As Europe Progresses Net-Zero Infrastructure US Risks Technology Leadership

Last month the International Energy Agency made headlines with a stark warning about the potential climate impacts of failing to commercialize carbon capture technologies, concluding that it will be “virtually impossible” to reach net-zero emissions without carbon capture. The IEA’s latest  carbon capture report also reckoned that with ample geologic storage for CO₂  available, success of carbon capture technologies will hinge on building out CO₂  transportation and storage infrastructure. Beyond enabling a near-term scale-up, planning and investing in the right net-zero infrastructure is essential to limit cost and land-use impacts.

So far, the US has been a global leader in carbon capture, with more than a dozen projects operating, and some 30 under way. Yet, the US currently lacks sufficient policies to incentivize CO₂  infrastructure planning and construction. The latest global announcements highlight that not only US technology leadership but most importantly near-term emissions reductions are at risk.

This past Friday, the European Commission proposed close to €1B ($1.17B) in investment under Connecting Europe Facilities, including six CO₂  infrastructure projects. In particular, the proposal includes €102M ($120M) for the Port of Rotterdam CO₂ Transport Hub and Offshore Storage (Porthos), which is seen as continental Europe’s most advanced carbon capture project, and could break ground as soon as 2022. Additional funding was also proposed to study the feasibility of CO₂ infrastructure and storage hubs in the United Kingdom, Ireland, the port of Amsterdam in the Netherlands, as well as a liquid CO₂ export terminal at the Port of Antwerp in Belgium. Some of the projects are intended to connect across the North Sea, including feeding into the Northern Lights project, which seeks to store CO₂ offshore on the Norwegian Continental Shelf.

The Commission’s CEF proposal came on the heels of the Norwegian Government’s proposal to invest upwards of 16.8Billion NOK ($1.8B) in a full-chain carbon capture project called Longship. The government white paper submitted to the Norwegian Parliament proposes to fund the carbon capture facility at the Norcem cement factory in Norway, while the second facility evaluated, the Fortum Oslo Varme waste incineration plant, could be supported if able to raise sufficient additional funding, for example, from the European Union. Longship also includes funding for the CO₂  transportation and offshore storage infrastructure project called Northern Lights, a joint project between Equinor, Shell, and Total. Northern Lights is expected to be able to store 1.5 million tons of CO₂    per year in its first phase, potentially expanding to storing 5 million tons per year from industrial sources in Europe in the second phase. Currently, carbon capture facilities globally store 40 million tons annually. Longship is also expected to create hundreds of jobs.

Meanwhile, across the Atlantic in Canada, the Alberta Carbon Trunk Line (ACTL) entered into operation earlier this year. The ACTL was built to collect some 14.6 million tons of CO₂ along its route from multiple facilities, but recently started operations with just two connected facilities capturing 1.5 million tons annually. Building infrastructure with excess capacity to accept additional CO₂ in the future makes it easier for additional facilities to capture their carbon and tap the ACTL as a carbon management option.

Government support for CO2 infrastructure attracts private investment in carbon capture by demonstrating commitment to emissions reductions and trust in the technology. Most importantly, it also solves a chicken-and-egg challenge: CO₂ transport and storage infrastructure must exist, or at least be certain to be built, before CO₂ capture projects can be committed. But the CO₂ capture projects must also exist or be certain before the transport and sequestration infrastructure can be committed. Building infrastructure with additional capacity allowing for a gradual scale-up of carbon capture will also be essential to achieving economies of scale.

Currently, the US lacks clear policy pathways to incentivize investment in CO₂ transportation and storage infrastructure.  While the Clean Economy Jobs and Innovation Act that passed the House recently includes important provisions that could accelerate the development of CO₂ infrastructure, more targeted policies to attract private sector investment are needed, or else the US risks falling behind on technology leadership, and meaningful climate impact.