Industrial companies are eyeing opportunities for carbon capture and storage (CCS) projects in Germany, where the technology has failed to take off because of factors including strong public opposition.
CCS has been seen as politically untouchable in Germany, given public disapproval of onshore CO2 storage sites, and opposition from environmental groups, which say that the technology could be used to extend the life of coal power plants.
Germany has no large-scale CCS facilities in the pipeline. The country's only commercial-scale CCS project — a demonstration facility at Vattenfall's Janschwalde lignite-fired power plant — was shelved in 2011 because of a lack of political support.
The technology remains "highly controversial", chancellor Angela Merkel said in May.
But there are signs that the CCS debate is being revived.
Germany's climate cabinet unveiled a package of measures last week to put the country on track to meet its emissions reduction targets. The plan included CCS and carbon capture and usage as options to decarbonise industry.
The EU also wants to adopt a target to reach net zero emissions by 2050 — a move that Germany supports. Meeting this aim will be very difficult without CCS.
"There is a different discussion now, in the sense that CCS might be the last option to get rid of CO2 which is not avoidable with technologies," German chemicals firm BASF's head of energy and climate policy Claus Beckmann said.
German policymakers appear more willing now to address public concerns about CCS that have "hindered its uptake" to date, Global CCS Institute advocacy manager Guloren Turan said.
The economy ministry and environmental group WWF Deutschland were among the speakers at a CCS conference in Oslo earlier this month — a sign that their attitudes to the technology are thawing, some observers said.
Industrial CCS
The CCS debate in Germany has tended to focus on the technology's use in coal power plants, raising criticism from environmental groups which say that this would extend the lifespan of these plants and crowd out new renewables generation.
But some observers see a chance to shift the focus to CCS in industry, now that the government has agreed to close the country's coal-fuelled power generation by 2038.
The coal exit presents a "new window of opportunity to discuss [CCS] again in a more neutral context," the German cement association's head of political and economic affairs Manuel Mohr said.
The cement sector is betting on CCS to decarbonise industrial processes for which low-carbon alternatives do not yet exist, such as converting limestone into clinker, which accounts for more than half of the emissions from cement production.
CCS promises a less disruptive way of cutting emissions for cementmakers than finding new methods of production. With CCS, companies could continue using the same industrial processes but capture and store the CO2 they produce, resulting in zero emissions.
"Carbon capture will play the largest role when it comes to decarbonising our sector in the long run," Mohr said.
Subsea storage
Projects to store CO2 offshore, rather than onshore in Germany, could also make CCS more palatable to voters.
Onshore CCS remains "not very popular" in Germany, but subsea storage has less public opposition, German research institute the Wuppertal Institut's vice-president Manfred Fischedick said.
Some European countries are already storing CO2 in subsea sites. Norway has been using natural gas fields to store CO2 since the 1990s, and its government plans to launch a full chain of CCS infrastructure — Europe's first — based around a North Sea reservoir. This could enable CO2 emissions from other countries to be transported to Norway and permanently stored.
High costs
Even if the public warms to the idea, the cost of CCS remains prohibitively high.
The cost of capturing and storing a tonne of CO2 in the cement sector can stretch to €175/t CO2. At these costs, the EU carbon price is nowhere near high enough to persuade industrial companies to invest in CCS, instead of buying carbon credits that allow them to continue emitting. The cost of an EU carbon credit has ranged from roughly €18-€30/t CO2 in 2019.
Industrial firms say they need more support from governments to develop CCS, particularly to scale up pilot projects to commercial scale.
A project testing technology to separate CO2 during cement production at HeidelbergCement's plant in Lixhe, Belgium, has received €12mn in EU grants, alongside €9mn in private funding. The next stage of that project, to test whether the separated CO2 can be captured or used in another industrial process, is dependent on more public support, the firm said.
EU funding programmes have so far failed to get large-scale CCS projects off the ground. And some national governments have cancelled funding for projects at short notice, rattling investors.
A new EU fund to support technologies including CCS will open to applications next year. The "innovation fund", which is currently valued at around €11.5bn, will give money to CCS projects in the early stages of development, a move the EU hopes will avoid the pitfalls of previous funding mechanisms. An older EU fund, designed to give money to projects only when they had started operating, did not lead to any CCS projects being built.
Observers in Germany say the government must also establish a regulatory framework for CCS, to kick-start investments. A lack of regulatory certainty "prevents companies from investing" in the technology, WWF Deutschland said.
