 2026.
And France aims to capture 4-8 million tonnes of CO2 by 2030 and up to 50 million tonnes by 2050, as part of a strategy issued in 2024.
In the UK, Eni reached the final investment decision on its Liverpool Bay CCS project last April, part of the wider HyNet North West hydrogen and carbon capture cluster.
The announcement follows the East Coast Cluster FID in December 2024.
These commitments in the UK “result from a combination of government policy and private sector motivation to decarbonise,” Horseman-Wilson said.
The UK government’s model de-risks private investment for developers, which can be “up to hundreds of millions of pounds per project,” she added.
The UK has a target of capturing and storing 20-30 mtpa of CO2 by 2030. That represents 5-8% of the country’s current emissions.
Wood Mackenzie estimates the cost to capture, transport and store CO2 in Europe ranges between US$30 – 300/tonne, depending on the application and the region.
However, it expects costs to fall through a combination of scale-up, available infrastructure and technology development.
By 2035, it expects the levelised cost of CCS in Europe to fall below the carbon price for over 90% of projects, based on an average cost of $140/tonne and a carbon price of $160/tonne for Europe.
Nonetheless, while the sector is “still developing, subsidies are required to kick-start projects, just as in the early stages of other energy technologies, such as renewables and nuclear,” she said, adding that “subsidies are typically designed to be temporary in nature, targeted at de-risking the initial investment.”
In Norway, for example, the government has fully funded the first phase of the Northern Lights project in order to start it up, however subsequent phases will all be commercially-funded, she said.
FID on the second non-funded phase was taken in March this year.
Of around 250 CCS projects currently operational, “the vast majority of operational projects use pre-combustion CO2 capture, which is less costly and technically challenging than capturing CO2 post-combustion,” she continued.
“Governments and emitters face the challenge of scaling-up post-combustion capture applications at heavy industries like cement and chemicals for the first time.”
“Project developers mostly cite commercial and regulatory matters, rather than technical, as the biggest challenges,” she added.
High costs, technical uncertainty
“CCS continues to be championed across European governments as they see it as necessary to meet net zero obligations, despite the high cost and technical uncertainty,” Andrew Reid, partner at NorthStone Advisers and a guest contributor at IEEFA Europe, told Gas Outlook.
The UK government’s view “is that CCS requires initial funding support to get projects off the ground and that in time, they will become self-financing as carbon markets and pricing develops,” he said.
The UK government is also specifically pursuing bioenergy with CCS — known as BECCS — as a key strategy to reach net zero by 2050.
But detractors say CCS is too costly and unlikely to bring the hoped carbon reduction in time to avoid the worse consequences of climate change.
“Pouring billions across Europe into CCS is climate folly,” Andrew Boswell, of the Scrap Carbon Capture – Not A Solution To Pollution campaign, told Gas Outlook.
“It’s a mirage promoted by fossil fuel and bioenergy lobbyists” he said.
According to his analysis of the 7th Carbon Budget report issued by the Climate Change Committee to the UK Government, continuing to rely on biomass and natural gas with CCS will require investments of £264 billion.
“Massive upstream emissions for gas and biomass supply chains dwarf any carbon captured, even if it works,” he concluded.
“The lobbyist captured UK Government has already poured £30bn into the CCS climate folly, and its Climate Change Committee advisors recklessly recommend a £264bn path for bioenergy and gas based CCS.”
“This isn’t decarbonisation – it’s climate arson largely funded by the public in energy bills and taxes.”
(Writing by Beatrice Bedeschi; editing by Sophie Davies)