Joint Letter- Harnessing the IPCEI mechanism for CCS in Europe

Dear Member State representatives,

The signatories of the letter, representing the CCS and CCU value chain, would like to express its support to an “Important Project of Common European Interest (IPCEI) in the area of industrial carbon management and in particular on CO2 capture, removal, utilisation, transport and storage in the next IPCEI round.

The European Union is committed to achieving economy-wide climate neutrality by 2050. Industrial carbon management is recognised as an essential pathway to reach these goals, as well as to help decarbonise production processes in industrial sectors that are critical to the European economy, complementing other climate mitigation efforts.

Industrial carbon management is an essential pillar of a sustainable and competitive economy in Europe, which has been legally and politically supported. The Commission’s Industrial Carbon Management Strategy (ICMS) stresses the key role of CCS in reaching Europe’s climate targets and to decarbonise hard to abate sectors for which CCS might be the only decarbonisation option allowing climate neutrality by 2050.The Net Zero Industry Act (NZIA) recognises carbon capture and storage as strategic net-zero technologies and supports project deployment with regulatory measures, including accelerated permitting procedures. The Act also includes a target for the EU to achieve 50 million tonnes per year of CO2 storage capacity by 2030.

A key bottleneck in the development of industrial carbon management in Europe is the lack of a viable business case including funding and de-risking mechanisms in order the build-out of CO2 transport and storage infrastructure. Developing infrastructure all over Europe is critical to European industries. Failure to do so could risk undermining the competitiveness of industrial regions without access to transport and storage infrastructure, potentially risking the integrity of the Single Market. The ICMS acknowledges the difficulties in building a viable business case for CCS and CCU projects, outlining the significant up-front investment capital required and uncertainty of future CO2 prices as a key barrier. Currently, the incentives
for private and public investment to provide the business case for industrial carbon management are lacking.

IPCEIs have a demonstrated track record of accelerating industrial production and unlock private investment, as it has been already the case for sectors considered strategic, such as microelectronics, batteries, and hydrogen. For these reasons we believe that the large, cross-border and essential nature of CCUS projects makes the IPCEI instrument appropriately and efficiently suited to overcome the recognized market failure and to support infrastructure investments of unprecedented importance for the EU. Establishing CCUS at large scale in Europe will allow Member States to reach respective decarbonisation objectives, climate and NZIA target while at the same time supporting the competitiveness of industry, safeguarding jobs and contributing to employment growth.

Therefore, we would positively support the potential initiative of an IPCEI for CCUS infrastructure and stand ready to act decisively in such new public-private partnership cooperation. We would like to call for your support in bringing the CCUS domains high on the agenda during the upcoming JEF-IPCEI Technical meeting. Further, in order to allow the full value chain – from capture to storage – to be swiftly deployed, as needed, we also want to highlight the importance of making the process of IPCEI more efficient, in order to allow for effective and rapid contribution to decarbonisation of hard-to-abate sectors.

Sincerely,

• AGROFERT, a.s. group
• Bellona
• Carbon Capture & Storage Association (CCSA)
• Carbon Capture and Storage Europe (CCS Europe)
• CEMBUREAU
• Clean Air Task Force
• Climeworks
• ENERGY HUB Port of Wilhemshaven
• Engie
• Equinor
• Gasunie
• Global CCS Institute
• Groningen Seaports
• Hafslund
• Heidelberg Materials
• Hydro
• Hydrogen Europe
• IFP Energies nouvelles
• IOGP Europe and its members
• Mitsubishi Heavy Industries
• Offshore Norge
• Open Grid Europe (OGE)
• Orlen
• Porthos CO2 Transport and Storage C.V.
• Uniper
• VIK (German Association of Industrial Energy Consumers)
• VNG
• Wintershall Dea
• Yara International
• Zero Emissions Platform and its members