D6.6 Revised Analysis of Policy Alignment - An update on changes between 2022 and 2025 for the EU, six Member States and the UK

Due to the relative high degree of innovativeness, the realization of a Carbon Capture and Usage (CCU) or a Carbon Capture and Storage (CCS) project requires a positive strategic, legislative and financial supporting framework from policy. The political strategy to aim for ambitious climate targets is a pre-condition for the application of CCU and CCS technologies in a Member State. Legislation regulates the operation of capture, transport and storage sites. A well-defined framework is highly relevant for operators to know the risks and potential costs related to a project, to know their own responsibilities and responsibilities of others, expectations by the competent authorities and making clear the roles of all participants in the whole project. Furthermore, such a framework is useful to citizens who wish to assess the regulatory steps and timelines and understand their own opportunities for input. As well, such a framework helps the authorities to take adequate decisions in granting procedures in decent time. Financial support is needed as long as the current CO₂ price itself is not sufficient to make the application of CCU or CCS technologies economically viable. Although it is to be expected that costs for CCU and CCS activities will fall over time when it moves from being a very innovative first-of-a-kind application to a more mainstream technology, in particular the first-of-a-kind applications require specific support to cover for high costs under high risks. At the same time, a strong CO2 price in the European Emissions Trading System (EU ETS) (in February 2022 prices reached levels as high as 90€/t CO2, more recently prices in 2025 vary between 60 and 85 €/t CO2 with a slight upward trend) along with the expectation that CO2 prices will remain
high in the future, and a clear signal that there will be a market for low-CO2-products present strong financial incentives to invest into CCU and CCS projects.
In the present report, the political, legislative and financial support system for CCU, but mainly for CCS activities on the EU-level along with seven Member States and the UK are analysed, with attention to updates that may have taken place since the first edition of this deliverable was issued in 2022. The countries studied comprise the PilotSTRATEGY countries (Portugal, Spain, France, Poland and Greece) and in addition the Netherlands as a Member State and the UK, both as countries more advanced on developing frameworks for CCS. The report highlights the role of EU legislation in the context of development of CCS projects in the Member States. In addition, it analyses the transposition of EU legislation into national law and provides information on further national legislation or support instruments relevant in the context. It shows that while countries such as the UK and the Netherlands have put a strong political focus on the development of CCS clusters, other Member States so far can mainly refer to what has been developed on the EU level, making it clear that developing own CCS or CCU projects within the country require significant additional efforts on the legislative framework. Clear political signals along with additional national support instruments can help the development of project initiatives.