Can carbon capture, use and storage help competitiveness and climate action?

In February, the European Commission put forward two significant strategies that signal a policy reorientation: the Competitiveness Compass and the Clean Industrtial Deal. Stéphane Séjourné, the Commission Vice-President for industry, believes that with these strategies, “Europe will accelerate on its twin decarbonization and reindustrialization.”

“This pact aims to position Europe as a world leader in clean industries — from boosting our production to beefing up regulatory and financial support to our most strategic industrial supply chains,” he said unveiling the strategy on 26 February. “It also secures our unique European model of setting decarbonization not only as an environmental goal, but also as our economic growth strategy.”

The Commission has stressed that it has a technology-neutral approach for how to reach the EU’s climate goals, but that it wants to encourage the development of “made in Europe” technologies.

Europe has taken a lead in carbon capture, use and storage (CCUS), which allows businesses to capture carbon dioxide emissions produced from industrial processes or power generation, preventing them from entering the atmosphere and contributing to climate change.

The stored carbon can also be used for industrial processes in turn.

The technology’s proponents say that by integrating CCUS into their operations, European companies could give themselves a significant competitive advantage by decoupling industrial growth from carbon emissions, permitting businesses to scale operations sustainably.

For sectors like cement, steel, and chemicals — typically high in emissions — CCUS offers a pathway to reduce environmental impact without compromising productivity while also creating new revenue streams via carbon trading schemes.

Implications for carbon capture

“The Clean Industrial Deal is a strong signal that the European Commission is serious about securing the future of European industries in the green transition,” says Olivia Powis, CEO of the Carbon Capture and Storage Association.

“Recognising the role of permanent carbon removals, low-carbon industrial products and low carbon hydrogen are all essential to a future market. But we need urgent clarity on the implementation of the Industrial Carbon Management measures: without it, Europe risks falling behind on CCUS. The CCUS sector is ready to act, but we need the backing to turn commitments into reality. Ambition alone will not deliver net-zero and the time to deliver the deal is now.”

Powis says she particularly welcomes the positive signals sent to the CCUS industry in the Clean Industrial Deal, including the commitment to rolling-out the creation of a market for captured carbon on the basis of the Industrial Carbon Management Strategy (ICMS).

The commitment to review the ETS Directive in 2026 also provides an opportunity for more policy support for CCUS.

In addition, the strategy mentions the key role that hydrogen can play in the decarbonisation of the EU energy system – with further attention to be put on creating a market for low-carbon hydrogen – and commits to strengthening the Innovation Fund and developing a regulatory framework for low-carbon industrial products.

However, she says she would like to see more detail on the announced commitments to the commercial deployment of CCUS technologies and ICMS implementation.

Competitiveness concerns

Both the Clean Industrial Deal and the Competitiveness Compass are a response to the competitiveness report delivered to the Commission by former European Central Bank president Mario Draghi in September.

There has been increasing concern, as referenced in the report, that the competitiveness of European industries is increasingly tested by their counterparts in nations with less aggressive climate policies such as the United States.

However, the report also recommends that European companies embrace the technologies on which they have a lead, such as CCS and other green technologies. By investing in advanced CCS projects and creating more efficient carbon capture processes, they can establish themselves as industry leaders in sustainability.

As sustainability becomes a significant value driver for consumers, European businesses can differentiate themselves by embodying strong environmental practices. This reputation not only attracts customers but can also enhance investor relations and facilitate partnerships.

The long-term viability of CCS technologies can outweigh the initial costs related to development and implementation. As EU regulations evolve, those businesses that proactively adopt CCS may find themselves ahead of the regulatory curve, thus reducing future compliance costs.

Carbon Capture and Storage could therefore present a unique opportunity for European businesses to remain competitive while working towards ambitious decarbonisation goals.

The European Commission’s recent initiatives could provide a robust framework for enhancing the competitiveness of industries while fostering innovation in sustainability. By effectively leveraging CCS technologies, European companies can not only navigate the complexities of climate regulation but can also position themselves as leaders in a rapidly evolving global market.

[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]