Five EU countries strengthen carbon capture and storage bonds with new declaration, paving the way for Europe’s CCUS market

Five European countries – Denmark, France, Germany, Sweden, and the Netherlands – have taken steps to build closer cooperation within the European Union (EU) on carbon capture and storage (CCS) by signing a declaration that showcases carbon capture, utilization, and storage (CCUS) as an essential climate tool. This is seen as an important step in the right direction towards creating a European market for CCUS.

Kadri Simson, European Commissioner for Energy, at the podium, during the third edition of the carbon capture, utilisation and storage (CCUS) Forum; Source: European Commission

The European Commission’s CCUS Forum in Aalborg, which brings together over 400 key players in the field of CCUS, has enabled Denmark, France, Germany, Sweden, and the Netherlands to sign the Aalborg Declaration on November 27, 2023. This declaration clinches CCUS’s role in the energy transition era, as these five countries have agreed that CCUS projects need to be scaled up both nationally and at the European level.

This declaration, which is in line with the aim of accelerating the development of a European market for CCUS and associated infrastructure across national borders, underlines that CCUS is “a necessary climate tool,” according to the Danish Energy Agency.

Lars Aagaard, Denmark’s Minister for Climate, Energy and Utilities, commented: “Today shows that there is a European will, both among us decision-makers and among the industry – and with the Aalborg Declaration, we are moving closer to a common European market for CO2 capture, usage, and storage. This is absolutely essential for the green transition, because CO2 capture, usage, and storage is a step on the ladder towards both our and the EU’s climate goals – and without that step, we will not reach the top.”

Good news for Denmark

Aside from enabling closer European cooperation on CCUS, the European Commission revealed that two Danish CCS projects – Norne and Bifrost – have been designated as projects of common interest (PCIs), giving them the status of particularly important infrastructure projects of interest to the entire Europe and allowing them to seek financial support from the EU.

Earlier this year, we saw the first CO2 storage in the Danish underground – and today two Danish projects have been named as important CCS projects for the benefit of all of Europe. Things are moving fast in Denmark because we have gradually sharpened all the edges – and because we have an industry that wants to contribute to the development of large-scale CO2 capture, usage, and storage. We are working to make this a European reality,” added Aagaard.

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The status of the two Danish projects as PCIs will be formally adopted on Tuesday, November 28, 2023. Denmark’s Ministry of Climate, Energy and Utilities is putting the wheels into motion to reach its goal of reducing greenhouse gas emissions by 70% by 2030. These developments also support the ambitions of Danish Shipping, aiming to establish Denmark as a key EU hub for both CCS and power-to-X technologies.

Jacob K. Clasen, Deputy CEO of Danish Shipping, emphasized: “Close cooperation with other European countries is a prerequisite for making the transport of CO2 by ship an attractive business area. If we approach it correctly, Denmark can become a pioneer in both CCS and power-to-X. It is very positive that the government is focused on this.”

Buildout of CCUS infrastructure on EU’s priority list

The European Commission’s Energy Commissioner, Kadri Simson, has also provided insight into the upcoming strategic considerations on CCUS and published a mapping of the capture and storage potential across the EU, marking Denmark as a country with significant storage potential. The map includes both possible locations for new infrastructure and the already ongoing expansion of the existing one.

Simson pointed out: “While CCUS is also getting international attention ahead of COP28, I am very proud that it is actually Europe that is taking the lead with concrete projects. Two things in particular come to mind: The final investment decision in the Porthos project to store CO2 in empty gas fields in the North Sea. And last week’s agreement to transport and store 800 000 tonnes of CO2 from an ammonia production facility in the Netherlands to the Northern Lights project in Norway.

“These projects show two things: First, EU industry is ready and committed to a full decarbonization of our economy. Second, there is strong political support for carbon capture and storage within the EU. But this also means that it is important to take the next step, and put in place the regulatory framework to scale up CCUS across the EU.”

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Furthermore, the European Commission’s Energy Commissioner confirms that decarbonization technologies, which are perceived to be key pillars for 2030 emission reduction goals, have been hand-picked. In this yet-to-be-published strategy, CCS has its own chapter, as the EU has set a target to deploy 50 million tons of CO2 storage capacity by 2030. Simson is convinced that this is “an opportunity” for oil and gas producers in the EU, as she believes that they could lend a helping hand in reaching the 2030 target by “using their experience and knowledge and embracing the opportunity to create a new market.”

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“We continue to financially support the scale-up of CCUS projects. As I said last year, financial support for research, innovation, and development for CCUS is vital for its long-term success. We already have three CCUS projects that receive financing from the Innovation Fund. Based on this year’s record €3 billion call for the Innovation Fund, we have invited an additional 11 large-scale CCS and CCU projects to negotiate grant agreements. We are also supporting the development of CCS infrastructure. We already have six cross-border CO2 networks in our list of ‘projects of common interest,'” outlined Simson.

Moreover, the European Commission’s Energy Commissioner disclosed that a new list of projects of common interest and mutual interest would encompass 14 CO2 transport and storage projects. This indicates that the development of a CO2 infrastructure network, running from the North Sea to the Mediterranean to the Baltics, is becoming “a European priority,” based on Simson’s statement.

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“We are currently working on the 2040 climate target. And this means that we need to scale up CCUS under all scenarios. This will have an important bearing on our work to build a strategy on CCUS in the EU. As you know the strategy is still in the making, and we expect it to be published early next year,” underscored the European Commissioner for Energy.