European Commission, Wintershall recognize CCS as “clear means” of decarbonization

World Oil Staff May 22, 2023

(WO) – The European Commission has recognized carbon capture and storage (CCS) as a clear means of decarbonizing the industrial sector and has set up support programs for this purpose. “This strengthens us in our plans to build up a new business field with CCS and hydrogen projects,” said Hugo Dijkgraaf, Chief Technology Officer of Wintershall Dea, at a panel discussion with political stakeholders on May 22 in Brussels. “Climate change must urgently be stopped. Low-carbon hydrogen and CCS are two solutions to complement renewables. With our CCS and hydrogen activities, we plan to save 20 to 30 million tonnes of CO2 annually by 2040.”

Dijkgraaf considers the recent European Commission proposal for a Net-Zero Industry Act (NZIA) a “boost” for CCS, as it calls CCS a “strategic net zero technology” that should benefit from faster permitting and easier access to funding. The act also formulates a very ambitious EU injection-capacity goal of 50 million tonnes per year as early as 2030, which would encourage CCS companies to deploy CCS at scale in order to meet the European climate targets.

Dijkgraaf suggested, however, that CO2 from the EU stored in European Economic Area (EEA) countries like Norway should also count for the injection target, considering Norway’s enormous storage potential. Equally important, he continued, is that Member States and EEA countries make enough licenses available, such as by organising exploration licensing rounds.

As a general matter, the EU is signaling a strong willingness to act with its programs, such as the Innovation Fund, Horizon Europe and the recently revised TEN-E regulation, which now includes cross-border CO2 networks as an additional priority.

Decarbonizing industry and building up a CCS market

“The European Commission understands that if Europe wants to remain competitive as an industrial location, we need pragmatic, fast and affordable solutions to decarbonize,” Dijkgraaf noted. “To pursue our ambitious targets, we need reliable framework conditions from policymakers and continued political support. The restructuring of industry is a mammoth task shared by industry, politics and the energy sector.”

Wintershall Dea plans to offer CCS primarily as a service for those industries which will not be able to completely avoid CO2 emissions in the future, even after electrification. The CO2 will be transported from the industrial emitter via a CO2 transport network to CO2 collection points and, from there, to safe storage sites under the seabed of the North Sea. “We want to be the architect of the entire CCS value chain, helping to drive the decarbonization of industry and thereby prevent deindustrialization in emission-intensive sectors,” says Dijkgraaf.

A well-functioning emissions trading system (ETS) can be an important driver for developing the market, since emitters do not have to buy CO2 allowances for CO2 that is stored safely and permanently. Additional drivers for making CCS a business case could be carbon contracts for difference (CCfDs), which are still under discussion in Germany, and which entail a long-term contract between the state and the emitter to help offset the higher costs of green production. A similar pull could come from green procurement requirements by the state.

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