NetZeroCities

Carbon capture and storage (CCS) and utilisation (CCU) present themselves as crucial solutions in the emission reduction strategies for hard-to-abate industries that have few other decarbonization options, such as chemical, cement, and steel production. It can also be used in the production of hydrogen.

CCS technologies prevent fossil-based CO₂ from entering the atmosphere by capturing it at the source and storing it safely underground so that it does not contribute to climate change. It involves three steps: during capture, the CO₂ is separated from other gases produced at large industrial facilities, such as steel mills, cement plants, petrochemical facilities, coal, and gas power plants; post-capture, the CO₂ is compressed for transportation, then dehydrated and sent towards the storage site generally through pipelines or ship; for safe and durable storage, the CO₂ is injected deep underground into rock formations (saline aquifers) and depleted oil and gas fields. In the case of CCU, the captured CO₂ is reused into useful products where it can be stored durably, such as cement, ceramics, or aggregates.

In its 2020 Energy Technology Perspectives report, the International Energy Agency (IEA) acknowledges CCUS as one the four pillars of the global energy transition, alongside electrification coupled with renewables uptake, bioenergy, and hydrogen, due to its role in reducing emissions from large power stations and industrial plants. Despite recognition of their unique role in decarbonization, the deployment of these technologies has been slow, with less than 0.5% of annual global investment in clean technologies being allocated to CCUS, and therefore with limited impact on global CO₂ emissions.

For CCS and CCU to reach their full decarbonization potential, challenges related to policy and regulatory support, social acceptance, and costs of the technologies will need to be overcome. With cities typically being large industrial centers, as well as centers for innovation, they are great candidates for integrating CCS and CCU in their decarbonization strategies.

Technical aspects/infrastructure:

The technology is tested and proven, with 19 operating full-scale projects world-wide.

The presence of heavy industry or fossil power plants in cities or in its proximity makes the case for CCS and/or CCU very clear, as they are often the only available solution for significant emission reductions, and even the cheapest option for deep decarbonization for several industrial sectors.

Access to transport infrastructure to transport the CO₂ to long-term storage sites (depleted oil and gas fields, saline aquifers) is a key enabler of CCS. The proximity to or the accessibility of durable storage is also an important factor.

Policy and regulatory/legal framework:

Quantified targets for CCS and CCU in climate-neutral roadmaps, including at city level, would support targeted investments in these technologies.
Carbon pricing is an important incentive for (retro)fitting power generation or industrial infrastructure with CCS.
In the EU, the regulatory framework relevant for CCS includes the EU ETS Directive (2003/87/EC) and its Monitoring and Reporting Guidelines (2010/345/EU), the Liability Directive (2004/35/EC) and the CCS Directive (2009/31/EC).
At city level, additional support measures are the inclusion of provisions for carbon capture in spatial planning and permitting discussions and by facilitating transportation routes from the capture point to the storage site, which is most likely to be located outside of the city. For CCU, mandating zero or near-zero building materials would support the business case for this technology.

Funding and financing:

Public funding support schemes, similar to the recent example in Denmark that presented a EUR 1.1 billion budget for CCS, are meant to increase investor confidence in CCS and reduce costs for future applications. From a city’s perspective, they can support building a business case for CCU through indirect measures such as showing the willingness to pay slightly more for these products and by mandating zero or near-zero building materials. See below in "enablers" some examples of funding opportunities.
In the case of CCU, it can also generate revenues from selling the captured CO₂ toward its potential uses.
Additional carbon finance through voluntary carbon markets.

Project governance and implementation modalities:

Public-private partnerships
Stakeholder consultation and engagement

	CO2 capture	CO2 Transport	CO2 Storage	CO2 Utilisation	Project development	Specific cities theme
Innovation Fund	√	√	√	√	√	X
CEF	X	√	X	X	√	X
Horizon Europe	√	√	√	√	√	√
ERDF	X	?	?	√	X	√
Cohesion Fund	X	?	?	√	X	√
EFSI	√	√	√	?	?	X
Other EIB	√	√	√	√	√	X

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