US Carbon Capture Incentives Leave EU ‘Lagging Behind’, Biofuel Makers Warn

by Sean Goulding Carroll (EURACTIV.com) Efforts to boost carbon capture and storage (CCS) in Europe are insufficient according to biofuel makers, who say the United States offer better incentives.

CCS sees carbon taken out of the atmosphere and injected underground, usually in depleted oil and gas fields, removing its contribution to global CO2 levels.

The European Commission included CCS in its Net-Zero Industry Act (NZIA) released on 16 March in answer to the US’s green-industry subsidising Inflation Reduction Act.

Under the NZIA, the EU set a binding target for storage capacity of 50 million tonnes of CO2 annually by 2030. This CO2 will be kept in “strategic storage sites” across the bloc, with oil and gas producers legally required to contribute to this goal.

The figure of 50 million tonnes annually is in line with forecasted demand from industry, according to the European Commission.

However, the plan does not include direct payments for CCS, with the EU instead relying on the bloc’s carbon market, the Emission Trading System (ETS), to stimulate uptake.

The CCS industry in the United States is growing, thanks in large part to the Biden administration’s decision to offer businesses a tax credit of $85 per tonne of CO2 stored.

As part of the brewing process, carbon is released as a by-product. This CO2 could be captured and sequestered underground, it is argued, but there is currently no incentive to do so.

“The total of this atmospheric carbon, captured first by photosynthesis then separated by fermentation, is huge,” says James Cogan, policy advisor at Ethanol Europe.

According to him, reaching the EU’s 35 billion cubic metre biomethane target for 2030 will involve separation of 30 million tonnes of CO2. “Add in the easily separated carbon dioxide from ethanol production and the figure jumps to around 40 million tonnes. European wine and beer production could add another two million,” he wrote in an opinion piece last month.

In total, the CO2 captured from fermentation in Europe could be “as big as the emissions of countries the size of Hungary, Sweden or Ireland,” Cogan says. Without incentives to capture and store this CO2, it will be vented back into the atmosphere, he warns, describing this as “a lost opportunity of colossal proportions”.

ClonBio has pushed for the EU to offer a price on carbon storage from revenues generated by the ETS through a “Contract for Difference” instrument, a move they say will unleash Europe’s CCS industry. READ MORE