I24c publishes in collaboration with the consultancy Element Energy a report on how to finance an industrial carbon capture and storage (ICCS) cluster through exciting EU finance mechanisms. While there are EU funds available that could support industrial CCS projects, the report concludes that in the short-term Member State support and contribution will be vital to operationalise the first industrial CCS cluster in Europe.
If Europe is to reach the Paris Agreement objectives of net zero emissions by 2050, there is now a striking degree of consensus that large strides are needed if we are to decarbonise Europe’s Resource and Energy-Intensive Industries, which are collectively responsible for around 20 per cent of Europe’s emissions and whose products are indispensable to the low carbon transition we need. Without doubt, industrial carbon capture and storage will have a role to play here, alongside innovative circular materials design and resource and energy efficient manufacturing processes, in helping many of these industries to reduce their emissions, at scale, as cost-effectively a possible while creating sustainable, well-paid employment.
This report is a new instalment in the i24c series of technical studies examining “bottlenecks” on the way to the full decarbonisation of Europe in line with the aims of the Paris Agreement. Through assessing the EU’s current finance mechanisms, the study examines whether EU and national funding mechanisms are “fit for purpose” when it comes to providing the finance ICCS clusters need. With the support of Element Energy, we have identified a funding pathway which could see Europe’s first ICCS cluster becoming operational by as soon as 2021. In what follows, we describe this pathway and make detailed suggestions for what key stakeholders should do, to ensure successful deployment.
The report concludes that a fully operational industrial CCS cluster is possible in the early 2020’s through grants, subsidies and guarantees. Enabling the deployment of Europe’s first-of-a-kind industrial CCS cluster will require a combination of funds and financing instruments from different sources including equity, debt, EU-ETS, EU funds and Member State support. European funding opportunities including the ETS Innovation Fund and the Structural Funds may be available to support industrial CCS clusters in Europe; however, funding availability before 2020 is likely to be extremely limited. Member State support and contribution is therefore vital in the short-term.
This report was co-authored by Emrah Durusut and Elian Pusceddu (Element Energy) and managed by Julia Reinaud and Rannveig van Iterson (i24c). The project was made possible through a European Climate Foundation research grant.