CCS is much more expensive than anticipated and requires extensive support from the state.

Carbon Capture and Storage (CCS) is projected to be much more costly than most estimates suggest, necessitating an extensive government strategy for its implementation in Germany and Europe, according to a report from think tanks Agora Industry and Oeko-Institut.

“The expenses for capturing, transporting, and storing CO2 range from 150 to 300 euros per tonne,” the think tanks stated in a press release. “These calculations indicate that the costs associated with existing or planned CO2 storage projects are at least 50 percent higher than earlier predictions.”

The German government has established a legal framework for the commercial application of CCS by updating regulations concerning carbon storage and transport, thereby facilitating the widespread use of CCS and carbon capture and utilization (CCU) as part of climate initiatives. The modifications permit subsea carbon storage, allow for the development of CO2 transport pipelines, and effectively prohibit CCS utilization in coal-fired power plants. Additionally, in late January, the German parliament approved a reform allowing the export of carbon dioxide for storage in other nations and for permanent offshore storage domestically.

Currently, CO2 emission allowances in the EU emissions trading system (ETS) are significantly cheaper, making investments in CCS rollout unviable. “Furthermore, the lengthy project development timelines of 6 to 13 years for constructing seabed storage facilities mean that available capacities can only be gradually increased and remain constrained,” the think tanks caution.

“For CCS to thrive in Germany and Europe, political backing must prioritize bridging the cost gap with CO2 prices and ensuring the establishment of CO2 infrastructure,” stated Agora director Julia Metz. “Federal government support is vital to enable industries without emission reduction alternatives, like the cement and lime sectors and waste management, to attain a climate-neutral future in Germany.”

The report highlighted that essential conditions for scaling up CCS are still missing, including a strategic industrial policy for its effective implementation, a strong carbon price, and initiatives to simplify planning and financing. “Only with governmental commitment to developing CO2 infrastructure, solid financing, and widespread measures to kickstart the market can CCS become a timely climate action option,” said Felix Matthes from Oeko-Institut.

After assessing offshore CCS projects across the European Economic Area and the UK at various development stages, the think tanks found that existing CCS initiatives in the EU and Norway are likely to reach an annual storage capacity of only ten million tonnes by the early 2030s. “This figure is merely one-fifth of the EU's goal of 50 million tonnes by 2030. To fulfill the EU's storage requirements by 2050, two large-scale storage facilities, each with a capacity of five million tonnes, must be commissioned yearly from now on.”