Europe Wanting To Take A lead In Carbon Capture Projects & Technology

20th January 2025

Since the beginning of the decade, the European Commission has pushed for legislation to integrate carbon capture and storage (CCS) into the EU carbon market. This initiative gained urgency during the gas crisis following Russia's invasion of Ukraine. As coal power plants ramped up production to offset reduced Russian gas deliveries, emissions surged, sending carbon market prices skyrocketing and straining industries across Europe. Meanwhile, the UK Government has committed billions to next-generation CCS projects, positioning itself as a global leader in carbon management and sustainability innovation.

CCUS in the USA
The United States remains the global frontrunner in carbon capture, utilisation and storage (CCUS), accounting for 50%-60% of global capacity and half of planned capacity worldwide. However, the sector's trajectory may shift with the next presidential administration in January 2025, potentially reshaping federal climate commitments.

The U.S. federal production tax credit, 45Q, incentivises companies by offering per-ton rewards for securely storing carbon dioxide in geological reservoirs. California’s Low Carbon Fuel Standard further drives demand for CCUS-enabled products, with similar policies spreading across states like Washington, Oregon, and British Columbia, and being considered in 14 other states.

CCUS in China
China’s “double carbon goal” aims for peak emissions by 2030 and carbon neutrality by 2060. Meeting this target necessitates substantial CCUS deployment, with projected emission reductions reaching up to 1.45 billion tons annually by 2050.

While China has made strides with around 40 CCUS projects in operation or intermittent use, the cumulative emissions reduction over 15 years (2005–2020) stands at only 3.298 million tons. Analysts stress the importance of developing robust strategies and processes to achieve the ambitious targets for 2040 and beyond.

CCUS in Europe
Europe has embraced diverse approaches to CCUS implementation, driven by ambitious climate goals. This is seen across the EU nations and those outside of the union such as the UK, Switzerland and Norway :

• United Kingdom: The UK is fostering CCUS hubs, including Net Zero Teesside, with over 60 projects in the pipeline. Policies include contracts for difference, capital co-funding, and regulated asset fees to support emitters and transport/storage operators.
• Norway: Norway’s Longship/Northern Lights project, operational from 2024, combines industrial carbon capture with shared transport and storage infrastructure, aiming to scale global CCUS deployment.
• Netherlands: Through the Rotterdam/Porthos hub, the Dutch government subsidises the gap between EU Emissions Trading System (ETS) costs and capture expenses, targeting significant industrial emission reductions by 2030.
• Germany: Germany’s Carbon Management Strategy (CMS) seeks carbon neutrality by 2045. The program includes subsidies for raw material industries and proposed amendments to the Carbon Dioxide Storage Act.
• Denmark: The Danish CCUS Fund provides DKK 2.15 billion in subsidies over 20 years, aiming for annual CO2 reductions of 0.4 million tons by 2025/2026 and 0.9 million tons by 2030.
• France: In 2023, France proposed a CCUS strategy targeting 4–8.5 million tons of CO2 captured annually by 2030 and 15–20 million tons by 2050.
• Spain: Leveraging its Ebro Basin, Spain plans to deploy CCUS technology capable of reducing 4.42 megatons of CO2 emissions annually by 2050.

Carbon capture is emerging as a pivotal tool for global decarbonisation. While regions vary in their approaches, the momentum behind CCUS underscores its critical role in achieving climate targets and fostering economic transformation.

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