Commission adopts Industrial Carbon Management Communication

In a previous communication announced on February 6, 2024, the European Commission recommended that Europe should reduce its greenhouse gas (GHG) emissions by 90 percent by 2040.

To achieve this, we need to scale up our efforts. This will be done mostly by reducing emissions, but the green transition will also require the deployment of technologies to capture CO₂ and remove it from the atmosphere. This is part of the European solution space, especially for heavy industry where emissions cannot be eliminated completely. Today, we propose a new and concrete roadmap to boost and finance this technology across Europe. This strategy will create a business environment for CO₂ and help us on our journey towards net zero emissions by 2050, said Wopke Hoekstra, Commissioner for Climate Action.

In the Net-Zero Industry Act, the Commission has proposed that the EU develop at least 50 million tonnes per year of carbon dioxide (CO₂) storage capacity by 2030.

Based on the impact assessment of the EU recommended climate target for 2040, this figure will need to grow to around 280 million tonnes by 2040.

The Communication on Industrial Carbon Management sets out a comprehensive policy approach to deliver on these targets and details on how these technologies could contribute to reducing emissions by 90 percent by 2040 and reaching climate neutrality by 2050.

A European approach to industrial carbon management

The announced Industrial Carbon Management Communication follows an open public consultation conducted in 2023 and builds on the efforts already undertaken under the CCUS Forum as well as by several Member States in this area.

It identifies a set of actions to be taken at the EU and national level to enable the deployment of these technologies and the necessary infrastructure to establish a single market for CO₂ in Europe in the decades ahead.

At present, 20 Member States have included industrial carbon management solutions in their draft National Energy and Climate Plans (NCEPs).

The Commission will start preparatory work on a possible future CO₂ transport and storage regulatory package, which would consider issues such as market and cost structure, third-party access, CO₂ quality standards, or investment incentives for new infrastructure.

The Commission’s Joint Research Centre (JRC) has also published a report on the future CO₂ transport network for Europe and related investment needs.

The Commission will also assess the volumes of CO₂ that need to be removed directly from the atmosphere (industrial carbon removals) to meet the EU’s emissions reduction ambitions for 2040 and 2050 and assess overall objectives and policy measures to achieve them.

This will include an assessment of how removals and permanent storage could be accounted for under the EU Emissions Trading System (ETS).

Renewables and energy efficiency remain central on the road to climate neutrality, but to reach net zero emissions we will also need technologies to remove, capture, transport, store, and use CO₂. With the strategy we present today, we want to establish a European market for CO₂. With the right support and coordination on projects and the right legal framework for CO₂ infrastructure and standards, we can support the development of these technologies in the EU. Carbon management technologies will allow us not only to cut emissions, but also to make our industry cleaner and more competitive, said Kadri Simson, Commissioner for Energy.

Permitting guidance

To help scale up the market for capture and permanent storage of CO₂ emissions, the Commission will establish guidance for project permitting processes and set up an atlas of potential storage sites.

In cooperation with the Member States, the Commission will also develop an aggregation tool for matching CO₂ suppliers with transport and storage operators and CO₂ off-takers.

The Commission aims to establish a clear carbon accounting framework for the utilization of captured CO₂ as a resource, which would reflect the climate benefits of using CO₂ as a resource in industrial processes.

This will help boost the uptake of sustainable carbon in industrial sectors.

European industry is working hard to reduce its emissions, but there are certain sectors where processes are particularly hard to adapt, and changes are costly to implement. For this reason, we need to boost innovation in technologies to capture, transport, and store carbon, to make them an effective climate solution. An acceleration of their deployment would help us meet our climate ambitions while enhancing the competitiveness of our industry, especially in times of significant geopolitical shifts. In this context, we are also stepping up our engagement with key industrial sectors but also citizens, to ensure that the transition is done in a socially fair manner, said Maroš Šefčovič, EVP for European Green Deal, Interinstitutional Relations and Foresight.

Establishing an enabling business environment for a CO₂ value chain

To make industrial carbon management projects happen on the ground, the Commission is setting out today a series of horizontal actions that could create a more attractive environment for investments.

• Investment and funding: The EU and Member States should further promote industrial carbon management projects under EU energy infrastructure programs and could consider Important Projects of Common European Interest (IPCEIs). The Commission will assess whether certain CO₂ capture projects can already be supported with market-based funding mechanisms such as competitive bidding auctions-as-a-service under the Innovation Fund.
• Research, innovation, and public awareness: The Commission will consider boosting funding for research and innovation on industrial carbon management projects through existing instruments, notably Horizon Europe and the Innovation Fund. The Commission will also support the establishment of a knowledge-sharing platform for carbon capture, use, and storage (CCUS) projects. Working closely with the Member States, the Commission will raise public awareness of these technologies, including highlighting their benefits and discussing potential rewards for local communities.
• International cooperation: The Commission will accelerate work with international partners on industrial carbon management, notably on the harmonization of reporting and accounting of carbon management activities, and ensure that international carbon pricing frameworks take into account removals to address emissions in hard-to-abate sectors.