Carbon capture and storage: Europe's climate gamble

Executive Summary  

As countries across the European Union (EU) and the UK race to become carbon neutral by the middle of the century, carbon capture and storage (CCS) has become a core pillar of the largest emitters in the region. The combined official targets of the EU and UK currently aim to capture and store 554 million tonnes of carbon dioxide (MtCO2) per annum by 2050, or 13% of the EU’s total 2022 emissions plus almost a quarter of the UK’s. If these are to be met, the successful implementation and scale-up of CCS is now critical. 

While CCS projects have been in operation since 1971, primarily supporting production operations within the oil and gas sector, their application across other industrial sectors is unproven. This presents a major risk to the ambitions of European nations, which are now reliant upon CCS application across multiple emissions-intensive sectors. These proposed uses typically have few or no current projects or test cases, lack supporting legislation or standards and are too expensive to work on a commercial basis. On top of that, they envisage an exceptionally complex value chain that relies on many technically and economically challenging individual projects to work simultaneously in project clusters.    

The scale of the technical, economic, legislative and project risks presented by CCS are significant. Our analysis shows that while there are just under 200 potential projects across Europe that aim to capture and store over 150 MtCO2 per annum, over 90% of the proposed emissions capture is from projects that are only at the prototype or demonstration stage.

Costs are also prohibitive. The cost of capture, transportation and storage across European projects averages US$198 per tonne of CO2 captured, or twice that of forecast carbon prices of US$105 per tonne over the balance of the decade. With insufficient economic incentive to implement CCS, owners of industrial emissions infrastructure will be reliant upon government subsidies to progress potential projects. This could mean as much as €140 billion is required from the taxpayer. 

Our concerns about technical feasibility and costs are evidenced by the small number of European projects in operation or under construction. For example, costs at a construction project in the Netherlands have more than doubled, while a carbon capture unit at a cement factory in Norway has had to be postponed because of cost increases. Offshore carbon storage facilities in Norway, often championed as success cases, have been plagued with technical issues that have prevented or delayed storage capacity. What we are currently witnessing across active European CCS projects is that the technical and economic challenges are real. 

We are far off the technical, commercial and legislative challenges being addressed successfully. CCS in its present form is not likely to work as hoped, cost more and, importantly, take much longer to implement than planned. The proposed timelines of European projects are already baked with optimism despite the obvious challenges and recent history of failures across the smaller, less complex projects in operation and under construction.  

This is the biggest risk that championing CCS presents—the likelihood that it may be too late to change track and mitigate or reduce emissions through alternative measures when it is finally realised that the CCS contribution to net-zero targets will fail.