Decarbonising European industry: Enabling carbon capture and storage through the EU ETS

The document highlights a €10 billion funding gap for announced carbon management projects in Europe and argues that the EU ETS alone is insufficient to drive the deployment of carbon capture and storage (CCS). It recommends a faster phase-out of free allowances by 2029, a significant expansion of the Innovation Fund, and the use of Carbon Contracts for Difference (CCfDs) to provide investor certainty and bridge the gap between current ETS prices and the actual costs of carbon abatement.

• Carbon capture and storage (CCS) is identified as a critical technology for decarbonising Europe's industrial sector, which accounts for 21% of the EU's total emissions. In some sectors like steel, it is the most cost-effective option, while in cement, it is described as the only viable solution.
• There is a €10 billion funding gap for announced carbon management projects in Europe. The current EU ETS price is considered too low to create a sufficient business case, meaning many CCS projects would currently result in a net loss for developers.
• The document recommends accelerating the phase-out of free allowances for industrial sectors to 2029 at the latest, arguing that the proposed 2036 timeline is too slow and does not align with the implementation of the Carbon Border Adjustment Mechanism (CBAM).
• To support large-scale deployment, the brief suggests significantly expanding the Innovation Fund and using it to ringfence funding for innovative carbon removal technologies such as Direct Air Capture, rather than including them in the ETS.
• Carbon Contracts for Difference (CCfDs) are presented as a critical tool to provide investor certainty by guaranteeing a public counterparty will pay the difference between the long-term cost of a technology and the volatile ETS price.

APA

Clean Air Task Force (n.d.). Decarbonising European industry: Enabling carbon capture and storage through the EU ETS. https://cdn.catf.us/wp-content/uploads/2022/02/15173443/decarbonising-european-industry.pdf

Chicago

Clean Air Task Force. Decarbonising European industry: Enabling carbon capture and storage through the EU ETS. n.d. https://cdn.catf.us/wp-content/uploads/2022/02/15173443/decarbonising-european-industry.pdf.

Wikipedia

{{cite report |author=Clean Air Task Force |title=Decarbonising European industry: Enabling carbon capture and storage through the EU ETS |url=https://cdn.catf.us/wp-content/uploads/2022/02/15173443/decarbonising-european-industry.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cleanairtaskforcenddecarbonising, author = {{Clean Air Task Force}}, title = {{Decarbonising European industry: Enabling carbon capture and storage through the EU ETS}}, institution = {Clean Air Task Force}, url = {https://cdn.catf.us/wp-content/uploads/2022/02/15173443/decarbonising-european-industry.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }